Document:

xene-ex102_33.htm

Exhibit 10.2

SHARE PURCHASE AGREEMENT

This Share Purchase Agreement (this “Agreement”), is made as of December 2, 2019 (the “Signing Date”), by and between Neurocrine Biosciences, Inc. (the “Investor”), a Delaware corporation, and Xenon Pharmaceuticals Inc. (the “Company”), a Canadian corporation.

RECITALS

WHEREAS, the Company and the Investor have entered into the Collaboration Agreement; and

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 common shares, no par value per share, of the Company (the “Common Shares”), in the amount and at a purchase price determined in accordance with the Collaboration Agreement; and 

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:

Article 1
Definitions

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

“2014 Equity Incentive Plan” shall mean the Company’s 2014 Equity Incentive Plan, as amended to date and as the same may be amended and/or restated from time to time.

“2019 Inducement Equity Incentive Plan” shall mean the Company’s 2019 Inducement Equity Incentive Plan, as amended to date and as the same may be amended and/or restated from time to time.

“Affiliate” shall mean, with respect to any Person, another Person that, directly or indirectly through one or more intermediaries, 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 such Person (ii) owns, directly or indirectly, beneficially or legally, more than fifty percent (50%) of the outstanding voting securities or capital stock of such other Person, or has other comparable ownership interest with respect to any Person other than a corporation; or (ii) has the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of such other Person.  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.

“Aggregate Purchase Price” shall mean $20,000,000.

 

 

 

“Acquisition Transaction” shall mean (i) any sale, license, lease, exchange, transfer or other disposition of the assets of the Company or any subsidiary of the Company constituting more than 50% of the consolidated assets of the Company in any one transaction or in a series of related transactions; or (ii) any merger, consolidation, business combination, share exchange, reorganization or similar transaction or series of related transactions involving the Company or any subsidiary of the Company whereby the holders of voting capital stock of the Company immediately prior to any such transaction hold less than 50% of the voting stock of the Company or the surviving corporation (or its parent company) immediately after the consummation of any such transaction.

“Agreement” shall have the meaning set forth in the Preamble.

“Board” shall mean the Board of Directors of the Company.

“Business Day” shall mean a day on which banking institutions in Burnaby, British Columbia, Canada and San Diego, California, United States are open for business, excluding any Saturday or Sunday.

“Change of Control” shall mean the transfer, in one transaction or a series of related transaction, as a result of which any Person or group of Persons, other than the Company, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of more than 50% of the total voting power of the voting securities of the Company.

“Closing Conditions” shall mean the conditions to Closing set forth in Article 6, Article 7, and Article 8 hereof.

“Collaboration Agreement” shall mean the License and Collaboration Agreement, dated December 2, 2019, between the Investor and the Company.

“Company SEC Documents” shall mean the required reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein) required to be filed by it under the Securities Act and the Exchange Act, and any required amendments to any of the foregoing, with the SEC.

“DOJ” shall mean the U.S. Department of Justice.

“Effective Date” shall have the meaning given to such term in the Collaboration Agreement.

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

“FTC” shall mean the U.S. Federal Trade Commission.

“GAAP” shall mean generally accepted accounting principles in the United States.

“Governmental Authority” shall mean any multinational, federal, national, state, provincial, local or other entity, office, commission, bureau, agency, political subdivision, instrumentality, branch, department, authority, board, court, arbitral or other tribunal exercising executive, judicial, legislative, police, regulatory, administrative or taxing authority or functions of any nature pertaining to government.

“LAS” shall mean the Nasdaq Notification Form: Listing of Additional Shares.

- 2 -

 

 

 

“Law” shall mean any law, statute, rule, regulation, order, judgment or ordinance having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision.

“Material Adverse Effect” shall mean any change, event or occurrence that, individually or in the aggregate, results in a material adverse effect on the business, or results of operations, assets or condition of the Company and its subsidiaries taken as a whole, provided, however, that no change, event, circumstance, occurrence or development resulting from the following shall be deemed (either alone or in combination) to constitute or shall be taken into account in determining whether there has been a Material Adverse Effect: (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, political, economic or business conditions or changes in generally accepted accounting principles in the United States or interpretations thereof, (C) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism, (D) earthquakes, hurricanes, floods or other natural disasters, (E) the announcement of this Agreement, the Collaboration Agreement or the transactions contemplated hereby and thereby, (F) any change in the Company’s stock price or trading volume or any failure to meet internal projections or forecasts or published revenue or earnings projections of industry analysts (provided that the underlying events giving rise to any such change shall not be excluded, except to the extent any such event is included in clause (A) through (E) of this definition) or (G) any breach, violation or non-performance by the Investor or any of its Affiliates under the Collaboration Agreement, provided, however, that the events excluded in clauses (A), (B), (C) and (D) shall only be excluded to the extent the effects of such events are not disproportionately adverse on the Company and its subsidiaries as compared to other companies operating in the Company’s industry.

“Person” shall mean any individual, partnership, joint venture, limited liability company, corporation, firm, trust, association, unincorporated organization, Governmental Authority 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.

“Rule 144” shall mean Rule 144 promulgated under the Securities Act.

“SEC” shall mean the U.S. Securities and Exchange Commission.

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

“Stock Option Plan” shall mean the Company’s Amended and Restated Stock Option Plan, as amended to date and as the same may be amended and/or restated from time to time.

“Termination Date” shall mean the date that is six months following the Signing Date.

“Third Party” shall mean any Person other than the Investor, the Company or any Affiliate of the Investor or the Company.

“Transfer Agent” shall mean the Company’s transfer agent.

 

- 3 -

 

 

 

Article 2
Purchase and Sale of Common Shares

Subject to the terms and conditions of this Agreement, at the Closing, the Company shall issue and sell to the Investor and the Investor shall purchase from the Company, 1,408,847 Common Shares (the “Purchased Shares”), for the Aggregate Purchase Price.

Article 3
Closing; Deliveries.

3.1 Closing.  The closing of the purchase and sale of the Purchased Shares hereunder (the “Closing”) shall take place remotely via the exchange of documents and signatures at 9:00 a.m. New York City time on the Signing Date, provided that all of the Closing Conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction at such time of such conditions) have been satisfied or waived, or at such other time, date, and location as the parties may agree.

3.2 Deliveries.

	
 
	
(a)
	
Deliveries by the Company.  At the Closing, or as soon as practicable thereafter, the Company shall deliver, or cause to be delivered, to the Investor the Purchased Shares, registered in the name of the Investor, and the Company shall instruct the Transfer Agent to register such issuance at the time of such issuance.  The Company shall also deliver at the Closing: (i) a certificate in form and substance reasonably satisfactory to the Investor and duly executed on behalf of the Company by an authorized executive officer of the Company, certifying that the conditions to Closing set forth in Article 6 and Section 8.1 hereof have been fulfilled and (ii) a certificate of the secretary or assistant secretary of the Company dated as of the Signing Date certifying (A) that attached thereto is a true and complete copy of the Amended and Restated By-laws of the Company as in effect at the time of the actions by the Board referred to in clause (B) below and on the Signing Date; (B) that attached thereto is a true and complete copy of all resolutions adopted by the Board authorizing the execution, delivery and performance of this Agreement and the transactions contemplated hereby and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby and thereby as of the Signing Date; (C) that attached thereto is a true and complete copy of the Company’s Restated Articles of Incorporation as in effect at the time of the actions by the Board referred to in clause (B) above and on the Signing Date; and (D) as to the incumbency and specimen signature of any officer of the Company executing this Agreement on behalf of the Company.

	
 
	
(b)
	
Deliveries by the Investor.  At the Closing, the Investor shall deliver, or cause to be delivered, to the Company the Aggregate Purchase Price by wire transfer of immediately available United States funds to an account designated by the Company.  The Investor shall also deliver, or cause to be delivered, at the Closing: (i) a certificate in form and substance reasonably satisfactory to the Company duly executed by an authorized executive officer of the Investor certifying that the conditions to Closing set forth in Article 7 hereof have been fulfilled and (ii) a certificate of the secretary or assistant secretary of the Investor dated as of the Signing Date certifying as to the incumbency and specimen signature of any officer executing this Agreement on behalf of the Investor.

- 4 -

 

 

 

Article 4
Representations and Warranties of the Company

The Company hereby represents and warrants to the Investor that:

4.1 Organization, Good Standing and Qualification.

	
 
	
(a)
	
The Company has been duly continued and is validly existing as a corporation in good standing under the Canada Business Corporations Act and is up-to-date in all material corporate filings and has the corporate power and capacity to own, lease and operate its properties and to conduct its business as described in the Company SEC Documents and to enter into and perform its obligations under this Agreement, except where the failure to be so qualified or in good standing or have such power or authority would not, singularly or in the aggregate, have a Material Adverse Effect.

4.2 Capitalization and Voting Rights.

	
 
	
(a)
	
As of the Signing Date, the authorized capital of the Company consists of: (i) an unlimited number of Common Shares, of which (A) 25,880,178 shares are issued and outstanding, (B) 2,964,029 shares are issuable upon the exercise of outstanding stock options or upon the settlement of outstanding equity awards issued pursuant to the 2014 Equity Incentive Plan, (C) 51,507 shares are reserved for future issuance pursuant to the 2014 Equity Incentive Plan, (D) 155,250 shares are issuable upon the exercise of outstanding stock options or upon the settlement of outstanding equity awards issued pursuant to the 2019 Inducement Equity Incentive Plan, (E) 244,750 shares are reserved for future issuance pursuant to the 2019 Inducement Equity Incentive Plan, (F) 532,874 shares are issuable upon the exercise of outstanding stock options or upon the settlement of outstanding equity awards issued pursuant to the Stock Option Plan, (G) no shares are reserved for future issuance pursuant to the Stock Option Plan and (H) 40,000 shares are issuable upon the exercise of outstanding warrants to purchase Common Shares and (ii) an unlimited number of preferred shares, no par value per share (the “Preferred Shares”), of which 1,016,000 Series 1 preferred shares are issued and outstanding. All of the issued and outstanding Common Shares and Preferred Shares have been duly authorized and validly issued and are fully paid and non-assessable, were issued in compliance with applicable securities Laws.  None of the outstanding Common Shares and Preferred Shares were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company.

	
 
	
(b)
	
There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any share capital of the Company other than those described in the Company SEC Documents.  

	
 
	
(c)
	
Except as disclosed 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, except for such rights as have been duly waived or expired.

	
 
	
(d)
	
The Common Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.

- 5 -

 

 

 

4.3 Subsidiaries.  Except as otherwise disclosed in the Company SEC Documents, the Company does not own or control, directly or indirectly, any corporation, association or other entity.

4.4 Authorization.

	
 
	
(a)
	
This Agreement and the Collaboration Agreement have been duly authorized, executed and delivered by the Company and, upon the due execution and delivery of this Agreement and the Collaboration Agreement 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 enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability.

	
 
	
(b)
	
No stop order or suspension of trading of the Common Shares has been imposed or to the Company’s knowledge, threatened by the Nasdaq Stock Market, the SEC or any other Governmental Authority and remains in effect.

4.5 No Defaults.  The Company is not (i) in violation of its Articles of Incorporation or By-laws or similar organizational documents; (ii) in default (nor, with the giving of notice or lapse of time, would it be in default) under any indenture, loan, credit agreement, note, lease, license agreement, contract, franchise or other instrument (including, without limitation, any pledge agreement, security agreement, mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness) to which the Company is a party or by which it may be bound, or to which any of its properties or assets are subject (an “Existing Instrument”); or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

4.6 No Conflicts.  The execution, delivery and performance of this Agreement and the Collaboration Agreement, the issuance and sale of the Purchased Shares and the consummation of the transactions contemplated by this Agreement and the Collaboration Agreement (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the articles of continuance or by-laws of the Company, (ii) will not conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, or require the consent of any other party to, any Existing Instrument and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company, except, in the case of clauses (ii) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect.

4.7 No Governmental Authority or Third Party Consents.  No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency is required for the execution, delivery and performance by the Company of each of this Agreement or the Collaboration Agreement or the issuance and sale of the Purchased Shares, except (i) such filings as may be required to be made with the SEC, with any state blue sky or securities regulatory authority or any Canadian securities regulatory authority, which filings shall be made in a timely manner in accordance with all applicable Laws, and (ii) with respect to the Purchased Shares, the filing with the Nasdaq Stock Market of, and the absence of unresolved issues with respect to, an LAS and, if required, a Nasdaq Shares Outstanding Change Form.

- 6 -

 

 

 

4.8 Valid Issuance of Shares.  The Purchased Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company against payment therefor at Closing, will be validly issued, fully paid and non-assessable, and the issuance and sale of the Purchased Shares is not subject to any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase the Shares.

4.9 Litigation.  There is no action, suit, proceeding, inquiry or investigation brought by or before any governmental entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company, would reasonably be expected to have a Material Adverse Effect.  No material labor dispute with the employees of the Company, or with the employees of any principal supplier, manufacturer, customer or contractor of the Company, exists or, to the knowledge of the Company, is threatened or imminent.

4.10 Licenses and Other Rights; Compliance with Laws.  The Company possesses such valid and current certificates, authorizations or permits required by state, federal, provincial or foreign regulatory agencies or bodies to conduct its business as currently conducted and as described in the Company SEC Documents (“Permits”), except where the failure to so possess could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.  The Company is not in violation of, or in default under, any of the Permits, except for such violations or defaults as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and has not received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit, which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect.

4.11 Company SEC Documents; Financial Statements; Nasdaq Stock Market.

	
 
	
(a)
	
As of their respective filing dates each of the Company SEC Documents complied in all material respects with the requirements of the Securities Act, 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.  As of the Signing Date, there are no outstanding or unresolved comments in comment letters received from the SEC or its staff.

	
 
	
(b)
	
The financial statements of the Company included in its Annual Report on Form 10-K for the most recently completed fiscal year and in each of its quarterly reports on Form 10-Q for the quarterly periods ended March 31, June 30, and September 30 of the current fiscal year filed with the SEC as of the date of this Agreement present fairly the financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods covered thereby, except as otherwise disclosed therein and, in the case of unaudited, interim financial statements, subject to normal year-end audit adjustments and the exclusion of certain footnotes, and any supporting schedules included in the Company SEC Documents present fairly the information required to be stated therein.

- 7 -

 

 

 

	
 
	
(c)
	
The Common Shares are listed on the Nasdaq Stock Market, and the Company has taken no action designed to, or which is likely to have the effect of, terminating the registration of the Common Shares under the Exchange Act or delisting the Common Shares from the Nasdaq Stock Market.  The Company has not received any notification that, and has no knowledge that, the SEC or the Nasdaq Stock Market is contemplating terminating such listing or registration.

	
 
	
(d)
	
Since the end of the Company’s most recent audited fiscal year, there have been no significant deficiencies or material weakness in the Company’s internal control over financial reporting (whether or not remediated) and no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company is not aware of any change in its internal control over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

	
 
	
(e)
	
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) that (i) are designed to ensure that material information relating to the Company, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the 1934 Act are being prepared; (ii) have been evaluated by management of the Company for effectiveness as of the end of the Company’s most recent fiscal quarter; and (iii) are effective in all material respects at the reasonable assurance level to perform the functions for which they were established  The Company has conducted evaluations of the effectiveness of its disclosure controls as required by Rule 13a-15 of the Exchange Act.

	
 
	
(f)
	
There is and has been no material failure on the part of the Company or, to the knowledge of the Company, any of the Company’s directors or officers, in their capacities as such, to comply with any applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications. 

4.12 Absence of Certain Changes.  Since September 30, 2019, (i) there has not occurred any event that has caused or would reasonably be expected to cause a Material Adverse Effect on the Company and its subsidiaries, taken as a whole; (ii) other than as described in the Company SEC Documents, the Company has not entered into any transactions not in the ordinary course of business that are material, individually or in the aggregate, to the Company; and (iii) other than as described in the Company SEC Documents, there has not been any material decrease in the share capital or any material increase in any short-term or long-term indebtedness of the Company and there has been no dividend or distribution of any kind declared, paid or made by the Company or any repurchase or redemption by the Company of any class of share capital.

4.13 Offering.  Subject to the accuracy of the Investor’s representations set forth in Sections 5.5, 5.6, 5.7, 5.9, 5.10 and 5.11 hereof, the offer, sale and issuance of the Purchased 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.

- 8 -

 

 

 

4.14 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), that is or will be integrated with the sale of the Purchased Shares in a manner that would require registration of the Purchased Shares under the Securities Act.

4.15 Brokers’ or Finders’ Fees.  There is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement or the Collaboration Agreement.

4.16 Investment Company.  The Company is not and, immediately after giving effect to the offering and sale of the Purchased Shares and the application of the proceeds thereof, will not be required to register as an “investment company” under the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

4.17 No General Solicitation.  Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Purchased Shares by any form of general solicitation or general advertising.  The Company has offered the Purchased Shares for sale only to the Investor.

4.18 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, in the course of its actions for, or on behalf of, the Company: (i) directly or indirectly used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made any direct or indirect unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any domestic government official, such foreign official or employee 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.

4.19 Regulation M Compliance.  The Company has not taken, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Shares to facilitate the sale or resale of the Purchased Shares.

4.20 Office 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.

- 9 -

 

 

 

4.21 Development Matters.

	
 
	
(a)
	
The studies, tests and preclinical or clinical trials conducted by or on behalf of the Company that are described in the Company SEC Documents (the “Company Studies and Trials”) were and, if still pending, are, to the Company’s knowledge, being conducted in all material respects in accordance with experimental protocols, procedures and controls designed and approved for such Company Studies and Trials; the descriptions of the results of the Company Studies and Trials contained in the Company SEC Documents are, to the Company’s knowledge, accurate in all material respects; the Company has no knowledge of any other studies or trials not described in the Company SEC Documents, the results of which are inconsistent with or call in question the results described or referred to in the Company SEC Documents; the Company has made all such filings and obtained all such approvals as may be required by the United States Food and Drug Administration (the “FDA”) or any committee thereof and from any foreign, state or local governmental authority exercising comparable authority, or health care facility Institutional Review Board, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and the Company has not received any notices or correspondence from the FDA or any foreign, state or local governmental authority exercising comparable authority requiring the termination, suspension or material modification of any Company Studies and Trials that termination, suspension or material modification would reasonably be expected to have a Material Adverse Effect.

4.22 Intellectual Property.  

	
 
	
(a)
	
The Company owns, or has obtained valid and enforceable licenses for all inventions, patent applications, patents, trademarks, trade names, service names, copyrights, trade secrets and other intellectual property described in the Company SEC Documents as being owned or licensed by them or which are necessary in all material respects for the conduct of its business as currently conducted or as currently proposed to be conducted (collectively, “Intellectual Property”).  

	
 
	
(b)
	
To the Company’s knowledge, except as could not reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect: (i) there are no third parties who have rights to any Intellectual Property, except for customary reversionary rights of third-party licensors or co-ownership rights with respect to Intellectual Property that are disclosed in the Company SEC Documents as being subject to a third party’s joint ownership interest or as being licensed to the Company; and (ii) there is no infringement by third parties of any Intellectual Property.  

	
 
	
(c)
	
Except as could not reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect, there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the Company’s rights in or to any Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim; (B) challenging the validity, enforceability or scope of any Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim; or (C) asserting that the Company infringes or otherwise violates, or would, upon the commercialization of any product or service described in the Company SEC Documents as under development, infringe or violate, any patent, trademark, trade name, service name, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim.  

- 10 -

 

 

 

	
 
	
(d)
	
The Company has complied in all material respects with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company, and all such agreements are in full force and effect as to the Company and to the Company’s knowledge as to the other parties to such agreements.  The product candidates described in the Company SEC Documents as under development by the Company fall within the scope of the claims of one or more patents or patent applications owned by, or exclusively licensed to, the Company.

4.23 Real and Personal Property.  The Company has good and marketable title in fee simple (in the case of real property) to, or has valid and marketable rights to lease or otherwise use, all items of real or personal property, which are material to the business of the Company taken as a whole, in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse claims and other defects except such as do not, individually or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company.  The real property, improvements, equipment and personal property held under lease by the Company are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company.

4.24 Environmental Matters.  Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect:  (i) the Company is not in violation of any federal, state, provincial, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”); (ii) the Company has all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance with their requirements; (iii) there are no pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company; and (iv) to the knowledge of the Company, there are no events or circumstances existing as of the date hereof that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company relating to Hazardous Materials or any Environmental Laws.

4.25 Taxes.  The Company (i) has timely filed all necessary federal, state, local and foreign tax returns (or timely filed extensions with respect to such returns), and all such returns were true, complete and correct, (ii) has paid all federal, state, local and foreign taxes, assessments, governmental or other charges due and payable for which it is liable, including, without limitation, all sales and use taxes and all taxes which the Company is obligated to withhold from amounts owing to employees, creditors and third parties, and (iii) does not have any tax deficiency or claims outstanding or assessed or, to its knowledge, proposed against it, except those, in each of the cases described in clauses (i), (ii) and (iii) above, that would not, singularly or in the aggregate, reasonably be expected to have a Material Adverse Effect The accruals and reserves on the books and records of the Company in respect of tax liabilities for any taxable period not yet finally determined are adequate to meet any assessments and related liabilities for any such period.

- 11 -

 

 

 

4.26 Insurance.  The Company carries or is covered by, insurance in such amounts and covering such risks as is adequate for the conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses, at a similar stage of development, in similar industries.  The Company has no reason to believe that it will not 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 at a cost that would not reasonably be expected to have a Material Adverse Effect. The Company has not been denied any insurance coverage which it has sought or for which it has applied.

Article 5
Representations and Warranties of the Investor

The Investor hereby represents and warrants to the Company that:

5.1 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 Investor has all requisite corporate power and corporate authority to enter into this Agreement, to purchase the Purchased Shares and to perform its obligations under and to carry out the other transactions contemplated by this Agreement.

5.2 Authorization.

	
 
	
(a)
	
The Investor has full right, power and authority to execute and deliver this Agreement and the Collaboration Agreement and to perform its obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery by it of each of this Agreement and the Collaboration Agreement and the consummation by it of the transactions contemplated thereby has been duly and validly taken.

	
 
	
(b)
	
This Agreement and the Collaboration Agreement have been duly executed and delivered by the Investor and, upon the due execution and delivery of this Agreement and the Collaboration Agreement 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 enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability.

5.3 No Conflicts.  The execution, delivery and performance of this Agreement and the Collaboration Agreement, the subscription for and purchase of the Purchased Shares and the consummation of the transactions contemplated by this Agreement and the Collaboration Agreement will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Investor pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Investor is a party, by which the Investor is bound or to which any of the property or assets of the Investor is subject, (ii) result in any violation of the provisions of the certificate of incorporation or by-laws or similar organizational documents of the Investor or (iii) result in the violation of any law or statute or any judgment, order, rule  or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Investor or any of its subsidiaries, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a material adverse effect on the Investor’s ability to perform its obligations or consummate the transactions contemplated hereby in accordance with the terms of this Agreement.

- 12 -

 

 

 

5.4 No Governmental Authority or Third Party Consents.  No consent, approval, authorization, order, license, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Investor of each of this Agreement or the Collaboration Agreement or with the subscription for and purchase of the Purchased Shares.

5.5 Purchase Entirely for Own Account.  The Investor is subscribing for the Purchased Shares as principal and acknowledges that the Purchased 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 Purchased Shares.  The Investor can bear the economic risk of an investment in the Purchased Shares indefinitely and a total loss with respect to such investment.  The Investor does not have and will not have as of the Closing any contract, undertaking, agreement, arrangement or understanding with any Person to sell, transfer or grant participation to a Person any of the Purchased Shares.

5.6 Disclosure of Information.  The Investor 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 Purchased Shares hereunder.  The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the Company, its financial condition, results of operations and prospects and the terms and conditions of the offering of the Purchased Shares sufficient to enable it to evaluate its investment.

5.7 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 Purchased Shares to be purchased hereunder.

5.8 Acquiring Person.  As of the Signing Date, neither the Investor nor any of its Affiliates beneficially owns, and immediately prior to the Closing, neither the Investor nor any of its Affiliates will beneficially own (in each case, 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 Investor’s rights under this Agreement), any securities of the Company, except for securities that may be beneficially owned by employee benefit plans of either the Investor or any of its Affiliates.

5.9 Residence. The Investor is not a resident or subject to the securities laws of a Province or Territory of Canada and has complied with the applicable securities legislation in the jurisdiction of its residence, in each case as they relate to the purchase of the Purchased Shares hereunder.

5.10 No “Bad Actor” Disqualification.  The Investor has not taken any of the actions set forth in, and is not subject to, the disqualification provisions of Rule 506(d)(1) of the Securities Act.  The Investor’s responses in the questionnaire delivered to the Company by the Investor related to qualification under Rule 506(d)(1) are true and correct as of the Signing Date and will remain true and correct as of the Closing.

5.11 Restricted Securities.  The Investor understands that the Purchased Shares, when issued, shall be “restricted securities” under U.S. 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 Purchased 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, as presently in effect.

- 13 -

 

 

 

5.12 Legends.  The Investor understands that any certificates representing the Purchased Shares shall bear 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 the Company) 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 a Share Purchase Agreement by and between Neurocrine Biosciences, Inc. and Xenon Pharmaceuticals Inc.”; and

	
 
	
(c)
	
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE APRIL 3, 2020.”; and

	
 
	
(d)
	
any legend required by applicable state securities Laws.

5.13 Financial Assurances.  As of the Signing Date, the Investor has, and as of the Closing, the Investor will have, access to cash in an amount sufficient to pay to the Company the Aggregate Purchase Price.

5.14 SEC Reports.  The Investor has reviewed the Company SEC Documents.

Article 6
Investor’s Conditions to Closing

The Investor’s obligation to purchase the Purchased Shares at the Closing is subject to the fulfillment as of the Closing of the following conditions (unless waived in writing by the Investor):

6.1 Representations and Warranties.  The representations and warranties made by the Company in Article 4 hereof shall be true and correct as of the Signing Date and as of the Closing as though made on and as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date; provided, however, that for purposes of this Section 6.1, all such representations and warranties of the Company (other than Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.8, and 4.11 hereof) shall be deemed to be true and correct for purposes of this Section 6.1 unless the failure or failures of such representations and warranties to be so true and correct, without regard to any “material,” “materiality” or “Material Adverse Effect” qualifiers set forth therein, constitute a Material Adverse Effect.

6.2 Covenants.  All covenants and agreements contained in this Agreement to be performed or complied with by the Company on or prior to the Closing shall have been performed or complied with in all material respects.

6.3 Collaboration Agreement.  The Collaboration Agreement shall not have been terminated in accordance with its terms and shall be in full force and effect as of the Closing.

6.4 No Material Adverse Effect.  From and after the Signing Date until the Closing, there shall have occurred no event that has caused a Material Adverse Effect.

6.5 Listing.  The Purchased Shares shall be eligible and approved for listing on the Nasdaq Stock Market.

- 14 -

 

 

 

Article 7
Company’s Conditions to Closing

The Company’s obligation to issue and sell the Purchased Shares at the Closing is subject to the fulfillment as of the Closing of the following conditions (unless waived in writing by the Company):

7.1 Representations and Warranties.  The representations and warranties made by the Investor in Article 5 hereof shall be true and correct as of the Signing Date and as of the Closing as though made on and as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date.

7.2 Covenants.  All covenants and agreements contained in this Agreement to be performed or complied with by the Investor on or prior to the Closing shall have been performed or complied with in all material respects.

7.3 Collaboration Agreement.  The Collaboration Agreement shall not have been terminated in accordance with its terms and shall be in full force and effect.

Article 8
Mutual Conditions to Closing

The obligations of the Investor and the Company to consummate the Closing are subject to the fulfillment as of the Closing of the following conditions:

8.1 Absence of Litigation.  There shall be no action, suit, proceeding or investigation by a Governmental Authority pending or currently threatened in writing against the Company or the Investor (i) that questions (A) the validity of this Agreement or (B) the right of the Company or the Investor to enter into this Agreement or to consummate the transactions contemplated hereby or thereby or (ii) which, if determined adversely, would impose substantial monetary damages on the Company or the Investor as a result of the consummation of the transactions contemplated by this Agreement.

8.2 No Prohibition.  No provision of any applicable Law and no judgment, injunction (preliminary or permanent), order or decree shall be in effect that prohibits, makes illegal or enjoins the consummation of the transactions contemplated hereby.

Article 9
Termination

9.1 Pre-Closing Termination.  This Agreement may be terminated at any time prior to the Closing by:

	
 
	
(a)
	
mutual written consent of the Company and the Investor;

	
 
	
(b)
	
either the Company or the Investor, upon written notice to the other, if any of the mutual conditions to the Closing set forth in Section 8 hereof shall have become incapable of fulfillment by the Termination Date and such conditions shall not have been waived in writing by the other party within ten business days after receiving receipt of written notice of an intention to terminate pursuant to this clause (b); provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure to consummate the transactions contemplated hereby prior to the Termination Date;

- 15 -

 

 

 

	
 
	
(c)
	
the Company, upon written notice to the Investor, so long as the Company is not then in breach of its representations, warranties, covenants or agreements under this Agreement such that any of the conditions set forth in Section 6.1, 6.2, 6.3, or 6.4 hereof, as applicable, could not be satisfied by the Termination Date, (i) upon a material breach of any covenant or agreement on the part of the Investor set forth in this Agreement, or (ii) if any representation or warranty of the Investor shall have been or become untrue, in each case such that any of the conditions set forth in Section 7.1, 7.2, or 7.3 hereof, as applicable, could not be satisfied by the Termination Date;

	
 
	
(d)
	
the Investor, upon written notice to the Company, so long as the Investor is not then in breach of its representations, warranties, covenants or agreements under this Agreement such that any of the conditions set forth in Section 7.1, 7.2, or 7.3 hereof, as applicable, could not be satisfied by the Termination Date, (i) upon a material breach of any covenant or agreement on the part of the Company set forth in this Agreement, or (ii) if any representation or warranty of the Company shall have been or become untrue, in each case such that any of the conditions set forth in Section 6.1, 6.2, 6.3, or 6.4 hereof, as applicable, could not be satisfied by the Termination Date.

9.2 Effect of Pre-Closing Termination.  In the event of the termination of this Agreement pursuant to Section 9.1 hereof, (i) this Agreement (except for this Section 9.2 and Article 11 hereof (other than Section 11.12), and any definitions set forth in this Agreement and used in such sections) shall forthwith become void and have no effect, without any liability on the part of any party hereto or its Affiliates, and (ii) all filings, applications and other submissions made pursuant to this Agreement, to the extent practicable, shall be withdrawn from the agency or other Person to which they were made or appropriately amended to reflect the termination of the transactions contemplated hereby; provided, however, that nothing contained in this Section 9.2 shall relieve any party from liability for fraud or any intentional or willful breach of this Agreement.

Article 10
Additional Covenants and Agreements

10.1 Market Listing.  From the Signing Date through the Closing, Company shall use all commercially reasonable efforts to (i) maintain the listing and trading of the Common Shares on the Nasdaq Stock Market and (ii) effect the listing of the Purchased Shares on the Nasdaq Stock Market, including submitting the LAS to the Nasdaq Stock Market.

10.2 Assistance and Cooperation.  Prior to the Closing, upon the terms and subject to the conditions set forth in this Agreement, 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 transactions contemplated by this Agreement, including using all reasonable efforts to accomplish the following: (i) taking all reasonable acts necessary to cause the conditions precedent set forth in Article 6, Article 7 and Article 8 hereof to be satisfied (including, in the case of the Company, promptly notifying the Investor of any notice from the Nasdaq Stock Market with respect to the LAS); (ii) taking all reasonable actions necessary to obtain all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Authorities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Authorities, if any); (iii) taking all reasonable actions necessary to obtain all necessary consents, approvals or waivers from Third Parties; and (iv) defending any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authority vacated or reversed.

- 16 -

 

 

 

10.3 Lock-Up Agreement. During the period commencing with the Effective Date and ending on the earlier of (i) the twenty-four (24) month anniversary of the Effective Date and (ii) the date on which the Company first publicly announces the results of a Phase 2 Clinical Trial for a XEN901 Product (each as defined in the Collaboration Agreement) (the “Lock-Up Period”), without the prior approval of the Company, the Investor shall not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale or, or otherwise dispose of or transfer any of the Purchased Shares (together with (a) 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 (b) any shares of Common Stock issued as (or issuable upon the exercise of any warrant or other securities that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the Purchased Shares (the “Lock-Up Securities”)), including, without limitation, any “short sale” or similar arrangement, or (ii) enter into any swap or any other agreement or any transaction that transfer, in whole or in part, directly or indirectly, the economic consequence of ownership of the Purchased Shares, whether any such swap or transaction is to be settled by deliver of securities, in cash or otherwise; provided, however, that the foregoing shall not (A) prohibit the Investor or its Affiliates from transferring Lock-Up Securities to an Affiliate of the Issuer if such transferee Affiliate executes an agreement with the Company to be bound by the restrictions set forth in this Section 10.3 and Section 10.4; (B) prohibit the Investor or its Affiliates from selling or otherwise disposing of or transferring Lock-Up Securities into a tender offer by a Third Party or an issuer tender offer by the Company; and (C) restrict any sale or other disposal or transfer of Common Shares which are not Lock-Up Securities held by an executive officer or director of the Investor for his or her personal account, or that may occur (or be deemed to occur) in connection with a Change of Control of the Investor (replacing references to “Company” with “Investor” in the definition of “Change of Control”). Transfers, sales and other disposals referred to in clauses (A) through (C) above are referred to herein as “Excluded Transfers”.

10.4 Sale Volume Limitation.  Following the expiration of the Lock-Up Period, without the prior approval of the Company, Investor shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale or, or otherwise dispose of or transfer during any calendar month greater than twelve and one-half percent (12.5%) of the aggregate number of Lock-Up Securities held by Investor or its Affiliates as of the last day of the Lock-Up Period; provided, however, that the foregoing shall not prohibit or restrict any Excluded Transfers. 

10.5 Standstill.  Without the prior approval of the Company, from the Effective Date until the twenty-four (24) month anniversary of the Effective Date, the Investor agrees that it will not, and will cause its Affiliates to not, directly or indirectly:

	
 
	
(a)
	
purchase, offer to purchase, or agree to purchase or otherwise acquire beneficial ownership (as determined in accordance with Rule 13d-3 and Rule 13d-5 under the Exchange Act) of any Common Stock, or any securities convertible or exchangeable into Common Stock, excluding any shares of Common Stock acquired pursuant to the transactions contemplated in the Collaboration Agreement; 

	
 
	
(b)
	
make, or participate in, any solicitation of proxies to vote any voting securities of the Company or any of its subsidiaries, or propose to change or control the management or board of directors of the Company by use of any public communication to holders of securities intended for such purpose; provided, however, that nothing in this Section 10.5 shall limit the Investor’s ability to vote or transfer (subject to Sections 10.3 and 10.4 hereof) its Common Stock; 

- 17 -

 

 

 

	
 
	
(c)
	
make a public proposal for a Change of Control, including a merger, consolidation or other business combination transaction or tender offer related thereto, or the purchase of all or substantially all of the assets of the Company and its subsidiaries; or

	
 
	
(d)
	
knowingly encourage, accept, or support a tender, exchange, or offer proposal by any Person other than the Investor, the consummation of which would result in a Change of Control.

Notwithstanding anything to the contrary contained in this Agreement, (i) if at any time (A) a Third Party enters into an agreement with the Company contemplating a Change of Control, including a merger, consolidation or other business combination transaction or tender offer related thereto, or the purchase of all or substantially all of the assets of the Company and its subsidiaries, or publicly announces its intention to do so, then the foregoing restrictions set forth in this Section 10.5 shall be suspended and of no further force or effect until the termination of such agreement or the public announcement of a withdrawal or abandonment of such intention, at which time such restrictions will be reinstated and apply in full force and effect or (B) a Third Party commences, or publicly announces an intention to commence, a tender, exchange, or offer that, if consummated, would result in a Change of Control, then the foregoing restrictions set forth in this Section 10.5 shall be suspended and of no force or effect until the expiration or termination of a tender, exchange or offer that has been commenced or the public announcement of a withdrawal or abandonment of an intention to commence a tender, exchange or offer at which time such restrictions will be reinstated and apply in full force and effect; (ii) the Investor shall not be precluded from making any confidential offers or proposals to the Board in a manner reasonably believed not to require the Company to make a public announcement of such offer or proposal; provided that Investor shall not publicly disclose any such offers or proposals; and (iii) Investor and its Affiliates shall not be precluded from owning or acquiring interests in mutual funds or similar entities that own capital stock of the Company, and nothing herein shall prohibit passive investments by pension or employee benefit plans of Investor.

 

10.6 Legend Removal.

	
 
	
(a)
	
Certificates evidencing the Purchased Shares shall not contain the legend set forth in 5.11(a) hereof: (i) following a sale of such Purchased Shares pursuant to a registration statement covering the resale of such Purchased Shares, while such registration statement is effective under the Securities Act, (ii) following any sale of such Purchased Shares pursuant to Rule 144, (iii) if such Purchased Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Purchased Shares and without volume or manner-of-sale restrictions under Rule 144 or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC).

	
 
	
(b)
	
The Company agrees that at such time as any legend set forth in Section 5.11 hereof is no longer required under this Section 10.6, the Company will, no later than three (3) Business Days following the delivery by the Investor to the Company or notice by the Investor to the Company of delivery by the Investor to the Transfer Agent of a certificate representing Purchased Shares issued with such legend (together with any legal opinion required by the Transfer Agent), deliver or cause to be delivered to the Investor a certificate representing such Purchased Shares that is free from such legend, or, in the event that such shares are uncertificated, remove any such legend in the Company’s share records.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in Section 5.11 hereof.

- 18 -

 

 

 

Article 11
Miscellaneous

11.1 Governing Law; Dispute Resolution.  This Agreement shall be governed by and construed in accordance with the Laws of the State of New York, without regard to the conflict of laws principles thereof that would require the application of the Law of any other jurisdiction.  Any disputes as to matters arising out of or in connection with this Agreement will be subject to the procedures set forth in Section 14.7 of the Collaboration Agreement.

11.2 Waiver.  Neither party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either party to assert a right hereunder or to insist upon compliance with any term of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition.  No waiver by either party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term except to the extent set forth in writing.

11.3 Notices.  All notices which are required or permitted hereunder shall be provided in accordance with Section 14.5 of the Collaboration Agreement.

11.4 Entire Agreement.  This Agreement and the Collaboration Agreement, together with the schedules and exhibits thereto, set forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the parties and supersede and terminate all prior agreements and understanding between the parties.  There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the parties other than as set forth herein and therein.  No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the parties unless reduced to writing and signed by the respective authorized officers of the parties.

11.5 Headings; Pronouns; Section References; English Language.  Headings and any table of contents used in this Agreement are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting 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.  This Agreement has been prepared in the English language, and the English language shall control its interpretation.

11.6 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.

11.7 Assignment.  Except for an assignment of this Agreement or any rights hereunder by the Investor to an Affiliate, neither this Agreement nor any of the rights or obligations hereunder may be assigned by either the Investor or the Company without (i) the prior written consent of Company in the case of any assignment by the Investor or (ii) the prior written consent of the Investor in the case of an assignment by the Company.

- 19 -

 

 

 

11.8 Parties in Interest.  All of the terms and provisions of this Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors, heirs, administrators and permitted assigns.

11.9 Counterparts.  This Agreement may be signed in counterparts, each and every one of which shall be deemed an original, notwithstanding variations in format or file designation which may result from the electronic transmission, storage and printing of copies from separate computers or printers.  Facsimile signatures and signatures transmitted via PDF shall be treated as original signatures.

11.10 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 hereto.  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.

11.11 No Strict Construction.  This Agreement has been prepared jointly and will not be construed against either party.

11.12 Survival of Warranties.  The representations and warranties of the Company and the Investor contained in this Agreement shall survive the Closing and the delivery of the Purchased Shares.

11.13 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.

11.14 Expenses.  Each party shall pay its own fees and expenses in connection with the preparation, negotiation, execution and delivery of this Agreement.

11.15 No Publicity.  The parties hereto agree that the provisions of Section 12.5 of the Collaboration Agreement shall be applicable to the parties to this Agreement with respect to any public disclosures regarding the proposed transactions contemplated by this Agreement or regarding the parties hereto or their Affiliates (it being understood that the provisions of Section 12.5 of the Collaboration Agreement shall be read to apply to disclosures of information relating to this Agreement and the transactions contemplated hereby).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

- 20 -

 

 

 

IN WITNESS WHEREOF, the parties intending to be bound have caused this Share Purchase Agreement to be executed by their duly authorized representatives as of the Signing Date.

		
	
 

 

Xenon Pharmaceuticals Inc.

 

By: /s/ Simon Pimstone

 

Name: Simon Pimstone

 

Title: Chief Executive Officer 

 
	
 

 

Neurocrine Biosciences, Inc.

 

By: /s/ Kevin Gorman

 

Name: Kevin Gorman

 

Title: Chief Executive OfficerExhibit
10.1

 

REGISTRATION
RIGHTS AGREEMENT

 

This
Registration Rights Agreement (the “Agreement”)
is made and entered into as of December 2, 2019 by and between FedNat Holding Company,
a Florida corporation (the “Company”), and 1347 Property Insurance
Holdings, Inc., a Delaware corporation (“Parent”).

 

This
Agreement is made pursuant to the Equity Purchase Agreement dated as of February 25, 2019 by and between the Company, Parent,
Maison Managers, Inc., a Delaware corporation, Maison Insurance Company, a Louisiana corporation, and ClaimCor, LLC, a Florida
limited liability company (the “Purchase 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 Parent agree as follows:

 

1.
Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have
the meanings given such terms in the Purchase Agreement. In addition to the terms defined elsewhere in this Agreement, the following
terms shall have the following meanings:

 

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

 

“Business
Day” means a day other than a Saturday or Sunday or other day on which banks located in New York City are authorized
or required by law to close.

 

“Closing
Date” has the meaning set forth in the Purchase Agreement.

 

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

 

“Common
Stock” means the common stock of the Company, par value $0.01 per share, and any securities into which such shares of
voting common stock may hereinafter be reclassified.

 

“Effective
Date” means the date that the Registration Statement filed pursuant to Section 2 is first declared effective by the
Commission.

 

“Effectiveness
Deadline” means, with respect to a Registration Statement, the earlier of: (i) the seventy-fifth (75th) day following
the Closing Date or (ii) the second (2nd) Trading Day after the date the Company is notified (orally or in writing, whichever
is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further
review; provided, that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for
business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business.

 

    	-1-

    	 

    

 

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

 

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

 

“Principal
Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading.

 

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

 

“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering
of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.

 

“Registrable
Securities” means all of the Shares and any securities issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the Shares, provided that Shares shall cease to be Registrable Securities upon
the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in
which case, only such security sold shall cease to be a Registrable Security); (B) becoming eligible for sale without time, volume
or manner of sale restrictions by Parent under Rule 144 and without current public information pursuant to Rule 144(c)(1); (C)
if such Shares have ceased to be outstanding; and (D) the date a Registration Statement becomes effective including such Shares
and all such Shares have been disposed by Parent in accordance with such effective Registration Statement. For the avoidance of
doubt, the fact that the Registrable Securities may at times cease to be Registrable Securities does not prevent them from again
becoming Registrable Securities in the future.

 

“Registration
Statements” means any one or more registration statements of the Company required to be filed pursuant to this Agreement
under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement,
amendments and supplements to such Registration Statements, including post-effective amendments, all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

 

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

 

    	-2-

    	 

    

 

“Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any successor rule thereto.

 

“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any successor rule thereto.

 

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

 

“Shares”
means the shares of Common Stock issued to the Parent pursuant to the Purchase Agreement.

 

“Trading
Day” means a day on which the Common Stock is listed or quoted and traded on its Principal Market.

 

“Trading
Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date
in question.

 

2.
Registration Request. The Company shall file with the Commission as soon as reasonably practicable after the Closing Date,
but in any event no later than fifteen (15) Business Days after the Closing Date, a Registration Statement covering the resale
of all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. Each Registration Statement
filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on Form S-1 or on another appropriate form in accordance herewith and the
Company shall undertake to register the Registrable Securities on Form S-3 as soon as such form is available; provided, that the
Company shall use its best efforts to maintain the effectiveness of the Registration Statement then in effect until such time
as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the Commission). The
Company shall use its best efforts to cause each Registration Statement to be declared effective by the Commission as soon as
practicable following the filing thereof, but in any event no later than the Effectiveness Deadline, and shall use its best efforts
to keep each Registration Statement continuously effective under the Securities Act until the earlier of (i) such time as all
of the Registrable Securities covered by such Registration Statement have been publicly sold by Parent or (ii) the date that all
Registrable Securities covered by such Registration Statement may be sold by Parent (A) without volume or manner of sale restrictions
under Rule 144 and (B) without the requirement for the Company to be in compliance with the current public information requirement
under Rule 144(c)(1) (such period of time, the “Effectiveness Period”). The Company shall request effectiveness
of any such Registration Statement as of 5:00 p.m., New York City time, on a Trading Day. The Company shall promptly notify Parent
via facsimile or electronic mail of a “.pdf” format data file of the effectiveness of a Registration Statement on
the same Trading Day that the Company confirms effectiveness with the Commission, which shall be the date requested for effectiveness
of such Registration Statement. The Company shall, by 9:30 a.m., New York City time, on the Trading Day after the effective date
of such Registration Statement, file a final Prospectus for a Registration Statement with the Commission, as required by Rule
424(b).

 

    	-3-

    	 

    

 

3.
Piggyback Registration.

 

(a)
Without prejudice to the rights of Parent under Section 4(o), if at any time when any Registrable Securities are outstanding,
there is not an effective Registration Statement covering all of the Registrable Securities and the Company intends to file a
Registration Statement covering a primary or secondary offering of any of its equity securities, whether or not the sale for its
own account, which is not a registration solely to implement an employee benefit plan pursuant to a registration statement on
Form S-8 (or successor form), a registration statement on Form S-4 (or successor form) or a transaction to which Rule 145 or any
other similar rule of the Commission is applicable, the Company will promptly (and in any event at least fifteen (15) Business
Days before the anticipated filing date) give written notice to Parent of its intention to effect such a registration (which notice
shall state the intended method of disposition of such Registrable Securities, the number of securities proposed to be registered,
the proposed managing underwriter(s) (if any, and if known) and a good faith estimate by the Company of the proposed minimum offering
price of such equity securities). The Company will effect the registration under the Securities Act of all Registrable Securities
that Parent requests be included in such registration (a “Piggyback Registration”) by a written notice delivered
to the Company within five (5) Business Days after the notice given by the Company in the preceding sentence. Subject to Section
3(b), securities requested to be included in a Company registration pursuant to this Section 3 shall be included by the Company
on the same form of Registration Statement as has been selected by the Company for the securities the Company is registering for
sale referred to above. Parent shall be permitted to withdraw all or part of the Registrable Securities from the Piggyback Registration
at any time at least five (5) Business Days prior to the effective date of the Registration Statement relating to such Piggyback
Registration. If the Company elects to terminate any registration filed under this Section 3 prior to the effectiveness of such
registration, the Company will have no obligation to register the securities sought to be included by Parent in such registration
under this Section 3. There shall be no limit to the number of Piggyback Registrations pursuant to this Section 3(a).

 

(b)
If a Registration Statement under this Section 3 relates to an underwritten offering and the managing underwriter(s) advise(s)
the Company that in its or their reasonable opinion the number of securities requested to be included in such offering exceeds
the number that can be sold without adversely affecting the marketability of such offering (including an adverse effect on the
per share offering price), the Company will include in such registration or Prospectus only such number of securities that in
the reasonable opinion of such underwriter(s) can be sold without adversely affecting the marketability of the offering (including
an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i)
first, the Common Stock and other securities the Company proposes to sell, (ii) second, the Registrable Securities of Parent to
the extent that Parent has requested inclusion of Registrable Securities pursuant to this Section 3, and (iii) third, any other
securities of the Company that have been requested to be so included, subject to the terms of this Agreement. The Company shall
select the investment banking firm or firms to act as the lead underwriter or underwriters in connection with an underwritten
offering made pursuant to this Section 3. Parent may not participate in any underwritten registration under this Section 3 unless
Parent (i) agrees to sell the Registrable Securities it desires to have covered by the underwritten offering on the basis provided
in any underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required, in customary form, under the terms of such underwriting arrangements.

 

    	-4-

    	 

    

 

4.
Registration Procedures. In connection with the Company’s registration obligations hereunder:

 

(a)
the Company shall, not less than three (3) Trading Days prior to the filing of a Registration Statement or any related Prospectus
or any amendment or supplement thereto (and, promptly upon request of Parent, copies of documents to be incorporated or deemed
to be incorporated by reference into such Registration Statement, Prospectus or amendment or supplement thereto), (i) furnish
to one counsel designated by Parent (“Parent’s Counsel”), copies of such Registration Statement, Prospectus
or amendment or supplement thereto, as proposed to be filed, which documents will be subject to the reasonable review of Parent’s
Counsel, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries
as shall be necessary, in the reasonable opinion of Parent’s Counsel, to conduct a reasonable investigation within the meaning
of the Securities Act; provided that all such documents provided prior to filing, and the information contained therein, shall
be confidential and may not be disclosed to any third party, nor shall Parent undertake any transactions in the Common Stock after
receiving such documents but prior to the filing of such documents. The Company shall not (i) file any Registration Statement,
or any such Prospectus, or amendment or supplement thereto containing information to which Parent’s Counsel reasonably objects
in good faith and (ii) submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or
supplement thereto without the prior approval of Parent, which consent shall not be unreasonably withheld, or delayed or conditioned,
provided, that, the Company is notified of such objection in writing no later than two (2) Trading Days after Parent has
been so furnished copies of a Registration Statement or any related Prospectus or amendments or supplements thereto.

 

(b)
(i) the Company shall prepare and file with the Commission such amendments, including post-effective amendments and supplements,
to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement
continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during a Grace Period
(as defined below)); (ii) the Company shall cause the related Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424 (except
during a Grace Period); (iii) the Company shall respond as promptly as reasonably practicable to any comments received from the
Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide
Parent’s Counsel true and complete copies of all correspondence from and to the Commission relating to such Registration
Statement (provided, that the Company shall excise any information contained therein which would constitute material non-public
information); and (iv) the Company shall comply in all material respects with the applicable provisions of the Securities Act
and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such
time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance
with the intended methods of disposition by Parent as set forth in such Registration Statement as so amended or in such Prospectus
as so supplemented; provided, that Parent shall be responsible for the delivery of the Prospectus to the Persons to whom Parent
sells any of the Registrable Securities (including in accordance with Rule 172 under the Securities Act), and Parent agrees to
dispose of Registrable Securities in compliance with applicable federal and state securities laws. In the case of amendments and
supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this
Section 4(b)) by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange
Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file
such amendments or supplements with the Commission on the same day on which the Exchange Act report is filed which created the
requirement for the Company to amend or supplement such Registration Statement.

 

    	-5-

    	 

    

 

(c)
the Company shall notify Parent (which notice shall, pursuant to clauses (ii) through (vi) hereof, be accompanied by an instruction
to suspend the use of the Prospectus until the requisite changes have been made, if applicable) as promptly as reasonably practicable
(and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement is proposed to be filed with the Commission; (B) when the Commission
notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement; and (C) with respect to each Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of the issuance by the Commission or any other federal or state governmental authority
of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any Proceeding for such purpose; (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage
of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so
that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were
made), not misleading and (vi) of the occurrence or existence of any pending corporate development with respect to the Company
that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of
the Company to allow continued availability of a Registration Statement or Prospectus, provided, that any and all of such
information shall remain confidential to Parent until such information otherwise becomes public, unless disclosure to Parent is
required by law or judicial process; provided, further, that notwithstanding any Parent’s agreement to keep
such information confidential, the Company and Parent make no acknowledgement that any such information is material, non-public
information.

 

    	-6-

    	 

    

 

(d)
Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the
Commission, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of
such information at the time is not, in the good faith judgment of the Company, in the best interests of the Company. The Company
shall be entitled to exercise its right under this Section 4(d) to suspend the availability of a Registration Statement
and Prospectus for a period or periods (each, a “Grace Period”) not to exceed sixty (60) calendar days (which
need not be consecutive days) in any twelve (12)-month period and any such Grace Period shall not exceed an aggregate of thirty
(30) consecutive days and the first day of any such period must be at least five (5) days after the last day of any such prior
Grace Period. For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the
date the Parent receives the notice referred to in Section 4(c)(ii) through (vi) and shall end on and include the
later of the date Parent receives the notice referred to in this Section 4(d) and the date referred to in such notice.
During the Grace Period, the Company shall not be required to maintain the effectiveness of any Registration Statement filed hereunder
and, in any event, Parent shall suspend sales of Registrable Securities pursuant to such Registration Statements during the pendency
of the Grace Period; provided, the Company shall promptly and in compliance Sections 4(c) and (d) (i) notify Parent in writing
of the existence of material non-public information giving rise to a Grace Period or the need to file a post-effective amendment,
as applicable, and the date on which such Grace Period will begin, (ii) use its best efforts to terminate a Grace Period as promptly
as reasonably practicable provided that such termination is, in the good faith judgment of the Company, in the best interest of
the Company, and to ensure that the use of the Prospectus may be resumed as promptly as is practicable, and (iii) notify Parent
in writing of the date on which the Grace Period ends. Notwithstanding anything to the contrary, the Company shall cause the Company’s
transfer agent to deliver unlegended Shares to a transferee of Parent in connection with any sale of Registrable Securities with
respect to which Parent has entered into a contract for sale prior to Parent’s receipt of the notice of a Grace Period and
for which Parent has not yet settled.

 

(e)
the Company shall use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending
the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, as soon as practicable.

 

(f)
the Company shall furnish to Parent, without charge, at least one (1) conformed copy of each Registration Statement and each amendment
thereto and all exhibits to the extent requested by Parent (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission; provided, that the Company shall have no obligation to provide
any document pursuant to this clause that is available on the Commission’s EDGAR or successor system.

 

    	-7-

    	 

    

 

(g)
the Company agrees to promptly deliver to Parent, without charge, as many copies of each Prospectus or Prospectuses (including
each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents
to the use of such Prospectus and each amendment or supplement thereto by Parent in connection with the offering and sale of Registrable
Securities covered by such Prospectus and any amendment or supplement thereto.

 

(h)
the Company shall, prior to any resale of Registrable Securities by Parent, use its best efforts to register or qualify or cooperate
with Parent in connection with the registration or qualification (or exemption from the registration or qualification) of such
Registrable Securities for the resale by Parent under the securities or Blue Sky laws of such jurisdictions within the United
States as Parent reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required
to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any general
tax in any such jurisdiction where it is not then so subject or file a consent to service of process in any such jurisdiction.

 

(i)
the Company shall reasonably cooperate with Parent to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free,
to the extent permitted under applicable law, of all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as Parent may reasonably request. Certificates for Registrable Securities free from
all restrictive legends may be transmitted by the Company’s transfer agent to Parent by crediting the account of Parent’s
prime broker with the Depositary Trust Company, if and as directed by Parent.

 

(j)
the Company shall following the occurrence of any event contemplated by Sections 4(c)(ii)-(vi), as promptly as reasonably practicable,
as applicable: (i) use its best efforts to prevent the issuance of any stop order or obtain its withdrawal at the earliest possible
moment if the stop order have been issued, or (ii) taking into account the Company’s good faith assessment of any adverse
consequences to the Company and its shareholders of the premature disclosure of such event, prepare and file a supplement or amendment,
including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter
delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of
prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading.

 

    	-8-

    	 

    

 

(k)
the Company may require Parent to furnish to the Company a certified statement as to (i) the number of securities of the Company
beneficially owned by Parent and any Affiliate thereof, (ii) any Financial Industry Regulatory Authority (“FINRA”)
affiliations, (iii) any natural persons who have the power to vote or dispose of the Common Stock, and (iv) any other information
as may be requested by the Commission, FINRA, any state securities commission or any other government or regulatory body with
jurisdiction over the Company or its activities. The Company shall reasonably cooperate with any broker-dealer through which Parent
proposes to resell its Registrable Securities in effecting a filing with the FINRA Corporate Financing Department, as requested
by Parent.

 

(l)
if requested by Parent’s Counsel, the Company shall (i) promptly incorporate in a Prospectus supplement or post-effective
amendment to the Registration Statement such information as the Company reasonably agrees (upon advice of counsel) is required
to be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon
as reasonably practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement
or post-effective amendment.

 

(m)
the Company shall use best efforts to cause all Registrable Securities to be listed on each Trading Market on which securities
of the same series or class issued by the Company are then listed, or if no such similar securities are then listed, on a Trading
Market selected by the Company.

 

(n)
the Company may require Parent to furnish to the Company in writing such information required under the Securities Act in connection
with such registration regarding Parent and the distribution of such Registrable Securities as the Company may, from time to time,
reasonably request in writing.

 

(o)
the Company shall not file any other registration statements until, or grant registration rights to any Person that can be exercised
prior to, the date that all Shares either are registered pursuant to a Registration Statement that is declared effective by the
Commission and is effective or may be sold without any restriction or limitation pursuant to Rule 144 and without the requirement
to be in compliance with Rule 144(c)(1); provided, that this Section 4(o) shall not prohibit the Company from filing
amendments (pre-effective and post-effective) to, or conducting offerings pursuant to, registration statements filed prior to
the date of this Agreement; and provided, further, that no such amendment shall increase the number of securities
registered on a registration statement.

 

(p)
in no event shall the Company include any securities other than Registrable Securities on any Registration Statement without the
prior written consent of Parent.

 

(q)
the Company shall comply with all applicable rules and regulations of the Commission in connection with its obligations under
this Agreement.

 

(r)
the Company shall hold in confidence and not make any disclosure of information concerning Parent provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information
is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction,
or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement
or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning Parent
is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to
Parent and allow Parent, at Parent’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.

 

    	-9-

    	 

    

 

(s)
the Company shall use its best efforts to cause the Registrable Securities covered by a Registration Statement to be registered
with or approved by such other U.S. state securities regulators as may be necessary to consummate the disposition of such Registrable
Securities.

 

(t)
unless required by applicable law, neither the Company nor any subsidiary or Affiliate thereof shall identify Parent as an underwriter
in any public disclosure or filing with the Commission or any Trading Market.

 

(u)
within two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the Commission,
the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to Parent and Parent’s Counsel) confirmation in writing that such Registration Statement has been
declared effective by the Commission.

 

5.
Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance with its obligations
under this Agreement (excluding any underwriting discounts and selling commissions, stock transfer taxes and fees of Parent’s
Counsel) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement.
The fees and expenses referred to in the foregoing sentence that are the Company’s responsibility shall include, without
limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then listed for trading, (B) with respect to compliance
with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company
in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of
the Registrable Securities for investment under the laws of such jurisdictions as requested by Parent) and (C) if not previously
paid by the Company in connection with an issuer filing, with respect to any filing that may be required to be made by any broker
through which Parent intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker
is receiving no more than a customary brokerage commission in connection with such sale), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses
is reasonably requested by Parent), (iii) messenger, telephone and delivery expenses of the Company, (iv) fees and disbursements
of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and
expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by
this Agreement, including the Company’s independent registered public accountants. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement
(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
on any securities exchange as required hereunder.

 

    	-10-

    	 

    

 

6.
Indemnification.

 

(a)
Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify, defend
and hold harmless Parent, the officers, directors, agents, general partners, managing members, managers, Affiliates and employees,
each Person who controls Parent (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and
the officers, directors, general partners, managing members, managers, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and investigation and reasonable and documented attorneys’ fees) and
expenses (collectively, “Losses”), as incurred, that arise out of or are based upon (i) any untrue or alleged
untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus or in any filing made in connection with the qualification of
the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are
offered, or arising out of or relating to any omission or alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading, or (ii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act or any state securities law or any rule or regulation thereunder, in connection with the
performance of its obligations under this Agreement, except to the extent, but only to the extent, that (A) such untrue statements,
alleged untrue statements, omissions or alleged omissions are based solely upon information regarding Parent furnished in writing
to the Company by or on behalf of Parent expressly for use therein, or to the extent that such information relates to Parent or
Parent’s proposed method of distribution of Registrable Securities and was reviewed and approved in writing by Parent or
Parent’s Counsel expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment
or supplement thereto, (B) Parent’s failure to deliver or cause to be delivered the Prospectus or any amendment or supplement
thereto made available by the Company, or (C) in the case of an occurrence of an event of the type specified in Sections 4(c)(ii)-(vi),
related to the use by Parent of an outdated or defective Prospectus after the Company has notified Parent that the Prospectus
is outdated or defective and prior to the receipt by Parent of the Advice contemplated and defined in Section 7(e) below, but
only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would
have been corrected. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf
of an Indemnified Party (as defined in Section 6(c)) and shall survive the transfer of the Registrable Securities by Parent. The
Company shall notify Parent promptly of the institution, threat or assertion of any Proceeding arising from or in connection with
the transactions contemplated by this Agreement of which the Company is aware.

 

    	-11-

    	 

    

 

(b)
Indemnification by Parent. Parent shall, notwithstanding any termination of this Agreement, indemnify and hold harmless
the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, in each case to the extent
and only to the extent, that such Losses arise solely out of or are based solely upon any untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus or
supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent,
that such untrue statements or omissions are based solely upon information regarding Parent furnished in writing to the Company
by or on behalf of Parent expressly for use therein. In no event shall the liability of Parent hereunder (together with any liability
under Section 6(d)) be greater in amount than the dollar amount of the net proceeds received by Parent upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

 

(c)
Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity
is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume
the defense thereof, including the employment of one (1) counsel reasonably satisfactory to the Indemnified Party and the payment
of all reasonable and documented fees and expenses incurred in connection with defense thereof; provided, that the failure of
any Indemnified Party to give such written notice within a reasonable time of commencement of any such Proceeding shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that such
failure shall have materially and adversely prejudiced the Indemnifying Party in its ability to defend such Proceeding.

 

An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or
(3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest exists if the same counsel were
to represent such Indemnified Party and the Indemnifying Party; provided, that the Indemnifying Party shall not be liable for
the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party
shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding,
does not involve a finding or admission of wrongdoing by the Indemnified Party or any of its affiliates, does not impose equitable
remedies or obligations on the Indemnified Party or any or its affiliates other than solely the payment of money damages for which
the Indemnifying Party will pay.

 

    	-12-

    	 

    

 

Subject
to the terms of this Agreement, all documented fees and expenses of the Indemnified Party (including reasonable fees and expenses
to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with
this Section 6(c)) shall be paid to the Indemnified Party, as incurred, within ten (10) Business Days after written notice thereof
to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion
of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not
be entitled to indemnification hereunder.

 

Such
indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by Parent pursuant to Section 7(j).

 

(d)
Contribution. If a claim for indemnification under Section 6(a) or 6(b) is unavailable to an Indemnified Party or insufficient
to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements
or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including
any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or
made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount
paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this
Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for
in Section 6(a) and 6(b) was available to such party in accordance with its terms.

 

The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 6(d), Parent shall not be required to
contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by Parent from the
sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that Parent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 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.

 

    	-13-

    	 

    

 

The
indemnity and contribution agreements contained in this Section 6 are in addition to any liability that the Indemnifying Parties
may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase
Agreement.

 

7.
Miscellaneous.

 

(a)
Remedies. In the event of a breach by the Company or by Parent of any of their obligations under this Agreement, the Company
or Parent, as the case may be, in addition to being entitled to seek to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to seek specific performance of its rights under this Agreement. The Company and
Parent agree that monetary damages may not provide adequate compensation for any losses incurred by reason of a breach by it of
any of the provisions of this Agreement.

 

(b)
Rule 144 Requirements. With a view of making available to the Parent the benefits of Rule 144 that may at any time permit
Parent to sell securities of the Company to the public without registration, the Company shall make and maintain public information
available, as those terms are understood and defined in Rule 144, and shall timely file with the Commission all reports and information
required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission
thereunder and as the Commission may require. The Company shall furnish to Parent promptly upon request a written statement as
to its compliance with the reporting requirements of Rule 144 (or any successor exemptive rule), the Securities Act and the Exchange
Act (at any time that it is subject to such reporting requirements); a copy of its most recent annual or quarterly report; and
such other reports and documents as Parent may reasonably request in availing itself of any rule or regulation of the Commission
allowing it to sell any such securities without registration.

 

(c)
Obligations of Parent in a Registration. Parent agrees to timely furnish in writing such information regarding it, the
securities sought to be registered and the intended method of disposition of the Registrable Securities held by it, as shall be
reasonably be required to effect the registration of such Registrable Securities (the “Requested Information”).

 

(d)
Compliance. Parent covenants and agrees that it will comply with the prospectus delivery requirements of the Securities
Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant
to the Registration Statement and shall sell the Registrable Securities only in accordance with a method of distribution described
in the Registration Statement.

 

(e)
Discontinued Disposition. Parent agrees that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Sections 4(c)(ii)-(vi), Parent will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of
the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is practicable.

 

    	-14-

    	 

    

 

(f)
Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, or waived unless the same shall be in writing and signed by the Company and Parent.

 

(g)
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be delivered as set forth in the Purchase Agreement.

 

(h)
Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns
of each of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. The Company may not assign its rights or obligations hereunder (except
by merger or in connection with another entity acquiring all or substantially all of such party’s assets) without the prior
written consent of the other party. Parent may assign its rights hereunder as set forth in Section 7(i).

 

(i)
Assignment of Registration Rights. The rights under this Agreement shall be automatically assignable by Parent to any transferee
of all or any portion of such Parent’s Registrable Securities if: (i) Parent agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment;
(ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name
and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred
or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee
or assignee is restricted under the Securities Act or applicable state securities laws; and (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein.

 

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

 

(k)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be determined in accordance with Section 9.07 of the Purchase Agreement.

 

(l)
Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

 

    	-15-

    	 

    

 

(m)
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 good faith 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.

 

(n)
Headings. The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

 

(o)
Effectiveness; Termination. This Agreement constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof. There are no restrictions, promises, warranties or undertakings, other than as set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject
matter hereof.

 

[SIGNATURES
ON FOLLOWING PAGE]

 

    	-16-

    	 

    

 

IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized
officers, effective as of the date first set forth on the first page hereof.

 

	 	COMPANY:
	 	 
	 	FEDNAT
    HOLDING COMPANY, a Florida corporation
	 	 	 
	 	By:
    	/s/
    Michael Braun
	 	Name:
    	Michael
    Braun
	 	Title:
    	Chief
    Executive Officer
	 	 	 
	 	PARENT:
	 	 
	 	1347
    PROPERTY INSURANCE HOLDINGS, INC., a Delaware corporation
	 	 	 
	 	By:	/s/
John S. Hill
	 	Name:
    	John
    S. Hill
	 	Title:
    	Vice
    President, Chief Financial Officer and Secretary

 

[End
of Agreement.]

 

Signature
Page to Registration Rights Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00302-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00302-of-00352.parquet"}]]