Document:

EX-4.69

 Exhibit 4.69 

2017-2019 Comprehensive Services Agreement 

between 
 CHINA UNITED
NETWORK COMMUNICATIONS GROUP 
 COMPANY LIMITED 

and 
 CHINA UNITED
NETWORK COMMUNICATIONS 
 CORPORATION LIMITED 

November 25, 2016 

  
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 Table of Contents 

 

							
	 	 	 	  	Page	 
	1.	 	 Basic Principles
	  	 	3	 
			
	2.	 	 The Components of Integrated Services
	  	 	4	 
			
	3.	 	 Pricing Principle and Payment
	  	 	5	 
			
	4.	 	 Validity
	  	 	5	 
			
	5.	 	 Representations, Warranties and Commitments
	  	 	6	 
			
	6.	 	 Coming Into Force
	  	 	6	 
			
	7.	 	 Force Majeure
	  	 	6	 
			
	8.	 	 Confidentiality
	  	 	6	 
			
	9.	 	 Non Waiver
	  	 	6	 
			
	10.	 	 Notice
	  	 	7	 
			
	11.	 	 Applicable Laws
	  	 	7	 
			
	12.	 	 Dispute Resolution
	  	 	7	 
			
	13.	 	 Other
	  	 	7	 
		
	Annex I: Lease of Telecommunication Resources	  	 	9	 
		
	Annex II: Premises Leasing	  	 	12	 
		
	Annex III: Telecom Value-added Services	  	 	15	 
		
	Annex IV: Materials Procurement	  	 	16	 
		
	Annex V: Project Design and Construction	  	 	18	 
		
	Annex VI: Auxiliary Telecommunication Services	  	 	20	 
		
	Annex VII: Integrated Services	  	 	22	 
		
	Annex VIII: Shared Services	  	 	24	 
		
	Annex IX: Financial Services	  	 	27	 

  
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 The Comprehensive Service Agreement (hereinafter referred to as “the Agreement”) is signed by the
following Parties on November 25, 2016 in Beijing, People’s Republic of China (hereinafter referred to as “China”): 
  

	(1)	Party A: China United Network Communications Group Company Limited (hereinafter referred to as “the Unicom Group”) 

Address: 21 Financial Street, Xicheng District, Beijing 

Legal Representative: WANG Xiaochu 
  

	(2)	Party B: China United Network Communications Corporation Limited (hereinafter referred to as “CUCL”) 

Address: 21 Financial Street, Xicheng District, Beijing 

Legal Representative: WANG Xiaochu 
 Each of the
Parties to the Agreement is individually called “the Party” and collectively “the Parties”. 
 Whereas: 

 

	1.	Duly organized and validly existing under the laws of China, the Unicom Group is an integrated telecom service carrier with limited liability. Duly organized and validly existing under the laws of China, China United
Network Communications Limited (hereinafter referred to as “the Unicom A Share Company”) is a company limited by shares and traded on the Shanghai Stock Exchange (hereinafter referred to as “the SHSE”) starting from
October 9, 2002. The Unicom Group is the controlling shareholder of the Unicom A Share Company; 

  

	2.	The Unicom A Share Company exercises indirect share-holding of China Unicom (Hong Kong) Limited (hereinafter referred to as “the Unicom Red-chip Company”) through China Unicom (BVI) Limited (“the Unicom
BVI Company”). Registered in the Hong Kong SAR, China (hereinafter referred to as “Hong Kong”), the Unicom Red-chip Company is a company limited by shares and traded on Hong Kong and the U. S. exchanges; 

 

	3.	CUCL is a foreign-invested company duly organized and validly existing under the laws of China, with the Unicom Red-chip Company holding 100% of its stake. CUCL mainly operates mobile telecommunications services
nationwide, fixed communications services, data communication services, all kinds of value-added telecom services, domestic and international communications facility services, as well as system integration businesses related to communications and
information services, etc.; and 

  
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	4.	For the purpose of enabling the Unicom Red-chip Company and its subsidiaries to run telecom businesses and in conformity with the relevant provisions of the Shanghai Stock Exchange Listing Rules (hereinafter referred to
as “the SHSE Rules”) applicable from time to time and the Hong Kong Stock Exchange Listing Rules (hereinafter referred to as “the HKSE Rules”) applicable from time to time, the Unicom Group and its subsidiaries (excluding the
Unicom A Share Company and its subsidiaries) have established a series of arrangements with CUCL for continuing connected transactions (hereinafter referred to as the “Arrangement for Continuing Connected Transactions”). As per the SHSE
Rules and the HKSE Rules, such continuing connected transactions shall be made public by the Unicom A Share Company and the Unicom Red-chip Company in conformity with their respective listing rules as applicable. The arrangements for the above
continuing connected transactions will be valid for 3 years, starting from 1 January 2017 and ending on December 31, 2019. 

 As per
the specific implementation of the relevant Arrangement for Continuing Connected Transactions, following joint research and discussions as well as based on equality and mutual benefit, the Parties have reached the following agreement: 

 

	1.	Basic Principles 

  

	1.1	The “Integrated Services” under the Agreement refers to certain services and facilities provided from one Party to the other Party or mutually provided between the Parties, with the receiving Party paying the
associated costs (hereinafter referred to as “the Service Fee”) to the providing Party. Unless otherwise agreed to, the Parties have the right to allow its controlled subsidiaries (to be determined in light of the Corporate Accounting
Standards as revised by Ministry of Finance from time to time) to provide or receive services as well as charge or pay for services as per the terms and conditions of the Agreement. 

 

	1.2	The services and/or facilities provided from any Party to the other Party as per the Agreement shall be regarded as paid transactions in the business exchanges between companies, where the providing Party has the right
to charge a reasonable amount of fees for the service and/or facilities it provides pursuant to the fair market principle and the receiving Party shall fulfill the corresponding payment obligations. 

 

	1.3	The conditions and quality of services and/or facilities provided by either Party to the other Party shall not be any worse than those of the same or similar services and/or facilities it provides to any third party.
While exercising rights or fulfilling obligations under the Agreement, the Parties shall comply with the principle of fair trade. 

  

	1.4	In case that either Party requires the other Party to increase the services and/or facilities provided under the Agreement, the other Party shall make its best efforts to provide the requested services and/or
facilities, with conditions of such services and/or facilities no worse than those provided to any third party. 

  

	1.5	In case that the services and/or facilities under the Agreement cannot be provided in whole or in part by one Party not due to its own reasons, the Party in question shall promptly notify the other Party, and do its
best to help the other Party to get the same or similar services and/or facilities from other sources. 

  
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	1.6	The services and/or facilities provided under the Agreement shall comply with the purpose of usage as agreed upon by the Parties and the standards prescribed by the State. 

 

	1.7	For any losses inflicted upon the counter Party as a result of breach of the Agreement by any Party, the inflicting Party shall bear the corresponding liabilities to the other Party for the breach (including but not
limited to direct and indirect losses inflicted upon the other Party for breach of the Agreement). However, the inflicting Party shall not be held liable for losses caused by force majeure. 

 

	1.8	While either Party is fulfilling its obligations under the Agreement, the other Party shall provide reasonable assistance where necessary. 

 

	1.9	Pursuant to the premise of Clause 1.3 of the Agreement and on condition that the charges from one Party do not exceed those from an independent third party, the Party that receives the services and/or facilities
(hereinafter referred to as “the receiving Party”) agrees to opt for the counter Party as its preferred service provider. 

  

	1.10	If there is an independent third party within the jurisdiction of one Party where the services are provided, and the independent third party: (i) provides higher quality of services; or (ii) provides the same
level of services but charges less; then the receiving Party has the right to terminate the services provided by the counter Party within the jurisdiction following a written notice to the counter Party, for which the receiving Party shall bear no
liability. 

  

	2.	The Components of Integrated Services 

  

	2.1	The integrated services mutually provided between the Parties under the Agreement and the associated arrangements are set out in the following annexes: 

Annex I: Lease of Telecommunication Resources (provided from Party A to Party B); 

Annex II: Premises Leasing (mutually provided); 

Annex III: Telecom Value-added Services (provided from Party A to Party B); 

Annex IV: Materials Procurement (provided from Party A to Party B); 

Annex V: Project Design and Construction (provided from Party A to Party B); 

Annex VI: Auxiliary Telecommunication Services (provided from Party A to Party B); 

Annex VII: Integrated Services (mutually provided); 

Annex VIII: Shared Services (mutually provided); 

Annex IX: Financial Services ( provided from Party B to Party ). 

  
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	3.	Pricing Principle and Payment 

  

	3.1	The pricing principles and/or service fee under the Agreement are set out in the annexes to the Agreement. 

  

	3.2	Calculation of the exact amount of service fee under the Agreement is subject to the relevant Chinese accounting standards applicable from time to time. 

 

	3.3	In case that the Parties cannot agree upon the amount of service fee under the Agreement, they shall jointly submit the matter to the competent department for the latter to determine the level of fees with reference to
the spirit and provisions of the Agreement and in accordance with price-related national policies and regulations. The decision of that department shall be deemed final and binding on the Parties. 

 

	3.4	As per the pricing principles and standards contained in the Agreement and the annex herewith, either Party shall pay the other Party in a timely fashion for the corresponding services it receives. 

 

	3.5	In case that either Party does not pay the service fee as agreed upon by the Parties in due course, then for each day exceeding the time limit, the defaulting Party shall pay the other Party a late fee of 0.05% of the
amount overdue; in case that the time limit is exceeded by 60 days and above, the other Party may opt to terminate the corresponding services following a written notice to the defaulting Party. If the defaulting Party still does not pay the service
fee 30 days after receipt of the notice, the receiving Party may declare termination of the corresponding services. However, the suspension or termination of such services shall not affect any prior rights or obligations of the Parties that have
already occurred or arisen under the Agreement. 

  

	3.6	In October each year, the Parties shall carry out a review of the pricing standards and other terms for the next fiscal year in regard to the services and facilities provided as per the Agreement, for which a
supplementary agreement is to be signed. If the Parties fail to reach a consensus prior to the above deadline in regard to the provisions of the supplementary agreement, then the pricing standards and relevant provisions for the current year shall
apply in the next fiscal year before the Parties reach a consensus or the discrepancies between the Parties are duly addressed pursuant to Clause 3.3 of the Agreement. 

 

	4.	Validity 

  

	4.1	The Agreement is valid until December 31, 2019, with immediate effect the next day following satisfaction of the conditions contained in Clause 6 of the Agreement. 

 

	4.2	Unless Party B informs Party A via a written notice at least 60 days in advance, the Agreement shall be automatically renewed for another 3 years at the expiry of the Agreement or its extended period as long as the
relevant laws, regulations or regulatory rules are applied. 

  
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	5.	Representations, Warranties and Commitments 

  

	5.1	The Parties make the following representations, warranties and commitments to each other: 

  

	 	5.1.1	It has full power and authority (including but not limited to the approval, consent or permission from competent government departments) to sign the Agreement and its annexes; 

 

	 	5.1.2	The Agreement and its annexes are valid and binding upon signing and sealing in the manner provided in the Agreement, with compulsory execution permissible as per its terms; 

 

	 	5.1.3	Any provisions in the Agreement and its annexes are not in violation of the laws and regulations of China. 

  

	6.	Coming Into Force 

 The agreement shall come into force from the date appearing atop the
main text of the Agreement subject to the review and approval by the General Meeting of Shareholders of the Unicom A Share Company and the Board of Directors of the Unicom Red-chip Company as well as signatures and seals by the Parties. 

 

	7.	Force Majeure 

 In the event that one Party cannot fulfill its obligations as per the
agreed conditions contained in the Agreement and its annexes due to unforeseeable force majeure of which the occurrences and consequences are unavoidable and insuperable, the Party shall promptly inform the situation to the other Party, and present
to the other Party within 15 days the details and valid documents supporting its inability to fulfill in whole or in part of its obligations under the Agreement and its annexes or listing the reasons for its delayed execution of such obligations. As
per the magnitude of influence of force majeure on the execution of such obligations, the Parties shall decide whether to suspend, partially exempt or delay the execution of such obligations. 

 

	8.	Confidentiality 

 Unless otherwise provided for by laws or regulatory authorities or for
the purpose of information disclosure by Party B to regulatory authorities, without written permission from the counter Party, neither Party shall provide or disclose any material or information relating to the businesses of the other Party to any
company, enterprise, organization or individual. 
  

	9.	Non Waiver 

 Unless otherwise provided for by laws, failure by either Party to exercise
or delay the exercise of its rights, power or privilege under the Agreement shall not be deemed as waiver of such rights, power or privilege, and the exercise of such rights, power or privilege in part shall not hinder future exercise of such
rights, power or privilege. 

  
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	10.	Notice 

 Any notice in relation to the Agreement shall be made in writing and delivered
by hand, fax or post from one Party to the other Party. Notices shall be regarded as delivered when signed by the recipient (hand delivery), or when the sender’s fax machine displays “sent” (facsimile) or on the third working day in
the wake of mailing (postal delivery, in which case the date shall be automatically extended when coinciding with statutory holidays). Notices shall take immediate effect upon delivery. 

 

	11.	Applicable Laws 

 Governed by the laws of China (for the purposes of the Agreement,
except for the laws of Hong Kong, Macao and Taiwan, the same below), interpretation and implementation of the Agreement is also subject to the laws of China. 
  

	12.	Dispute Resolution 

 Except for the situation provided for in Clause 3.3 of the
Agreement, all disputes arising out of implementation of the Agreement or relating to the Agreement shall be resolved through friendly consultations between the Parties. In case that no consensus is reached within thirty (30) days after one
Party makes the request to resolve the dispute through consultations, either Party may submit the dispute to China International Economic and Trade Arbitration Commission (CIETAC), in which case three (3) arbitrators are required to resolve the
dispute in Beijing by arbitration as per the then effective arbitration rules. With Chinese as the arbitration language, the arbitration award shall be final and binding on the Parties. Unless otherwise provided by the arbitral tribunal, the
arbitration costs shall be borne by the losing Party. 
  

	13.	Other 

  

	13.1	Once the Agreement enters into force, the original arrangement of continuing connected transactions shall be terminated on December 31, 2016. 

 

	13.2	Annex I to Annex VIII of the Agreement forms an integral part of the Agreement and bears the same effect as the main text of the Agreement. In case that the text of the annexes is inconsistent with that of the main text
of the Agreement, the text of the annexes shall prevail. 

  

	13.3	As agreed by the Parties, the Parties may opt to amend or supplement the Agreement and its annexes. All amendments or supplements shall enter into force following signatures and seals by special seal for contractual by
legal representatives or authorized representatives of the Parties. 

  

	13.4	The Agreement is severable, i.e., if any provision of the Agreement or its annexes is determined as illegal or unenforceable, the effectiveness and implementation of other provisions of the Agreement and its annexes
shall not be affected accordingly. 

  
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	13.5	The Agreement is made in four original copies, with each Party holding two copies and all the four copies bearing the same legal effect. 

  
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 Annex I: Lease of Telecommunication Resources 

 

	1.	Lease of Telecommunication Resources 

 The two Parties agree that Party B leases Party A’s
international telecommunications channel gateways (including international submarine cable landing stations, international land cable entry points, landing stations or entry extension terminal stations, as well as international satellite earth
stations), international telecommunications service gateways (including international voice exchanges, the STPs, international ATM/FR nodes, international transmission/DDN, international nodes for IP networks and international internet gateways
(IIGs)), the international submarine cable capacity, international land cables and other international telecommunications resources (the “International Telecommunications Resources”), as well as other telecommunications facilities owned by
Party A but needed by Party B in its service operations (“Telecommunications Resources and Facilities”). 
  

	2.	Contents of the Lease of Telecommunications Resources and Facilities 

  

	 	2.1	Party B leases international telecommunications resources owned by Party A. 

  

	 	2.2	Party B leases other telecommunications resources and facilities owned by Party A. 

  

	 	2.3	The two Parties shall make adjustments where necessary to the scope, type and quantity of telecommunications resources and facilities at any time. Such adjustments shall be confirmed once a year. 

 

	3.	Obligations 

  

	 	3.1	Party B shall be responsible for maintaining the leased international telecommunications resources at its own expense in accordance with relevant regulations and specifications. 

 

	 	3.2	The two Parties shall determine through consultation which Party is to undertake the maintenance in part or in full for the telecommunications facilities, in which case the relevant costs shall be borne by Party B
(unless otherwise agreed by the two Parties); if Party A undertakes the maintenance in part or in full for the telecommunications facilities, Party B shall make compensations to Party A for the costs arising therefrom. 

 

	 	3.3	Party B shall make proper use of the leased telecommunications resources and facilities. In the validity of this annex and to the extent permitted by the laws where applicable, Party B shall be entitled to lease the
telecommunications resources and facilities to any of the third parties as part of its normal Network Elements (NE) lease services, for which the rates shall be based on relevant state regulations and the principles of equality and fairness.

  
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	 	3.4	If Party B deems it necessary to suspend the telecommunications resources and facilities for the sake of maintenance and other reasons, a prior notice shall be issued to Party A within a reasonable period of time.

  

	4.	Quality Assurance 

  

	 	4.1	Party A shall ensure that the quality of its leasing telecommunications resources and facilities are in line with national standards and regulations. 

 

	 	4.2	Party B shall ensure that its telecommunications equipment connected to the telecommunications resources and facilities is in line with the quality standards and technical requirements provided by the competent national
authorities. 

  

	5.	Fees and Payment 

  

	 	5.1	The rental fees payable by Party B for the leased resources and facilities equals to the annual depreciation amount of the communication resources and facilities, and shall not be higher than the market price.

  

	 	5.2	Within three months after the end of each calendar year, the two Parties shall carry out a review of the rental fee of the telecommunications resources and facilities (if necessary) provided pursuant to this annex.
Adjustments shall be made in the next year with regard to the rental fee errors (if any) identified in the review process. 

  

	 	5.3	The expenses to be paid under Clause 3.2 of this annex shall be determined with reference to the market price. In case that no market price is available, the price shall be worked out by the two Parties through
negotiation. However, the price shall be negotiated on a “reasonable cost plus reasonable profit” basis, and the “reasonable cost” means the cost to be determined by the two Parties through negotiation. 

 

	 	5.4	At the time of determining the price standard or reasonable profit, the management shall, to the extent practicable, refer to the rate of profit of at least two comparable transactions with the independent third party
during the same period or profit of related industries. 

  

	 	5.5	Within ten working days following the end of each quarter, Party B shall provide to Party A a list of rental charges of the previous quarter, as well as a list of the charges and fees provided pursuant to aforementioned
Clause 5.3 of this annex. Meanwhile, Party B shall pay Party A the balance of rental charges after deduction of the relevant charges provided pursuant to Clause 5.3 hereinbefore. After the receipt of the payment, Party A shall issue a statement of
payment to Party B. Where dispute arises, adjustments shall be made in the next quarter upon confirmation by the two Parties. 

  

	 	5.6	The two Parties shall pay rental charges and fees in light of the articles heretofore. In the event of overdue payment, a penalty charge of 0.05% of the amount due will be imposed on the Party owing the payment for each
day (1 day) of outstanding payment. 

  
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	6.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for the communications resources
and facilities leased by Party A to Party B shall be RMB 600 million. 

  
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 Annex II: Premises Leasing 
  

	1.	Scope and Purposes of Leasing 

  

	 	1.1	Party A and Party B agree to lease premises and related attached equipment owned respectively by their branches, subsidiaries, affiliated companies or holding enterprises or units (“subsidiary companies”) to
each other for the purpose of production and operation. Both Parties confirm that subsidiary companies hereinbefore have agreed to entrust Party A and Party B with the rights to lease the premises under this annex. 

Party A agrees to lease its own premises and related attached equipment under this annex (“Party A’s Premises”) to Party B;
Party B agrees to rent Party A’s Premises and pay the consideration accordingly. Meanwhile, Party B agrees to lease its own premises and related attached equipment under this annex (“Party B’s Premises”) to Party A; Party A
agrees to rent Party B’s Premises and pay the consideration accordingly. 
  

	 	1.2	Party A and Party B agree that the premises leased from each other are to be used for business operation in accordance with the law within the scope permitted. One Party may sub-lease the other Party’s premises to
the third parties upon the written permission of the other Party herein. However, the sub-lessee shall still bear the responsibilities and obligations hereunder for the leased premises. 

 

	2.	Lease Term 

  

	 	2.1	The lease term of the premises under the annex shall be determined by the two Parties in accordance with the specific leasing circumstances of each leased premise, but shall be subject to the provisions of Clause 2.2 of
this annex. 

  

	 	2.2	If the Lessee commits one of the acts described hereinafter, the Lessor is entitled to terminate the lease of the premises under this annex: 

 

	 	(1)	The Lessee subleases or lends the Lessor’s premises to other parties without the Lessor’s consent (excluding subleasing or lending to the affiliated companies or associated companies of the Lessee);

  

	 	(2)	The Lessee breaches the agreed articles of lease purposes, or uses the Lessor’s premises to carry out unlawful or illegal activities and infringes upon the interests of the public. 

 

	 	2.3	On the expiry of this annex, if the Lessee does not exercise the right to renew the lease according to this annex, but is unable to actually return the rental premises to the Lessor due to business operation, the Lessor
shall extend, as appropriate, the lease term, and shall be entitled to charge the Lessee for the extended rent. The specific amount shall be determined by the Lessee and the Lessor through consultation. 

  
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	3.	Rents and Payment 

  

	 	3.1	The Parties agree on rental fees of premises and related ancillary equipment mutually leased by both Parties based on the market price. If the market price is not available or cannot be determined, the rental fees shall
be determined through the Parties’ negotiation. 

  

	 	(1)	The market price refers to the market price or charging standard for an independent third party to provide the same or similar assets or services under the normal commercial terms. 

 

	 	(2)	The negotiated price is the price determined in accordance with the reasonable cost plus the tax and reasonable profit of the lease. 

 

	 	(3)	At the time of determining the price standard or reasonable profit, the management shall, to the extent practicable, refer to the rate of profit of at least two comparable transactions with the independent third party
during the same period or profit of related industries. 

  

	 	3.2	Party A and Party B agree that the leasing of each Party’s specific premises may be stipulated in separate implementation documents otherwise signed in order to provide the applicable terms and conditions. However,
the implementation documents shall be in line with the principles, guidelines, terms and conditions provided by this annex. 

  

	 	3.3	A review of the rent provided in this Article hereto shall be carried out once a year, and whether adjustments are needed as well as the specific rental prices after adjustments shall be determined by both Parties
through consultations. Only the adjusted rent shall be no higher than the market price. 

  

	 	3.4	The rent shall be settled on a quarterly basis, and the settlement date shall be the last day of each quarter. Should the last day be Saturday, Sunday or public holiday, the settlement date shall be postponed to the
first working day after the end of holidays. 

  

	 	3.5	All administrative fees and other fees arising from the lease of Party A and Party B’s premises charged by the state and local government shall be borne by the Lessor, unless otherwise expressly stipulated in this
annex. 

  

	 	3.6	The Lessee shall pay the rent to the Lessor in light of the Article hereof. In the event of overdue payment, a penalty charge of 0.05% of the amount due will be charged by the Lessor for each day (1 calendar day,
similarly hereinafter) of outstanding payment. 

  
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	4.	Repairing and Refurbishment during Lease Term. 

 The Lessor shall undertake the obligations of
repairing and refurbishing the premises during the lease term and bear the costs arising therefrom. Unless otherwise provided by this annex, the Lessee shall consult the Lessor and both Parties shall reach written agreements before carrying out any
necessary decoration construction in the leased premises, such as transformation of the main structure of the premise. However, the Lessor shall not reject or delay the Lessee’s request for the transformation of the main structure of the
premise without reasonable grounds. With the main structure of the premises remaining untouched, the Lessee can make alteration and addition at its own expenses without informing the Lessor or obtaining its consent. The additions or values arising
from the decoration, alteration or addition made by the Lessee or the Lessor during the lease term shall belong to the Lessor. 
  

	5.	Change of Lessor 

  

	 	5.1	In the event that the Lessor transfers the ownership of its rental premises to the third parties, this annex shall remain valid for the new owner of the premises. 

 

	 	5.2	The Lessor shall inform the Lessee three months prior to the transfer of the ownership of the leased premises. Under the same terms the Lessee has the right of preemption to the Premises. 

 

	6.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for the premises leased by Party
A to Party B shall be RMB 2.5 billion, and those for the premises leased by Party B to Party A shall be RMB 100 million. 

  
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 Annex III: Telecom Value-added Services 

 

	1.	General Description of Service Contents 

 Party A (or its holding subsidiaries) as a Provider
offers various value-added services to Party B’s subscribers through all kinds of telecommunications networks and data platforms. 
  

	2.	Settlement 

  

	 	2.1	The actual cash income generated by value-added services provided by Party A to Party B under this annex, shall be settle by the branches of Party A and Party B according to the average proportion of amount paid by
Party B to other provider of value-added telecom services content providers (CP/SP) independent from Party B in the market in the same area. 

  

	 	2.2	Settlement shall be based on Party B’s billing information. 

  

	 	2.3	Both Parties agree that the settlement should be made once a month directly by each Party’s relevant subordinated bodies in light of the settlement principles provided by this annex. 

 

	3.	Obligations 

  

	 	3.1	Where the services under this annex may be affected due to one Party’s network construction (including but not limited to capacity expansion or renovation), the Party carrying out the construction work shall inform
the other Party six months in advance. 

  

	 	3.2	Both Parties shall conduct network maintenance in line with related regulations provided by competent national telecommunications authorities at any time so as to guarantee the normal operation of the whole network.

  

	 	3.3	Without the consent of the other Party, neither Party shall suspend the telecommunications generated from services under this annex. Where telecommunications were suspended or severely impeded, both Parties shall take
effective measures immediately to recover the telecommunications service. 

  

	4.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for various value-added services
provided by Party A to Party B shall be RMB 500 million. 

  
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 Annex IV: Materials Procurement 
  

	1.	Scope of Materials Procurement Services 

  

	 	1.1	Materials procurement service items provided by Party A to Party B under this annex include but not limited to: 

  

	 	(1)	Procurement of imported telecom materials; 

  

	 	(2)	Procurement of domestic telecom materials; 

  

	 	(3)	Procurement of domestic non-telecom materials. 

 Abovementioned procurement services also
include management of bidding and tendering, review of technical specifications, installation, inquiry, and agent services. 
  

	 	1.2	The proprietary materials sold by Party A directly to Party B mainly include cables, modems and so on. 

  

	 	1.3	Party A also provides Party B with storage, transportation and other services related to material procurement services and direct materials procurement. 

 

	2.	Service Fees and Payment 

  

	 	2.1	Party B shall pay service fees to Party A for purchasing equipment: 

  

	 	(1)	The pricing and/or charging standard of the commission on the domestic material procurement services under this annex shall not exceed 3% of the material procurement contract amount. 

 

	 	(2)	The pricing and/or charging standard of the commission on the imported material procurement services under this annex shall not exceed 1% of the material procurement contract amount. 

 

	 	(3)	Pricing standards for Party B to sell proprietary materials under this annex, and the pricing standards and/or charging standard of commissions for storage and transportation services related to the procurement services
and direct procurement pricing shall be determined based on the market price. If the market price is not available or cannot be determined, the rental fees shall be determined by the negotiated price. 

 

	 	(A)	Market price refers to the market price or charging standard for the third party to provide the same or similar assets or services under the normal commercial terms. 

 

	 	(B)	Negotiated price refers to the price determined in accordance with the reasonable cost of sales plus tax and reasonable profits. 

  
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	 	(C)	At the time of determining the price standard or reasonable profit, the management shall, to the extent practicable, refer to the rate of profit of at least two comparable transactions with the independent third party
during the same period or profit of related industries. 

  

	 	2.2	Party B agrees to pay service fees to Party A each month. 

 In the event of overdue payment,
Party B shall pay Party A a penalty at the rate of 0.05% of the amount overdue for each day (1 day). 
  

	3.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for the materials procurement
services provided by Party A to Party B shall be RMB 1 billion. 

  
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 Annex V: Project Design and Construction 

 

	1.	Main contents under this annex 

 Party A shall provide the following services for Party B in
terms of project design and construction: 
  

	 	1.1	Project design, including: 

 Planning and design, project investigation and survey,
communication circuit engineering (including pipeline projects, fiber and cable projects, and overhead pole line projects), communication equipment projects (including phone switching project, transmission projects, data and multimedia projects,
communication power and air-conditioning projects, microwave communication projects and technical support system projects) and corporate communication projects; 
  

	 	1.2	Project construction, including: 

 Communication equipment, communication lines, communication
power (including air conditioners for communication), communication pipelines and technical business support system; 
  

	 	1.3	Project supervision 

  

	 	1.4	IT services, including: 

 Office automation, software testing, network upgrading, R&D of new
services and support systems. 
  

	2.	Pricing principles 

  

	 	2.1	The pricing and / or charging standards for engineering design and construction services under this annex shall be determined by reference to the market price, except as provided for in the second paragraph of this
article. Market price is the market price or charge standard for the third party to provide the same or similar products or services under the normal commercial terms. When determining the price standard, the management shall, to the extent
practicable, refer to at least two comparable transactions with the independent third party. 

  

	 	2.2	Licensee shall, through the tender to determine the specific service provider of the engineering design and construction. The provider shall have the qualifications and conditions of not less than the independent third
party, and in an equal position with the independent third party to participate in the bidding process. In this case, the price should be determined according to the bidding procedure. 

  
 -18- 

	3.	Service payments 

  

	 	3.1	Party B shall pay Party A or Party A’s fiduciaries service fees for services received in a timely manner in accordance with the pricing and charging standards defined in this annex, the supplementary agreements of
this annex (if any) and the implementation documents. 

  

	 	3.2	If Party B fails to pay the relevant service fees as scheduled according to the provisions in this annex, the supplementary agreements of this annex (if any) and the implementation documents, Party B shall pay Party A
0.05% of the overdue amount as fine for delaying payment every one (1) day (calendar day, hereinafter inclusive); if the payment is deferred for sixty (60) days, Party A may inform Party B in written form of the suspension of the service;
if Party B fails to pay the relevant service fees within thirty (30) days upon the receipt of the written notification, Party A may declare the termination of the relevant services. However, the suspension or termination of the services will
not affect the rights and obligations underway between the two Parties under this annex. 

  

	4.	Priority 

  

	 	4.1	Unless otherwise provided, for the same service, if the clauses and conditions provided by independent third party for Party B are not superior to those provided by Party A, Party B shall give priority to Party A.

  

	 	4.2	Party A shall make commitment to Party B that the conditions Party A provides for the third party will not be superior to that provided to Party B concerning the same or similar services under this annex.

  

	 	4.3	Party A has rights to provide services for the third party under the circumstances that services provided by Party A for Party B under this annex will not be affected. 

 

	5.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for the project design and
construction services provided by Party A to Party B shall be RMB 6.5 billion. 

  
 -19- 

 Annex VI: Auxiliary Telecommunication Services 

 

	1.	Main contents 

 The auxiliary telecom services provided by Party A for Party B under this annex
include: the provision of the auxiliary telecom services including pre-sale, sale and after-sale of various communication services, such as installation, disassembly, transfer and repair of customers’ communication equipment, agential sales of
certain communication products, bills printing and mailing, collecting telephone charges, making telephone cards and developing new customers; market and customers information collection and feedback; maintenance of auxiliary equipment of
communication bureaus or rooms (such as air conditioners and firefighting equipment) and telephone booths. 
  

	2.	Pricing principles 

  

	 	2.1	The pricing and / or charging standards of the Auxiliary Telecommunication Services under this annex shall be determined on the basis of the market price. 

 

	 	(1)	Market price is the market price or charge standard for the third party to provide the same or similar assets or services under the normal commercial terms. 

 

	 	(2)	The negotiated price refers to the price determined at reasonable cost plus sales tax and reasonable profit. 

  

	 	(3)	At the time of determining the price standard or reasonable profit, the management shall, to the extent practicable, refer to the rate of profit of at least two comparable transactions with the independent third party
during the same period or profit of related industries. 

  

	 	2.2	The specific amount of service fees under this annex shall be calculated pursuant to the relevant accounting principles in China (if applicable). 

 

	 	2.3	Party A and Party B shall examine and verify (if necessary) every service and facility provided under this annex and the pricing standards set for the next accounting year before December 31 of every year.

  

	 	2.4	Party A and Party B are expected to sign specific implementation documents as needed concerning the services provided. The implementation documents shall specify the services required by Party B and the binding
principles, criteria and clauses and conditions under this annex. 

  

	3.	Service payments 

  

	 	3.1	Party B shall pay Party A or Party A’s fiduciaries for service fees in a timely manner in accordance with the pricing and charging standards defined in this annex, the supplementary agreements of this annex (if
any) and the implementation documents. 

  
 -20- 

	 	3.2	If Party B fails to pay the relevant service fees as scheduled according to the provisions in this annex, the supplementary agreements of this annex (if any) and the implementation documents, Party B shall pay Party A
0.05% of the overdue amount as fine for delaying payment every one (1) day (calendar day, hereinafter inclusive); if the payment is deferred for sixty (60) days, Party A may inform Party B in written form of the suspension of the service;
if Party B fails to pay the relevant service fees within thirty (30) days upon the receipt of the written notification, Party A may declare the termination of the relevant services. However, the suspension or termination of the services will
not affect the rights and obligations underway between the two Parties under this annex. 

  

	4.	Priority 

  

	 	4.1	For the same service, if the clauses and conditions provided by independent third party for Party B are not superior to those provided by Party A, Party B shall give priority to Party A. 

 

	 	4.2	Party A shall make commitment to Party B that the conditions that Party A provide for the third party will not be superior to those provided to Party B concerning the same or similar services under this annex.

  

	 	4.3	Party A has rights to provide services for the third party under the circumstances that services provided by Party A for Party B under this annex will not be affected. 

 

	5.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for the auxiliary
telecommunication services provided by Party A to Party B shall be RMB 4.5 billion. 

  
 -21- 

 Annex VII: Integrated Services 
  

	1.	Main contents 

 Party A and Party B agree to provide or receive the services from each other in
accordance with the clauses and conditions under this annex, including catering service, equipment leasing (except the facilities/equipment covered by the Framework Agreement on Leasing of Communication Resources), vehicle service, medical care,
labor service, security, hotel service, meeting service, gardening (afforestation), decoration, products sale, infrastructure agents, equipment maintenance, market development, technical support, R&D, cleaning service, parking service,
employment training, warehousing (such as storage of telecom equipment, including parts and circuits), advertisements (such as those made by Party B and published on the media of Party A) and publication/printing, property management and ICT
services (including support services such as construction and installation, system integration service, software development, products sales and agency service, operation and maintenance service and consultancy service). 

 

	2.	Pricing principles 

  

	 	2.1	The pricing and / or charging standards of the Integrated Services under this annex shall be determined on the basis of the market price. 

 

	 	(1)	Market price is the market price or charge standard for the third party to provide the same or similar assets or services under the normal commercial terms. 

 

	 	(2)	The negotiated price refers to the price determined at reasonable cost plus sales tax and reasonable profit. 

  

	 	(3)	At the time of determining the price standard or reasonable profit, the management shall, to the extent practicable, refer to the rate of profit of at least two comparable transactions with the independent third party
during the same period or profit of related industries. 

  

	 	2.2	The specific amount of service fees under this annex shall be calculated pursuant to the relevant accounting principles in China (if applicable). 

 

	 	2.3	Party A and Party B shall examine and verify (if necessary) every service and facility provided under this annex and the pricing standards set for the next accounting year before December 31 of every year.

  

	 	2.4	Party A and Party B are expected to sign specific implementation documents as needed concerning the services provided. The implementation documents shall specify the services required by Party B and the binding
principles, criteria and clauses and conditions under this annex. 

  
 -22- 

	3.	Service payments 

  

	 	3.1	The service receiving Party shall pay Party A or Party A’s fiduciaries for service fees in a timely manner in accordance with the pricing and charging standards defined in this annex, the supplementary agreements
of this annex (if any) and the implementation documents. 

  

	 	3.2	If the service receiving Party fails to pay the relevant service fees as scheduled according to the provisions in this annex, the supplementary agreements of this annex (if any) and the implementation documents, Party B
shall pay Party A 0.05% of the overdue amount as fine for delaying payment every one (1) day (calendar day, hereinafter inclusive); if the payment is deferred for sixty (60) days, Party A may inform Party B in written form of the
suspension of the service; if Party B fails to pay the relevant service fees within thirty (30) days upon the receipt of the written notification, Party A may declare the termination of the relevant services. However, the suspension or
termination of the services will not affect the rights and obligations underway between the two Parties under this annex. 

  

	4.	Priority 

  

	 	4.1	For the same service, if the terms and conditions of the independent third party are not superior to the terms and conditions proposed by the other Party, the Party may give priority to the other Party.

  

	 	4.2	The Parties undertake that the conditions of the same or similar service provided to the third party will not be superior to that provided to the other Party. 

 

	 	4.3	A party shall have the right to provide services to the third party only if it does not affect the service provided to the other Party in accordance with this annex. 

 

	5.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for the integrated services
provided by Party A to Party B shall be RMB 3.5 billion, and those for the integrated services provided by Party B to Party A shall be RMB 400 million. 

  
 -23- 

 Annex VIII: Shared Services 
  

	1.	Contents of services 

 Party A and Party B agree to provide or receive relevant services from
each other based on the clauses and conditions agreed upon under this annex, including (but not limited to): (1) the headquarter HR service provided by Party B for Party A; (2) the services of business support center (BSC) provided by the
two Parties for each other and the hosting service related to the services in the Article 1 (1) and (2) provided by Party B for Party A; (3) other shared services such as sites and the headquarters’ listed service provided by
Party A for Party B. 
  

	2.	Headquarter HR service 

 The HR services offered by Party B for Party A include shared service
of administrative personnel and business operational management personnel at the headquarter and the hosting management of Party A’s businesses, finance and personnel. 
  

	3.	BSC Services 

  

	 	3.1	BSC services provided by Party B for Party A include: 

  

	 	(1)	Collecting the data on international communication services, billing and generation of the monthly account and account checking and settlement with overseas operators; 

 

	 	(2)	Collecting and distributing the roaming data about the whole network-based services, including but not limited to the smart network (such as 300 and 800), IP cards, PHS SMS and generation the inter-province roaming
statement of accounting; 

  

	 	(3)	Settlement with other domestic operators or settlement entities for the whole network; 

  

	 	(4)	Intra-network settlement; 

  

	 	(5)	Providing statistical reports on business data for the associated units of Party A; 

  

	 	3.2	BSC services provided by Party A for Party B include: 

  

	 	(1)	Producing and issuing telephone cards and IC cards on the backbone smart networks of Party A (hereinafter referred to as telecommunication cards), including identifying qualifications of, evaluating and managing card
providers and relevant raw materials providers; organizing the bidding among card providers and signing of framework agreement on telecommunication cards procurement; overseeing the contracts execution by manufacturers and provincial companies;
formulating the annual theme plan of telecommunication cards; according to the theme plan, organizing the subscription and production of telecom cards by provincial companies; signing, executing the contracts on code cards of Party A and organizing
their production. 

  
 -24- 

	 	(2)	Managing telecom cards service, including development of the regulations on production of telecom cards and graphic design; gathering statistical data on cards business for operational analysis. 

 

	 	3.3	Obligations of the Parties 

  

	 	(1)	Party B is obligated to complete the international settlement, inter-network settlement and inter-province settlement of all services in a timely and accurate manner pursuant to the rules about international settlement,
inter-network settlement and inter-province settlement introduced by the competent agency of communication industry of the State Council and report to Party A as required. 

 

	 	(2)	Party A is obligated to complete the design, production and management of the valued cards according to the required time limit, quantity and quality, which are agreed upon between the two Parties. 

 

	 	(3)	Party A shall meet and complete other business demands presented by Party B on time based on the business system and network capabilities. 

 

	4.	Use of site 

  

	 	4.1	Purpose of site use 

  

	 	(1)	Party A agrees to provide its site, No. 21 office building located at the Financial Street, Xicheng District, Beijing (including air conditioners, power supply, utilities equipment and other relevant auxiliary
facilities within), for Party B according to Party B’s demand. 

  

	 	(2)	Party B takes the above-mentioned site as its main working place. 

  

	 	4.2	Commitment and guarantee. 

 Party A guarantees that it has right to provide the above-mentioned
site for use (including air conditioners, power supply, utilities equipment and other relevant auxiliary facilities within) for Party B. If any third party, in any condition and for any reason, takes objection to Party A’s ownership and/or
right of use with the above-mentioned site or assets, and hence Party B’s rights under this annex cannot be fulfilled or are subject to any harm, Party A agrees to undertake and pay all the losses incurred to Party B. Party A promises to
provide Party B’s auditors with the accounting records about Party A and its associated personnel concerning the connected transaction. 

  
 -25- 

	5.	Other shared services listed by the headquarter 

 Party A provides Party B with other shared
services listed by the headquarter, such as advertisements, publicity, R&D, business reception, maintenance and repair as well as property management. 
  

	6.	Cost sharing of shared services 

 Party A and Party B agree that costs incurred by the HR
service provided for Party A from Party B, BSC services provided for each other, and sites and other shared services listed by the headquarter (including depreciation of equipment and assets added for the shared service under this agreement and the
actual rental fee, property management fee and labor cost) will be shared between the two Parties based on each other’s ratio of total assets (among which, Party A’s total assets exclude those of its overseas subsidiaries and listed
companies, the sharing ratio will be decided upon consultation after the two Parties offer total assets listed the their financial statements to each other and will be adjusted every year based on the change of the two Parties’ total assets ).
The specific settlements will be jointly worked out by the two Parties. 
  

	7.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for the shared services provided
by Party A to Party B shall be RMB 500 million, and those for the shared services provided by Party B to Party A shall be RMB 100 million. 

  
 -26- 

 Annex IX: Financial Services 
  

	1.	Main contents 

 The financial services provided by Party B or any of its subsidiaries under this
annex shall include: 
  

	 	1.1	Deposit services; 

  

	 	1.2	Loans and other credit services, including loans, finance leases, bills discounting, guarantees, etc.. 

  

	 	1.3	Other financial services, including settlement services, bill acceptance, entrusted loans, credit verification, financial advisory, consulting and agency services, approved by the insurance agency services, other
services which may be engaged by the financial services provider under this annex as approved by the CBRC. 

  

	2.	Pricing principles 

  

	 	2.1	On deposit 

 The deposit interest rate charged by Party B or its subsidiary party to Party A
should not be higher than the upper limit imposed by the People’s Bank of China on the interest rate of deposit in the same type, and not higher than the interest rate of the same type of deposits charged to other customers of Party B or its
subsidiaries and not higher than the interest rate charged by the general commercial banks providing similar type of deposit to Party A. 
  

	 	2.2	On loans 

 The loan interest rate should follow the standard rates specified by the
People’s Bank of China, and not be less than the interest rate of the same type of loans charged to other customers of Party B or its subsidiaries and not lower than the interest rate charged by the general commercial banks providing similar
type of load to Party A. 
  

	 	2.3	Other financial services 

 The fees charged by Party B or its subsidiaries to provide financial
services to Party A shall be subject to the relevant provisions of the People’s Bank of China or the banking regulatory commission. If there are no relevant provisions, the service fee shall be determined by a fair agreement between the two
Parties on the basis of the fees charged for the same kind of financial services on the market. 
  

	 	2.4	Party A and Party B or its subsidiaries will enter into implementation document regarding the providing of relevant services based on its demand from time to time; the implementation document should contain specific
services needed by Party A at the time, and specify the binding principles, standards and terms and conditions under this annex. 

  
 -27- 

	3.	Service payments 

  

	 	3.1	Party A shall be in accordance with the supplementary agreement of this annex, this annex (if any), pricing and charging standards implementation document, make payment in a timely manner for the service charges of the
service received from Party B or its subsidiary. 

  

	 	3.2	If Party A fails to pay related fees as scheduled in accordance with the supplementary agreement of this annex, this annex (if any), and the implementation document, Party B or its subsidiaries may charge Party A fines
according to the standard imposed by the People’s Bank of China or the CBRC; if the payment is deferred for sixty (60) days, Party A may inform Party B in written form of the suspension of the service; if Party B fails to pay the relevant
service fees within thirty (30) days upon the receipt of the written notification, Party A may declare the termination of the relevant services. However, the suspension or termination of the services will not affect the rights and obligations
underway between the two Parties under this annex . 

  

	4.	Transaction Caps 

 In 2017, 2018 and 2019, the transaction caps for the financial services
provided by Party A to Party B shall be as follows: 
 Daily deposits (including interest) shall not exceed RMB 8.2 billion; 

Daily loan balance (including interest) and other daily credit service balance shall not exceed RMB 6.3 billion, of which daily guarantee
balance shall not exceed RMB 100 million; 
 The service fee charged for other financial services shall not exceed RMB 100 million. 

  
 -28-Exhibit 10.1

 

Execution Version

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of April 20, 2017 by and among Syros Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the Investors identified on Exhibit A attached hereto (each an “Investor” and collectively the “Investors”).

 

RECITALS

 

A.            The Company and the Investors are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the provisions of Section 4(a)(2) of the 1933 Act (as defined below);

 

B.            The Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, upon the terms and subject to the conditions stated in this Agreement, an aggregate of 2,592,591 shares (the “Shares”) of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”); and

 

C.            Contemporaneously with the sale of the Shares, the parties hereto will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights in respect of the Shares under the 1933 Act, and the rules and regulations promulgated thereunder, and applicable state securities laws.

 

In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Definitions.  For the purposes of this Agreement, the following terms shall have the meanings set forth below:

 

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common Control with, such Person.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

 

“Closing” has the meaning set forth in Section 3.1.

 

“Closing Date” has the meaning set forth in Section 3.1.

 

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

 

 

“Company Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the 1933 Act, any Person listed in the first paragraph of Rule 506(d)(1).

 

“Company Intellectual Property” has the meaning set forth in Section 4.14.

 

“Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company.

 

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

 

“Environmental Laws” has the meaning set forth in Section 4.15.

 

“FDA” has the meaning set forth in Section 4.30.

 

“GAAP” has the meaning set forth in Section 4.17.

 

“Losses” has the meaning set forth in Section 8.2.

 

“Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations, financial condition or business of the Company and its subsidiary taken as a whole, (ii) the legality or enforceability of any of the Transaction Documents or (iii) the ability of the Company to perform its obligations under the Transaction Documents, except that for purposes of Section 6.1(i) of this Agreement, in no event shall a change in the market price of the Common Stock alone constitute a “Material Adverse Effect”; provided that the foregoing exception shall not apply to the underlying causes giving rise to or contributing to such change or prevent any of such underlying causes from being taken into account in determining whether a Material Adverse Effect has occurred.

 

“Material Contract” means any contract, instrument or other agreement to which the Company is a party or by which it is bound that has been filed or was required to have been filed as an exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“Nasdaq” means the Nasdaq Global Select Market.

 

“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.

 

“Placement Agents” means J.P. Morgan Securities LLC and Cowen and Company LLC.

 

“Press Release” has the meaning set forth in Section 9.7.

 

2

 

“Principal Trading Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of the date of this Agreement and the Closing Date, shall be the Nasdaq Global Select Market.

 

“Registration Rights Agreement” has the meaning set forth in the recitals to this Agreement.

 

“Required Investors” has the meaning set forth in the Registration Rights Agreement.

 

“SEC Filings” has the meaning set forth in Section 4.

 

“Shares” has the meaning set forth in the recitals to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the 1934 Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).

 

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

 

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

 

“Transfer Agent” has the meaning set forth in Section 7.4(a).

 

“Transaction Documents” means this Agreement and the Registration Rights Agreement.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

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

 

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

 

2.             Purchase and Sale of the Shares. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company will issue and sell, and the Investors will purchase, severally and not jointly, for a price per Share of $13.50, the number of Shares set

 

3

 

forth opposite the name of such Investor under the heading “Number of Shares to be Purchased” on Exhibit A attached hereto.

 

3.             Closing.

 

3.1.         Upon the satisfaction of the conditions set forth in Section 6, the completion of the purchase and sale of the Shares (the “Closing”) shall occur remotely via exchange of documents and signatures at a time (the “Closing Date”) to be agreed to by the Company and the Investors but (i) in no event earlier than the third Business Day after the date hereof and (ii) in no event later than the fifth Business Day after the date hereof, and of which the Investors will be notified in advance by the Placement Agents.

 

3.2.         On the Closing Date, each Investor shall deliver or cause to be delivered to the Company, via wire transfer of immediately available funds pursuant to the wire instructions delivered to such Investor by the Company on or prior to the Closing Date, an amount equal to the purchase price to be paid by the Investor for the Shares to be acquired by it as set forth opposite the name of such Investor under the heading “Aggregate Purchase Price of Shares” on Exhibit A attached hereto.

 

3.3.         At or before the Closing, the Company shall deliver or cause to be delivered to each Investor a number of Shares, registered in the name of the Investor (or its nominee in accordance with its delivery instructions), equal to the number of Shares set forth opposite the name of such Investor under the heading “Number of Shares to be Purchased” on  Exhibit A attached hereto.  The Shares shall be delivered via a book-entry record through the Company’s transfer agent.  Unless the Company and an Investor otherwise mutually agree with respect to such Investor’s Shares, at Closing settlement shall occur on a “delivery versus payment” basis.

 

4.             Representations and Warranties of the Company.  The Company hereby represents and warrants to the Investors that (for purposes of these representations and warranties in their entirety, references in this Agreement to the “Company” refer to Syros Pharmaceuticals, Inc. and its wholly owned subsidiary, except as otherwise indicated herein or as the context otherwise requires):

 

4.1.         Organization, Good Standing and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted and to own or lease its properties.  The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not had and would not reasonably be expected to have a Material Adverse Effect.  Syros Securities Corporation, a Massachusetts corporation, is the only subsidiary of the Company and is wholly-owned by the Company.  The Company’s subsidiary is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite power and authority to carry on its business as now conducted and to own or lease its properties.  The Company’s subsidiary is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the

 

4

 

conduct of its business or its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not had and would not reasonably be expected to have a Material Adverse Effect.  All of the issued and outstanding capital stock of the Company’s subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company free and clear of any security interest, mortgage, pledge, lien, encumbrance or adverse claim.

 

4.2.         Authorization.  The Company has the requisite corporate power and authority and has taken all requisite corporate action necessary for, and no further action on the part of the Company, its officers, directors and stockholders is necessary for, (i) the authorization, execution and delivery of the Transaction Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Shares.  The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally and to general equitable principles.

 

4.3.         Capitalization.  The Company is authorized under its Certificate of Incorporation to issue 200,000,000 shares of Common Stock.  The Company’s disclosure of its issued and outstanding capital stock in its most recent SEC Filing containing such disclosure was accurate in all material respects as of the date indicated in such SEC Filing.  All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid and nonassessable; none of such shares were issued in violation of any pre-emptive rights; and such shares were issued in compliance in all material respects with applicable state and federal securities law and any rights of third parties.  No Person is entitled to pre-emptive or similar statutory or contractual rights with respect to the issuance by the Company of any securities of the Company, including, without limitation, the Shares.  Except for stock options approved pursuant to Company stock-based compensation plans described in the SEC Filings, there are no outstanding warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company is or may be obligated to issue any equity securities of any kind, except as contemplated by this Agreement.  Except for the Registration Rights Agreement, there are no voting agreements, buy-sell agreements, option or right of first purchase agreements or other agreements of any kind among the Company and any of the securityholders of the Company relating to the securities of the Company held by them.  Except as provided in the Registration Rights Agreement, and except as provided in that certain Second Amended and Restated Investors’ Rights Agreement, dated as of October 9, 2014, among the Company and certain investors signatory thereto, no Person has the right to require the Company to register any securities of the Company under the 1933 Act, whether on a demand basis or in connection with the registration of securities of the Company for its own account or for the account of any other Person.

 

The issuance and sale of the Shares hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investors) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding security.

 

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The Company does not have outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain events.

 

4.4.         Valid Issuance.  The Shares have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and shall be free and clear of all encumbrances and restrictions (other than those created by the Investors), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws.

 

4.5.         Consents.  The execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale of the Shares require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than (a) filings that have been made pursuant to applicable state securities laws, (b) post-sale filings pursuant to applicable state and federal securities laws, (c) filings pursuant to the rules and regulations of Nasdaq and (d) filing of the registration statement required to be filed by the Registration Rights Agreement, each of which the Company has filed or undertakes to file within the applicable time.  Subject to the accuracy of the representations and warranties of each Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Shares and (ii) the other transactions contemplated by the Transaction Documents from the provisions of any stockholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties is subject that is or could reasonably be expected to become applicable to the Investors as a result of the transactions contemplated hereby, including without limitation, the issuance of the Shares and the ownership, disposition or voting of the Shares by the Investors or the exercise of any right granted to the Investors pursuant to this Agreement or the other Transaction Documents.

 

4.6.         Use of Proceeds.  The net proceeds of the sale of the Shares hereunder shall be used by the Company for working capital and general corporate purposes.

 

4.7.         No Material Adverse Change.  Since December 31, 2016, except as identified and described in the SEC Filings filed at least one Trading Day prior to the date hereof, there has not been:

 

(i)            any change in the consolidated assets, liabilities, financial condition or operating results of the Company from that reflected in the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, except for changes in the ordinary course of business which have not had and would not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate;

 

(ii)           any declaration or payment by the Company of any dividend, or any authorization or payment by the Company of any distribution, on any of the capital stock of the Company, or any redemption or repurchase by the Company of any securities of the Company;

 

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(iii)          any material damage, destruction or loss, whether or not covered by insurance, to any assets or properties of the Company;

 

(iv)          any waiver, not in the ordinary course of business, by the Company of a material right or of a material debt owed to it;

 

(v)           any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company, except in the ordinary course of business and which is not material to the assets, properties, financial condition, operating results or business of the Company (as such business is presently conducted);

 

(vi)          any change or amendment to the Company’s Certificate of Incorporation or Bylaws, or material change to any material contract or arrangement by which the Company is bound or to which any of its assets or properties is subject;

 

(vii)         any material labor difficulties or, to the Company’s Knowledge, labor union organizing activities with respect to employees of the Company;

 

(viii)        any material transaction entered into by the Company other than in the ordinary course of business;

 

(ix)          the loss of the services of any key employee, or material change in the composition or duties of the senior management of the Company; or

 

(x)           any other event or condition of any character that has had or would reasonably be expected to have a Material Adverse Effect.

 

4.8.         SEC Filings. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the 1933 Act and the 1934 Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (collectively, the “SEC Filings”).  At the time of filing thereof, the SEC Filings complied in all material respects with the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the SEC thereunder. All material agreements to which the Company is a party or to which the property or assets of the Company is subject are included as part of or identified in the SEC Filings, to the extent such agreements are required to be included or identified pursuant to the rules and regulations of the SEC.

 

4.9.         No Conflict, Breach, Violation or Default.  The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Shares in accordance with the provisions thereof will not, except (solely in the case of clause (i)(b) and clause (ii)) for such violations, conflicts or defaults as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (i) conflict with or result in a breach or violation of (a) any of the terms and provisions of, or constitute a default under, the Company’s Certificate of Incorporation or the Company’s Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investors through the Electronic Data Gathering, Analysis, and Retrieval system (the “EDGAR system”)), or (b) assuming the accuracy of the representations and warranties in Section 5, any applicable

 

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statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or its subsidiary, or any of their assets or properties, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien, encumbrance or other adverse claim upon any of the properties or assets of the Company or its subsidiary or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract.  This Section does not relate to matters with respect to tax status, which are the subject of Section 4.10, employee relations and labor matters, which are the subject of Section 4.13, or environmental laws, which are the subject of Section 4.15.

 

4.10.       Tax Matters.  The Company and its subsidiary have timely prepared and filed all tax returns required to have been filed by them with all appropriate governmental agencies and timely paid all taxes shown thereon or otherwise owed by them.  The charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal periods are adequate in all material respects, and there are no material unpaid assessments against the Company nor, to the Company’s Knowledge, any basis for the assessment of any additional taxes, penalties or interest for any fiscal period or audits by any federal, state or local taxing authority except for any assessment which is not material to the Company.  All taxes and other assessments and levies that the Company is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper governmental entity or third party when due.  There are no tax liens or claims pending or, to the Company’s Knowledge, threatened against the Company or any of its assets or property.  There are no outstanding tax sharing agreements or other such arrangements between the Company and any other corporation or entity.

 

4.11.       Title to Properties.  The Company and its subsidiary have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, encumbrances and defects, except such as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and the Company and its subsidiary hold any leased real or personal property under valid and enforceable leases with no exceptions, except such as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

4.12.       Certificates, Authorities and Permits.  The Company possesses adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by it, except where failure to so possess would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. The Company has not received any written notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that would reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, on the Company.

 

4.13.       Labor Matters.

 

(a)              The Company is not party to or bound by any collective bargaining agreements or other agreements with labor organizations.  To the Company’s Knowledge, the Company has not violated in any material respect any laws, regulations, orders or contract terms

 

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affecting the collective bargaining rights of employees or labor organizations, or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and hours.

 

(b)              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 Company’s Knowledge, is threatened or imminent.

 

4.14.       Intellectual Property.  Except as expressly contemplated by the SEC Filings, the Company owns, possesses, licenses or has other rights to use, the patents and patent applications, copyrights, trademarks, service marks, trade names, service names and trade secrets described in the SEC Filings as necessary or material for use in connection with its business and which the failure to so have would have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Company Intellectual Property”).  There is no pending or, to the Company’s Knowledge, threatened action, suit, proceeding or claim by any Person that the Company’s business as now conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of another.  To the Company’s Knowledge, there is no existing infringement by another Person of any of the Company Intellectual Property that would have or would reasonably be expected to have a Material Adverse Effect. The Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of the Company Intellectual Property, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

4.15.       Environmental Matters.  The Company is not in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), has not released any hazardous substances regulated by Environmental Law onto any real property that it owns or operates, and has not received any written notice or claim it is liable for any off-site disposal or contamination pursuant to any Environmental Laws, which violation, release, notice, claim, or liability would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and to the Company’s Knowledge, there is no pending or threatened investigation that would reasonably be expected to lead to such a claim.

 

4.16.       Legal Proceedings.  There are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or its subsidiary is or may reasonably be expected to become a party or to which any property of the Company or its subsidiary is or may reasonably be expected to become the subject that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

4.17.       Financial Statements.  The financial statements included in each SEC Filing comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement) and present fairly, in all material respects, the consolidated financial position of the Company as of the dates shown and its consolidated results of operations and cash flows for the periods shown, subject in the case of unaudited financial

 

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statements to normal, immaterial year-end audit adjustments, and such consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”) (except as may be disclosed therein or in the notes thereto, and except that the unaudited financial statements may not contain all footnotes required by GAAP, and, in the case of quarterly financial statements, except as permitted by Form 10-Q under the 1934 Act).  Except as set forth in the financial statements of the Company included in the SEC Filings filed prior to the date hereof, the Company has not incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since the date of such financial statements, none of which, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect.

 

4.18.       Insurance Coverage.  The Company maintains in full force and effect insurance coverage that is customary for comparably situated companies for the business being conducted and properties owned or leased by the Company, and the Company reasonably believes such insurance coverage to be adequate against all liabilities, claims and risks against which it is customary for comparably situated companies to insure.

 

4.19.       Compliance with Nasdaq Continued Listing Requirements.  The Company is in compliance with applicable Nasdaq continued listing requirements.  There are no proceedings pending or, to the Company’s Knowledge, threatened against the Company relating to the continued listing of the Common Stock on Nasdaq and the Company has not received any notice of, nor to the Company’s Knowledge is there any reasonable basis for, the delisting of the Common Stock from Nasdaq.

 

4.20.       Brokers and Finders.  Other than the Placement Agents, no Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company. No Investor shall have any obligation with respect to any fees, or with respect to any claims made by or on behalf of other Persons for fees, in each case of the type contemplated by this Section 4.20 that may be due in connection with the transactions contemplated by this Agreement or the Transaction Documents.

 

4.21.       No Directed Selling Efforts or General Solicitation.  Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D promulgated under the 1933 Act) in connection with the offer or sale of any of the Shares.

 

4.22.       No Integrated Offering.  Neither the Company nor its subsidiary nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any Company security, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Shares under the 1933 Act.

 

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4.23.       Private Placement.  Assuming the accuracy of the representations and warranties of the Investors set forth in Section 5, the offer and sale of the Shares to the Investors as contemplated hereby is exempt from the registration requirements of the 1933 Act. The issuance and sale of the Shares does not contravene the rules and regulations of Nasdaq.

 

4.24.       Questionable Payments.  Neither the Company nor its subsidiary nor, to the Company’s Knowledge, any of their current or former directors, officers, employees, agents or other Persons acting on behalf of the Company or its subsidiary, has on behalf of the Company or its subsidiary in connection with its business: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets which is in violation of law; (d) made any false or fictitious entries on the books and records of the Company; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature.

 

4.25.       Transactions with Affiliates.  None of the executive officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company (other than as holders of stock options and/or warrants, and for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the Company’s Knowledge, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

 

4.26.       Internal Controls.  The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the 1934 Act), which are designed to ensure that material information relating to the Company, including its subsidiary, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities.  Since the end of the Company’s most recent audited fiscal year, there have been no significant deficiencies or material weaknesses 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 would reasonably be expected to materially affect, the Company’s internal control over financial reporting. The Company is not aware of any change in its internal controls over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or would reasonably be expected to materially affect, the Company’s internal control over financial reporting.

 

4.27.       Disclosures.  Neither the Company nor any Person acting on its behalf has provided the Investors or their agents or counsel with any information that constitutes or would reasonably be expected to constitute material, non-public information concerning the Company or its subsidiary, other than with respect to the transactions contemplated hereby which will be disclosed in the Press Release (as defined below).  The SEC Filings do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not

 

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misleading.  The Company understands and confirms that the Investors will rely on the foregoing representations in effecting transactions in securities of the Company.

 

4.28.       Required Filings. Except for the transactions contemplated by this Agreement, including the acquisition of the Shares contemplated hereby, no event or circumstance has occurred or information exists with respect to the Company or its business, properties, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the SEC Filings are being incorporated by reference into an effective registration statement filed by the Company under the 1933 Act).

 

4.29.       Investment Company.  The Company is not required to be registered as, and is not an Affiliate of, and immediately following the Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

4.30.       Tests and Preclinical and Clinical Trials.  The studies, tests and preclinical and clinical trials conducted by or, to the Company’s Knowledge, on behalf of the Company that are described in the SEC Filings were and, if still pending, are being, conducted in all material respects in accordance with the protocols submitted to the U.S. Food and Drug Administration (the “FDA”) or any foreign governmental body exercising comparable authority, procedures and controls pursuant to, where applicable, accepted professional and scientific standards, and all applicable laws and regulations; the descriptions of the studies, tests and preclinical and clinical trials conducted by or, to the Company’s Knowledge, on behalf of the Company, and the results thereof, contained in the SEC Filings are accurate and complete in all material respects; the Company is not aware of any other studies, tests or preclinical and clinical trials, the results of which call into question the results described in the SEC Filings; and the Company has not received any notices or correspondence from the FDA, any foreign, state or local governmental body exercising comparable authority or any Institutional Review Board requiring the termination, suspension, material modification or clinical hold of any studies, tests or preclinical or clinical trials conducted by or on behalf of the Company.

 

4.31.       Manipulation of Price.  The Company has not, and, to the Company’s Knowledge, no Person acting on its behalf has taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares.

 

4.32.       Anti-Bribery and Anti-Money Laundering Laws.  Each of the Company, its subsidiary and any of their respective officers, directors, supervisors, managers, agents, or employees, are and have at all times been in compliance with and its participation in the offering will not violate: (A) anti-bribery laws, including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to any law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act 2010, or any other law, rule or regulation of similar purposes and scope or (B) anti-money laundering laws, including but not limited to, applicable federal, state, international, foreign or other laws, regulations or

 

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government guidance regarding anti-money laundering, including, without limitation, Title 18 US. Code section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur, all as amended, and any Executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued thereunder.

 

4.33.       Compliance.  The Company is not (i) in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) in violation of any judgment, decree or order of any court, arbitrator or governmental body specifically naming the Company or (iii) in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

4.34.       No Bad Actors.  No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the 1933 Act (a “Disqualification Event”) is applicable to the Company or, to the Company’s knowledge, any Company Covered Person, except (i) for a Disqualification Event as to which Rule 506(d)(2)(ii—iv) or (d)(3) is applicable and (ii) no such representation is made with respect to the Placement Agents, or any of their respective general partners, managing members, directors, executive officers or other officers.

 

4.35.       No Additional Agreements.  The Company has no other agreements or understandings (including, without limitation, side letters) with any Investor to purchase Shares on terms more favorable to such Investor than as set forth herein.

 

4.36.       Shell Company Status.  The Company is not, and has never been, an issuer identified in Rule 144(i)(1).

 

5.             Representations and Warranties of the Investors.  Each of the Investors hereby severally, and not jointly, represents and warrants to the Company that:

 

5.1.         Organization and Existence.  Such Investor is a validly existing corporation, limited partnership, limited liability company or other legal entity and has all requisite corporate, partnership or limited liability company power and authority to enter into and consummate the transactions contemplated by the Transaction Documents and to carry out its obligations hereunder and thereunder, and to invest in the Shares pursuant to this Agreement.

 

5.2.         Authorization.  The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized and each has been duly executed and when delivered will constitute the valid and legally binding

 

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obligation of such Investor, enforceable against such Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally and to general equitable principles.

 

5.3.         Purchase Entirely for Own Account.  The Shares to be received by such Investor hereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Shares in compliance with applicable federal and state securities laws.  Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Shares for any period of time.  Such Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require it to be so registered.

 

5.4.         Investment Experience.  Such Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby.

 

5.5.         Disclosure of Information.  Such Investor has had an opportunity to receive, review and understand all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Shares, and has conducted and completed its own independent due diligence.  Such Investor acknowledges that copies of the SEC Filings are available on the EDGAR system.  Based on the information such Investor has deemed appropriate, and without reliance upon any Placement Agent, it has independently made its own analysis and decision to enter into the Transaction Documents.  Such Investor is relying exclusively on its own sources of information, investment analysis and due diligence (including professional advice it deems appropriate) with respect to the execution, delivery and performance of the Transaction Documents, the Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Company, including but not limited to all business, legal, regulatory, accounting, credit and tax matters.  Neither such inquiries nor any other due diligence investigation conducted by such Investor shall modify, limit or otherwise affect such Investor’s right to rely on the Company’s representations and warranties contained in this Agreement.

 

5.6.         Restricted Securities.  Such Investor understands that the Shares are characterized as “restricted securities” under the 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 and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.

 

5.7.         Legends.  It is understood that, except as provided below, certificates evidencing the Shares may bear the following or any similar legend:

 

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(a)              “The securities represented hereby have not been registered with the Securities and Exchange Commission or the securities commission of any state in reliance upon an exemption from registration under the Securities Act of 1933, as amended, and, accordingly, may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to Rule 144, or (iii) the Company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933, as amended; provided that solely with respect to this subsection (iii), the holder of the securities is not required to deliver an opinion with respect to a transfer without consideration to an affiliate of such holder.”

 

(b)           If required by the authorities of any state in connection with the issuance of sale of the Shares, the legend required by such state authority.

 

5.8.         Accredited Investor.  Such Investor is an (a) “accredited investor” within the meaning of Rule 501(a) (1), (2), (3) or (7) under the 1933 Act and (b) an “Institutional Account” as defined in FINRA Rule 4512(c) .  Such Investor has executed and delivered to the Company a questionnaire in substantially the form attached hereto as Exhibit C (the “Investor Questionnaire”), which such Investor represents and warrants is true, correct and complete. Such investor is a sophisticated institutional investor with sufficient knowledge and experience in investing in private equity transactions to properly evaluate the risks and merits of its purchase of the Shares.

 

5.9.         Placement Agents.  Such Investor hereby acknowledges and agrees that (a) each of the Placement Agents is acting solely as placement agent in connection with the execution, delivery and performance of the Transaction Documents and is not acting as an underwriter or in any other capacity and is not and shall not be construed as a fiduciary for such Investor, the Company or any other person or entity in connection with the execution, delivery and performance of the Transaction Documents, (b) no Placement Agent has made or will make any representation or warranty, whether express or implied, of any kind or character, or has  provided any advice or recommendation in connection with the execution, delivery and performance of the Transaction Documents, (c) no Placement Agent will have any responsibility with respect to (i) any representations, warranties or agreements made by any person or entity under or in connection with the execution, delivery and performance of the Transaction Documents, or the execution, legality, validity or enforceability (with respect to any person) thereof, or (ii) the business, affairs, financial condition, operations, properties or prospects of, or any other matter concerning the Company, and (d) no Placement Agent will have any liability or obligation (including without limitation, for or with respect to any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by such Investor, the Company or any other person or entity), whether in contract, tort or otherwise, to such Investor, or to any person claiming through it, in respect of the execution, delivery and performance of the Transaction Documents.

 

5.10.       No General Solicitation.  Such Investor did not learn of the investment in the Shares as a result of any general solicitation or general advertising.

 

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5.11.       Brokers and Finders.  No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.

 

5.12        Short Sales and Confidentiality Prior to the Date Hereof.  Other than consummating the transactions contemplated hereunder, such Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Investor was first contacted by the Company, a Placement Agent or any other Person regarding the transactions contemplated hereby and ending immediately prior to the date hereof.  Notwithstanding the foregoing, in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Investor’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.  Other than to other Persons party to this Agreement, such Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

 

5.13        No Government Recommendation or Approval.  Such Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Shares.

 

5.14        No Intent to Effect a Change of Control.  Such Investor has no present intent to effect a “change of control” of the Company as such term is understood under the rules promulgated pursuant to Section 13(d) of the 1934 Act.

 

5.16        Residency. Such Investor’s office in which its investment decision with respect to the Shares was made is located at the address immediately below such Investor’s name on its signature page hereto.

 

5.17        No Conflicts. The execution, delivery and performance by such Investor of the Transaction Documents and the consummation by such Investor of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Investor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Investor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Investor, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Investor to perform its obligations hereunder.

 

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6.             Conditions to Closing.

 

6.1.         Conditions to the Investors’ Obligations.  The obligation of each Investor to purchase Shares at the Closing is subject to the fulfillment to such Investor’s satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by such Investor (as to itself only):

 

(a)              The representations and warranties made by the Company in Section 4 hereof shall be true and correct as of the date hereof and as of the Closing Date, as though made on and as of such date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date.  The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

 

(b)              The Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary for consummation of the purchase and sale of the Shares and the consummation of the other transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

 

(c)              The Company shall have executed and delivered the Registration Rights Agreement.

 

(d)              The Company shall have filed with Nasdaq a Notification Form: Listing of Additional Shares for the listing of the Shares, and Nasdaq shall have raised no objection to the consummation of the transactions contemplated by the Transaction Documents.

 

(e)              No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.

 

(f)              The Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in subsections (a), (b), (d), (e), (i) and (j) of this Section 6.1.

 

(g)              The Company shall have delivered a Certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date, certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement and the other Transaction Documents and the issuance of the Shares, certifying the current versions of the Certificate of Incorporation and Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents and related documents on behalf of the Company.

 

(h)              The Investors shall have received an opinion from Wilmer Cutler Pickering Hale and Dorr LLP, the Company’s counsel, dated as of the Closing Date, in form and

 

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substance reasonably acceptable to the Investors and addressing such legal matters as the Investors may reasonably request.

 

(i)               There shall have been no Material Adverse Effect with respect to the Company since the date hereof.

 

(j)               No stop order or suspension of trading shall have been imposed by Nasdaq, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.

 

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

 

(a)              The representations and warranties made by the Investors in Section 5 hereof shall be true and correct as of the date hereof and as of the Closing Date as though made on and as of such date.  The Investors shall have performed in all material respects all obligations and covenants herein required to be performed by them on or prior to the Closing Date.

 

(b)              The Investors shall have executed and delivered the Registration Rights Agreement and each Investor Questionnaire.

 

(c)              Any Investor purchasing Shares at the Closing shall have paid in full its purchase price to the Company.

 

6.3.         Termination of Obligations to Effect Closing; Effects.

 

(a)              The obligations of the Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall terminate as follows:

 

(i)            Upon the mutual written consent of the Company and Investors that agreed to purchase a majority of the Shares to be issued and sold pursuant to this Agreement;

 

(ii)           By the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;

 

(iii)          By an Investor (with respect to itself only) if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor; or

 

(iv)          By either the Company or any Investor (with respect to itself only) if the Closing has not occurred on or prior to April 27, 2017;

 

provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction

 

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Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.

 

(b)              In the event of termination by the Company or any Investor of its obligations to effect the Closing pursuant to this Section 6.3, written notice thereof shall be given to the other Investors by the Company and the other Investors shall have the right to terminate their obligations to effect the Closing upon written notice to the Company and the other Investors.  Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

 

7.             Covenants and Agreements of the Company.

 

7.1.         No Conflicting Agreements.  The Company will not take any action, enter into any agreement or make any commitment that would conflict or interfere in any material respect with the Company’s obligations to the Investors under the Transaction Documents.

 

7.2.         Nasdaq Listing.  The Company will use commercially reasonable efforts to continue the listing and trading of its Common Stock on Nasdaq and, in accordance therewith, will use commercially reasonable efforts to comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable.

 

7.3.         Reporting Status.  The Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would otherwise permit such termination.

 

7.4.         Termination of Covenants.  The provisions of Sections 7.1, 7.2 and 7.3 shall terminate and be of no further force and effect on the date on which the Company’s obligations under the Registration Rights Agreement to register or maintain the effectiveness of any registration covering the Registrable Securities (as such term is defined in the Registration Rights Agreement) shall terminate.

 

7.5.         Removal of Legends.

 

(a)              In connection with any sale, assignment, transfer or other disposition of the Shares by an Investor pursuant to Rule 144 or pursuant to any other exemption under the 1933 Act such that the purchaser acquires freely tradable shares and upon compliance by the Investor with the requirements of this Agreement, if requested by the Investor, the Company shall cause the transfer agent for the Common Stock (the “Transfer Agent”) to remove any restrictive legends related to the book entry account holding such Shares and make a new, unlegended entry for such book entry Shares sold or disposed of without restrictive legends, provided that the Company has received from the Investor customary representations and other documentation reasonably acceptable to the Company in connection therewith.

 

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(b)              Subject to receipt from the Investor by the Company and the Transfer Agent of customary representations and other documentation reasonably acceptable to the Company and the Transfer Agent in connection therewith, upon the earliest of such time as the Shares (i) have been sold or transferred pursuant to an effective registration statement, (ii) have been sold pursuant to Rule 144, or (iii) are eligible for resale under Rule 144(b)(1) or any successor provision (such earliest date, the “Effective Date”), the Company shall (A) deliver to the Transfer Agent irrevocable instructions that the Transfer Agent shall make a new, unlegended entry for such book entry Shares, and (B) cause its counsel to deliver to the Transfer Agent one or more opinions to the effect that the removal of such legends in such circumstances may be effected under the 1933 Act if required by the Transfer Agent to effect the removal of the legend in accordance with the provisions of this Agreement. The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 7.5, it will, within three Trading Days of the delivery by an Investor to the Company or the Transfer Agent of a certificate representing shares issued with a restrictive legend and receipt from the Investor by the Company and the Transfer Agent of customary representations and other documentation reasonably acceptable to the Company and the Transfer Agent in connection therewith, deliver or cause to be delivered to such Investor a certificate representing such Shares that is free from all restrictive and other legends. Shares subject to legend removal hereunder may be transmitted by the Transfer Agent to the Investor by crediting the account of the Investor’s prime broker with the DTC System as directed by such Investor.  The Company shall be responsible for the fees of its Transfer Agent and all DTC fees associated with such issuance.

 

(c)              Each Investor, severally and not jointly with the other Investors, agrees with the Company (i) that such Investor will sell any Shares pursuant to either the registration requirements of the 1933 Act, including any applicable prospectus delivery requirements, or an exemption therefrom, (ii) that if Shares are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein and (iii) that if, after the effective date of the registration statement covering the resale of the Shares, such registration statement is not then effective and the Company has provided notice to such Investor to that effect, such Investor will sell Shares only in compliance with an exemption from the registration requirements of the 1933 Act.

 

7.6.         Subsequent Equity Sales.

 

(a)              From the date hereof until forty-five (45) days after the Closing Date, without the consent of the Required Investors, the Company shall not (A) issue shares of Common Stock or Common Stock Equivalents or (B) file with the SEC a registration statement under the 1933 Act relating to any shares of Common Stock or Common Stock Equivalents, except pursuant to the terms of agreements to which the Company is currently a party.  Notwithstanding the foregoing, the provisions of this Section 7.5(a) shall not apply to (i) the issuance of the Shares hereunder, (ii) the issuance of Common Stock or Common Stock Equivalents upon the conversion or exercise of any securities of the Company outstanding on the date hereof or outstanding pursuant to clause (iii) or (v) below, (iii) the issuance of any Common Stock or Common Stock Equivalents pursuant to any Company stock-based compensation plans, (iv) the filing of a registration statement on Form S-8 under the Securities Act to register the offer and sale of securities on a newly adopted stock-based compensation plan, or (v) the issuance of any Common Stock or Common Stock Equivalents in connection with a transaction

 

20

 

with an unaffiliated third party that includes a bona fide commercial relationship with the Company (including any joint venture, marketing or distribution arrangement, strategic alliance, collaboration agreement or corporate partnering, intellectual property license agreement or acquisition agreement or other strategic transaction or debt financing transaction with the Company); provided, however, that the aggregate number of shares of Common Stock issued pursuant to clause (v) during the forty-five (45) day restricted period shall not exceed 10% of the total number of shares of Common Stock issued and outstanding immediately following the Closing.

 

(b)           The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that will be integrated with the offer or sale of the Shares in a manner that would require the registration under the 1933 Act of the sale of the Shares to the Investors, or that will be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any trading market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

 

7.7.         Fees.  The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s commissions (other than for Persons engaged by any Investor) relating to or arising out of the transactions contemplated hereby, including, without limitation, any fees or commissions payable to the Placement Agents.

 

7.8.         Short Sales and Confidentiality After the Date Hereof.  Each Investor covenants that neither it nor any Affiliates acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period from the date hereof until the earlier of such time as (i) the transactions contemplated by this Agreement are first publicly announced or (ii) this Agreement is terminated in full.  Notwithstanding the foregoing, in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Investor’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Investor’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.  Each Investor covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, such Investor will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Each Investor understands and acknowledges that the SEC currently takes the position that coverage of Short Sales of shares of the Common Stock “against the box” prior to effectiveness of a resale registration statement with securities included in such registration statement would be a violation of Section 5 of the 1933 Act, as set forth in Item 239.10 of the Securities Act Rules Compliance and Disclosure Interpretations compiled by the Office of Chief Counsel, Division of Corporation Finance.

 

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8.             Survival and Indemnification.

 

8.1.         Survival.  The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement for the applicable statute of limitations.

 

8.2.         Indemnification.  The Company agrees to indemnify and hold harmless each Investor and its Affiliates, and their respective directors, officers, trustees, members, managers, employees, investment advisers and agents, from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable and documented attorney fees and disbursements and other documented out-of-pocket expenses reasonably incurred in connection with investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person solely to the extent such amounts have been finally judicially determined not to have resulted from such Person’s fraud or willful misconduct.

 

8.3.         Conduct of Indemnification Proceedings.  Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties.  No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.  No indemnified party will, except with the consent of the indemnifying party, consent to entry of any judgment or enter into any settlement.

 

9.             Miscellaneous.

 

9.1.         Successors and Assigns.  This Agreement may not be assigned by a party hereto without the prior written consent of the Company or each of the Investors, as applicable,

 

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provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a third party acquiring some or all of its Shares in a transaction complying with applicable securities laws without the prior written consent of the Company or the other Investors, provided such assignee agrees in writing to be bound by the provisions hereof that apply to Investors.  The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties.  Without limiting the generality of the foregoing, in the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Shares” shall be deemed to refer to the securities received by the Investors in connection with such transaction.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective permitted successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

9.2.         Counterparts; Faxes; E-mail.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may also be executed via facsimile or e-mail, which shall be deemed an original.

 

9.3.         Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

9.4.         Notices.  Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by facsimile or e-mail, then such notice shall be deemed given upon receipt of confirmation of complete facsimile transmittal or confirmation of receipt of n e-mail transmission, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one Business Day after delivery to such carrier.  All notices shall be addressed to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’ advance written notice to the other party:

 

If to the Company:

 

Syros Pharmaceuticals, Inc.
 620 Memorial Drive, Suite 300

Cambridge, Massachusetts

Attention: Chief Executive Officer
 Email: nsimonian@syros.com

 

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With a copy to:

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

Attention: Steven D. Singer

Fax: (617) 526-5000

 

If to the Investors:

 

Only to the addresses set forth on the signature pages hereto.

 

9.5.         Expenses.  The Company shall pay the reasonable legal fees and expenses of Greenberg Traurig, LLP, counsel to certain Investors, incurred by such Investors in connection with the transactions contemplated by the Transaction Documents, not to exceed $20,000, which amount shall be paid directly by the Company to Greenberg Traurig, LLP at the Closing.  Except as set forth above and elsewhere in the Transaction Documents, the parties hereto shall pay their own costs and expenses in connection herewith regardless of whether the transactions contemplated hereby are consummated; it being understood that each of the Company and each Investor has relied on the advice of its own respective counsel.

 

9.6.         Amendments and Waivers.  Prior to Closing, no amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by a duly authorized representative of such party.  Following the Closing, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Investors.  Notwithstanding the foregoing, this Agreement may not be amended and the observance of any term of this Agreement may not be waived with respect to any Investor without the written consent of such Investor unless such amendment or waiver applies to all Investors in the same fashion. Any amendment or waiver effected in accordance with this paragraph shall be binding upon (i) prior to Closing, each Investor that signed such amendment or waiver and (ii) following the Closing, each holder of any Shares purchased under this Agreement at the time outstanding, and in each case, each future holder of all such Shares and the Company.

 

9.7.         Publicity.  Except as set forth below, no public release or announcement concerning the transactions contemplated hereby shall be issued by the Investors without the prior consent of the Company (which consent shall not be unreasonably withheld), except as such release or announcement may be required by law or the applicable rules or regulations of any securities exchange or securities market, in which case the Investors shall allow the Company reasonable time to comment on such release or announcement in advance of such Issuance.  Notwithstanding the foregoing, each Investor may identify the Company and the value of such Investor’s security holdings in the Company in accordance with applicable investment reporting and disclosure regulations or internal policies without prior notice to or consent from the Company.  The Company shall not include the name of any Investor or any Affiliate or investment adviser of such Investor in any press release or public announcement (which, for the avoidance of doubt, shall not include any SEC Filing to the extent such disclosure is required by SEC rules and regulations) without the prior written consent of such Investor.  By 8:30 a.m.

 

24

 

(New York City time) on the Business Day immediately following the date this Agreement is executed, the Company shall issue a press release disclosing all material terms of transactions contemplated by this Agreement and any other material, nonpublic information that the Company may have provided any Investor at any time prior to the filing of such press release (the “Press Release”).  From and after the issuance of the Press Release, no Investor shall be in possession of any material, non-public information received from the Company, any subsidiary or any of their respective officers, directors, employees or agents (including the Placement Agents).  No later than 5:30 p.m. (New York City time) on the first Business Day following the date this Agreement is executed, the Company will file a Current Report on Form 8-K (the “8-K Filing”) attaching the press release described in the foregoing sentence as well as copies of the Transaction Documents.  In addition, the Company will make such other filings and notices in the manner and time required by the SEC or Nasdaq.  The Company shall not, and shall cause each of its officers, directors, employees and agents, not to, provide any Investor with any such material, nonpublic information regarding the Company from and after the filing of the Press Release without the express prior written consent of such Investor.

 

9.8.         Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

 

9.9.         Benefit of Agreement.  Each of the Placement Agents is an intended third-party beneficiary of the representations and warranties of each Investor set forth in Section 5 of this Agreement.

 

9.10.       Entire Agreement.  This Agreement, including the signature pages, Exhibits, and the other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof and thereof.

 

9.11.       Further Assurances.  The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

 

9.12.       Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof.  Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby.  Service of process in connection with any

 

25

 

such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement.  Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

9.13.       Independent Nature of Investors’ Obligations and Rights.  The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Transaction Document.  The decision of each Investor to purchase Shares pursuant to the Transaction Documents has been made by such Investor independently of any other Investor.  Nothing contained herein or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor will be acting as agent of such Investor in connection with monitoring its investment in the Shares or enforcing its rights under the Transaction Documents.  Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.  The Company acknowledges that each of the Investors has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do so by any Investor.  It is expressly understood and agreed that each provision contained in this Agreement is between the Company and an Investor, solely, and not between the Company and the Investors collectively and not between and among the Investors.

 

[remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

 

	
COMPANY:
    	
SYROS   PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nancy Simonian
    
	
 
    	
 
    	
Name:   Nancy Simonian
    
	
 
    	
 
    	
Title:   Chief Executive Officer
    

 

 

	
INVESTOR:
    	
Salthill   Investors (Bermuda) L.P.
   By: Wellington Management Company
   LLP, as investment adviser
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Emily Babalas
    
	
 
    	
 
    	
Name:Emily   D. Babalas
    
	
 
    	
 
    	
Title:Managing   Director and Counsel
    

 

 

	
INVESTOR:
    	
Salthill   Partners, L.P.
   By: Wellington Management Company
   LLP, as investment adviser
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Emily Babalas
    
	
 
    	
 
    	
Name:Emily   D. Babalas
    
	
 
    	
 
    	
Title:Managing   Director and Counsel
    

 

29

 

	
INVESTOR:
    	
Hawkes   Bay Master Investors (Cayman) LP
   By: Wellington Management Company LLP,
   as investment adviser
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Emily Babalas
    
	
 
    	
 
    	
Name:Emily   D. Babalas
    
	
 
    	
 
    	
Title:Managing   Director and Counsel
    

 

30

 

	
INVESTOR:
    	
Wellington   Trust Company, National
   Association Multiple Collective Investment
   Funds Trust, Biotechnology Portfolio
   By: Wellington Management Company LLP,
   as investment adviser
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Emily Babalas
    
	
 
    	
 
    	
Name:   Emily D. Babalas
    
	
 
    	
 
    	
Title:   Managing Director and Counsel
    

 

31

 

	
INVESTOR:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Greenhouse
    
	
 
    	
 
    	
Name:David   Greenhouse
    
	
 
    	
 
    	
Title:Managing   Partner
    

 

32

 

	
INVESTOR:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   James Silverman
    
	
 
    	
 
    	
Name:   James Silverman
    
	
 
    	
 
    	
Title:   Managing Director
    

 

33

 

	
INVESTOR:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Srinivas Akkaraju
    
	
 
    	
 
    	
Name:   Srinivas Akkaraju
    
	
 
    	
 
    	
Title:   Managing General Partner
    

 

34

 

	
INVESTOR:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Eli Casdin
    
	
 
    	
 
    	
Name:   Eli Casdin
    
	
 
    	
 
    	
Title:   CIO
    

 

35

 

	
INVESTOR:
    	
CRMA SPV, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bihua Chen
    
	
 
    	
 
    	
Name: Bihua Chen
    
	
 
    	
 
    	
Title: Managing Member of the Special LP
    

 

36

 

	
INVESTOR:
    	
Cormorant   Global Healthcare Master Fund, LP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bihua Chen
    
	
 
    	
 
    	
Name:   Bihua Chen
    
	
 
    	
 
    	
Title:   Managing Member of the GP
    

 

37

 

	
INVESTOR:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By: Baker Bros.   Advisors LP, Management Company and Investment Adviser to BAKER BROTHERS LIFE   SCIENCES, L.P., pursuant to authority granted to it by Baker Brothers Life   Sciences Capital, L.P., general partner to BAKER BROTHERS LIFE SCIENCES,   L.P., and not as the general partner 
    	
By: Baker Bros.   Advisors LP, Management Company and Investment Adviser to 667, L.P., pursuant   to authority granted to it by Baker Biotech Capital, L.P., general partner to   667, L.P., and not as the general partner
    
	
 
    	
 
    
	
/s/   Scott Lessing
    	
 
    	
/s/   Scott Lessing
    
	
By:   Scott L. Lessing, President
    	
 
    	
By:   Scott L. Lessing, President
    

 

38

 

EXHIBIT A

 

Schedule of Investors

 

	
Investor Name
    	
 
    	
Number of Shares to
   be Purchased
    	
 
    	
Aggregate Purchase
   Price of Shares
    	
 
    
	
Hawkes Bay   Master Investors (Cayman) LP
    	
 
    	
623,774
    	
 
    	
$
    	
8,420,949.00
    	
 
    
	
Salthill   Investors (Bermuda) L.P.
    	
 
    	
64,541
    	
 
    	
$
    	
871,303.50
    	
 
    
	
Salthill   Partners, L.P.
    	
 
    	
144,573
    	
 
    	
$
    	
1,951,735.50
    	
 
    
	
Wellington Trust   Company, National Association Multiple Collective Investment Funds Trust,   Biotechnology Portfolio
    	
 
    	
130,075
    	
 
    	
$
    	
1,756,012.50
    	
 
    
	
Samsara   BioCapital, LP
    	
 
    	
740,740
    	
 
    	
$
    	
9,999,990.00
    	
 
    
	
Baker Brothers   Life Sciences, L.P.
    	
 
    	
333,741
    	
 
    	
$
    	
4,505,503.50
    	
 
    
	
667, L.P.
    	
 
    	
36,629
    	
 
    	
$
    	
494,491.50
    	
 
    
	
Cormorant Global   Healthcare Master Fund, LP
    	
 
    	
246,459
    	
 
    	
$
    	
3,327,196.50
    	
 
    
	
CRMA SPV, L.P.
    	
 
    	
49,837
    	
 
    	
$
    	
672,799.50
    	
 
    
	
Special   Situations Life Sciences Fund, L.P.
    	
 
    	
74,074
    	
 
    	
$
    	
999,999.00
    	
 
    
	
Casdin Master   Fund LP
    	
 
    	
74,074
    	
 
    	
$
    	
999,999.00
    	
 
    
	
Opaleye L.P.
    	
 
    	
74,074
    	
 
    	
$
    	
999,999.00
    	
 
    
	
TOTAL
    	
 
    	
2,592,591
    	
 
    	
$
    	
34,999,978.50
    	
 
    

 

39

 

EXHIBIT B

 

Registration Rights Agreement

 

40

 

EXHIBIT C

 

Investor Questionnaire

 

41

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