EX-10.1
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of November 24, 2014 by and among Eleven
Biotherapeutics, 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 Section 4(a)(2) of the Securities Act of 1933, as amended; and
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, (i) shares (the “Shares”) of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”) and (ii) warrants in the form attached hereto as Exhibit B to
purchase Common Stock (each, a “Common Warrant” and collectively, the “Common Warrants”).
C. Contemporaneously with
the sale of the Shares and Common Warrants, the parties hereto will execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the
Company will agree to provide certain registration rights in respect of the Shares and the Common Warrant Shares (as defined below) under the Securities Act of 1933, as amended, 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.
“Closing Securities” means the Shares and the Common Warrants.
“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.
“Common Warrants” shall have the meaning ascribed to such term in the
recitals to this Agreement.
“Common Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Common Warrants.
“Company Intellectual Property” has the meaning set forth in Section 4.15(a).
“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.
“Disclosure Schedules” has the meaning set forth in Section 4.
“Environmental Laws” has the meaning set forth in Section 4.16.
“Evaluation Date” has the meaning set forth in Section 4.27.
“FDA” has the meaning set forth in Section 4.31.
“GAAP” has the meaning set forth in Section 4.18.
“IPO Registration Statement” means the Company’s registration statement (File No. 333-193131), including a
prospectus, as amended at the time it became effective on February 5, 2014, including the information deemed pursuant to Rule 430A, 430B or 430C under the 1933 Act to be part of such registration statement at the time of its effectiveness.
“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,
condition (financial or otherwise), business, or prospects of the Company 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.
“Material Contract” means any contract, instrument or other agreement to which the Company is a
party or by which it is bound which is material to the business of the Company, including those that have been filed or were 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.
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“Nasdaq” means The Nasdaq Global 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 Citigroup Global Markets Inc., Cowen and Company, LLC and Leerink Partners LLC.
“Press Release” has the meaning set forth in Section 9.7.
“Registration Rights Agreement” has the meaning set forth in the Recitals.
“Required Investors” has the meaning set forth in the Registration Rights Agreement.
“SEC Filings” has the meaning set forth in Section 4.6.
“Securities” means the Shares, the Common Warrants and the Common Warrant Shares.
“Shares” has the meaning set forth in the Recitals.
“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).
“Subscription Amount” means, as
to an Investor, the aggregate amount to be paid for the Closing Securities purchased hereunder as specified opposite such Investor’s name on Exhibit A attached hereto, under the column entitled “Aggregate Purchase Price of Closing
Securities,” in United States Dollars and in immediately available funds.
“Subsidiary” of any Person means another
Person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50%
or more of the equity interests of which) is owned directly or indirectly by such first Person.
“Transfer Agent” has the
meaning set forth in Section 7.7.
“Transaction Documents” means this Agreement, the Common Warrants and the
Registration Rights Agreement.
“USPTO” has the meaning set forth in Section 4.15(a).
“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.
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2. Purchase and Sale of the Shares and Common Warrants. 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, 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 at a price per Share equal to $11.47. In addition, each Investor shall receive a Common Warrant to purchase one half of a share of Common Stock for every one Share purchased at
Closing. The Common Warrants shall have an exercise price equal to $15.00 per Common Warrant Share.
3. Closing.
3.1. Upon the satisfaction of the conditions set forth in Section 6, the completion of the purchase and sale of the Closing
Securities (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, 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 the
Subscription Amount 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.
3.3. At or before the Closing, the Company shall deliver or cause to be delivered to each Investor the following:
(a) Shares registered in the name of the Investor, in an amount equal to 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; and
(b) a Common Warrant, substantially in
the form of Exhibit B attached hereto, registered in the name of such Investor, to purchase up to the number of Common Warrant Shares set forth opposite the name of such Investor under the heading “Number of Common Warrant Shares
Underlying Common Warrants Purchased” on Exhibit A attached hereto.
4. Representations and Warranties of the Company.
The Company hereby represents and warrants to the Investors that, except as set forth in the schedules delivered herewith (collectively, the “Disclosure Schedules”) and except as otherwise described in the SEC Filings, which qualify these
representations and warranties in their entirety:
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 could not reasonably be expected to have a Material Adverse Effect. The Company has no Subsidiaries.
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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 Closing Securities. 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.
Schedule 4.3 sets forth as of the date hereof (a) the authorized capital stock of the Company; (b) the number of shares of capital stock issued and outstanding; (c) the number of shares of capital stock issuable pursuant
to the Company’s stock plans; and (d) the number of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Closing Securities) exercisable for, or convertible into or exchangeable for any shares
of capital stock of the Company. All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and 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. Except as described on Schedule 4.3, 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. Except as described on Schedule 4.3, 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 and except as contemplated by this Agreement. Except as described on Schedule 4.3 and
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 described on Schedule 4.3 and except as provided in the Registration Rights Agreement, 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 Closing Securities 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.
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
Closing Securities have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, will be validly issued, fully
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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. The Common Warrant Shares have been duly and validly authorized and reserved for issuance and, upon exercise of the Common Warrants in accordance with their terms, including the payment
of any exercise price therefor, will be validly issued, fully paid and nonassessable and will be sold free and clear of any liens. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the
Shares and the Common Warrant Shares.
4.5. Consents. The execution, delivery and performance by the Company of the Transaction
Documents and the offer, issuance and sale of the Closing Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than filings that have been made pursuant to applicable
state securities laws and post-sale filings pursuant to applicable state and federal securities laws and the rules and regulations of Nasdaq which the Company undertakes to file within the applicable time periods and other than the registration
statement required to be filed by the Registration Rights Agreement. 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 Closing Securities 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 Closing Securities and the ownership, disposition or voting of the Shares or the Common Warrant 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. Delivery of SEC Filings; Business. The Company has made
available to the Investors through the EDGAR system, true and complete copies of the IPO Registration Statement and the Company’s filings pursuant to the 1934 Act (collectively, the “SEC Filings”). The Company has made all filings
required to be made pursuant to the 1934 Act. The Company is engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business
of the Company.
4.7. Use of Proceeds. The net proceeds of the sale of the Closing Securities hereunder shall be used by the
Company for working capital and general corporate purposes.
4.8. No Material Adverse Change. Since September 30, 2014, except
as identified and described in the SEC Filings, there has not been:
(i) any change in the assets, liabilities, financial condition or
operating results of the Company from that reflected in the financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, 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;
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(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;
(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 By-laws, or material change to any material contract or
arrangement by which the Company or 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;
(x) the loss or, to the
Company’s Knowledge, threatened loss of any customer which has had or would reasonably be expected to have a Material Adverse Effect; or
(xi) any other event or condition of any character that has had or would reasonably be expected to have a Material Adverse Effect.
4.9. SEC Filings.
(a)
At the time of filing thereof, the SEC Filings complied as to form in all material respects with the requirements of the 1934 Act and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
(b) Each registration statement and any amendment thereto filed by the Company pursuant to the 1933 Act and the rules and regulations
thereunder, as of the date such statement or amendment became effective, complied as to form in all material respects with the 1933 Act and did not contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
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light of the circumstances under which they were made, not misleading; and each prospectus filed pursuant to Rule 424(b) under the 1933 Act, as of its issue date and as of the closing of any sale
of securities pursuant thereto, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
4.10. 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 Closing Securities in accordance with the provisions thereof will not (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 By-laws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investors through
the EDGAR system), or (b) assuming the accuracy of the representations and warranties in Section 5, any applicable statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction
over the Company, or any of its 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 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 4.11, employee relations and labor matters, which are the subject of Section 4.14, and environmental laws, which are the subject of Section 4.16.
4.11. Tax Matters. The Company has timely prepared and filed all tax returns required to have been filed by the Company with all
appropriate governmental agencies and timely paid all taxes shown thereon or otherwise owed by it. 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.
4.12. Title to Properties. Except as disclosed in the SEC
Filings, the Company has good and marketable title to all real properties and all other properties and assets owned by it, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere
with the use made or currently planned to be made thereof by them; and except as disclosed in the SEC Filings, the Company holds any leased real or personal property under valid and enforceable leases with no exceptions that would materially
interfere with the use made or currently planned to be made thereof by it.
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4.13. 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, and the Company has not received any written notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely to the Company, would reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, on the Company.
4.14. Labor Matters.
(a) The Company is not a party to or bound by any collective bargaining agreements or other agreements with labor organizations. The Company
has not violated in any material respect any laws, regulations, orders or contract terms, affecting the collective bargaining rights of employees, labor organizations or any laws, regulations or orders affecting employment discrimination, equal
opportunity employment, or employees’ health, safety, welfare, wages and hours.
(b) (i) There are no labor disputes existing, or to
the Company’s Knowledge, threatened, involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any other disruptions of or by the Company’s employees, (ii) there are no unfair labor practices or petitions for
election pending or, to the Company’s Knowledge, threatened before the National Labor Relations Board or any other federal, state or local labor commission relating to the Company’s employees, (iii) no demand for recognition or
certification heretofore made by any labor organization or group of employees is pending with respect to the Company and (iv) to the Company’s Knowledge, the Company enjoys good labor and employee relations with its employees and labor
organizations.
(c) The Company is, and at all times has been, in compliance in all material respects with all applicable laws respecting
employment (including laws relating to classification of employees and independent contractors) and employment practices, terms and conditions of employment, wages and hours, and immigration and naturalization. There are no claims pending against
the Company before the Equal Employment Opportunity Commission or any other administrative body or in any court asserting any violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or
1983 or any other federal, state or local law, statute or ordinance barring discrimination in employment.
(d) Each of the Company’s
employees is a Person who is either a United States citizen or a permanent resident entitled to work in the United States. To the Company’s Knowledge, the Company has no material liability for the improper classification by the Company of such
employees as independent contractors or leased employees prior to the Closing.
4.15. 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
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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 Intellectual Property Rights 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 its Intellectual Property Rights, except where failure to do so would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
4.16. 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 released any hazardous substances regulated by Environmental Law on to any real property that it owns or operates, has 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 to have a Material Adverse Effect, individually or
in the aggregate; and to the Company’s Knowledge, there is no pending or threatened investigation that would reasonably be expected to lead to such a claim.
4.17. Legal Proceedings. Except as described in the SEC Filings, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company is or may reasonably be expected to become a party or to which any property of the Company is or may reasonably be expected to become the subject that, individually or in the aggregate, if
determined adversely to the Company, could reasonably be expected to have a Material Adverse Effect; to the Company’s Knowledge, no such investigations, actions, suits or proceedings are threatened or contemplated by any governmental or
regulatory authority or threatened by others; and (i) there are no current or pending legal, governmental or regulatory actions, suits or proceedings that are required under the 1933 Act or 1934 Act to be described in the SEC Filings that are
not so described in the SEC Filings and (ii) there are no statutes, regulations or contracts or other documents that are required under the 1933 Act or 1934 Act to be filed as exhibits to the SEC Filings that are not so filed as exhibits to the
SEC Filings or described in the SEC Filings. The U.S. Securities and Exchange Commission (the “SEC”) has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the
1933 Act or the 1934 Act.
4.18. 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 financial position of the Company as of the dates shown and its results of operations and cash flows for the periods shown, subject in the case of unaudited financial statements to normal, immaterial year-end audit adjustments, and such
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,
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and, in the case of quarterly financial statements, 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.
4.19. 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.
4.20. 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.
4.21. 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 4.21 that may be due in connection with the
transactions contemplated by this Agreement or the Transaction Documents.
4.22. 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) in connection with the offer or sale of any of the Closing
Securities.
4.23. No Integrated Offering. Neither the Company nor any Person acting on its 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 or the Common Warrant Shares under the 1933 Act.
4.24.
Private Placement. Assuming the accuracy of the representations and warranties of the Investors set forth in Section 5, the offer and sale of the Closing Securities to the Investors as contemplated hereby is exempt from the registration
requirements of the 1933 Act.
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4.25. Questionable Payments. Neither the Company nor, to the Company’s
Knowledge, any of its current or former directors, officers, employees, agents or other Persons acting on behalf of the Company, has on behalf of the Company or 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.
4.26. Transactions with Affiliates. Except as disclosed in the SEC
Filings, 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.
4.27. Internal Controls. The Company is in compliance in all material respects with the provisions of the Sarbanes-Oxley Act of 2002
currently applicable to the Company. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has
established disclosure controls and procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company and required
to be disclosed by the Company in the reports that it files or submits under the 1934 Act is made known to the certifying officers by others within the Company, particularly during the period in which the Company’s most recently filed periodic
report under the 1934 Act, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the end of the period covered by the most recently filed
periodic report under the 1934 Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the 1934 Act the conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 308 of Regulation S-K)
or, to the Company’s Knowledge, in other factors that could significantly affect the Company’s internal controls. The Company maintains a standard system of accounting established and administered in accordance with GAAP and the applicable
requirements of the 1934 Act.
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4.28. 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 which according to applicable law, rule or regulation was required to have been disclosed
publicly by the Company, but which has not been so disclosed, other than with respect to the transactions contemplated hereby. The written materials delivered to the Investors in connection with the transactions contemplated by the Transaction
Documents, when considered together with 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 misleading. The Company understands and confirms that the Investors will rely on the foregoing representations in effecting transactions in securities of the Company.
4.29. Required Filings. Except for the transactions contemplated by this Agreement, including the acquisition of the Closing Securities
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).
4.30. 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.
4.31. 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.
4.32. 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
Securities.
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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 or limited liability company 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 Securities 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 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.
5.3. Purchase Entirely for Own Account. The Securities 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 Securities 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 Securities 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 Securities 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 Securities, and has conducted and completed its own
independent due diligence. Such Investor acknowledges receipt of copies of the SEC Filings. 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 Securities 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.
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5.6. Restricted Securities. Such Investor understands that the Securities 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 Securities may bear the following or any similar legend:
(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.”
(b) If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by such state
authority.
5.8. Accredited Investor. Such Investor is (a) an “accredited investor” within the meaning of Rule
501(a) (1), (2), (3) or (7) under the 1933 Act and (b) 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 Securities. Such Investor has determined based on its own independent review and such professional advice as it deems appropriate that its purchase of the Securities and participation in the transactions contemplated by the
Transaction Documents (i) are fully consistent with its financial needs, objectives and condition, (ii) comply and are fully consistent with all investment policies, guidelines and other restrictions applicable to such Investor,
(iii) have been duly authorized and approved by all necessary action, (iv) do not and will not violate or constitute a default under such Investor’s charter, by-laws or other constituent document or under any law, rule, regulation,
agreement or other obligation by which such Investor is bound and (v) are a fit, proper and suitable investment for such Investor, notwithstanding the substantial risks inherent in investing in or holding the Securities.
5.9. No General Solicitation. Such Investor did not learn of the investment in the Securities as a result of any general solicitation
or general advertising.
5.10. 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.
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5.11. 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, the Placement Agents 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 Securities 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.
5.12. 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 Securities.
5.13. 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.
5.14. No Rule 506
Disqualifying Activities. Such Investor has not taken any of the actions set forth in, and is not subject to, the disqualification provisions of Rule 506(d)(1) of the Securities Act.
6. Conditions to Closing.
6.1. Conditions to the Investors’ Obligations. The obligation of each Investor to purchase Closing Securities 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 at all times prior to and on the
Closing 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.
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(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 Closing Securities 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 the Common
Warrant Shares, a copy of which shall have been provided to the Investors.
(e) The Company shall have received gross proceeds from the
sale of the Closing Securities as contemplated hereby of at least $15,000,000.
(f) 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.
(g)
The Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial and Business Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in
subsections (a), (b), (d), (e), (f) and (j) of this Section 6.1.
(h) 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 Closing Securities, certifying the current versions of the Certificate of Incorporation and By-laws 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.
(i) 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 substance reasonably acceptable to the Investors and addressing such legal matters as the Investors may reasonably request.
(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.
(k) The Company’s directors and officers shall have executed and delivered customary
“lock-up” agreements, in form and substance reasonably acceptable to the Investors and the Placement Agents.
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6.2. Conditions to Obligations of the Company. The Company’s obligation to sell and
issue Closing Securities 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 in all material respects when
made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said 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.
(c) Any Investor purchasing Closing Securities at the Closing shall have paid in full its Subscription
Amount 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 Closing Securities 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; or
(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;
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 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.
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7. Covenants and Agreements of the Company.
7.1. Reports; Public Information.
(a) The Company will furnish to the Investors and/or their assignees such information relating to the Company as from time to time may
reasonably be requested by the Investors and/or their assignees; provided, however, that the Company shall not disclose material nonpublic information to the Investors, or to advisors to or representatives of the Investors, unless prior to
disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the opportunity to accept or refuse to accept such material nonpublic
information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto.
(b) At any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of
the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public
information requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to such Investor’s other available remedies, the Company shall pay to each Investor, in cash, as partial liquidated damages and not as a
penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of such Investor’s Securities on the day of a Public Information
Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is
no longer required for the Investors to transfer the Shares and Common Warrant Shares pursuant to Rule 144. The payments to which an Investor shall be entitled pursuant to this Section 7.1(b) are referred to herein as “Public
Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third
(3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure
Payments shall bear interest at the rate of 1% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Investor’s right to pursue actual damages for the Public Information Failure, and such Investor
shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
7.2. 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.
7.3.
Insurance. The Company shall not materially reduce the insurance coverages described in Section 4.19.
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7.4. Compliance with Laws. The Company will comply in all material respects with all
applicable laws, rules, regulations, orders and decrees of all governmental authorities.
7.5. 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 respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of such market or exchange, as applicable.
7.6. Termination of Covenants. The provisions of
Sections 7.1 through 7.5 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.
7.7. Removal of
Legends.
(a) Certificates evidencing the Shares and Common Warrant Shares shall not contain any legend (including the legend set
forth in this Agreement), (i) while a registration statement (including the registration statement required to be filed pursuant to the Registration Rights Agreement) covering the resale of such security is effective under the 1933 Act,
(ii) following any sale of such Shares or Common Warrant Shares pursuant to Rule 144, (iii) if such Shares or Common Warrant Shares are eligible for sale under Rule 144, or (iv) if such legend is not required under applicable
requirements of the 1933 Act (including judicial interpretations and pronouncements issued by the staff of the SEC). 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 Securities and make a new, unlegended entry for such book entry Securities sold or disposed of without restrictive legends within three Business Days of the request of the Investor, provided that the
Company has received customary representations and other documentation reasonably acceptable to the Company in connection therewith (such date, the “Legend Removal Date”). Subject to receipt by the Company of customary
representations and other documentation reasonably acceptable to the Company in connection therewith, upon the earlier of such time as the Securities (i) have been sold or transferred pursuant to an effective registration statement,
(ii) such time as the Securities have been sold pursuant to Rule 144, or (iii) are eligible for resale under Rule 144(b)(1) or any successor provision, 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 Securities, 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. The Company shall be responsible for the fees of its Transfer Agent and all DTC fees associated with such issuance.
(b) In addition to such Investor’s other available remedies, the Company shall pay to an Investor, in cash, as partial liquidated damages
and not as a penalty, for each $1,000 of Common Warrant Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to
Section 4.1(c), $10 per trading day (increasing to $20 per trading day five (5) trading days after such damages have begun to accrue) for each trading day after the Legend Removal Date until such certificate is delivered without a legend.
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7.8. Subsequent Equity Sales.
(a) From the date hereof until ninety (90) days after the Closing Date without the consent of (i) prior to Closing, Investors that
agreed to purchase a majority of the Shares to be issued and sold pursuant to this Agreement, and (ii) following the Closing, the Required Investors, the Company shall not issue shares of Common Stock or Common Stock Equivalents.
Notwithstanding the foregoing, the provisions of this Section 7.8(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), (iv) or (v) below, (iii) the issuance of any Common Stock or Common Stock Equivalents pursuant to any Company stock-based compensation
plans, (iv) the issuance of any Common Stock or Common Stock Equivalents to any lender or lenders in connection with any loan agreement between the Company and any lender or lenders and any amendment or modification thereto, or (v) the
issuance of any Common Stock or Common Stock Equivalents in connection with a transaction 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 or intellectual property license agreement with the Company); provided, however, that the aggregate number of shares of Common Stock issued pursuant to clause
(v) during the sixty (60) 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 Securities in a manner that would require the registration under the
1933 Act of the sale of the Securities to the Investors, or that will be integrated with the offer or sale of the Securities 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.
7.9.
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) after the transactions contemplated by this Agreement are first publicly announced or (ii) this Agreement is terminated in full. 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 and agents, and their respective successors and assigns, from and against any and all losses, claims,
damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other 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.
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 to pay such fees or expenses, or (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, which consent shall not be unreasonably withheld, conditioned or delayed, 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.
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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
the Investors, as applicable, 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 Securities 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 “Securities” 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, then
such notice shall be deemed given upon receipt of confirmation of complete transmittal, (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:
Eleven
Biotherapeutics, Inc.
215 First Street, Suite 400
Cambridge, Massachusetts 02142
Attention: Chief Financial and Business Officer
Fax: (617) 858-0911
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With a copy to:
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston,
Massachusetts 02109
Attention: Richard A. Hoffman
Fax: (617) 526-5000
If to
the Investors:
to the addresses set forth on the signature pages hereto.
9.5. Expenses. 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. The Company shall reimburse the Investors upon demand for all reasonable documented
out-of-pocket expenses incurred by the Investors, including without limitation reimbursement of reasonable attorneys’ fees and disbursements, in connection with any amendment, modification or waiver of this Agreement or the other Transaction
Documents requested by the Company. In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the party or parties
which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable documented out-of-pocket costs and expenses incurred by the prevailing party in such
proceedings.
9.6. Amendments and Waivers. 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 (a) prior to the Closing, Investors that agreed to purchase a majority of the
Securities to be issued and sold pursuant to this Agreement, (b) following the Closing, the Required Investors and (c) following the point in time at which all Securities cease to be Registrable Securities (as such term is defined in the
Registration Rights Agreement), the Investors holding a majority of the Shares and Common Warrant Shares then held by 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 and (ii) following the Closing, each holder of any Securities purchased under this Agreement at the time outstanding, and in each case, each future holder of all such Securities and the Company.
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9.7. Publicity. Except as set forth below, no public release or announcement concerning
the transactions contemplated hereby shall be issued by the Company or the Investors without the prior consent of the Company (in the case of a release or announcement by the Investors) or the Investors (in the case of a release or announcement by
the Company) (which consents 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 Company or the
Investors, as the case may be, shall allow the Investors or the Company, as applicable, to the extent reasonably practicable in the circumstances, reasonable time to comment on such release or announcement in advance of such issuance. By 8:30 a.m.
(New York City time) on the trading 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 (the “Press Release”).
No later than 5:30 p.m. (New York City time) on the first trading day following the date this Agreement is executed, the Company will file a Current Report on Form 8-K 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 parties acknowledge that from and after the issuance of the Press Release, no Investor shall be
in possession of any material, nonpublic information received from the Company or any of its respective officers, directors, employees or agents, with respect to the transactions contemplated hereby that is not disclosed in the Press Release. 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 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. Entire
Agreement. This Agreement, including the signature pages, Exhibits and the Disclosure Schedules, 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.
9.10. 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.
9.11. 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
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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 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.
9.12. 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 Closing Securities 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 Securities 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.
9.13. Limitation of Liability. Notwithstanding anything herein to the contrary, the Company acknowledges and agrees that the liability
of an Investor arising directly or indirectly under any Transaction Document of any and every nature whatsoever shall be satisfied solely out of the assets of such Investor and that no trustee, officer, other investment vehicle or any other
Affiliate of such Investor or any investor, shareholder or holder of shares of beneficial interest of such Investor shall be personally liable for any liabilities of such Investor.
9.14. Placement Agents. Each party hereto acknowledges and agrees for the express benefit of each of the Placement Agents, their
affiliates and their representatives that:
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(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 and no Placement
Agent will make any representation or warranty, whether express or implied, of any kind or character and has not 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,
(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 party, or to any person claiming through it, in respect of (i) for any action taken, suffered or omitted by any of them in good faith and reasonably believed to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement or any Transaction Document or (ii) for anything which any of them may do or refrain from doing in connection with this Agreement or any Transaction Document, and
(e) each of the Placement Agents, their affiliates and their representatives shall be entitled to (1) rely on, and shall be
protected in acting upon, the representations and warranties made by the parties hereto in this Agreement, and on any certificate, opinion, instrument, notice, letter or any other document or security delivered to any of them by or on behalf of the
Company, and (2) be indemnified by the Company for acting as the Placement Agents hereunder pursuant to the indemnification provisions set forth in the engagement letter, dated as of November 14, 2014, among the Company and the Placement
Agents.
[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.
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ELEVEN BIOTHERAPEUTICS, INC. |
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By: |
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Name: Gregory D. Perry |
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Title: Chief Financial and Business Officer |
INVESTOR:
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| Investor Information |
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| Contact Person: |
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| Address: |
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| Zip Code: |
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| Telephone: |
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| Facsimile: |
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| Email: |
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| Tax ID #: |
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| Name in which Shares should be issued: |
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[Signature Page to Securities Purchase Agreement]
EXHIBIT A
Schedule of Investors
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| Investor Name and Address |
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Number of
Shares to be
Purchased |
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Number of
Common
Warrants to be
Purchased |
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Number of
Common
Warrant Shares
Underlying
Common
Warrants
Purchased |
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Aggregate
Purchase Price of
Closing Securities |
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| Broadfin Health Care
Master Fund, LTD
300 Park Avenue, 25th Fl
New York, NY 10022 |
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108,900 |
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54,450 |
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54,450 |
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$ |
1,249,083.00 |
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| Redmile Capital Fund, LP
1 Letterman Dr., Bldg. D,
Ste D3-300
San Francisco, CA 94129 |
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61,000 |
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30,500 |
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30,500 |
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$ |
699,670.00 |
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| Redmile Capital Offshore
Fund, Ltd
1 Letterman Dr., Bldg. D,
Ste D3-300
San Francisco, CA 94129 |
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98,800 |
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49,400 |
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49,400 |
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$ |
1,133,236.00 |
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| Redmile Capital Offshore
Fund II, Ltd.
1 Letterman Dr., Bldg. D,
Ste D3-300
San Francisco, CA 94129 |
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19,600 |
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9,800 |
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9,800 |
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$ |
224,812.00 |
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| Redmile Special
Opportunities Fund, Ltd.
1 Letterman Dr., Bldg. D,
Ste D3-300
San Francisco, CA 94129 |
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28,500 |
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14,250 |
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14,250 |
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$ |
326,895.00 |
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| P Redmile Ltd.
900 3rd Avenue
New York, NY 10022 |
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32,100 |
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16,050 |
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16,050 |
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$ |
368,187.00 |
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| Sabby Healthcare Master
Fund, Ltd.
10 Mountainview Road
Suite 205
Upper Saddle River, NJ
07458 |
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435,918 |
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217,959 |
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217,959 |
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$ |
4,999,979.46 |
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| Sabby Volatility Warrant Master Fund, Ltd.
10 Mountainview Road Suite 205
Upper Saddle River, NJ 07458 |
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261,552 |
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130,776 |
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130,776 |
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$ |
3,000,001.44 |
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| Sphera Global Healthcare Master Fund
21 Ha’Arbaah Street Tel Aviv 64739
Israel |
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87,110 |
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43,555 |
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43,555 |
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$ |
999,151.70 |
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| Tekla Healthcare Opportunities Fund
2 Liberty Square Boston, MA 02109 |
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610,200 |
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305,100 |
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305,100 |
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$ |
6,998,994.00 |
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| Total |
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1,743,680 |
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871,840 |
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871,840 |
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$ |
20,000,009.60 |
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EXHIBIT B
Form of Common Warrant
31
EXHIBIT C
Registration Rights Agreement
32
