UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
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INTRODUCTORY NOTE
Business Combination
On October 31, 2023 (the “Closing Date”), Forbion European Acquisition Corp., a Cayman Islands exempted company and a special purpose acquisition corporation (“FEAC”), enGene Inc., a corporation incorporated under the laws of Canada (“enGene”), and enGene Holdings Inc. (the “registrant” or “New enGene”) consummated the previously announced business combination (the “Business Combination”) pursuant to the Business Combination Agreement, dated as of May 16, 2023 (as amended, the “Business Combination Agreement”). As a result of the Business Combination, New enGene became a publicly traded company, with enGene, a subsidiary of New enGene, continuing the existing business operations. The ordinary shares and warrants of New enGene will commence trading on the Nasdaq Global Market under the symbols “ENGN” and “ENGNW,” respectively, on November 1, 2023.
The Business Combination was completed pursuant to the Business Combination Agreement through, among other things, the following series of transactions; terms used herein but not otherwise defined herein shall have the meaning set forth in Section 1.1 of the Business Combination Agreement:
| • | on September 5, 2023, FEAC incorporated 15333881 Canada Inc., a corporation incorporated under the laws of Canada and a direct wholly owned subsidiary of FEAC (“Can Merger Sub”) and on September 6, 2023, New enGene incorporated enGene Cayman Inc., a Cayman Islands exempted company and a direct wholly owned subsidiary of New enGene (“Cayman Merger Sub”); |
| • | pursuant to a Sponsor and Insiders Letter Agreement entered into concurrently with the execution and delivery of the Business Combination Agreement (the “Sponsor and Insiders Letter Agreement”), on October 27, 2023, Forbion Growth Sponsor FEAC I B.V., a private limited liability company incorporated in The Netherlands (the “Sponsor”), surrendered, after giving effect to the conversion of all or part of the principal amount outstanding under loans made by the Sponsor to FEAC into private placement warrants of FEAC (“FEAC Private Placement Warrants”), 1,789,004 FEAC Class B Shares and 5,463,381 FEAC Private Placement Warrants, as a contribution to the capital of FEAC and for no consideration (the “Surrender”), effective immediately prior to the Class B Conversion (as defined below); |
| • | on October 27, 2023, each FEAC Class B Share that remained outstanding following the Surrender was exchanged for one FEAC Class A Share (the “Class B Conversion”); |
| • | on October 30, 2023, Cayman Merger Sub merged with and into FEAC with FEAC as the surviving entity pursuant to a plan of merger under the laws of the Cayman Islands (the “Cayman Merger”), and pursuant thereto: (i) New enGene issued to the holders of FEAC Shares (including the Sponsor but excluding the holders of any dissenting FEAC Shares) New enGene Shares in exchange for such holders’ FEAC Shares and such FEAC Shares were not cancelled but were transferred to New enGene, (ii) FEAC thereby became a wholly owned subsidiary of New enGene, and (iii) each issued share of Cayman Merger Sub was exchanged for a FEAC Class A Share as the surviving entity, and Cayman Merger Sub (having merged into FEAC) ceased to exist as a separate entity by virtue of the Cayman Merger; |
| • | concurrently with the Cayman Merger, and effective at the same time the Cayman Merger became effective under Cayman Islands law, (i) New enGene assumed the warrants of FEAC to purchase one FEAC Class A Share at an exercise price of $11.50 per share, subject to adjustment (as so assumed, “New enGene Warrants”) pursuant to a warrant assignment, assumption and amendment agreement, (ii) FEAC as the entity surviving the Cayman Merger issued to New enGene a non-interest bearing demand promissory note payable denominated in Canadian dollars (“C$”) having a |
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principal amount equal to the fair market value of the FEAC Warrants assumed by New enGene (“Note 3”) in consideration of the assumption by New enGene of obligations under the FEAC Warrants (as so assumed, New enGene Warrants), and (iii) New enGene redeemed the initial Class B common shares of New enGene held by the sole shareholder of New enGene for an amount equal to the amount of capital that the sole shareholder of New enGene contributed for purposes of the incorporation of New enGene (such transactions, together with the Cayman Merger, the “Cayman Reorganization”); |
| • | following the Cayman Reorganization, FEAC filed an election to change its classification for U.S. federal income tax purposes from a corporation to an entity disregarded as separate from its owner New enGene, to be effective as of the beginning of the Closing Date (the “U.S. Entity Classification Election” and, together with the Cayman Reorganization, the “FEAC Reorganization”); |
| • | on the Closing Date and pursuant to the Plan of Arrangement, subsequent to the FEAC Reorganization becoming effective and prior to the consummation of the PIPE Financing (as defined below), FEAC loaned to New enGene an amount equal to the total funds held in its Trust Account (subject to certain deductions described in the Business Combination Agreement), less the principal amount of Note 3 (together, the “Loan Amount”) in consideration for which New enGene issued a C$ denominated non-interest bearing demand promissory note to FEAC having a principal amount equal to the Loan Amount converted into its Canadian dollar equivalent based on 1.3833 (the C$:U.S.$ Bank of Canada daily exchange rate on the business day immediately prior to the Closing Date), following which FEAC sold to New enGene, and New enGene purchased, all of the outstanding common shares of Can Merger Sub for a purchase price of C$10 (the “Can Merger Sub Share Sale”); |
| • | following the Can Merger Sub Share Sale but prior to the Amalgamation, the PIPE Financing was consummated; |
| • | subsequent to the Can Merger Sub Share Sale and PIPE Financing, Can Merger Sub and enGene amalgamated pursuant to the Plan of Arrangement (the “Amalgamation” the date of the Amalgamation being the “Closing Date”), and pursuant to the Amalgamation, (i) each enGene Share outstanding immediately prior to the Amalgamation was exchanged for New enGene Shares at the enGene Exchange Ratio and each enGene Warrant outstanding immediately prior to the Amalgamation was exchanged for New enGene Warrants per the enGene Exchange Ratio; (ii) each Can Merger Sub share outstanding immediately prior to the Amalgamation was exchanged for one common share in the authorized share capital of the amalgamated entity; and (iii) in consideration for the issuance of New enGene Shares, the amalgamated entity issued its common shares to New enGene; and |
| • | following the Amalgamation, New enGene continued from being a corporation incorporated under and governed by the Canada Business Corporations Act to a company continued to and governed by the Business Corporations Act (British Columbia). |
The transactions described above, together with the other transactions contemplated by the Business Combination Agreement, are hereinafter referred to as the “Transactions.” The foregoing description of the Business Combination does not purport to be complete and is qualified in its entirety by the full text of the Business Combination Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Holders of 10,379,144 FEAC Class A Shares elected to have their shares redeemed in connection with the Business Combination.
As used in this Current Report on Form 8-K, unless otherwise stated or the context clearly indicates otherwise, the terms the “Company,” the “registrant,” “New enGene,” “we,” “us,” and “our” refer to enGene Holdings Inc., and its subsidiaries at and after the Closing Date and giving effect to the consummation of the Transactions (the “Closing”).
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In addition, certain information contained in the proxy statement/prospectus (the “Proxy Statement/Prospectus”) contained in New enGene’s registration statement on Form S-4 (Registration No. 333-273851), as amended (the “Form S-4 Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “Commission”) is incorporated herein by reference as specified below.
| Item 1.01. | Entry into a Material Definitive Agreement. |
The Introductory Note to this Current Report on Form 8-K discusses the consummation of the Transactions and various other transactions and events contemplated by the Business Combination Agreement which took place on or prior to the Closing Date and is incorporated herein by reference. In addition, the information contained in the Proxy Statement/Prospectus under the headings “The Business Combination Agreement” and “Ancillary Agreements Related to the Business Combination” is incorporated herein by reference.
Registration Rights Agreement
On the Closing Date, New enGene, FEAC, the Sponsor Holders (as defined in the Registration Rights Agreement) and the enGene Holders (as defined in the Registration Rights Agreement) entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things, New enGene granted the Sponsor Holders and the enGene Holders certain customary registration rights with respect to their respective Equity Securities (as defined in the Registration Rights Agreement) of New enGene, in each case, on the terms and subject to the conditions described therein.
The foregoing description of the Registration Rights Agreement is subject to and qualified in its entirety by reference to the full text of the Registration Rights Agreement, a form of which is filed as Exhibit 10.8 hereto, and the terms of which are incorporated herein by reference.
Indemnification Agreements
On the Closing Date, New enGene entered into indemnification agreements with each of its directors and of its executive officers (each, an “Indemnification Agreement” and collectively, the “Indemnification Agreements”). Each Indemnification Agreement provides for the indemnification by New enGene of the director or executive officer party thereto to the fullest extent permitted under Canadian law and the Business Corporation Act (British Columbia). In addition, the Indemnification Agreements provide, to the fullest extent permitted by Canadian law, the advancement of all expenses actually and reasonably incurred by New enGene’s directors and executive officers in connection with a legal proceeding involving his or her status as a director, executive officer, officer or employee.
The foregoing description of the Indemnification Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of each such indemnification agreement, a form of which is attached hereto as Exhibit 10.25 and is incorporated herein by reference.
Warrant Assumption Agreement
On October 30, 2023, FEAC, enGene, New enGene and Continental Stock Transfer & Trust Company, a New York corporation (“Continental”), entered into that certain Warrant Assignment, Assumption and Amendment Agreement (the “Warrant Assumption Agreement”) pursuant to which New enGene assumed the warrants of FEAC to purchase one FEAC Class A Share at an exercise price of $11.50 per share, subject to adjustment (the “FEAC Warrants,” and as so assumed, “New enGene Warrants”).
This summary and the information incorporated herein by reference is qualified in its entirety by reference to the text of the Warrant Assumption Agreement, which is included as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
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| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
The Introductory Note to this Current Report on Form 8-K discusses the consummation of the Transactions and various other transactions and events contemplated by the Business Combination Agreement which took place on or prior to the Closing Date and as a result of which, among other things, enGene and FEAC became wholly owned subsidiaries of New enGene, and such description is incorporated herein by reference.
FORM 10 INFORMATION
Item 2.01(f) of Current Report on Form 8-K states that if the registrant was formerly a shell company, as New enGene was immediately before the Business Combination, then following the closing of the transaction in which the registrant ceases to be a shell company, the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, New enGene is providing the information below that would be included in a Registration Statement on Form 10 if it were to file such a Form 10. Please note that the information provided below relates to the combined company after the consummation of the Business Combination unless otherwise specifically indicated or the context otherwise requires.
Forward-Looking Statements
This Current Report on Form 8-K, including the information incorporated herein by reference, contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and “forward-looking information” within the meaning of Canadian securities laws (collectively, “forward-looking statements”). New enGene’s forward-looking statements include, but are not limited to, statements regarding New enGene’s expectations, hopes, beliefs, intentions, goals or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would” and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Current Report on Form 8-K, including the information incorporated herein by reference, may include, for example, statements about:
| • | the expected benefits of the Business Combination; |
| • | New enGene’s financial performance following the Business Combination, including financial projections and business metrics and any underlying assumptions thereunder; |
| • | the ability to maintain the listing of New enGene securities on a national securities exchange following the Business Combination; |
| • | New enGene’s success in recruiting and retaining, or changes required in, officers, key personnel or directors following the completion of the Business Combination; |
| • | New enGene’s plans and ability to execute product development, manufacturing process development, preclinical and clinical development efforts successfully and on anticipated timelines; |
| • | New enGene’s ability to design, initiate and successfully complete clinical trials and other studies for its product candidates and its plans and expectations regarding its ongoing or planned clinical trials; |
| • | New enGene’s plans and ability to obtain and maintain marketing approval from the U.S. Food and Drug Administration and other regulatory authorities, including the European Medicines Agency, for its product candidates; |
| • | New enGene’s plans and ability to commercialize its product candidates, if approved by applicable regulatory authorities; |
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| • | the degree of market acceptance of New enGene’s product candidates, if approved, and the availability of third-party coverage and reimbursement; |
| • | the ability of New enGene’s external contract manufacturers to support the manufacturing, release testing, stability analysis, clinical labeling and packaging of New enGene’s products; |
| • | New enGene’s future financial performance and the sufficiency of New enGene’s cash and cash equivalents to fund its operations; |
| • | the outcome of any known and unknown litigation and regulatory proceedings; and |
| • | New enGene’s ability to implement and maintain effective internal controls. |
All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and various assumptions. Certain assumptions made in preparing the forward-looking statements include:
| • | New enGene is able to recruit and retain qualified scientific and management personnel, establish clinical trial sites and patient registration for clinical trials and acquire technologies complementary to, or necessary for, its programs; |
| • | New enGene is able to enroll a cohort of patients in the Phase 2 LEGEND trial to assess EG-70’s efficacy and safety in the BCG-naïve patient population to evaluate its ultimate potential as a monotherapy in first line patients and expanding EG-70’s opportunity; |
| • | New enGene is able to file a Biologics License Application in 2025 with the FDA for approval to market EG-70 in the United States as a monotherapy to treat BCG-unresponsive NMIBC; |
| • | EG-70’s product profile can be integrated seamlessly into community urology clinics where the vast majority of NMIBC patients are treated; |
| • | New enGene is able to retain commercial rights to EG-70 in the United States and commercialize EG-70 independently, while selectively partnering outside of the United States;. |
| • | New enGene is able to execute the “pipeline-in-a-product” development strategy for EG-70; and |
| • | New enGene is able to utilize the DDX gene delivery platform to develop effective, new agents for the delivery of genetic medicines to mucosal tissues. |
You should not place undue reliance on these forward-looking statements, which may affect our business, financial condition and operating results. The following uncertainties and factors, including among other things those described in “Risk Factors” referred to below, could affect future performance and actual results to differ materially and adversely from those expressed in, anticipated or implied by forward-looking statements:
| • | the ability of New enGene to continue to meet stock exchange listing standards following the consummation of the Business Combination; |
| • | the risk that the consummation of the Business Combination disrupts current plans and operations of enGene; |
| • | the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, the net cash proceeds to New enGene following redemptions and transaction expenses; |
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| • | risks applicable to enGene’s business, including the extensive regulation of all aspects of enGene’s business, competition from other existing or newly developed products and treatments; |
| • | risks associated with the protection of intellectual property, New enGene’s ability to raise additional capital to fund its produce development activity, and its ability to maintain key relationships and to attract and retain talented personnel; |
| • | the possibility that enGene or New enGene may be adversely affected by changes in domestic and foreign business, market, financial, political, legal conditions and laws and regulations; or |
| • | other risks and uncertainties set forth in the section entitled “Risk Factors” in this Current Report on Form 8-K, including the information incorporated herein by reference. |
In addition, statements that “we believe” and similar statements reflect beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Current Report on Form 8-K. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Current Report on Form 8-K relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Current Report on Form 8-K to reflect events or circumstances after the date hereof or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
BUSINESS
The business of New enGene after the Business Combination is described in the Proxy Statement/Prospectus under the heading “Business of enGene” beginning on page 300 and that information is incorporated herein by reference.
RISK FACTORS
The risks associated with New enGene’s business are described in the Proxy Statement/Prospectus under the heading “Risk Factors — Risks Related to enGene and New enGene’s Business Following the Business Combination” (including, “— Risks Relating to Our Business,” “— Regulatory Risks,” “— Risks Related to International Operations,” “— Risks Related to Our Intellectual Property,” “— Risks Related to Acquisitions and Collaborations” and “— Risks Relating to Investment in New enGene’s Securities”) beginning on page 73 and “Risk Factors — Risks Related to Being a Public Company” beginning on page 155 and are incorporated herein by reference.
FINANCIAL INFORMATION
Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of New enGene. Reference is also made to the disclosure contained in the Proxy Statement/Prospectus in the sections entitled “Selected Historical Financial Information of FEAC” beginning on page 275, and “Selected Historical Financial Information of enGene” beginning on page 278. Reference is further made to the Quarterly Report on Form 10-Q filed by FEAC with the SEC on October 30, 2023 (the “FEAC Q3 2023 10-Q”) in the section entitled “Part I, Item 1. Financial Information” and the disclosure contained in the FEAC Q3 2023 10-Q in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, each of which is incorporated herein by reference.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The disclosure contained in the Proxy Statement/Prospectus under the heading “enGene’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 338 is incorporated herein by reference.
PROPERTIES
The facilities of New enGene are described in the Proxy Statement/Prospectus in the section entitled “Business of enGene — Facilities” beginning on page 336 and such description is incorporated herein by reference.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of New enGene Shares immediately following consummation of the Business Combination by:
| • | each person known to New enGene to be the beneficial owner of more than 5% of New enGene Shares upon giving effect to the proposed Business Combination; |
| • | each director and each of New enGene’s named executive officers; and |
| • | all current executive officers and directors as a group. |
Unless otherwise indicated, we believe that all persons named in the below table have sole voting and investment power with respect to all New enGene Shares beneficially owned by them. Except as otherwise noted herein, the number and percentage of New enGene Shares beneficially owned is determined in accordance with Rule 13d-3 of the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, a person is deemed to be a beneficial owner of a security if that person has sole or shared voting power, which includes the power to vote or to direct the voting of the security, or investment power, which includes the power to dispose of or to direct the disposition of the security. In determining beneficial ownership percentages, we deem shares that a person will have the right to acquire within 60 days following the Closing Date, if any, to be outstanding and to be beneficially owned by the person with such right to acquire additional New enGene Shares for the purposes of computing the percentage ownership of that person (including in the total when calculating the applicable beneficial owner’s percentage of ownership), but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
| Name and Address of Beneficial Owner |
Number of Shares |
Percent of Total Voting Power |
||||||
New enGene greater than 5% holders |
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Forbion Growth (1) |
8,169,004 | 31.9 | % | |||||
Lumira Ventures III, L.P. and affiliates (2) |
3,381,853 | 14.4 | % | |||||
Forbion Capital Fund III Coöperarief U.A. (3) |
3,369,275 | 14.2 | % | |||||
Fonds de solidarité des travailleurs du Québec (4) |
3,088,682 | 13.1 | % | |||||
Biotechnology Value Fund, L.P. and affiliates (5) |
3,196,439 | 13.2 | % | |||||
New enGene directors and named executive officers |
||||||||
Jason D. Hanson (6) |
1,216,266 | 5.0 | % | |||||
Dr. Anthony T. Cheung (7) |
535,442 | 2.3 | % | |||||
Dr. James C. Sullivan (6) |
112,465 | * | ||||||
Dr. Gerald Brunk (8) |
3,381,853 | 14.4 | % | |||||
Jasper Bos (9) |
— | — | % | |||||
Dr. Richard Glickman (10) |
90,436 | * | % | |||||
New enGene directors and executive officers as a group (9 persons) |
5,535,972 | 21.6 | % | |||||
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| * | Less than 1%. |
Unless otherwise indicated, the address of each person named below is c/o enGene Holdings Inc., 7171 Rue Frederick Banting, Saint-Laurent, QC H4S 1Z9, Canada.
| (1) | Forbion Growth Sponsor FEAC I B.V., or Sponsor, is the record holder of 3,765,932 of the New enGene Shares reported herein. Forbion Growth Opportunities Fund I Cooperatief U.A. (“FGOF”) is the record holder of 2,000,000 New enGene Shares reported herein. The number of shares reported also includes warrants held by Sponsor that may be exercised to acquire 1,736,406 New enGene Shares, and warrants held by FGOF that may be exercised to acquire 666,666 New enGene Shares, in each case that are exercisable within 60 days following October 31, 2023. FGOF wholly owns the Sponsor and therefore the Sponsor and FGOF have shared voting and investment power over the New enGene Shares held by the Sponsor. Forbion Growth Management B.V. (“Forbion Management”) is the sole director of FGOF and therefore shares voting and investment power (i) with FGOF over the New enGene Shares that will be held by FGOF and (ii) with FGOF and, indirectly, the Sponsor, over the New enGene Shares that will be held by the Sponsor. Forbion Management exercises voting and investment power through its investment committee (the “Investment Committee”) consisting of Sander Slootweg, Martien van Osch, Geert-Jan Mulder, Vincent van Houten, Dirk Kersten, Nanna Lüneborg, Wouter Joustra and Jasper Bos. None of the members of the Investment Committee has individual voting and investment power with respect to the FEAC Shares, and each such member disclaims beneficial ownership of the FEAC Shares except to the extent of his or her proportionate pecuniary interest therein. Jasper Bos, Cyril Lesser, Sander Slootweg and Wouter Joustra, who are directors of the Sponsor, have voting and investment discretion with respect to the New enGene Shares owned by the Sponsor and may be deemed to have indirect shared beneficial ownership of the New enGene Shares owned by the Sponsor. Jasper Bos, Cyril Lesser, Sander Slootweg and Wouter Joustra each disclaim beneficial ownership over the New enGene Shares except to the extent of their pecuniary interest therein. FGOF, Sponsor, Forbion Management and such members of the Investment Committee each disclaims any affiliation with Forbion III and its directors, officers or other affiliates. The business address of the above-named Forbion persons is c/o Forbion, Gooimeer 2-35, 1411 DC Naarden, The Netherlands. |
| (2) | Consists of 1,341,790 shares held by Lumira Ventures III, L.P. (“Lumira III”), 44,647 shares held by Lumira Ventures III (International), L.P. (“Lumira III Int’l”), 348,686 shares held by Lumira Ventures IV, L.P. (“Lumira IV”), 83,816 shares held by Lumira Ventures IV (International), L.P. (“Lumira IV Int’l”), 1,077,386 shares held by Merck Lumira Biosciences Fund, L.P. (“Merck-Lumira”), and 152,974 shares held by Merck Lumira Biosciences Fund (Québec), L.P. (“Merck-Lumira B” and, together with Lumira III, Lumira III Int’l, Lumira IV, Lumira IV Int’l, and Merck-Lumira, the “Lumira entities”). The number of shares reported also includes warrants held by Lumira III that may be exercised to acquire 114,945 New enGene Shares, warrants held by Lumira III Int’l that may be exercised to acquire 3,825 New enGene Shares, warrants held by Lumira IV that may be exercised to acquire 38,301 New enGene Shares, warrants held by Lumira IV Int’l that may be exercised to acquire 9,207 New enGene Shares, warrants held by Merck-Lumira that may be exercised to acquire 145,603 New enGene Shares, and warrants held by Merck-Lumira B that may be exercised to acquire 20,673 New enGene Shares, in each case that are exercisable within 60 days following October 31, 2023. Lumira III and Lumira III Int’l are controlled by their general partner, Lumira Ventures III GP, L.P., and managed by Lumira Capital Investment Management Inc. (“Lumira Mgmt”). Lumira Ventures III GP, L.P. is controlled by its general partners, Lumira III GP Inc. and Lumira III GP Holdings Co. Lumira IV and Lumira IV Int’l are controlled by their general partner, Lumira IV GP 2020 Inc., and managed by Lumira Mgmt. Merck-Lumira and Merck-Lumira B are controlled by their general partner, Lumira Capital GP, L.P., and managed by Lumira Mgmt. Lumira Capital GP, L.P. is controlled by its general partners, Lumira GP Inc. and Lumira GP Holdings Co. Dr. Brunk is an executive officer of each of Lumira III GP Inc., Lumira III GP Holdings Co., Lumira IV GP 2020 Inc., Lumira GP Inc., Lumira GP Holdings Co. and Lumira Mgmt. Each of Lumira III GP Inc., Lumira III GP Holdings Co., Lumira IV GP 2020 Inc., Lumira GP Inc., Lumira GP Holdings Co., Lumira Mgmt and Dr. Brunk may be deemed to beneficially own the securities held by the respective Lumira entities, but each disclaims beneficial ownership except to the extent of their respective pecuniary interests therein, if any. The business address of the Lumira entities 141 Adelaide Street West, Suite 770, Toronto, Ontario, Canada M5H 3L5. |
| (3) | The number of shares reported includes warrants that may be exercised to acquire 475,076 New enGene Shares that are exercisable within 60 days following October 31, 2023. Forbion III Management B.V. (“Forbion III”) is the director of Forbion Capital Fund III Coöperatief U.A. (“Forbion III COOP”) with voting and investment power over the shares held by Forbion III COOP. Such voting and investment power are exercised by Forbion III through its investment committee, consisting of H. A. Slootweg, M. A. van Osch, G. J. Mulder, H.N. Reithinger, Dr. M. Boorsma and S. J. H. van Deventer. None of the members of the investment committee have individual voting and investment power with respect to such shares, and the members of the investment committee, including Dr. Boorsma, who is currently a director of enGene, disclaim beneficial ownership of such shares except to the extent of their proportionate pecuniary interests therein. Forbion III COOP disclaims any affiliation with FEAC, Sponsor, or any of FEAC’s or Sponsor’s direct or indirect directors, officers or other affiliates. The business address of Forbion III COOP and Forbion III is Gooimeer 2-35, 1411 DC Naarden, The Netherlands. |
| (4) | The number of shares reported includes warrants that may be exercised to acquire 446,572 New enGene Shares that are exercisable within 60 days following October 31, 2023. Fonds de solidarité des travailleurs du Québec (the “Fonds”) is |
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| managed by a 19-member board of directors, which is majority independent and includes Mr. Claude Séguin, the chair of the board, and Ms. Janie C. Béïque, who is also the President and Chief Executive Officer of the Fonds. Investment power over the enGene shares held by the Fonds is exercised either by its board of directors or by a 9-member investment committee of the Fonds’ board of directors, which is majority independent and includes Pierre-Maurice Vachon, who is also a President of the Fonds, and Magali Picard, who is also first vice-chair of the board. None of the members of the Fonds’ board of directors or investment committee have individual voting or investment power over the enGene shares held by the Fonds. Mr. Séguin, Ms. Béïque, Mr. Vachon and Ms. Picard each disclaim beneficial ownership of such shares except to the extent of their pecuniary interests therein. The business address of the Fonds is 545 Crémazie Blvd. East, Suite 200, Montréal, Québec, Canada H2M 2W4. |
| (5) | Consists of 1,204,412 New enGene Shares held by Biotechnology Value Fund, L.P. (“BVF”), 912,776 New enGene Shares held by Biotechnology Value Fund II, L.P. (“BVF2”), 104,257 New enGene Shares held by Biotechnology Value Trading Fund OS LP (“Trading Fund OS”) and 29,592 New enGene Shares held by MSI BVF SPV, LLC (“MSI BVF”). The number of shares reported also includes warrants held by BVF that may be exercised to acquire 505,835 New enGene Shares, warrants held by BVF2 that may be exercised to acquire 383,352 New enGene Shares, warrants held by Trading Fund OS that may be exercised to acquire 43,786 New enGene Shares, and warrants held by MSI BVF that may be exercised to acquire 12,429 New enGene Shares, in each case that are exercisable within 60 days following October 31, 2023.BVF I GP LLC (“BVF GP”) is the general partner of BVF, and may be deemed to beneficially own the New enGene Shares held by BVF; BVF II GP LLC (“BVF2 GP”) is the general partner of BVF2, and may be deemed to beneficially own the New enGene Shares held by BVF2; BVF Partners OS Ltd. (“Partners OS”) is the general partner of Trading Fund OS, and may be deemed to beneficially own the New enGene Shares held by Trading Fund OS. BVF GP Holdings LLC (“BVF GPH”) is the sole member of each of BVF GP and BVF2 GP, and may be deemed to beneficially own the New enGene Shares beneficially owned by BVF and BVF2. BVF Partners L.P. (“Partners”) is the investment manager of BVF, BVF2, Trading Fund OS and MSI BVF and the sole member of Partners OS, and may be deemed to beneficially own the New enGene Shares beneficially owned by BVF, BVF2, Trading Fund OS, and MSI BVF. BVF Inc. is the general partner of Partners, and may be deemed to beneficially own the New enGene Shares beneficially owned by Partners. Mark N. Lampert is a director and officer of BVF Inc., and may be deemed to beneficially own the New enGene Shares beneficially owned by BVF Inc. Each of BVF GP, BVF2 GP, Partners OS, BVF GPH, Partners, BVF Inc. and Mr. Lampert disclaims beneficial ownership of the shares beneficially owned by BVF, BVF2, Trading Fund OS and MSI BVF. The business address of BVF, BVF GP, BVF2, BVF2 GP, BVF GPH, MSI BVF, Partners, BVF Inc. and Mark N. Lampert is 44 Montgomery St., 40th Floor, San Francisco, California 94104. The business address of Trading Fund OS and Partners OS is PO Box 309 Ugland House, Grand Cayman, KY1-1104, Cayman Islands. |
| (6) | Represents options to acquire New enGene Shares that are exercisable within 60 days following October 31, 2023. |
| (7) | Consists of 49,933 New enGene Shares and options to acquire 485,509 New enGene Shares that are exercisable within 60 days following October 31, 2023. |
| (8) | Consists of New enGene Shares and warrants to purchase New enGene Shares held by the Lumira entities. See footnote (2) above. Dr. Brunk is an executive officer of certain entities controlling and/or managing the Lumira entities. Dr. Brunk disclaims beneficial ownership of the New enGene Shares held by the Lumira entities, except to the extent of his pecuniary interest therein, if any. |
| (9) | Mr. Bos is a director of Sponsor, and a member of the investment committee of Forbion Management. Mr. Bos disclaims beneficial ownership over the New enGene Shares held by Sponsor and FGOF, except to the extent of his proportionate pecuniary interest therein. |
| (10) | Consists of 24,555 New enGene Shares and options to acquire 65,881 New enGene Shares that are exercisable within 60 days following October 31, 2023. |
DIRECTORS AND EXECUTIVE OFFICERS
The disclosure contained in the Proxy Statement/Prospectus under the heading “Directors and Executive Officers of New enGene After the Business Combination” beginning on page 380 is incorporated herein by reference.
EXECUTIVE COMPENSATION
The disclosures contained in the Proxy Statement/Prospectus under the heading “enGene’s Executive and Director Compensation” beginning on page 371 and “Directors and Executive Officers of New enGene After the Business Combination — Compensation Committee Interlocks and Insider Participation” on page 387 are incorporated herein by reference.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain relationships and related party transactions and director independence of New enGene are described in the Proxy Statement/Prospectus under the headings “Certain Relationships and Related Party Transactions” beginning on page 409, and “Directors and Executive Officers of New enGene After the Business Combination — Independence of the Members of the Board of Directors” on page 383, and that information is incorporated herein by reference. enGene, as a private company, does not have a formal written related party transaction policy. New enGene will implement policies and procedures with respect to the approval of related party transactions concurrently with the Closing.
LEGAL PROCEEDINGS
Reference is made to the disclosure regarding legal proceedings in the section of the Proxy Statement/Prospectus titled “Business of enGene — Legal Proceedings” beginning on page 337 and that information is incorporated herein by reference.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
New enGene’s common shares are expected to begin trading on The Nasdaq Global Market under the symbol “ENGN” and New enGene’s warrants are expected to begin trading on The Nasdaq Global Market under the symbol “ENGNW” on November 1, 2023, in lieu of the ordinary shares, units and warrants of FEAC. New enGene has not paid any cash dividends on its common shares to date. It is the present intention of New enGene’s board of directors to retain future earnings for the development, operation and expansion of its business, and New enGene’s board of directors does not anticipate declaring or paying any cash dividends for the foreseeable future. The payment of dividends is within the discretion of New enGene’s board of directors and will be contingent upon New enGene’s future revenues and earnings, as well as its capital requirements and general financial condition and restrictions that may be contained in debt agreements.
RECENT SALES OF UNREGISTERED SECURITIES
Reference is made to the disclosure set forth under Item 3.02 of this Current Report on Form 8-K concerning the issuance of New enGene Shares in connection with the Transactions, which disclosure is incorporated herein by reference.
DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED
The disclosure contained in the Proxy Statement/Prospectus under the headings “Proposal No. 2 — The Governing Documents Proposal — Comparison of Corporate Governance and Shareholder Rights” beginning on page 231, and “— Description of New enGene Securities” beginning on page 389 is incorporated herein by reference. The information set forth under Item 3.03 of this Current Report on Form 8-K is incorporated herein by reference.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to the disclosure set forth under Item 1.01 of this Current Report on Form 8-K concerning the Indemnification Agreements, which disclosure is incorporated herein by reference. Further information about the indemnification of New enGene’s directors and executive officers is set forth in Item 20 of the Form S-4/A Registration Statement under the caption “New enGene” beginning on page II-1 and that information is incorporated herein by reference.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
FINANCIAL STATEMENTS AND EXHIBITS
The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
PIPE Financing
On May 16, 2023, concurrently with the execution of the Business Combination Agreement, FEAC, New enGene and certain investors (the “PIPE Investors”) entered into subscription agreements (the “Subscription Agreements” and each a “Subscription Agreement”) pursuant to which, among other things, the PIPE Investors agreed, subject to the completion of each element of the Transactions (other than those Transactions that are scheduled to be completed following the Closing Date), to subscribe for and purchase, and FEAC agreed that it would issue and sell to the PIPE Investors (which obligation will be assumed (the “Assumption”) by New enGene after the completion of the FEAC Reorganization and prior to the consummation of the PIPE Financing (as defined below) the number of FEAC Class A Shares (or after the Assumption, New enGene Shares) provided for in the applicable Subscription Agreement. Pursuant to the Subscription Agreements, as amended by the Side Letter Agreements (as defined below), and the Assumption, in connection with the consummation of the Business Combination, New enGene issued to the PIPE Investors collectively 6,435,441 New enGene Shares and 2,702,791 New enGene Warrants for an aggregate purchase price equal to $56,891,682 (the “PIPE Financing”).
Immediately following the execution and delivery of the Subscription Agreements, FEAC and New enGene also entered into a side letter with each PIPE Investor (the “Side Letter Agreement” and collectively, the “Side Letter Agreements”) to amend the relevant Subscription Agreement and which, together with the relevant Subscription Agreement, reflects the total number of FEAC Class A Shares and FEAC Warrants to be issued by FEAC (or after the Assumption, the total number of New enGene Shares and New enGene Warrants to be issued by New enGene) pursuant to the PIPE Financing in consideration of the purchase price set forth in the relevant Subscription Agreement.
The New enGene Shares and New enGene Warrants issued to the Subscribers in the PIPE Financing were issued pursuant to and in accordance with the exemption from registration under the Securities Act, under Section 4(a)(2) promulgated under the Securities Act.
The foregoing description of the Subscription Agreements and the Side Letter Agreements is subject to and qualified in its entirety by reference to the full text of the Subscription Agreements and the Side Letter Agreements, forms of which are attached as Exhibit 10.2 and Exhibit 10.3, respectively, to the Current Report on Form 8-K, and the terms of which are incorporated herein by reference.
Non-Redemption Agreement
On May 16, 2023, concurrently with the execution of the Business Combination Agreement, FEAC and a FEAC shareholder entered into a non-redemption agreement (the “Non-Redemption Agreement”), pursuant to which, among other things, FEAC agreed to issue an additional 26,575 FEAC Class A Shares and 81,158 FEAC Warrants (or after the Assumption, New enGene to issue additional New enGene Shares and New enGene Warrants) to such FEAC shareholder in consideration of such FEAC shareholder’s commitment (i) to vote or cause to be voted all of its 166,665 FEAC Class A Shares in favor of the Transaction Proposals and (ii) not to redeem its 166,665 FEAC Class A Shares in connection with the approval of the Business Combination by the shareholders of FEAC. On the Closing Date, New enGene issued such additional New enGene Shares and New enGene Warrants to such shareholder in accordance with the terms of the Non-Redemption Agreement.
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The New enGene Shares and New enGene Warrants issued to such shareholder in accordance with the terms of the Non-Redemption Agreement were issued pursuant to and in accordance with the exemption from registration under the Securities Act, under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act.
The foregoing description of the Non-Redemption Agreement is subject to and qualified in its entirety by reference to the full text of the Non-Redemption Agreement, a form of which is attached as Exhibit 10.7 to this Current Report on Form 8-K.
| Item 3.03. | Material Modification to Rights of Security Holders. |
In connection with the Closing and effective as of the Closing Date, New enGene adopted the Articles of enGene Holdings Inc. in the form annexed to Proxy Statement/Prospectus as Annex F (and filed as Exhibit 3.1 to the Form S-4/A Registration Agreement), which is incorporated herein by reference. Reference is made to the sections of the Proxy Statement/Prospectus captioned “Proposal No. 2 — The Governing Documents Proposal” beginning on page 227, “— Comparison of Corporate Governance and Shareholder Rights” beginning on page 231, and “Description of New enGene Securities” beginning on page 389, for a description of the terms of the New enGene Shares, each of which is incorporated herein by reference.
| Item 5.01. | Changes in Control of Registrant. |
Reference is made to the disclosure in the Proxy Statement/Prospectus in the section titled “Proposal No. 1 — The Business Combination Proposal,” beginning on page 173, which is incorporated herein by reference. Further reference is made to the information contained in the Introductory Note to this Current Report on Form 8-K, which is incorporated herein by reference.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Directors and Executive Officers of New enGene
Effective as of the Closing Date, the directors and executive officers of New enGene are as described in the Proxy Statement/Prospectus under the heading “Directors and Executive Officers of New enGene After the Business Combination” beginning on page 380, which disclosure is incorporated herein by reference. The information set forth above in the sections titled “Directors and Executive Officers” and “Certain Relationships and Related Transactions, and Director Independence” is incorporated herein by reference.
Incentive Equity Plan
At the extraordinary general meeting of FEAC shareholders held October 24, 2023, in connection with the approval of the Business Combination, shareholders adopted the enGene Holdings Inc. 2023 Incentive Equity Plan in the form annexed to the Proxy Statement/Prospectus as Exhibit G to Annex A (the “Incentive Equity Plan”). The material features of the Incentive Equity Plan are described in the Proxy Statement/Prospectus under the headings “Proposal No. 4 — The Incentive Equity Plan Proposal” beginning on page 243, and such description is incorporated herein by reference.
This summary and the information incorporated herein by reference is qualified in its entirety by reference to the text of the Incentive Equity Plan, which is included as Exhibit 10.20 to this Current Report on Form 8-K and is incorporated herein by reference.
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| Item 5.03. | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
The information contained in Item 3.03 to this Current Report on Form 8-K is incorporated in this Item 5.03 by reference.
| Item 5.05. | Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics. |
In connection with the Business Combination, on October 31, 2023, New enGene’s board of directors approved and adopted a new Code of Business Conduct and Ethics applicable to all employees, officers and directors of New enGene. A copy of the Code of Business Conduct and Ethics can be found on New enGene’s website at www.engene.com. The information on New enGene’s website is not incorporated herein by reference.
| Item 5.06. | Change in Shell Company Status. |
On October 31, 2023, as a result of the consummation of the Business Combination, each of FEAC and New enGene ceased to be a shell company. The material terms of the Business Combination are described in the Proxy Statement/Prospectus under the heading “Proposal No. 1 — The Business Combination Proposal” beginning on page 173 which is incorporated herein by reference. Further, the information set forth in the Introductory Note and under Item 2.01 is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(a) Financial Statements of Business Acquired.
In accordance with Rule 12b-23 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 12b-23”), the following financial statements of enGene are incorporated by reference to such financial statements appearing on pages F-2 to F-80 of the Proxy Statement/Prospectus:
| • | Unaudited condensed consolidated balance sheets as of July 31, 2023, and October 31, 2022; and the related condensed consolidated statements of operations and comprehensive loss for the three and nine months ended July 31, 2023, and 2022, condensed consolidated statements of redeemable convertible preferred shares and shareholders’ deficit for the three and nine months ended July 31, 2023 and 20223, and the condensed consolidated statements of cash flows for the nine months ended July 31, 2023 and 2022; and |
| • | Audited consolidated balance sheet as of October 31, 2022 and 2021; and the related consolidated statements of operations and comprehensive loss, consolidated statements of redeemable convertible preferred shares and shareholders’ deficit, and consolidated statements of cash flows for the years ended October 31, 2022, 2021, and 2020. |
In addition, the following financial statements of New enGene are incorporated by reference to such financial statements appearing on pages F-130 to F-138 of the Proxy Statement/Prospectus:
| • | Audited balance sheets as of July 31, 2023; and the related statement of operations and comprehensive loss, statement of redeemable common shares and shareholder’s deficit, and statement of cash flows for April 24, 2023 (inception) to July 31, 2023. |
In accordance with Rule 12b-23, the following financial statements of FEAC are incorporated by reference to such financial statements appearing on pages F-107 to F-129 of the Proxy Statement/Prospectus:
| • | Audited balance sheets as of December 31, 2022 and 2021, the related statements of operations, changes in shareholders’ deficit and cash flows for the year ended December 31, 2022, and for August 9, 2021 (inception) through December 31, 2021. |
In addition, the following financial statements of FEAC are filed as Exhibit 99.2 to this Current Report on Form 8-K:
| • | Unaudited condensed balance sheets as of September 30, 2023 and December 31, 2022, and the related condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and September 30, 2022, condensed statements of changes in shareholders’ deficit for the three and nine months ended September 30, 2023 and September 30, 2022, and condensed statements of cash flows for the nine months ended September 30, 2023 and September 30, 2022. |
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(b) Pro Forma Financial Information.
In accordance with Rule 12b-23, unaudited pro forma condensed combined financial information regarding New enGene to reflect the consummation of the Transactions as of July 31, 2023, and for the nine months ended July 31, 2023 and for the year ended October 31, 2022, are filed as Exhibit 99.1 to this Current Report on Form 8-K.
(d) Exhibits
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| * | Filed herewith. |
| + | Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules upon request by the Securities and Exchange Commission. |
| # | Portions of this exhibit are redacted in accordance with Regulation S-K Item 601(b)(10)(iv). |
| - | Indicates a management contract or compensatory plan or arrangement. |
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENGENE HOLDINGS INC. | ||||||
| October 31, 2023 | By: | /s/ Jason D. Hanson | ||||
| Name: | Jason D. Hanson | |||||
| Title: | Chief Executive Officer | |||||
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Exhibit 4.3
Execution Version
WARRANT ASSIGNMENT, ASSUMPTION
AND AMENDMENT AGREEMENT
This Warrant Assignment, Assumption and Amendment Agreement (this “Agreement”) is made as of October 30, 2023, by and among Forbion European Acquisition Corp., a Cayman Islands exempted company (the “Company”), enGene Inc., a company incorporated under the laws of Canada (“enGene”), enGene Holdings Inc., a company incorporated under the laws of Canada that intends to continue to a company governed by the Business Corporations Act (British Columbia) (“New enGene”), and Continental Stock Transfer & Trust Company, a New York corporation (the “Warrant Agent”).
WHEREAS, the Company and the Warrant Agent are parties to that certain warrant agreement, dated as of December 9, 2021 (the “Original Warrant Agreement”);
WHEREAS, the Company consummated, on December 14, 2021, an initial public offering (including the associated over-allotment offering, the “Offering”) of units of the Company’s equity securities, each such unit comprised of one Class A ordinary share of the Company, par value $0.0001 per share (“Ordinary Shares”) and one-third of a redeemable Public Warrant (as defined below) and, in connection therewith, issued and delivered warrants for the purchase of 4,216,667 Ordinary Shares to public investors in the Offering (the “FEAC Public Warrants”);
WHEREAS, Forbion Growth Sponsor FEAC I B.V., a Dutch limited liability company (the “Sponsor”), substantially concurrently with the Offering, purchased from the Company warrants for the purchase of an 5,195,000 Ordinary Shares, each bearing the legend set forth in Exhibit A hereto (the “Private Placement Warrants”), at a purchase price of $1.50 per Private Placement Warrant;
WHEREAS, in order to finance the Company’s transaction costs in connection with an intended initial Business Combination (as defined below), the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, from time to time loan to the Company funds as the Company may require (“Working Capital Loans”);
WHEREAS, in order to extend the period of time the Company has to consummate a Business Combination (as defined below) by up to two additional three month periods, the Sponsor or its affiliates or designees must deposit into the trust account additional funds of $1,265,000 ($0.10 per unit) for each respective available three-month extension, for a total payment of up to $2,530,000 ($0.20 per unit), in exchange for one or more non-interest bearing, unsecured promissory notes (“Extension Loans”);
WHEREAS, up to $1,500,000 of the Working Capital Loans and Extension Loans, taken together, are convertible (at a rate of a warrant for one share for every $1.50 of such loans) into warrants for the purchase of Ordinary Shares at a price of $1.50 per warrant, which warrants will be identical to the Private Placement Warrants (the “Sponsor Loan Warrants” and, together with the Private Placement Warrants, the “FEAC Private Placement Warrants” and, together with the FEAC Public Warrants, the “FEAC Warrants”);
WHEREAS, all of the FEAC Warrants are governed by the Original Warrant Agreement;
WHEREAS, the Company, enGene, New enGene and certain other persons party thereto have entered into a Business Combination Agreement (as the same may be amended or modified from time to time, the “Business Combination Agreement”), pursuant to which, on the terms and subject to the conditions set forth therein, among other things, at the time of consummation (the “Closing”) of the Transactions (as defined therein), the Company, enGene and New enGene will, among other things, combine their respective businesses (the transactions contemplated by the Business Combination Agreement are referred to herein as the “Business Combination”);
WHEREAS, at the Initial Merger Effective Time and as part of the Cayman Merger (each as defined in the Business Combination Agreement), each outstanding Ordinary Share will be converted into the right to receive one common share of New enGene (each, a “Common Share” and together, the “Common Shares”);
WHEREAS, pursuant to each of the Business Combination Agreement and Section 4.4 of the Original Warrant Agreement, as part of the Cayman Reorganization (as defined in the Business Combination Agreement), concurrently with the Cayman Merger, and effective at the same time the Cayman Merger becomes effective under the Cayman Islands law (the “Effective Time”), each of the FEAC Public Warrants issued and outstanding immediately prior thereto will be assumed by New enGene and amended as provided herein to reflect that such warrants will thereupon become warrants to purchase Common Shares on substantially the same terms as the FEAC Public Warrants (“New enGene Public Warrants”), and the rights and obligations of the Company under the Original Warrant Agreement shall be assigned to and assumed by New enGene;
WHEREAS, the Sponsor, the Company, enGene, New enGene and certain other parties thereto named therein have entered into a Sponsor and Insiders Letter Agreement, dated May 16, 2023 (the “Sponsor Letter Agreement”), pursuant to which, among other things, the Sponsor has agreed to surrender FEAC Private Placement Warrants for the purchase of 5,463,381 Ordinary Shares (the “Forfeited Warrants”) as a contribution to the capital of FEAC and for no consideration, effective at the time specified in the Business Combination Agreement, on the terms and conditions set forth in the Business Combination Agreement and the Sponsor Letter Agreement (the “Warrant Forfeiture”);
WHEREAS, as part of the Cayman Reorganization, concurrently with the Cayman Merger, and effective at the same time the Cayman Merger becomes effective under the Cayman Islands law, the FEAC Private Placement Warrants remaining after giving effect to the Warrant Forfeiture are being assumed by New enGene, and amended as provided herein to reflect that such warrants will thereupon become warrants to purchase Common Shares on substantially the same terms as the FEAC Private Placement Warrants (“New enGene Private Placement Warrants”);
WHEREAS, following the Cayman Reorganization, the Company will file an election to change its classification for U.S. federal income tax purposes from a corporation to an entity disregarded as separate from its owner New enGene, to be effective as of the beginning of the Closing Date (the “U.S. Entity Classification Election” and, together with the Cayman Reorganization, the “FEAC Reorganization”);
WHEREAS, following the Closing of the Business Combination, the Company will be liquidated;
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WHEREAS, in connection with the Closing of the Business Combination, New enGene has issued (i) to its PIPE Investors (as defined in the Business Combination Agreement) certain warrants for the purchase of Common Shares on substantially the same terms as the New enGene Public Warrants and (ii) to a Company shareholder party to a non-redemption agreement with the Company certain warrants for the purchase of Common Shares on substantially the same terms as the New enGene Public Warrants (such warrants, together with the New enGene Private Placement Warrants and the New enGene Public Warrants, being “New enGene Warrants”);
WHEREAS, enGene has issued to its 2022 Noteholders and its 2023 Noteholders (as such terms are defined in the Business Combination Agreement) certain warrants of enGene (the “enGene Warrants”) for the purchase of common shares of enGene (“enGene Common Shares”);
WHEREAS, on the Closing Date, pursuant to the Amalgamation (as defined in the Business Combination Agreement), (i) each enGene Warrant outstanding immediately prior to the Amalgamation will be exchanged for New enGene Private Placement Warrants for the purchase of such number of Common Shares as is determined as per the Exchange Ratio (as defined in the Business Combination Agreement), upon and subject to the other terms and conditions set forth in Business Combination, the Plan of Arrangement (as defined in the Business Combination Agreement) and in accordance with the provisions of applicable law;
WHEREAS, as part of the Cayman Reorganization the Company desires to assign all of its right, title and interest in the Original Warrant Agreement to New enGene and New enGene wishes to accept such assignment, and the parties hereto desire to amend the Original Warrant Agreement in the form of this Agreement to reflect such assignment and assumption;
WHEREAS, Section 9.8 of the Original Warrant Agreement provides that the Company and the Warrant Agent may amend the Original Warrant Agreement without the consent of any registered holders for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained therein or adding or changing any other provisions with respect to matters or questions arising under the Original Warrant Agreement as the Company and the Warrant Agent may deem necessary or desirable and that the Company and the Warrant Agent deem shall not adversely affect the interest of the registered holders;
WHEREAS, the parties hereto desire to enter into this Agreement to provide for the Warrant Agent to act following the Closing on behalf of New enGene hereunder, and the Warrant Agent is willing to so act, including in connection with the issuances, surrenders, assignments, assumptions and amendments in respect of the FEAC Warrants, the enGene Warrants and the New enGene Warrants described herein, and in connection with the issuance, registration, transfer, exchange, redemption and exercise of the New enGene Warrants;
WHEREAS, New enGene desires to provide for the form and provisions of the New enGene Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of New enGene, the Warrant Agent, and the holders of the Warrants; and
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WHEREAS, all acts and things have been done and performed which are necessary to make the New enGene Warrants, when executed on behalf of New enGene and countersigned by or on behalf of the Warrant Agent, if a physical certificate is issued, as provided herein, the valid, binding and legal obligations of New enGene, and to authorize the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:
1. Assignment and Assumption; Consent.
1.1 Assignment and Assumption. The Company hereby assigns to New enGene all of the Company’s right, title and interest in and to the Original Warrant Agreement (as amended hereby) as of the Effective Time. New enGene hereby assumes, and agrees to pay, perform, satisfy and discharge in full, as the same become due, all of the Company’s liabilities and obligations under the Original Warrant Agreement (as amended hereby).
1.2 Consent. The Warrant Agent hereby consents to the assignment of the Original Warrant Agreement by the Company to New enGene pursuant to Section 1.1 hereof effective as of the Effective Time, and the assumption of the Original Warrant Agreement by New enGene from the Company pursuant to Section 1.1 hereof effective as of the Effective Time, and to the continuation of the Original Warrant Agreement in full force and effect from and after the Effective Time, subject at all times to the Original Warrant Agreement (as amended hereby) and to all of the provisions, covenants, agreements, terms and conditions of the Original Warrant Agreement and this Agreement.
2. Warrant Forfeiture. Sponsor hereby confirms the prior surrender, pursuant to and effected by the Sponsor Letter Agreement, of the Forfeited Warrants to the Company as a contribution to the capital of FEAC and for no consideration, effective as of the time and date set forth in the Sponsor Letter Agreement.
3. Amendment of Original Warrant Agreement. The Company and the Warrant Agent hereby amend the Original Warrant Agreement as provided in this Section 3, effective as of the Effective Time, and acknowledge and agree that the amendments to the Original Warrant Agreement set forth in this Section 3 are necessary or desirable and that such amendments do not adversely affect the interests of the registered holders.
3.1 Defined Terms. Unless the context otherwise requires, from and after the Effective Time:
(a) All references to the “Company” in the Original Warrant Agreement shall mean and refer to enGene Holdings Inc. as the successor-in-interest to Forbion European Acquisition Corp.
(b) All references to “Ordinary Shares” in the Original Warrant Agreement shall mean and refer to the Common Shares. As a result thereof, all such references shall be references to the Common Shares of enGene Holdings Inc. rather than the Ordinary Shares of Forbion European Acquisition Corp.
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(c) All references to “Public Warrants”, “Private Placement Warrants” and “Warrants” in the Original Warrant Agreement shall mean and refer to the New enGene Public Warrants, the New enGene Private Placement Warrants and the New enGene Warrants, respectively.
(d) All references to “Warrants” in the Original Warrant Agreement shall mean and refer to the New enGene Warrants.
(e) All references to the “Board of Directors” or any committee thereof in the Original Warrant Agreement shall mean the board of directors or committee thereof, as applicable, of enGene Holdings Inc.
(f) All references to the Company’s “Charter” shall mean the Articles of New enGene after giving effect to the continuation of New enGene to a company governed by the Business Corporations Act (British Columbia).
(g) The term “Business Day” as used in the Original Warrant Agreement shall mean a day, other than a Saturday, Sunday or federal holiday, on which banks in Toronto, Ontario and New York, New York are generally open for normal business.
3.2 Detachability of Warrants. Section 2.4 and Section 5.6 of the Original Warrant Agreement are each hereby deleted and replaced with the following:
“INTENTIONALLY OMITTED”
3.3 Notices. Section 9.2 of the Original Warrant Agreement is hereby deleted and replaced with the following:
Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:
enGene Holdings Inc.
7171 Rue Frederick Banting
Saint-Laurent, QC H4S 1Z9
Canada
Attn: Jason Hanson
Email: jhanson@engeneinc.com
with a copy to (which will not constitute notice):
Morgan, Lewis & Bockius LLP
101 Park Ave.
New York, NY 10178-0060
United States
Attn: Howard A. Kenny
Email: howard.kenny@morganlewis.com
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with a copy (which shall not constitute notice) to:
Blake, Cassels & Graydon LLP
595 Burrard Street, Suite 2600,
Three Bentall Centre,
Vancouver, British Columbia V7X 1L3
Canada
Attn: Joseph Garcia
Email: joseph.garcia@blakes.com
Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attention: Compliance Department
3.4 Legend. The restricted legend contained in Exhibit A of the Original Warrant Agreement is hereby deleted and replaced with the Legend contained in Exhibit A hereto.
3.5 Warrant Certificate. The Warrant Certificate contained in Exhibit B of the Original Warrant Agreement is hereby deleted and replaced with the Warrant Certificate contained in Exhibit B hereto.
[ Signature Page Follows ]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly executed by its duly authorized representative as of the date first above written.
| FORBION EUROPEAN ACQUISITION CORP. |
| By: /s/ Jasper Bos |
| Name: Jasper Bos |
| Title: Executive Officer |
| ENGENE INC. |
| By: /s/ Anthony Cheung |
| Name: Anthony Cheung |
| Title: Chief Technology Officer |
| ENGENE HOLDINGS INC. |
| By: /s/ Anthony Cheung |
| Name: Anthony Cheung |
| Title: Chief Technology Officer |
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY |
| By: /s/ Henry Farrell |
| Name: Henry Farrell |
| Title: Vice President |
[Signature Page to Warrant Assignment and Amendment Agreement]
EXHIBIT A
LEGEND
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE WARRANT AGREEMENT BY AND AMONG NEW ENGENE HOLDINGS INC. (AS SUCCESSOR TO FORBION EUROPEAN ACQUISITION CORP.), CONTINENTAL STOCK TRANSFER & TRUST COMPANY AND THE OTHER PARTIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH FORBION EUROPEAN ACQUISITION CORP. COMPLETES THE BUSINESS COMBINATION (AS DEFINED IN THE RECITALS OF THE WARRANT AGREEMENT, AS AMENDED, REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT, AS AMENDED) WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND COMMON SHARES OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES ARE ENTITLED TO REGISTRATION RIGHTS UNDER CERTAIN AGREEMENTS BY AND AMONG THE COMPANY AND THE RESPECTIVE PARTIES THERETO.
EXHIBIT B
Form of Warrant Certificate
Face
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED FOR IN THE
WARRANT AGREEMENT DESCRIBED BELOW
ENGENE HOLDINGS INC.
Organized under the laws of the Province of British Colombia, Canada
CUSIP •
Warrant Certificate
This Warrant Certificate certifies that , or registered assigns, is the registered holder of warrants evidenced hereby (the “Warrants” and each, a “Warrant”) to purchase Class A Ordinary Shares, $0.0001 par value per share (the “Common Shares”), of enGene Holdings Inc., a company organized under the laws of the Province of British Colombia, Canada (the “Company”). Each Warrant entitles the holder, upon exercise during the Exercise Period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable Common Shares as set forth below, at the exercise price (the “Warrant Price”) as determined pursuant to the Warrant Agreement, payable in US dollars, by bank wire or certified check (or through “cashless exercise” as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment of the Warrant Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially exercisable for one fully paid and non-assessable Common Share. No fractional shares will be issued upon exercise of any Warrant. If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a Common Share, the Company will, upon exercise, round down to the nearest whole number the number of Common Shares to be issued to the Warrant holder. The number of Common Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Warrant Price per Common Share for any Warrant is equal to $11.50 per share. The Warrant Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
Subject to the conditions set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end of such Exercise Period, such Warrants shall become void.
Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.
[ Signature Page Follows ]
| ENGENE HOLDINGS INC. | ||
| By: | ||
| Name: | [•] | |
| Title: | [•] | |
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent | ||
| By: | ||
| Name: | [•] | |
| Title: | [•] | |
Form of Warrant Certificate
Reverse
The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive Common Shares and are issued or to be issued pursuant to a Warrant Agreement dated as of October 30, 2023 (the “Warrant Agreement”), duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder” meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Warrant Price as specified in the Warrant Agreement (or through “cashless exercise” as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the Common Shares to be issued upon exercise is effective under the Securities Act of 1933, as amended, and (ii) a prospectus thereunder relating to the Common Shares is current, except through “cashless exercise” as provided for in the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain events the number of Common Shares issuable upon the exercise of the Warrants set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in a Common Share, the Company shall, upon exercise, round down to the nearest whole number of Common Shares to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a shareholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive Common Shares and herewith tenders payment for such Common Shares to the order of enGene Holdings Inc. (the “Company”) in the amount of $ in accordance with the terms hereof. The undersigned requests that a certificate for such Common Shares be registered in the name of whose address is and that such Common Shares be delivered to whose address is . If said number of shares is less than all of the Common Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such Common Shares be registered in the name of , whose address is and that such Warrant Certificate be delivered to , whose address is .
In the event that the Warrant may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of Common Shares that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive Common Shares. If said number of shares is less than all of the Common Shares purchasable hereunder (after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such Common Shares be registered in the name of , whose address is and that such Warrant Certificate be delivered to , whose address is .
[ Signature Page Follows ]
Date: [•], 202[•]
| (Signature) |
| (Address) |
| (Tax Identification Number) |
| Signature Guaranteed: |
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED).
Exhibit 10.8
Execution Version
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”), dated effective as of October 31, 2023 (the “Effective Date”), is made by and among enGene Holdings Inc., a company incorporated under the laws of Canada that intends to continue to a company governed by the Business Corporations Act (British Columbia) (the “Company”), Forbion European Acquisition Corp., a Cayman Islands exempted company (“FEAC”), each of the parties listed on Schedule A hereto as a “Sponsor Holder” (each, a “Sponsor Holder” and collectively, the “Sponsor Holders”), and each of the parties listed on Schedule A hereto as an “enGene Holder” (each, an “enGene Holder” and collectively, the “enGene Holders”, and, together with the Sponsor Holders, each, a “Holder” and collectively, the “Holders”).
WHEREAS, pursuant to that certain Business Combination Agreement, dated as of May 16, 2023 (the “Business Combination Agreement”), by and among FEAC and enGene Inc., a corporation incorporated and existing under the laws of Canada (“enGene”), the Cayman Merger Sub and the Can Merger Sub referred to therein, and the Company, among other things, (a) all of the issued and outstanding Class B ordinary shares of FEAC following the surrender of a portion thereof (the “Founder Shares”) were converted into Class A ordinary shares of FEAC (the “Class B Conversion”), (b) Cayman Merger Sub merged with and into FEAC with FEAC surviving the merger (the “Cayman Merger”) and all of the issued and outstanding Class A ordinary shares of FEAC (after giving effect to the Class B Conversion) were exchanged for common shares of the Company (the “Common Shares”), and all of the issued and outstanding warrants to purchase (at an exercise price of $11.50 per share) Class A ordinary shares of FEAC were assumed by the Company, and thereby became exercisable for warrants to purchase Common Shares at an exercise price of $11.50 per share (the “FEAC-Derived Warrants”), in each case on a on a one-for-one basis, and (c) Can Merger Sub and enGene amalgamated (the “Amalgamation”) in accordance with the terms of the plan of arrangement substantially in the form attached to the Business Combination Agreement and pursuant to the Amalgamation, each enGene common share outstanding immediately prior to the Amalgamation was exchanged for Common Shares the Company Exchange Ratio (as defined in the Business Combination Agreement) and each enGene warrant outstanding immediately prior to the Amalgamation was exchanged for warrants to acquire Common Shares per the Exchange Ratio (the “enGene-Derived Warrants” and collectively with the FEAC-Derived Warrants, the “Warrants”), all as further described in the Business Combination Agreement (such transactions and the other transactions consummated pursuant to the Business Combination Agreement, the “Transactions”);
WHEREAS, FEAC and each of the Sponsor Holders are parties to that certain Registration Rights Agreement dated as of December 9, 2021 (the “Prior Agreement”); and
WHEREAS, the parties to the Prior Agreement desire to terminate the Prior Agreement, and the Company and the Holders desire to provide for certain rights and obligations included herein with respect to the Registrable Securities (as defined below) held by the Holders, in each case contingent upon the occurrence of, and effective as of, Closing (as defined below).
NOW, THEREFORE, in consideration of the foregoing, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For purposes of this Agreement, the following terms and variations thereof have the meanings set forth below:
“Adverse Disclosure” means any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company, after consultation with outside counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain a Misstatement, (ii) would not be required to be made at such time if the Registration Statement were not being filed, and (iii) the Company has a bona fide business purpose for not making public.
“Affiliate” means, with respect to any specified Person, a Person that directly or indirectly Controls or is Controlled by, or is under common Control with, such specified Person. For purposes of this Agreement, no party to this Agreement shall be deemed to be an Affiliate of the Company or another party to this Agreement solely by reason of the execution and delivery of this Agreement. Notwithstanding the foregoing or anything to the contrary herein, any portfolio company or entity managed or controlled by any investment vehicle owned, controlled or managed by Forbion Capital Partners B.V. or any of its Affiliates (other than the Sponsor) shall not be considered an Affiliate of FEAC.
“Agreement” is defined in the Preamble.
“Amalgamation” is defined in the Recitals.
“Beneficial Owner” of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares (a) voting power, which includes the power to vote, or to direct the voting of, such security and/or (b) investment power, which includes the power to dispose of, or to direct the disposition of, such security. The term “Beneficially Own” shall have a correlative meaning.
“Board” means the Board of Directors of the Company or a duly authorized committee thereof.
“Business Combination Agreement” is defined in the Recitals.
“Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York and Vancouver, British Columbia are open for the general transaction of business.
“Cayman Merger” is defined in the Recitals.
“Class B Conversion” is defined in the Recitals.
“Closing” means the date on which the closing of the Arrangement (as defined in the Business Combination Agreement) occurs under the Business Combination Agreement.
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“Commission” means the U.S. Securities and Exchange Commission.
“Common Shares” is defined in the Recitals.
“Company” is defined in the Preamble.
“Control” (including the terms “Controls,” “Controlled by” and “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.
“Demand Registration” is defined in Section 2.1.1.
“Demand Requesting Holder” is defined in Section 2.1.1.
“Demanding Holders” is defined in Section 2.1.1.
“Effective Date” is defined in the Preamble.
“Effective Time” means the moment in time at which the closing of the Arrangement (as defined in the Business Combination Agreement) occurs under the Business Combination Agreement.
“enGene” is defined in the Recitals.
“enGene-Derived Common Shares” means the Common Shares issued by the Company pursuant to the Amalgamation in exchange for the issued and outstanding common shares in the capital of enGene.
“enGene-Derived Warrants” is defined in the Recitals.
“enGene Holder” and “enGene Holders” are defined in the Preamble.
“enGene Holder Lock-Up Period’ means the period starting on the Effective Date and ending at 12:01 am, US eastern time, on the enGene Lock-Up End Date.
“enGene Lock-Up End Date” means the earlier of (x) the six-month anniversary of the Effective Date and (y) the date (after the date of the Closing) on which the Company completes a liquidation, merger, amalgamation, arrangement, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Common Shares for cash, securities or other property.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“FEAC” is defined in the Preamble.
“FEAC-Derived Warrants” is defined in the Recitals.
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“Form S-1” means a Registration Statement on Form S-1 or any comparable successor form or forms thereto.
“Form S-3” means a Registration Statement on Form S-3 or any comparable successor form or forms thereto.
“Founder Shares” is defined in the Recitals.
“Founder Shares-Derived Common Shares” means the Common Shares issued by the Company pursuant to the Cayman Merger in exchange for the Class A ordinary shares of FEAC that were issued by FEAC pursuant to the Class B Conversion.
“Governmental Entity” means any United States, Canadian or other (a) federal, state, provincial, local, municipal or other government, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal) or (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal (public or private).
“Holder” and “Holders” are defined in the Preamble.
“Law” means any federal, state, provincial, local, foreign, national or supranational statute, law (including common law), act, statute, ordinance, treaty, rule, Order, code, regulation or other binding directive or guidance issued, promulgated or enforced by a Governmental Entity having jurisdiction over a given matter.
“Lock-Up Period” means the enGene Holder Lock-Up Period, the Sponsor Lock-Up Period, and/or the lock-up period set forth in Article V hereof, as applicable.
“Maximum Number of Securities” is defined in Section 2.1.5.
“Misstatement” means an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus in the light of the circumstances under which they were made not misleading.
“New Registration Statement” is defined in Section 2.3.3.
“Order” means any writ, order, judgment, injunction, decision, determination, award, ruling, subpoena, verdict or decree entered, issued or rendered by any Governmental Entity.
“Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, any court, administrative agency, regulatory body, commission or other governmental authority, board, bureau or instrumentality, domestic or foreign and any subdivision thereof or other entity, and also includes any managed investment account.
“Piggyback Registration” is defined in Section 2.2.1.
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“Prior Agreement” is defined in the Recitals.
“Pro Rata” is defined in Section 2.1.5.
“Prospectus” means the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security” and “Registrable Securities” means (a) the Founder Shares-Derived Common Shares held by a Sponsor Holder at the Effective Time, immediately after giving effect to the Closing of the Transactions, (b) the FEAC-Derived Warrants held by a Sponsor Holder at the Effective Time, immediately after giving effect to the Closing of the Transactions, (c) all Common Shares issuable upon the exercise of a FEAC-Derived Warrant by a Sponsor Holder, (d) the enGene-Derived Common Shares held by an enGene Holder or Sponsor Holder at the Effective Time, immediately after giving effect to the Closing of the Transactions, (e) the enGene-Derived Warrants held by an enGene Holder or Sponsor Holder at the Effective Time, immediately after giving effect to the Closing of the Transactions, (f) all Common Shares issuable upon the exercise of an enGene-Derived Warrant by an enGene Holder or Sponsor Holder and (g) any other equity security of the Company issued or issuable with respect to any such Common Shares by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any Registrable Securities, such securities shall cease to be Registrable Securities when: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been Transferred in accordance with such Registration Statement; (ii) such securities shall have been otherwise Transferred, new certificates (or book entry position) for such securities not bearing a legend restricting further Transfer shall have been delivered by the Company to the Transferee, and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) such securities have been sold under Rule 144 (or other similar exemption under the Securities Act then in force); (v) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction; or (vi) Rule 144 (or other similar exemption under the Securities Act then in force) is available for the sale of all of such Holder’s Common Shares without regard to volume limitations, manner of sale requirements or registration requirement.
“Registration” means a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registration Expenses” means the out-of-pocket expenses of a Registration or Underwritten Offering, as applicable, including, without limitation, the following:
(A) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any fees of the securities exchange on which Common Shares are then listed;
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(B) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
(C) printing, messenger, telephone and delivery expenses;
(D) reasonable fees and disbursements of counsel for the Company;
(E) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration or Underwritten Offering; and
(F) reasonable fees and expenses, not to exceed $100,000 in connection with any Registration Statement or Underwritten Offering, of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders or the majority-in interest of the Takedown Requesting Holders, as applicable.
“Registration Statement” means any registration statement under the Securities Act that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Required Information” has the meaning set forth in Section 6.1.
“Resale Shelf Registration” is defined in Section 2.1.1.
“Resale Shelf Registration Statement” is defined in Section 2.3.1.
“Rule 144” means such rule promulgated under the Securities Act, as the same shall be amended from time to time, or any successor rule then in force.
“SEC Guidance” is defined in Section 2.3.3.
“Securities Act” means the Securities Act of 1933, as amended from time to time.
“Sponsor” means Forbion Growth Sponsor FEAC I B.V., a Dutch private limited liability company.
“Sponsor Holder” and “Sponsor Holders” are defined in the Preamble.
“Sponsor Holder Lock-Up Period” means the period starting on the Effective Date and ending at 12:01 am, US eastern time, on the Sponsor Lock-Up End Date.
“Sponsor Lock-Up End Date” means the earlier of (A) 12:01 am, U.S. eastern time, on the twelve-month anniversary of the date of the Closing and (B) following the Closing, (x) if the closing price of the Common Shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20
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trading days within any 30-trading day period commencing at least 150 days after the Closing (provided, however that any transfer restrictions applicable to Sponsor Holders shall not be lifted pursuant to this clause (B)(x) prior to the date that is one hundred and eighty one (181) days following the Closing) and (y) the date on which the Company completes a liquidation, merger, amalgamation, arrangement, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Common Shares for cash, securities or other property.
“Takedown Requesting Holder” is defined in Section 2.3.4.
“Transactions” is defined in the Recitals.
“Transfer” means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate, exchange or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation, exchange or similar disposition of, any interest owned by a person or any interest (including a beneficial interest) in, or the ownership, control or possession of, any interest owned by a person. The terms “Transferred”, “Transferee” and similar shall be construed accordingly.
“Underwriter” means a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“Underwritten Registration” or “Underwritten Offering” means a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public, including for the avoidance of doubt an Underwritten Shelf Takedown.
“Underwritten Shelf Takedown” is defined in Section 2.3.4.
“Warrants” is defined in the Recitals.
ARTICLE II
REGISTRATION
Section 2.1 Demand Registration.
2.1.1 Request for Registration. Subject to the provisions of Section 2.1.5 and Section 2.4 hereof, at any time and from time to time following the Lock-Up Period applicable to any Holder, (i) Sponsor Holders who hold at least a majority in interest of the then-outstanding number of Registrable Securities held by all Sponsor Holders at such time, or (ii) enGene Holders holding at least a majority in interest of the then-outstanding number of Registrable Securities held by all enGene Holders at such time (such Holders described in clauses (i) and (ii), the “Demanding Holders”) may make a written demand for Registration of all or part of their Registrable Securities on Form S-3 (or, if Form S-3 is not available to be used by the Company at such time, on Form S-1 or another appropriate form permitting Registration of such Registrable Securities for resale by such Demanding Holders), which written demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such written
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demand a “Demand Registration”). The Holders making a Demand Registration may request that the registration be made pursuant to Rule 415 under the Securities Act (a “Resale Shelf Registration). The Company shall, within five (5) days of the Company’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such demand, and each such Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Demand Requesting Holder”) shall so notify the Company, in writing, within five (5) days after the receipt by the Holder of the notice from the Company. Upon receipt by the Company of any such written notification from a Demand Requesting Holder(s) to the Company, such Demand Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company shall effect, as soon thereafter as practicable, the Registration of all Registrable Securities requested by the Demanding Holders and Demand Requesting Holders pursuant to such Demand Registration. Under no circumstances shall the Company be obligated to effect more than two Registrations for the enGene Holders and two Registrations for the Sponsor Holders pursuant to a Demand Registration under this Section 2.1.1.]
2.1.2 Holder Information. The Company’s obligations to include the Registrable Securities held by a Holder in any Registration Statement are contingent upon such Holder furnishing in writing to the Company such information regarding the Holder, the securities of the Company held by the Holder and the intended method of disposition of the Registrable Securities as shall be reasonably requested by the Company to effect the registration of the Registrable Securities, and the Holder shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling shareholder in similar situations.
2.1.3 Effective Registration. Notwithstanding the provisions of Section 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (a) the Registration Statement filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and remains effective for not less than 180 days (or such shorter period as shall terminate when all Registrable Securities covered by such Registration Statement have been sold or withdrawn), or if such Registration Statement relates to an Underwritten Offering, such longer period as, in the opinion of counsel for the Underwriter or Underwriters, a Prospectus is required by law to be delivered in connection with sales of Registrable Securities by an Underwriter or dealer and (b) the Company has complied with all of its obligations under this Agreement with respect thereto; provided, further, however, that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency, the Registration Statement with respect to such Registration shall be deemed not to have been declared effective for purposes of counting Registrations under Section 2.1.1 above unless and until (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly notify the Company in writing, but in no event later than five (5) days, of such election; provided, further, however, that the Company shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or has been terminated.
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2.1.4 Underwritten Offering. Subject to the provisions of Section 2.1.5 and Section 2.4 hereof, if a Demanding Holder advises the Company as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Demand Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this Section 2.1.4 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Demanding Holder initiating the Demand Registration, which Underwriter(s) shall be reasonably acceptable to the Company.
2.1.5 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises the Company, the Demanding Holder(s) and the Demand Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holder(s) and the Demand Requesting Holders (if any) desire to sell, taken together with all other Common Shares or other equity securities that the Company desires to sell, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other shareholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holder(s) (pro rata based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders requested be included in such Underwritten Registration (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities that each Demand Requesting Holding (if any) has requested to be included in such Underwritten Registration (pro rata based on the respective number of Registrable Securities that each Demand Requesting Holding (if any) has requested to be included in such Underwritten Registration) and the aggregate number of Registrable Securities that the Demand Requesting Holders have requested to be included in such Underwritten Registration that can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), Common Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), Common Shares or other equity securities of other persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.
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2.1.6 Demand Registration Withdrawal. A Holder shall have the right to withdraw from a Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter(s) (if any) of their intention to withdraw from such Registration (i) in the case of an Underwritten Offering, prior to the launch of the roadshow for the offering, and (ii) otherwise, prior to the effectiveness of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. If a Demanding Holder initiating a Demand Registration or a majority-in-interest of the Demand Requesting Holders (if any) withdraws from a proposed offering pursuant to this Section 2.1.6, then such registration shall not count as a Demand Registration provided for in Section 2.1. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration prior to its withdrawal under this Section 2.1.6.
Section 2.2 Piggyback Registration.
2.2.1 Piggyback Rights. If at any time or from time to time following the Lock-Up Period applicable to any Holder hereof the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of shareholders of the Company, other than a Registration Statement (i) filed pursuant to Section 2.1, (ii) filed in connection with any employee stock option or other benefit plan, (iii) for an exchange offer or offering of securities solely to the Company’s existing shareholders, (iv) for an offering of debt that is convertible into equity securities of the Company, (v) to register the offering of securities in connection with a transaction to be registered on Form S-4 or (vi) for a dividend reinvestment plan, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter(s), if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written notice (such Registration a “Piggyback Registration”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing Underwriter(s) of a proposed Underwritten Offering to permit the Registrable Securities requested by a Holder pursuant to this Section 2.2.1 (to the extent that such Holder is not then subject to a Lock-Up Period) to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this Section 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.
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2.2.2 Reduction of Piggyback Registration. If the managing Underwriter(s) in an Underwritten Registration that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of Common Shares that the Company desires to sell, taken together with (a) Common Shares, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (b) the Registrable Securities as to which registration has been requested pursuant to Section 2.2 hereof, and (c) Common Shares, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other shareholders of the Company, exceeds the Maximum Number of Securities, then:
(i) If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, Common Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing section (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section 2.2.1 hereof, pro rata, based on the respective number of Registrable Securities that each Holder has so requested, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), Common Shares, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other shareholders of the Company, which can be sold without exceeding the Maximum Number of Securities; and
(ii) If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration (A) first, Common Shares or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing section (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section 2.2.1, pro rata based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Registration, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), Common Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), Common Shares or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.
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2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to (i) in the case of an Underwritten Offering, the date on which the roadshow for the offering is launched, and (ii) otherwise, the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration. the Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.2.3.
2.2.4 Unlimited Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof, and there shall be no limit on the number of Piggyback Registrations.
2.2.5 Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder of Registrable Securities has elected to include securities in such registration.
Section 2.3 Resale Shelf Registrations.
2.3.1 Registration Statement Covering Resale of Registrable Securities. Notwithstanding the right of any Holder to request a Resale Shelf Registration pursuant to Section 2.1.1, the Company shall prepare and file or cause to be prepared and filed with the Commission as soon as practicable (but in any case no later than 15 calendar days after the Effective Date) a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act or any successor thereto registering the resale from time to time by Holders of all of the Registrable Securities held by the Holders (the “Resale Shelf Registration Statement”). The Company shall use its commercially reasonable efforts to cause such Registration Statement to become effective as soon as practicable after filing, but no later than the earlier of (i) sixty (60) calendar days after the Closing (or ninety (90) calendar days after the Closing if the Commission notifies the Company that it will “review” the Registration Statement) and (ii) fifteen (15) Business Days after the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Registration Statement will not be “reviewed” or will not be subject to further review. The Resale Shelf Registration Statement shall be filed on any then applicable form. If the Resale Shelf Registration Statement is initially filed on Form S-1 and thereafter the Company becomes eligible to use Form S-3 for secondary sales, the Company shall, as promptly as practicable, cause such Resale Shelf Registration Statement to be amended, or shall file a new replacement Resale Shelf Registration Statement, such that the Resale Shelf Registration Statement is on Form S-3. If any Resale Shelf Registration Statement filed pursuant to Section 2.3.1 is filed on Form S-3 and thereafter the Company becomes ineligible to use Form S-3 for secondary sales, the Company shall promptly notify the Holders of such ineligibility and use its
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best efforts to file a shelf registration on an appropriate form as promptly as practicable to replace the shelf registration statement on Form S-3 and have such replacement Resale Shelf Registration Statement declared effective as promptly as practicable and to cause such replacement Resale Shelf Registration Statement to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Resale Shelf Registration Statement is available or, if not available, that another Resale Shelf Registration Statement is available, for the resale of all the Registrable Securities held by the Holders until all such Registrable Securities have ceased to be Registrable Securities; provided, however, that at any time the Company once again becomes eligible to use Form S-3, the Company shall cause such replacement Resale Shelf Registration Statement to be amended, or shall file a new replacement Resale Shelf Registration Statement, such that the Resale Shelf Registration Statement is once again on Form S-3. Once effective, the Company shall use commercially reasonable efforts to keep the Resale Shelf Registration Statement that is required to be filed pursuant to this Section 2.3.1 and Prospectus included therein continuously effective and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available at all times until the earlier of (i) the third anniversary of the Closing, and (ii) as to any particular Holder, the date on which the Holder ceases to hold any Registrable Securities. The Registration Statement filed with the Commission pursuant to this Section 2.3.1 shall contain a Prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) at any time beginning on the effective date for such Registration Statement (subject to the Lock-Up Period applicable to such Holder, which shall control), and shall provide that such Registrable Securities may be sold pursuant to any method or combination of methods legally available to, and requested by, Holders. The Resale Shelf Registration Statement filed hereunder may also register Common Shares other than Registrable Securities, including shares sold by the Company in one or more PIPE transactions and shares issuable upon the exercise of warrants.
2.3.2 Notification and Distribution of Materials. The Company shall notify the Holders in writing of the effectiveness of the Resale Shelf Registration Statement as soon as practicable, and in any event within three (3) Business Days after the Resale Shelf Registration Statement becomes effective (which may be accomplished by the issuance of a press release with such information), and shall furnish to any Holder, without charge, at its request, such number of copies of the Resale Shelf Registration Statement (including any amendments, supplements and exhibits), the Prospectus contained therein (including each preliminary prospectus and all related amendments and supplements) and any documents incorporated by reference in the Resale Shelf Registration Statement or such other documents as the Holders may reasonably request in order to facilitate the sale of the Registrable Securities in the manner described in the Resale Shelf Registration Statement (to the extent any of such documents are not available on EDGAR).
2.3.3 SEC Cutback. Notwithstanding the registration obligations set forth in this Section 2.3, in the event the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (i) inform each of the Holders thereof and use its reasonable best efforts to file amendments to the Resale Shelf Registration Statement as required by the Commission and/or (ii) withdraw the Resale Shelf Registration Statement and file a new registration statement (a “New Registration Statement”) on Form S-3, or if Form S-3 is not then available to the Company for such registration statement,
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on such other form available to register for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such amendment or New Registration Statement, the Company shall use its reasonable best efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff (the “SEC Guidance”). Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater number of Registrable Securities), unless otherwise directed in writing by a Holder as to further limit its Registrable Securities to be included on the Registration Statement, the number of Registrable Securities to be registered on such Registration Statement will be reduced on a pro rata basis based on the total number of Registrable Securities held by the Holders, subject to a determination by the Commission that certain Holders must be reduced first based on the number of Registrable Securities held by such Holders. In the event the Company amends the Resale Shelf Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its reasonable best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Resale Shelf Registration Statement, as amended, or the New Registration Statement.
2.3.4 Underwritten Shelf Takedown. At any time and from time to time after a Resale Shelf Registration Statement has been declared effective by the Commission, to the extent such Resale Shelf Registration may be used for an underwritten offering, any of the Demanding Holders may request to sell all or any portion of the Registrable Securities in an underwritten offering that is registered pursuant to the Resale Shelf Registration Statement (each, an “Underwritten Shelf Takedown”); provided, however, that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include securities with a total offering price (including piggyback securities and before deduction of underwriting discounts) reasonably expected to exceed, in the aggregate, $10,000,000. All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company, which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown. Within five (5) days of receipt of this notice, the Company must notify all of the Holders of Registrable Securities of the Underwritten Shelf Takedown. Within five (5) days of delivery of this notice, Holders of Registrable Securities must notify the Company if they wish to participate in the Underwritten Shelf Takedown. The Company shall include in any Underwritten Shelf Takedown the securities requested to be included by any Holder within such specified timeframe (each a “Takedown Requesting Holder”). All such Holders proposing to distribute their Registrable Securities through an Underwritten Shelf Takedown under this Section 2.3.4 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Takedown Requesting Holder (who must be reasonably acceptable to the Company).
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2.3.5 Reduction of Underwritten Shelf Takedown. If the managing Underwriter(s) in an Underwritten Shelf Takedown, in good faith, advise the Company and the Takedown Requesting Holders in writing that the dollar amount or number of Registrable Securities that the Takedown Requesting Holders desire to sell, taken together with all other Common Shares or other equity securities that the Company desires to sell, exceeds the Maximum Number of Securities, then the Company shall include in such Underwritten Shelf Takedown, as follows: (i) first, the Registrable Securities of the Demanding Holders, on a Pro Rata basis, (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing section (i), the Registrable Securities of the Takedown Requesting Holders, on a Pro Rata basis, that can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), Common Shares or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities.
2.3.6 Registrations effected by the Company pursuant to Section 2.3.1 shall not be counted as Demand Registrations effected pursuant to Section 2.1.
2.3.7 Under no circumstances shall the Company be obligated to effect more than three Underwritten Shelf Takedowns for the enGene Holders and three Underwritten Shelf Takedowns for the Sponsor Holders pursuant to Section 2.3.4].
Section 2.4 Restrictions on Registration Rights. Notwithstanding anything to the contrary contained herein, the Company shall not be obligated to (but may, at its sole option) file a Registration Statement pursuant to a Demand Registration request made under Section 2.1 during the period starting with the date thirty (30) days prior to Company’s good faith estimate of the date of the filing of, and ending on a date ninety (90) days after the effective date of, a Company initiated Registration and provided that Company has delivered written notice to the Holders prior to receipt of a Demand Registration pursuant to Section 2.1.1 and that New Holdco continues to actively employ, in good faith, all reasonable efforts to cause the applicable Registration Statement to become effective.
Section 2.5 Other Registration Rights. The Company represents that, as of the date hereof and other than as set forth herein, no Person has the right to request or require it to register any equity securities issued by it, other than (i) such registration rights granted pursuant to the PIPE Financing, the Convertible Bridge Financing and the Non-Redemption Agreement, each as defined in the Business Combination Agreement, and (ii) such registration rights as applicable under the terms of the Warrants. The Company will not grant any Person any registration rights with respect to the equity of the Company that are prior in right or in conflict or inconsistent with the rights of the Holders as set forth in this Article II in any material respect (it being understood that this shall not preclude the grant of additional demand and piggyback registration rights in and of themselves so long as such rights are not prior in right to the rights under this Agreement).
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ARTICLE III
COMPANY PROCEDURES
Section 3.1 General Procedures. If at any time on or after the Effective Time the Company is required to effect the Registration of Registrable Securities, the Company shall use its reasonable best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as possible:
3.1.1 prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold or are no longer outstanding;
3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus or are no longer outstanding;
3.1.3 prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriter(s), if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holders; provided, that the Company will not have any obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system;
3.1.4 prior to any public offering of Registrable Securities, use its reasonable best efforts to: (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed;
3.1.6 provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
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3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 advise each Holder of Registrable Securities covered by such Registration Statement, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any Prospectus forming a part of such registration statement has been filed (provided that any such notice may be made by the issuance of a press release including such information);
3.1.9 at least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus, furnish a copy thereof to each seller of such Registrable Securities or its counsel; provided, that the Company will not have any obligation to provide any document pursuant to this clause that is or will become available on the Commission’s EDGAR system;
3.1.10 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.11 permit a representative of the Holders, the Underwriter(s), if any, and any attorney or accountant retained by such Holders or Underwriter(s) to participate in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter(s), attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriter(s) enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.12 in the event of an Underwritten Offering, request a customary “comfort” letter from the Company’s independent registered public accounting firm, addressed to the Underwriter(s) and in customary form and covering such matters of the type customarily covered by “comfort” letters as the managing Underwriter(s) may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders and such managing Underwriter;
3.1.13 in the event of an Underwritten Offering, request one or more customary legal opinions of counsel representing the Company for the purposes of such Registration, addressed to the Underwriter(s) and “negative assurance letters” covering such matters with respect to the Registration in respect of which such opinions and letters are being given as the Underwriter(s) may reasonably request and as are customarily included in such opinions and negative assurance letters;
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3.1.14 in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter(s) of such offering;
3.1.15 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);
3.1.16 if a Registration, including an Underwritten Offering, use its commercially reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter(s) in any Underwritten Offering; and
3.1.17 otherwise, in good faith, use commercially reasonable efforts to cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.
Section 3.2 Registration Expenses. All Registration Expenses shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
Section 3.3 Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.
Section 3.4 Suspension of Sales; Adverse Disclosure. The Company shall promptly notify each of the Holders in writing if a Registration Statement or Prospectus contains a Misstatement and, upon receipt of such written notice from the Company, each of the Holders shall forthwith discontinue disposition of Registrable Securities until he, she or it has received copies of a supplemented or amended Prospectus correcting the Misstatement, provided that the Company hereby covenants promptly to prepare and file any required supplement or amendment correcting any Misstatement promptly after the time of such notice and, if necessary, to request the immediate effectiveness thereof. If the filing, initial effectiveness or continued use of a Registration Statement or Prospectus included in any Registration Statement at any time (a) would require the Company to make an Adverse Disclosure, (b) would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, (c) requires the Company to update the financial statements contained in such Registration Statement pursuant to the rules and regulations of the Commission through the filing
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of a post-effective amendment which is subject to potential Commission review, or (d) in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company, which judgment shall be documented in writing and provided to the Holders in the form of a written certificate signed by such officer, such filing, initial effectiveness or continued use of a Registration Statement would be materially detrimental to the Company. the Company shall have the right to defer the filing, initial effectiveness or continued use of any Registration Statement pursuant to (a), (b) or (c) for a period of not more than ninety (90) days in any three hundred and sixty (360)-day period. In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities.
Section 3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, shall expend commercially reasonable efforts to (i) file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act (and upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements), and (ii) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Common Shares held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including using commercially reasonable efforts to cause any legal opinions to be delivered.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
Section 4.1 Indemnification.
4.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and agents and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriter(s), their officers and directors and each person who controls (within the meaning of the Securities Act) such Underwriter(s) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
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4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall, severally and not jointly, indemnify the Company, its directors and officers and agents and each person who controls (within the meaning of the Securities Act) the Company against any losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriter(s), their officers, directors and each person who controls (within the meaning of the Securities Act) such Underwriter(s) to the same extent as provided in the foregoing with respect to indemnification of the Company.
4.1.3 Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided, however, that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement 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 to such claim or litigation.
4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or Affiliate of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution (pursuant to Section 4.1.5) to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.
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4.1.5 If the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall to the extent permitted by law contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by a court of law by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this Section 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 4.1.2, 4.1.2 and 4.1.3 above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
ARTICLE V
LOCK-UP
Section 5.1 Lock-Up.
5.1.1 Each Holder agrees, and the Company agrees and shall cause each director and officer of the Company to agree, that, in connection with each Registration or sale of Registrable Securities pursuant to Section 2.1, Section 2.2 or Section 2.3 conducted as an Underwritten Offering, if requested, to become bound by and to execute and deliver a customary lock-up agreement with the underwriter(s) of such Underwritten Offering restricting such applicable person or entity’s right to (a) Transfer, directly or indirectly, any equity securities of the Company held by such person or entity or (b) enter into any swap or other arrangement that Transfers to another any of the economic consequences of ownership of such securities during the period commencing on the date of the final Prospectus relating to the Underwritten Offering and ending on the date specified by the underwriters (such period not to exceed ninety (90) days). The terms of such lock-up agreements shall be negotiated among the applicable Holders requested to enter into lock-up agreements in accordance with the immediately preceding sentence, the Company and the underwriters and shall include customary exclusions from the restrictions on Transfer set forth therein, including that such restrictions on the applicable Holders shall be conditioned upon all officers and directors of the Company, as well as all such applicable Holders, being subject to the same restrictions; provided, however, to the extent any Holder is granted a release or waiver from the restrictions contained in this Section 5.1. and in such Holder’s lock-up
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agreement prior to the expiration of the period set forth in such Holder’s lock-up agreement, then all applicable Holders shall be automatically granted a release or waiver from the restrictions contained in this Section 5.1 and the applicable lock-up agreements to which they are party to the same extent, on substantially the same terms as and on a pro rata basis with, the Holder to which such release or waiver is granted. The provisions of this Section 5.1 shall not apply to any Holder that then holds less than one percent (1%) of then total issued and outstanding Common Shares.
ARTICLE VI
TERMINATION
Section 6.1 Prior Agreement Termination. By execution and delivery of this Agreement and contingent upon the occurrence of, and effective as of, Closing, FEAC and Sponsor (who represents and warrants that it holds at least a majority-in-interest of the “Registrable Securities” under the Prior Agreement), hereby terminate in its entirety the Prior Agreement pursuant to the power and authority granted to FEAC and the holders of at least a majority-in-interest of such “Registrable Securities” in Section 6.5 of the Prior Agreement.
Section 6.2 Termination. This Agreement shall terminate in the case of any Holder, the date on which neither the Holder nor any of its permitted assignees holds any Registrable Securities.
ARTICLE VII
GENERAL PROVISIONS
Section 7.1 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by e-mail or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses or e-mail addresses (or at such other address or email address for a party as shall be specified in a notice given in accordance with this Section 7.1):
If to the Company, to it at:
enGene Holdings Inc.
7171 Rue Frederick Banting
Saint-Laurent, QC H4S 1Z9, Canada
Attn: Jason D. Hanson, Chief Executive Officer
Email: jhanson@engeneinc.com
with a copy (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attn: Howard Kenny
Email: howard.kenny@morganlewis.com
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And
Blake, Cassels & Graydon LLP
595 Burrad Street, Suite 2600
Three Bentall Centre
Vancouver, British Columbia V7X 1L3
Canada
Attn: Joseph Garcia
Email: joseph.garcia@blakes.com
If to a Holder, to the address or email address set forth for such Holder on the signature page hereof.
Section 7.2 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
Section 7.3 Entire Agreement; Assignment. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise), by any party without the prior express written consent of the other parties hereto.
Section 7.4 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto (and its respective permitted assigns), and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 7.5 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. All legal actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any Delaware Chancery Court; provided, however, that if jurisdiction is not then available in the Delaware Chancery Court, then any such legal action may be brought in any federal court located in the State of Delaware or any other Delaware state court. The parties hereto hereby (a) irrevocably submit to the exclusive jurisdiction of the aforesaid courts for themselves and with respect to their respective properties for the purpose of any action arising out of or relating to this Agreement brought by any party hereto, and (b) agree not to commence any action relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award
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rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action arising out of or relating to this Agreement or the transactions contemplated hereby, (i) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (ii) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) that (x) the action in any such court is brought in an inconvenient forum, (y) the venue of such action is improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
Section 7.6 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.6.
Section 7.7 Headings; Interpretation. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The parties have participated jointly in the negotiation and drafting of this Agreement. If any ambiguity or question of intent arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement. Unless the context of this Agreement clearly requires otherwise, use of the masculine gender shall include the feminine and neutral genders and vice versa, and the definitions of terms contained in this Agreement are applicable to the singular as well as the plural forms of such terms. The words “includes” or “including” means “including without limitation.” The words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this Agreement shall refer to this Agreement as a whole and not any particular section or article in which such words appear, the word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends and such phrase shall not mean simply “if.” Any reference to a law shall include any rules and regulations promulgated thereunder, and means such law as from time to time amended, modified or supplemented. References herein to any contract (including this Agreement) mean such contract as amended, supplemented or modified from time to time in accordance with the terms thereof.
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Section 7.8 Counterparts. This Agreement may be executed and delivered (including by facsimile or portable document format (pdf) transmission) in counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.Section 7.9 Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity. Each of the parties hereby further waives (i) any defense in any action for specific performance that a remedy at law would be adequate and (ii) any requirement under any Law to post security or a bond as a prerequisite to obtaining equitable relief.
Section 7.10 Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the transactions contemplated hereby are consummated.
Section 7.11 Amendment. This Agreement may not be amended, and no provision herein may be waived, except by an instrument in writing signed by (i) the Company, (ii) Sponsor Holders who hold at least a majority-in-interest of the then-outstanding number of Registrable Securities held by all Sponsor Holders at such time and (iii) enGene Holders holding at least a majority-in-interest of the then-outstanding number of Registrable Securities held by all enGene Holders at such time.
Section 7.12 Waiver. At any time, the Company may (a) extend the time for the performance of any obligation or other act of any Holder, (b) waive any inaccuracy in the representations and warranties of any Holder contained herein or in any document delivered by such Holder pursuant hereto and (c) waive compliance with any agreement of such Holder or any condition to its own obligations contained herein. At any time, upon the affirmative vote or written consent of (x) a majority-in-interest of the Sponsor Holders and (y) a majority-in-interest of the enGene Holders, such Holders may (i) extend the time for the performance of any obligation or other act of the Company, (ii) waive any inaccuracy in the representations and warranties of the Company contained herein or in any document delivered by the Company pursuant hereto and (iii) waive compliance with any agreement of the Company or any condition to their own obligations contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby.
Section 7.13 Further Assurances. At the request of the Company, in the case of any Holder, or at the request of any Holder, in the case of the Company, and without further consideration, each party shall execute and deliver or cause to be executed and delivered such additional documents and instruments and take such further action as may be reasonably necessary to consummate the transactions contemplated by this Agreement.
Section 7.14 Corporate Opportunities. It is hereby acknowledged that the Sponsor Holders and their Affiliates participate in, and own and will own substantial equity interests in other entities (existing and future) that participate in, similar industries to the Company (the “Portfolio Companies”) and may make investments and enter into advisory service agreements and other agreements from time to time with such Portfolio Companies. Any individual who serves as a director, officer, employee, agent, partner, shareholder, member or manager of a Sponsor Holder may also serve as a director, officer, employee, agent, partner, shareholder or member of
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(i) such Sponsor Holder’s Affiliate or Portfolio Company or (ii) a different Sponsor Holder or such different Sponsor Holder’s Affiliate or Portfolio Company and, at any given time, such Sponsor Holder, its Affiliates or Portfolio Companies may be in direct or indirect competition with the Company and/or its Affiliates. The Company waives, to the maximum extent permitted by Law, the application of the doctrine of corporate opportunity (or any analogous doctrine) with respect to any Sponsor Holders, their Affiliates or Portfolio Companies or any of their directors (subject to compliance by such director with his or her fiduciary duties as a director of the Company (as such, a “Sponsor Director”) and Laws applicable to the Company or its directors). As a result of such waiver, none of Sponsor Holders, their Affiliates or Portfolio Companies, nor any of their directors (subject to compliance by a Sponsor Director with his or her fiduciary duties as a director of the Company) and Laws applicable to the Company or its directors), shall have any obligation to refrain from: (A) engaging in or managing the same or similar activities or lines of business as the Company or any of its Affiliates or developing or marketing any products or services that compete (directly or indirectly) with those of the Company or any of its subsidiaries; (B) acquiring assets in the same or similar areas of operation and lines of business of the Company; (C) investing in, owning or disposing of any (public or private) interest in any person engaged in the same or similar activities or lines of business as, or otherwise in competition with, the Company or any of its Affiliates (including a Sponsor Holder or their Affiliates, a “Competing Person”); (D) developing a business relationship with any Competing Person; or (E) entering into any agreement to provide any service(s) to any Competing Person or acting as director, officer, employee, agent, partner, shareholder, member, manager or advisor to, or other principal of, any Competing Person, regardless (in the case of each of clauses (A) through (E)) of whether such activities are in direct or indirect competition with the business or activities of the Company or any of its subsidiaries (the activities described in clauses (A) through (D) are referred to herein as “Specified Activities”). To the fullest extent permitted by law, the Company hereby renounces (for itself and on behalf of its subsidiaries) any interest or expectancy in, or in being notified of or offered an opportunity to participate in, any Specified Activity that may be presented to or become known to Sponsor, its Affiliates or Portfolio Companies or any Sponsor Director, other than any such Specified Activity that was learned, discovered or sourced solely in the course of a Sponsor Director acting in such Sponsor Director’s capacity as a director of the Company or any of its Affiliates.
Section 7.15 No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party.
(Next Page is Signature Page)
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IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized representative to execute and deliver this Agreement as of the date first written above.
| ENGENE HOLDINGS INC. | ||
| By: | /s/ Jason D. Hanson | |
| Name: | Jason D. Hanson | |
| Title: | Chief Executive Officer | |
| FORBION EUROPEAN ACQUISITION CORP. | ||
| By: | /s/ Jasper Bos | |
| Name: | Jasper Bos | |
| Title: | Chief Executive Officer | |
[Company Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized representative to execute and deliver this Agreement as of the date first written above.
| SPONSOR HOLDERS: | ||
| FORBION GROWTH SPONSOR FEAC I B.V. | ||
| By: | /s/ Cyril Lesser | |
| Name: | Cyril Lesser | |
| Title: | Director | |
| Notice Information: | ||
| Gooimeer 2-35 | ||
| 1411 DC Naarden | ||
| The Netherlands | ||
[Sponsor Holders Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized representative to execute and deliver this Agreement as of the date first written above.
| ENGENE HOLDERS: | ||
| LUMIRA VENTURES III, L.P., by its general partner LUMIRA VENTURES III GP, L.P. by its general partner LUMIRA III GP INC. | ||
| By: | /s/ Vasco Larcina | |
| Name: | Vasco Larcina | |
| Title: | Chief Financial Officer | |
| By: | /s/ Gerald Brunk | |
| Name: | Gerald Brunk | |
| Title: | Senior Vice President | |
| Notice Information: | ||
| c/o Lumira Capital Corp. 141 Adelaide Street West | ||
| Suite 770 | ||
| Toronto, Ontario M5H 3L5 | ||
| Attention: Vasco Larcina | ||
| Email: vlarcina@lumira.vc | ||
[enGene Holders Signature Page to Registration Rights Agreement]
| LUMIRA VENTURES III (INTERNATIONAL), L.P., by its general partner LUMIRA VENTURES III GP, L.P. by its general partner LUMIRA III GP INC. | ||
| By: | /s/ Vasco Larcina | |
| Name: | Vasco Larcina | |
| Title: | Chief Financial Officer | |
| By: | /s/ Gerald Brunk | |
| Name: | Gerald Brunk | |
| Title: | Senior Vice President | |
| Notice Information: | ||
| c/o Lumira Capital Corp. 141 Adelaide Street West | ||
| Suite 770 | ||
| Toronto, Ontario M5H 3L5 | ||
| Attention: Vasco Larcina | ||
| Email: vlarcina@lumira.vc | ||
[enGene Holders Signature Page to Registration Rights Agreement]
| LUMIRA VENTURES IV, L.P., by its general partner LUMIRA IV GP 2020 INC. | ||
| By: | /s/ Vasco Larcina | |
| Name: | Vasco Larcina | |
| Title: | Chief Financial Officer | |
| By: | /s/ Gerald Brunk | |
| Name: | Gerald Brunk | |
| Title: | Senior Vice President | |
| Notice Information: | ||
| c/o Lumira Capital Corp. 141 Adelaide Street West | ||
| Suite 770 | ||
| Toronto, Ontario M5H 3L5 | ||
| Attention: Vasco Larcina | ||
| Email: vlarcina@lumira.vc | ||
[enGene Holders Signature Page to Registration Rights Agreement]
| LUMIRA VENTURES IV (INTERNATIONAL), L.P., by its general partner LUMIRA IV GP 2020 INC. | ||
| By: | /s/ Vasco Larcina | |
| Name: | Vasco Larcina | |
| Title: | Chief Financial Officer | |
| By: | /s/ Gerald Brunk | |
| Name: | Gerald Brunk | |
| Title: | Senior Vice President | |
| Notice Information: | ||
| c/o Lumira Capital Corp. 141 Adelaide Street West | ||
| Suite 770 | ||
| Toronto, Ontario M5H 3L5 | ||
| Attention: Vasco Larcina | ||
| Email: vlarcina@lumira.vc | ||
[enGene Holders Signature Page to Registration Rights Agreement]
| MERCK LUMIRA BIOSCIENCES FUND, L.P., by its general partner LUMIRA CAPITAL GP, L.P. by its general partner LUMIRA GP HOLDINGS CO. | ||
| By: | /s/ Vasco Larcina | |
| Name: | Vasco Larcina | |
| Title: | Chief Financial Officer | |
| By: | /s/ Gerald Brunk | |
| Name: | Gerald Brunk | |
| Title: | Senior Vice President | |
| Notice Information: | ||
| c/o Lumira Capital Corp. 141 Adelaide Street West | ||
| Suite 770 | ||
| Toronto, Ontario M5H 3L5 | ||
| Attention: Vasco Larcina | ||
| Email: vlarcina@lumira.vc | ||
[enGene Holders Signature Page to Registration Rights Agreement]
| MERCK LUMIRA BIOSCIENCES FUND (QUÉBEC), L.P., by its general partner LUMIRA CAPITAL GP, L.P. by its general partner LUMIRA GP HOLDINGS CO. | ||
| By: | /s/ Vasco Larcina | |
| Name: | Vasco Larcina | |
| Title: | Chief Financial Officer | |
| By: | /s/ Gerald Brunk | |
| Name: | Gerald Brunk | |
| Title: | Senior Vice President | |
| Notice Information: | ||
| c/o Lumira Capital Corp. 141 Adelaide Street West | ||
| Suite 770 | ||
| Toronto, Ontario M5H 3L5 | ||
| Attention: Vasco Larcina | ||
| Email: vlarcina@lumira.vc | ||
[enGene Holders Signature Page to Registration Rights Agreement]
| FORBION III MANAGEMENT B.V., as director of FORBION CAPITAL FUND III COOPERATIEF U.A. | ||
| By: | /s/ Marco Boorsna | |
| Name: | Marco Boorsma | |
| Title: | Proxyholder | |
| By: | /s/ Geert-Jan Mulder | |
| Name: | Geert-Jan Mulder | |
| Title: | Authorized Signatory | |
| Notice Information: | ||
| Goomeer 2-35 1411 DC Naarden | ||
| The Netherlands | ||
| Attention: Marco Boorsma | ||
| Email: marco.boorsma@forbion.com | ||
[enGene Holders Signature Page to Registration Rights Agreement]
| FONDS DE SOLIDARITÉ DES TRAVAILLEURS DU QUÉBEC (F.T.Q.) | ||
| By: | /s/ Geneviève Guertin | |
| Name: | Geneviève Guertin | |
| Title: | Vice-President, Private Equity and Impact Investing – Life Sciences | |
| Notice Information: | ||
| 545 Crémazie Boulevard East | ||
| Suite 200 | ||
| Montréal, Québec, H2M 2W4 | ||
| Attention: Vice-President, Legal Affairs | ||
| Email: affairesjuridiques@fondsftq.com | ||
[enGene Holders Signature Page to Registration Rights Agreement]
| By: | /s/ Anthony T. Cheung | |
| Name: | Dr. Anthony T. Cheung | |
| Notice Information: | ||
| 3960 Saint-Hubert Street Suite 3 | ||
| Montreal, Quebec H2L 4A5 | ||
| By: | /s/ Richard Glickman | |
| Name: | Dr. Richard Glickman | |
| Notice Information: | ||
| 7764 West Saanich Road | ||
| Brentwood Bay, BC V8M 1R7 | ||
[enGene Holders Signature Page to Registration Rights Agreement]
Schedule A
Sponsor Holders
| Name of Holder |
Number of Shares | Number of Warrants | ||||||
| Forbion Growth Sponsor FEAC I B.V. |
3,765,932 | 1,736,406 | ||||||
enGene Holders
| Name of Holder |
Number of Shares | Number of Warrants | ||||||
| Lumira Ventures III, L.P. |
1,341,790 | 114,945 | ||||||
| Lumira Ventures III (International), L.P. |
44,647 | 3,825 | ||||||
| Lumira Ventures IV, L.P. |
348,686 | 38,301 | ||||||
| Lumira Ventures IV (International), L.P. |
83,816 | 9,207 | ||||||
| Merck Lumira Biosciences Fund, L.P. |
1,077,386 | 145,603 | ||||||
| Merck Lumira Biosciences Fund (Québec), L.P. |
152,974 | 20,673 | ||||||
| Forbion Capital Fund III Coöperarief U.A. |
2,894,199 | 475,076 | ||||||
| Fonds de Solidarité des Travailleurs du Québec |
2,642,110 | 446,572 | ||||||
| Dr. Anthony T. Cheung |
49,933 | — | ||||||
| Dr. Richard Glickman |
24,555 | — | ||||||
Schedule A
Exhibit 10.20
ENGENE HOLDINGS INC.
2023 INCENTIVE EQUITY PLAN
Effective as of the Effective Date (as defined below), the enGene Holdings Inc. 2023 Incentive Equity Plan (as in effect from time to time, the “Plan”) is hereby established.
The purpose of the Plan is to provide employees, certain consultants and advisors, and the non-employee members of the Board of Directors, of enGene Holdings Inc., a company organized under the laws of Canada that that intends to continue as a company governed by the Business Corporations Act (British Columbia) (together with its successors, the “Company”), and its subsidiaries, with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, share awards, share units, and other share-based awards.
The Company believes that the Plan will encourage the participants to contribute materially to the growth of the Company, thereby benefitting the Company’s shareholders, and will align the economic interests of the participants with those of the shareholders.
In connection with the consummation of the transactions contemplated under the Business Combination Agreement, (i) the amended and restated equity incentive plan of enGene Inc. (the “Corporation”) dated June 29, 2021 and as may be further amended and/or restated from time to time, and (ii) each other plan that provides for the award to any current or former director, manager, officer, employee, individual independent contractor or other individual service provider of the Company, the Corporation and any of their subsidiaries (the “Group Company”) of rights of any kind to receive equity securities of any Group Company or benefits measured in whole or in part by reference to equity securities of any Group Company (the “Prior Plans”), will be converted and exchanged into rights to acquire shares of the Company as set forth in the Business Combination Agreement, with such equity security rights to be merged into and converted into grants under the Plan. No additional grants shall be made under the Prior Plans after the Effective Date.
Section 1. Definitions
The following terms has the meanings set forth below for purposes of the Plan:
(a) “409A” means Section 409A of the Code.
(b) “Board” means the Board of Directors of the Company.
(c) “Business Combination Agreement” means that certain Business Combination Agreement, dated as of May 16, 2023, by and among Forbion European Acquisition Corp., a Cayman Islands exempted company, enGene Inc., a corporation existing under the laws of Canada, the Company, and the other persons named therein and party thereto.
(d) “Canadian Employees” means officers, employees, and non-employee members of the Board, or a corporation that does not deal at arm’s length with the Company for purposes of the Tax Act, who are residents of Canada for purposes of the Tax Act.
(e) “Cause” has the meaning given to that term in any written employment agreement, offer letter or severance or termination agreement between the Employer and the Participant, or if no such agreement exists or if such term is not defined therein, and unless otherwise defined in the Grant Instrument, Cause means a finding by the Committee that the Participant (i) has breached his or her employment or service contract with the Employer, (ii) has engaged in disloyalty to the Employer, including, without limitation, fraud, embezzlement, theft, commission of a felony, indictable offence or proven dishonesty, (iii) has disclosed trade secrets or confidential information of the Employer to persons not entitled to receive such information, (iv) has breached any written non-competition, non-solicitation, invention assignment or confidentiality agreement between the Participant and the Employer or (v) has engaged in such other behavior detrimental to the interests of the Employer as the Committee determines.
(f) “CEO” means the Chief Executive Officer of the Company (or if there is none then appointed, the President of the Company).
(g) “Change of Control”, unless otherwise set forth in a Grant Instrument, shall be deemed to have occurred if:
(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities of the Company; provided that a Change of Control shall not be deemed to occur as a result of a transaction in which the Company becomes a direct or indirect subsidiary of another Person and in which the shareholders of the Company, immediately prior to the transaction, will beneficially own, immediately after the transaction, shares of such other Person representing more than 50% of the voting power of the then outstanding securities of such other Person.
(ii) The consummation of (A) an amalgamation, arrangement, merger, consolidation or other form of business combination of the Company with another Person where, immediately after such transaction, the shareholders of the Company, immediately prior to such transaction, will not beneficially own, in substantially the same proportion as ownership immediately prior to such transaction, shares entitling such shareholders to more than 50% of all votes to which all shareholders of the surviving Person would be entitled in the election of directors, or where the members of the Board, immediately prior to such transaction, will not, immediately after such transaction, constitute a majority of the board of directors of the surviving Person or (B) a sale or other disposition of all or substantially all of the assets of the Company.
(iii) A change in the composition of the Board over a period of 12 consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections, or threatened election contests, for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.
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(iv) The consummation of a complete dissolution or liquidation of the Company.
The Committee may modify the definition of Change of Control for a particular Grant as the Committee deems appropriate to comply with 409A or otherwise. Notwithstanding the foregoing, if a Grant constitutes deferred compensation subject to 409A and the Grant provides for payment upon a Change of Control, then, for purposes of such payment provisions, no Change of Control shall be deemed to have occurred upon an event described in items (i) – (iv) above unless the event would also constitute a change in ownership or effective control of, or a change in the ownership of a substantial portion of the assets of, the Company under 409A.
(a) “Common Share” shall mean the common shares of the Company.
(b) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.
(c) “Committee” means the Compensation Committee of the Board or another committee appointed by the Board to administer the Plan and to the extent the Board does not appoint a committee, the Board can serve as the Committee. The Committee shall consist of Directors who are “non-employee directors” as defined under Rule 16b-3 promulgated under the Exchange Act and “independent directors,” as determined in accordance with the independence standards established by the stock exchange on which the Common Shares are at the time primarily traded.
(d) “Consultant” means a person other than an Employee, officer or Director of the Company or of any of its subsidiaries that:
(i) is engaged to provide bona fide services to the Company or a Related Entity of the Company, other than services provided in relation to a distribution, the offer and sale of securities in a capital-raising transaction, or, directly or indirectly, to promote or maintain a market for the Company’s securities;
(ii) provides the services under a written contract with the Company or a Related Entity of the Company; and
(iii) spends or will spend a significant amount of time and attention on the affairs and business of the Company or a Related Entity of the Company;
and includes
(iv) for an individual consultant, a corporation of which the individual consultant is an employee or shareholder, and a partnership of which the individual consultant is an employee or partner; and
(v) for a consultant that is not an individual, an employee, executive officer, or director of the consultant, provided that the individual employee, executive officer, or director spends or will spend a significant amount of time and attention on the affairs and business of the Company or a Related Entity of the Company.
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(e) “Director” means a member of the Board of the Company or any of its subsidiaries.
(f) “Disability” or “Disabled” means, unless otherwise set forth in the Grant Instrument, a Participant’s becoming disabled within the meaning of the Employer’s long-term disability plan applicable to the Participant.
(g) “Dividend Equivalent” means an amount determined by multiplying the number of Common Shares subject to a Share Unit or Other Share-Based Award by the per-share cash dividend paid by the Company on its outstanding Common Shares, or the per-share Fair Market Value of any dividend paid on its outstanding Common Shares in consideration other than cash. If interest is credited on accumulated divided equivalents, the term “Dividend Equivalent” shall include the accrued interest.
(h) “Effective Date” means the effective date of the consummation of the merger contemplated by the Business Combination Agreement, subject to approval of the Plan by the shareholders of the Company.
(i) “Employed by, or providing service to, the Employer” means employment or service as an Employee, Consultant or member of the Board (so that, for purposes of exercising Options and SARs and satisfying conditions with respect to Share Awards, Share Units, and Other Share-Based Awards, a Participant shall not be considered to have terminated employment or service until the Participant ceases to be an Employee, Consultant or member of the Board), unless the Committee determines otherwise. If a Participant’s relationship is with a subsidiary of the Company and that entity ceases to be a subsidiary of the Company, the Participant will be deemed to cease employment or service when the entity ceases to be a subsidiary of the Company, unless the Participant transfers employment or service to an Employer.
(j) “Employee” means an employee of the Employer (including an officer or Director who is also an employee), but excluding any person who is classified by the Employer as a “contractor” or “consultant,” no matter how characterized by the Internal Revenue Service, other governmental agency or a court. Any change of characterization of an individual by the Internal Revenue Service or any court or government agency shall have no effect upon the classification of an individual as an Employee for purposes of this Plan, unless the Committee determines otherwise.
(k) “Employer” means the Company and its subsidiaries.
(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(m) “Exercise Price” means the per share price at which Common Shares may be purchased under an Option, as designated by the Committee.
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(n) “Fair Market Value” means:
(i) For so long as the Common Shares are publicly traded, the Fair Market Value per share shall be determined as follows: (A) if the principal trading market for the Common Shares is a national securities exchange, the closing sales price during regular trading hours on the relevant date or, if there were no trades on that date, the latest preceding date upon which a sale was reported, or (B) if the Common Shares are not principally traded on any such exchange, the last reported sale price of a share of Common Shares during regular trading hours on the relevant date, as reported by the OTC Bulletin Board.
(ii) If the Common Shares are not publicly traded or, if publicly traded, is not subject to reported transactions as set forth above, the Fair Market Value per share shall be determined in good faith by the Committee through any reasonable valuation method authorized under the Code or Tax Act, if applicable, and commonly used to value privately held stock.
(o) “GAAP” means United States generally accepted accounting principles.
(p) “Grant” means an Option, SAR, Share Award, Share Unit or Other Share-Based Award granted under the Plan.
(q) “Grant Instrument” means the written agreement that sets forth the terms and conditions of a Grant, including all amendments thereto.
(r) “Incentive Stock Option” means an Option that is intended to meet the requirements of an incentive stock option under Section 422 of the Code.
(s) “Non-Employee Director” means a Director who is not an Employee.
(t) “Nonqualified Stock Option” means an Option that is not intended to be taxed as an incentive stock option under Section 422 of the Code.
(u) “Option” means an option to purchase Common Shares, as described in Section 6.
(v) “Other Share-Based Award” means any Grant based on, measured by or payable in Common Shares (other than an Option, Share Unit, Share Award, or SAR), as described in Section 10.
(w) “Participant” means an Employee, Consultant or Non-Employee Director designated by the Committee to participate in the Plan.
(x) “Performance Goals” means performance goals that may include, but are not limited to, one or more of the following criteria: cash flow; free cash flow; earnings (including gross margin, earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation, amortization and charges for share-based compensation, earnings before interest, taxes, depreciation and amortization, adjusted earnings before interest, taxes, depreciation and amortization and net earnings); earnings per share; growth in earnings or earnings per share; book value growth; share price; return on equity or average shareholder equity; total shareholder return or growth in total shareholder return either directly or in relation to a comparative group; return on capital; return on assets or net assets; revenue, growth in revenue or return on sales; sales; expense reduction or expense control; expense to revenue ratio;
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income, net income or adjusted net income; operating income, net operating income, adjusted operating income or net operating income after tax; operating profit or net operating profit; operating margin; gross profit margin; return on operating revenue or return on operating profit; regulatory filings; regulatory approvals, litigation and regulatory resolution goals; other operational, regulatory or departmental objectives; budget comparisons; growth in shareholder value relative to established indexes, or another peer group or peer group index; development and implementation of strategic plans and/or organizational restructuring goals; development and implementation of risk and crisis management programs; improvement in workforce diversity; compliance requirements and compliance relief; safety goals; productivity goals; workforce management and succession planning goals; economic value added (including typical adjustments consistently applied from generally accepted accounting principles required to determine economic value added performance measures); measures of customer satisfaction, employee satisfaction or staff development; development or marketing collaborations, formations of joint ventures or partnerships or the completion of other similar transactions intended to enhance the Company’s revenue or profitability or enhance its customer base; merger and acquisitions; and other similar criteria as determined by the Committee. Performance Goals applicable to a Grant shall be determined by the Committee, and may be established on an absolute or relative basis and may be established on a corporate-wide basis or with respect to one or more business units, divisions, subsidiaries or business segments. Relative performance may be measured against a group of peer companies, a financial market index or other objective and quantifiable indices.
(y) “Person” means any natural person, corporation, limited liability company, partnership, trust, joint stock company, business trust, unincorporated association, joint venture, governmental authority or other legal entity of any nature whatsoever.
(z) “Related Entity” means, for the Company, a person that controls or is controlled by the Company or that is controlled by the same person that controls the Company.
(aa) “Restriction Period” has the meaning given that term in Section 7(a).
(bb) “SAR” means a stock appreciation right, as described in Section 9.
(cc) “Share Award” means an award of Common Shares, as described in Section 7.
(dd) “Share Unit” means an award of a phantom unit representing a Common Share, as described in Section 8.
(ee) “Substitute Awards” has the meaning given that term in Section 4(c).
(ff) “Tax Act” means the Income Tax Act (Canada), as amended, including any applicable regulations and guidance thereunder.
(gg) “Termination Date” means, in respect of a Canadian Employee, the date that an Employee ceases to provide services to, or otherwise ceases its relationship with, the Employer on a permanent basis, for any reason, whether lawful or otherwise (including, without limitation by reason of termination for Cause, termination without Cause, resignation, death or
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disability), without regard to any applicable period of notice, payment in lieu of notice, severance pay, termination pay, benefits continuation, or similar compensation and/or benefits to which the Employee may then be entitled, subject only to the express minimum requirements of applicable employment or labour standards legislation (if applicable).
Section 2. Administration
(a) Committee. The Plan shall be administered and interpreted by the Committee; provided, however, that any Grants to members of the Board must be authorized by a majority of the Board (counting all Board members for purposes of a quorum, but only non-interested Board members for purposes of such majority approval). The Committee may delegate authority to one or more subcommittees, as it deems appropriate. Subject to compliance with applicable law and the applicable stock exchange rules, the Board, in its discretion, may perform any action of the Committee hereunder in any individual instance (without any need for any formal assumption of authority from the Committee). To the extent that the Board, a subcommittee or the CEO, as described below administers the Plan, references in the Plan to the “Committee” shall be deemed to refer to the Board or such subcommittee or the CEO.
(b) Delegation to CEO. Subject to compliance with applicable law and applicable stock exchange requirements, so long as the CEO is also a Director, the Committee may delegate all or part of its authority and power to the CEO, as it deems appropriate, with respect to Grants to Employees or Consultants who are not executive officers under Section 16 of the Exchange Act.
(c) Committee Authority. The Committee shall have the sole authority to (i) determine the individuals to whom Grants shall be made under the Plan, (ii) determine the type, size, terms and conditions of the Grants to be made to each such individual, (iii) determine the time when the Grants will be made and the duration of any applicable exercise or Restriction Period, including the criteria for exercisability and the acceleration of exercisability, (iv) amend the terms of any previously issued Grant, subject to the provisions of Section 17 below, (v) determine and adopt terms, guidelines, and provisions, not inconsistent with the Plan and applicable law, that apply to individuals residing outside of the United States who receive Grants under the Plan, and (vi) deal with any other matters arising under the Plan.
(d) Committee Determinations. The Committee shall have full power and express discretionary authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Committee’s interpretations of the Plan and all determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all Persons having any interest in the Plan or in any awards granted hereunder. All powers of the Committee shall be executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated individuals.
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(e) Indemnification. No member of the Committee or the Board, and no employee of the Company shall be liable for any act or failure to act with respect to the Plan, except in circumstances involving his or her bad faith or willful misconduct, or for any act or failure to act hereunder by any other member of the Committee or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated. The Company shall indemnify members of the Committee and the Board and any agent of the Committee or the Board who is an employee of the Company or a subsidiary against any and all liabilities or expenses to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan, except in circumstances involving such Person’s bad faith or willful misconduct.
Section 3. Grants
Grants under the Plan may consist of Options as described in Section 6, Share Awards as described in Section 7, Share Units as described in Section 8, SARs as described in Section 9, and Other Share-Based Awards as described in Section 10. All Grants shall be subject to the terms and conditions set forth herein and to such other terms and conditions consistent with this Plan as the Committee deems appropriate and as are specified in writing by the Committee to the individual in the Grant Instrument. All Grants shall be made conditional upon the Participant’s acknowledgement, in writing or by acceptance of the Grant, that all decisions and determinations of the Committee shall be final and binding on the Participant, his or her beneficiaries and any other person having or claiming an interest under such Grant. Grants under a particular Section of the Plan need not be uniform as among the Participants.
Section 4. Shares Subject to the Plan
(a) Shares Authorized. Subject to adjustment as described below in Sections 4(b) and 4(e) below, the aggregate number of Common Shares that may be issued or transferred under the Plan shall be 2,607,943 Common Shares, plus 2,706,941 Common Shares subject to outstanding grants under the Prior Plan as of the Effective Date. The aggregate number of Common Shares that may be issued or transferred under the Plan pursuant to Incentive Stock Options shall not exceed 2,607,943 Common Shares. Commencing with the first business day of each calendar year beginning in 2024, the aggregate number of Common Shares that may be issued or transferred under the Plan shall be increased by a number equal to the lesser of (x) 1,946,226 million Common Shares and (y) such lesser number of Common Shares as may be determined by the Committee.
(b) Source of Shares; Share Counting. Shares issued or transferred under the Plan may be authorized but unissued Common Shares or reacquired Common Shares, including shares purchased by the Company on the open market for purposes of the Plan. If and to the extent Options or SARs granted under the Plan (including options or SARs granted under the Prior Plan, if any), expire or are canceled, forfeited, exchanged or surrendered without having been exercised, or if any Share Awards, Share Units or Other Share-Based Awards (including options or SARs granted under the Prior Plan, if any) are forfeited, terminated or otherwise not paid in full, the shares subject to such Grants shall again be available for purposes of the Plan. If Common Shares otherwise issuable under the Plan are surrendered in payment of the Exercise Price of an Option, then the number of Common Shares available for issuance under the Plan shall be reduced only by the net number of shares actually issued by the Company upon such exercise and not by the gross number of shares as to which such Option is exercised. Upon the
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exercise of any SAR under the Plan, the number of Common Shares available for issuance under the Plan shall be reduced by only by the net number of shares actually issued by the Company upon such exercise. If Common Shares otherwise issuable under the Plan are withheld by the Company in satisfaction of the withholding taxes incurred in connection with the issuance, vesting or exercise of any Grant or the issuance of Common Shares thereunder, then the number of Common Shares available for issuance under the Plan shall be reduced by the net number of shares issued, vested or exercised under such Grant, calculated in each instance after payment of such share withholding. To the extent any Grants are paid in cash, and not in Common Shares, any shares previously subject to such Grants shall again be available for issuance or transfer under the Plan. For the avoidance of doubt, if shares are repurchased by the Company on the open market with the proceeds of the Exercise Price of Options, such shares may not again be made available for issuance under the Plan.
(c) Substitute Awards. Shares issued or transferred under Grants made pursuant to an assumption, substitution or exchange for previously granted awards of a company acquired by the Company in a transaction (“Substitute Awards”) shall not reduce the number of Common Shares available under the Plan and available shares under a shareholder approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for Grants under the Plan and shall not reduce the Plan’s share reserve (subject to applicable stock exchange listing and Code or Tax Act requirements).
(d) Individual Limits for Non-Employee Directors. Subject to adjustment as described below in Section 4(e), the maximum aggregate grant date value of Common Shares subject to Grants granted to any Non-Employee Director during any calendar year, taken together with any cash fees earned by such Non-Employee Director for services rendered during the calendar year, shall not exceed $500,000 in total value; provided, however, that with respect to the year during which the Non-Employee Director is first appointed or elected to the Board, the maximum aggregate grant date value of Common Shares granted to such Non-Employee Director during the initial annual period, taken together with any cash fees earned by such Non-Employee Director for services rendered during such period, shall not exceed $750,000 in total value during the initial annual period. For purposes of this limit, the value of such Grants shall be calculated based on the grant date fair value of such Grants for financial reporting purposes.
(e) Adjustments. If there is any change in the number or kind of Common Shares outstanding by reason of (i) a stock dividend, spinoff, recapitalization, stock split, or combination or exchange of shares, (ii) a merger, amalgamation, reorganization or consolidation, (iii) a reclassification or change in par value, or (iv) any other extraordinary or unusual event affecting the outstanding Common Shares as a class without the Company’s receipt of consideration, or if the value of outstanding Common Shares is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution, the maximum number and kind of Common Shares available for issuance under the Plan, the maximum amount of Grants which a Non-Employee Director may receive in any year, the number and kind of shares covered by outstanding Grants, the number and kind of shares issued and to be issued under the Plan, and the price per share or the applicable market value of such Grants shall be equitably adjusted by the Committee to reflect any increase or decrease in the number of, or change in the kind or value of, the issued Common Shares to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under the Plan and such
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outstanding Grants; provided, however, that any fractional shares resulting from such adjustment shall be eliminated. In addition, in the event of a Change of Control, the provisions of Section 12 shall apply. Any adjustments to outstanding Grants to individuals subject to U.S. income tax shall be consistent with Section 409A or Section 424 of the Code, to the extent applicable. The adjustments of Grants under this Section 4(e) shall include adjustment of shares, Exercise Price of Stock Options, base amount of SARs, Performance Goals or other terms and conditions, as the Committee deems appropriate. The Committee shall have the sole discretion and authority to determine what appropriate adjustments shall be made and any adjustments determined by the Committee shall be final, binding and conclusive.
Section 5. Eligibility for Participation
(a) Eligible Persons. All Employees, Non-Employee Directors and Consultants shall be eligible to participate in the Plan.
(b) Selection of Participants. The Committee shall select the Employees, Non-Employee Directors and Consultants to receive Grants and shall determine the number of Common Shares subject to a particular Grant in such manner as the Committee determines.
(c) Voluntary Participation. Participation in the Plan will be entirely voluntary and any decision not to participate will not affect any Employee’s, Non-Employee Director’s or Consultant’s employment or other service relationship with the Company or any of its subsidiaries.
Section 6. Options
The Committee may grant Options to an Employee, Non-Employee Director or Consultant upon such terms as the Committee deems appropriate. The following provisions are applicable to Options:
(a) Number of Shares. The Committee shall determine the number of Common Shares that will be subject to each Grant of Options to Employees, Non-Employee Directors and Consultants.
(b) Type of Option and Exercise Price.
(i) The Committee may grant Incentive Stock Options or Nonqualified Stock Options or any combination of the two, all in accordance with the terms and conditions set forth herein. Incentive Stock Options may be granted only to employees of the Company or its parent or subsidiary corporations, as defined in Section 424 of the Code, who are subject to U.S. income tax. Nonqualified Stock Options may be granted to Employees, Non-Employee Directors and Consultants.
(ii) The Exercise Price of Common Shares subject to an Option shall be determined by the Committee and shall be equal to or greater than the Fair Market Value of the Common Shares on the date the Option is granted. However, an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns securities possessing more than 10% of the total combined voting power of all classes of securities of the Company, or any
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parent or subsidiary corporation of the Company, as defined in Section 424 of the Code, unless the Exercise Price per share is not less than 110% of the Fair Market Value of the Common Shares on the date of grant. Notwithstanding the foregoing, the Exercise Price of any Option granted to a Canadian Employee shall under no circumstances be less than 100% of the Fair Market Value on the date the Option is granted.
(c) Option Term. The Committee shall determine the term of each Option. The term of any Option shall not exceed ten years from the date of grant. However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns securities possessing more than 10% of the total combined voting power of all classes of securities of the Company, or any parent or subsidiary corporation of the Company, as defined in Section 424 of the Code, may not have a term that exceeds five years from the date of grant. Notwithstanding the foregoing, in the event that on the last business day of the term of an Option (other than an Incentive Stock Option), the exercise of the Option is prohibited by applicable law, including a prohibition on purchases or sales of Common Shares under the Company’s insider trading policy, the term of the Option shall be extended for a period of 30 days following the end of the legal prohibition, unless the Committee determines otherwise.
(d) Exercisability of Options. Options shall become exercisable in accordance with such terms and conditions, consistent with the Plan, as may be determined by the Committee and specified in the Grant Instrument. The Committee may accelerate the exercisability of any or all outstanding Options at any time for any reason.
(e) Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such Options may become exercisable, as determined by the Committee, upon the Participant’s death, Disability or retirement, or upon a Change of Control or other circumstances permitted by applicable regulations).
(f) Termination of Employment or Service. Except as provided in the Grant Instrument, an Option may only be exercised while the Participant is employed by, or providing services to, the Employer (and in the case of a Canadian Employee, prior to a Termination Date). The Committee shall determine in the Grant Instrument under what circumstances and during what time periods a Participant may exercise an Option after termination of employment or service.
(g) Exercise of Options. A Participant may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Participant shall pay the Exercise Price for an Option as specified by the Committee (i) in cash, (ii) unless the Committee determines otherwise, by delivering Common Shares owned by the Participant and having a Fair Market Value on the date of exercise at least equal to the Exercise Price or by attestation (on a form prescribed by the Committee) to ownership of Common Shares having a Fair Market Value on the date of exercise at least equal to the Exercise Price, (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, (iv) if permitted by the Committee, and solely with respect to Nonqualified Stock Options, by withholding Common Shares subject to the exercisable Option,
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which have a Fair Market Value on the date of exercise equal to the Exercise Price, or (v) by such other method as the Committee may approve. Common Shares used to exercise an Option shall have been held by the Participant for the requisite period of time necessary to avoid adverse accounting consequences to the Company with respect to the Option. Payment for the shares to be issued or transferred pursuant to the Option, and any required withholding taxes, must be received by the Company by the time specified by the Committee depending on the type of payment being made, but in all cases prior to the issuance or transfer of such shares.
(h) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the Common Shares on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year, under the Plan or any other stock option plan of the Company or a parent or subsidiary, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option.
Section 7. Share Awards
The Committee may issue or transfer Common Shares to an Employee, Non-Employee Director or Consultant under a Share Award, upon such terms as the Committee deems appropriate. The following provisions are applicable to Share Awards:
(a) General Requirements. Common Shares issued or transferred pursuant to Share Awards may be issued or transferred subject to restrictions or no restrictions, as determined by the Committee. The Committee may, but shall not be required to, establish conditions under which restrictions on Share Awards shall lapse over a period of time or according to such other criteria as the Committee deems appropriate, including, without limitation, restrictions based on the achievement of specific Performance Goals. The period of time during which the Share Awards will remain subject to restrictions will be designated in the Grant Instrument as the “Restriction Period.”
(b) Number of Shares. The Committee shall determine the number of Common Shares to be issued or transferred pursuant to a Share Award and the restrictions applicable to such shares.
(c) Requirement of Employment or Service. If the Participant ceases to be employed by, or provide service to, the Employer (or in the case of a Canadian Employee, a Termination Date occurs) during a period designated in the Grant Instrument as the Restriction Period, or if other specified conditions are not met, the Share Award shall terminate as to all shares covered by the Grant as to which the restrictions have not lapsed, and those Common Shares must be immediately returned to the Company. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.
(d) Restrictions on Transfer and Legend on Share Certificate. During the Restriction Period, a Participant may not sell, assign, transfer, pledge or otherwise dispose of the shares of a Share Award except under Section 15. Unless otherwise determined by the Committee, the Company will retain possession of certificates for shares of Share Awards until all restrictions on such shares have lapsed. Each certificate for a Share Award, unless held by the Company, shall contain a legend giving appropriate notice of the restrictions in the Grant.
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The Participant shall be entitled to have the legend removed from the share certificate covering the shares subject to restrictions when all restrictions on such shares have lapsed. The Committee may determine that the Company will not issue certificates for Share Awards until all restrictions on such shares have lapsed.
(e) Right to Vote and to Receive Dividends. Unless the Committee determines otherwise, during the Restriction Period, the Participant shall have the right to vote shares of Share Awards and to receive any dividends or other distributions paid on such shares, subject to any restrictions deemed appropriate by the Committee, including, without limitation, the achievement of specific Performance Goals. Dividends with respect to Share Awards that vest based on performance shall vest if and to the extent that the underlying Share Award vests, as determined by the Committee.
(f) Lapse of Restrictions. All restrictions imposed on Share Awards shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all conditions, if any, imposed by the Committee. The Committee may determine, as to any or all Share Awards, that the restrictions shall lapse without regard to any Restriction Period.
Section 8. Share Units
The Committee may grant Share Units, each of which shall represent one hypothetical Common Share, to an Employee, Non-Employee Director or Consultant upon such terms and conditions as the Committee deems appropriate. The following provisions are applicable to Share Units:
(a) Crediting of Units. Each Share Unit shall represent the right of the Participant to receive a Common Share or an amount of cash based on the value of a Common Share, if and when specified conditions are met. All Share Units shall be credited to bookkeeping accounts established on the Company’s records for purposes of the Plan.
(b) Terms of Share Units. The Committee may grant Share Units that vest and are payable if specified Performance Goals or other conditions are met, or under other circumstances. Share Units may be paid at the end of a specified performance period or other period, or payment may be deferred to a date authorized by the Committee. The Committee may accelerate vesting or payment, as to any or all Share Units at any time for any reason, provided such acceleration complies with 409A. The Committee shall determine the number of Share Units to be granted and the requirements applicable to such Share Units. Notwithstanding anything to the contrary, the vesting period for Share Units granted to a Canadian Employee shall, in all cases, be in compliance with the requirements pertaining to the exception to the application of the salary deferral arrangement rules in paragraph (k) of the definition of “salary deferral arrangement” in subsection 248(1) of the Tax Act, as such subsection may be amended or enacted from time to time.
(c) Requirement of Employment or Service. If the Participant ceases to be employed by, or provide service to, the Employer (or in the case of a Canadian Employee, a Termination Date occurs) prior to the vesting of Share Units, or if other conditions established by the Committee are not met, the Participant’s Share Units shall be forfeited. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.
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(d) Payment With Respect to Share Units. Payments with respect to Share Units shall be made in cash, Common Shares or any combination of the foregoing, as the Committee shall determine.
(e) Canadian Employees. All Share Units granted to Canadian Employees shall be in compliance with the requirements pertaining to the exception to the application of the salary deferral arrangement rules in paragraph (k) of the definition of “salary deferral arrangement” in subsection 248(1) of the Tax Act, as such subsection may be amended or enacted from time to time.
Section 9. Stock Appreciation Rights
The Committee may grant SARs to an Employee, Non-Employee Director or Consultant separately or in tandem with any Option. The following provisions are applicable to SARs:
(a) General Requirements. The Committee may grant SARs to an Employee, Non-Employee Director or Consultant separately or in tandem with any Option (for all or a portion of the applicable Option). Tandem SARs may be granted either at the time the Option is granted or at any time thereafter while the Option remains outstanding; provided, however, that, in the case of an Incentive Stock Option, SARs may be granted only at the time of the grant of the Incentive Stock Option. The Committee shall establish the base amount of the SAR at the time the SAR is granted. The base amount of each SAR shall be equal to or greater than the Fair Market Value of a Common Share as of the date of grant of the SAR. The term of any SAR shall not exceed ten years from the date of grant. Notwithstanding the foregoing, in the event that on the last business day of the term of a SAR, the exercise of the SAR is prohibited by applicable law, including a prohibition on purchases or sales of Common Shares under the Company’s insider trading policy, the term shall be extended for a period of 30 days following the end of the legal prohibition, unless the Committee determines otherwise.
(b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to a Participant that shall be exercisable during a specified period shall not exceed the number of Common Shares that the Participant may purchase upon the exercise of the related Option during such period. Upon the exercise of an Option, the SARs relating to the Common Shares covered by such Option shall terminate. Upon the exercise of SARs, the related Option shall terminate to the extent of an equal number of Common Shares.
(c) Exercisability. A SAR shall be exercisable during the period specified by the Committee in the Grant Instrument and shall be subject to such vesting and other restrictions as may be specified in the Grant Instrument. The Committee may accelerate the exercisability of any or all outstanding SARs at any time for any reason. SARs may only be exercised while the Participant is employed by, or providing service to, the Employer (and in the case of a Canadian Employee, prior to a Termination Date) or during the applicable period after termination of employment or service (or in the case of a Canadian Employee, after Termination Date) as specified by the Committee. A tandem SAR shall be exercisable only during the period when the Option to which it is related is also exercisable.
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(d) Grants to Non-Exempt Employees. Notwithstanding the foregoing, SARs granted to persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at least six months after the date of grant (except that such SARs may become exercisable, as determined by the Committee, upon the Participant’s death, Disability or retirement, or upon a Change of Control or other circumstances permitted by applicable regulations).
(e) Value of SARs. When a Participant exercises SARs, the Participant shall receive in settlement of such SARs an amount equal to the value of the stock appreciation for the number of SARs exercised. The stock appreciation for a SAR is the amount by which the Fair Market Value of the underlying Common Shares on the date of exercise of the SAR exceeds the base amount of the SAR as described in subsection (a).
(f) Form of Payment. The appreciation in a SAR shall be paid in Common Shares, cash or any combination of the foregoing, as the Committee shall determine. For purposes of calculating the number of Common Shares to be received, Common Shares shall be valued at their Fair Market Value on the date of exercise of the SAR.
Section 10. Other Share-Based Awards
The Committee may grant Other Share-Based Awards, which are awards (other than those described in Sections 6 through 9) that are based on or measured by Common Shares, to any Employee, Non-Employee Director or Consultant, on such terms and conditions as the Committee shall determine. Other Share-Based Awards may be awarded subject to the achievement of Performance Goals or other criteria or other conditions and may be payable in cash, Common Shares or any combination of the foregoing, as the Committee shall determine.
Section 11. Dividend Equivalents
The Committee may grant Dividend Equivalents in connection with Share Units or Other Share-Based Awards. Dividend Equivalents may be paid currently or accrued as contingent cash obligations and may be payable in cash or Common Shares, and upon such terms and conditions as the Committee shall determine. Dividend Equivalents with respect to Share Units or Other Share-Based Awards that vest based on performance shall vest and be paid only if and to the extent the underlying Share Units or Other Share-Based Awards vest and are paid, as determined by the Committee.
Section 12. Consequences of a Change of Control
(a) Assumption of Outstanding Grants. Upon a Change of Control where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Committee determines otherwise, all outstanding Grants that are not exercised or paid at the time of the Change of Control shall be assumed by, or replaced with grants (with respect to cash, securities, or a combination thereof) that have comparable terms by, the surviving corporation (or a parent or subsidiary of the surviving corporation). An assumption
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or substitution of any Grants shall be done in a manner consistent with the provisions of Sections 409A and, if applicable, 424 of the Code, for individuals subject to U.S. income tax. After a Change of Control, references to the “Company” or “Employer” as they relate to employment matters shall include the successor employer in the transaction, subject to applicable law.
(b) Other Alternatives. In the event of a Change of Control, if any outstanding Grants are not assumed by, or replaced with grants that have comparable terms by, the surviving corporation (or a parent or subsidiary of the surviving corporation), the Committee may (but is not obligated to) make adjustments to the terms and conditions of outstanding Grants, including, without limitation, taking any of the following actions (or combination thereof) with respect to any or all outstanding Grants, without the consent of any Participant: (i) the Committee may determine that outstanding Stock Options and SARs shall automatically accelerate and become fully exercisable and the restrictions and conditions on outstanding Share Awards, Share Units and Dividend Equivalents shall immediately lapse; (ii) the Committee may determine that Participants shall receive a payment in settlement of outstanding Share Units or Dividend Equivalents, in such amount and form as may be determined by the Committee; (iii) the Committee may require that Participants surrender their outstanding Stock Options and SARs in exchange for a payment by the Company, in cash or Common Shares as determined by the Committee, in an amount equal to the amount, if any, by which the then Fair Market Value of the Common Shares subject to the Participant’s unexercised Stock Options and SARs exceeds the Stock Option Exercise Price or SAR base amount, and (iv) after giving Participants an opportunity to exercise all of their outstanding Stock Options and SARs, the Committee may terminate any or all unexercised Stock Options and SARs at such time as the Committee deems appropriate. Such surrender, termination or payment shall take place as of the date of the Change of Control or such other date as the Committee may specify. Without limiting the foregoing, if the per share Fair Market Value of the Common Shares does not exceed the per share Stock Option Exercise Price or SAR base amount, as applicable, the Company shall not be required to make any payment to the Participant upon surrender of the Stock Option or SAR and shall have the right to cancel any such Stock Option or SAR for no consideration.
Section 13. Deferrals
The Committee may permit or require a Participant to defer receipt of the payment of cash or the delivery of shares that would otherwise be due to such Participant in connection with any Grant. If any such deferral election is permitted or required, the Committee shall establish rules and procedures for such deferrals and may provide for interest or other earnings to be paid on such deferrals. The rules and procedures for any such deferrals shall be consistent with applicable requirements of 409A.
Section 14. Withholding of Taxes
(a) Required Withholding. All Grants under the Plan shall be subject to applicable United States federal (including taxes under FICA), state and local, foreign country or other tax withholding requirements. The Employer may require that the Participant or other person receiving Grants or exercising Grants pay to the Employer an amount sufficient to satisfy such tax withholding requirements with respect to such Grants, or the Employer may deduct from other wages and compensation paid by the Employer the amount of any withholding taxes due with respect to such Grants.
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(b) Share Withholding. The Committee may permit or require the Employer’s tax withholding obligation with respect to Grants paid in Common Shares to be satisfied by having shares withheld up to an amount that does not exceed the Participant’s applicable withholding tax rate for United States federal (including FICA), state and local, foreign country or other tax liabilities. The Committee may, in its discretion, and subject to such rules as the Committee may adopt, allow Participants to elect to have such share withholding applied to all or a portion of the tax withholding obligation arising in connection with any particular Grant. Unless the Committee determines otherwise, share withholding for taxes shall not exceed the Participant’s minimum applicable tax withholding amount.
Section 15. Transferability of Grants
(a) Nontransferability of Grants. Except as described in subsection (b) below, only the Participant may exercise rights under a Grant during the Participant’s lifetime. A Participant may not transfer those rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Grants other than Incentive Stock Options, pursuant to a domestic relations order. When a Participant dies, the personal representative or other person entitled to succeed to the rights of the Participant may exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Grant under the Participant’s will or under the applicable laws of descent and distribution.
(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the Committee may provide, in a Grant Instrument, that a Participant may transfer Nonqualified Stock Options to a permitted assign in compliance with the applicable securities laws, according to such terms as the Committee may determine; provided that the Participant receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.
Section 16. Requirements for Issuance or Transfer of Shares
No Common Shares shall be issued or transferred in connection with any Grant hereunder unless and until all legal requirements applicable to the issuance or transfer of such Common Shares have been complied with to the satisfaction of the Committee. The Committee shall have the right to condition any Grant on the Participant’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of the Common Shares as the Committee shall deem necessary or advisable, and certificates representing such shares may be legended to reflect any such restrictions. Certificates representing Common Shares issued or transferred under the Plan may be subject to such stop-transfer orders and other restrictions as the Committee deems appropriate to comply with applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon.
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Section 17. Amendment and Termination of the Plan
(a) Amendment. The Board may amend or terminate the Plan at any time; provided, however, that the Board shall not amend the Plan without shareholder approval if such approval is required in order to comply with the Code, the Tax Act or other applicable law, or to comply with applicable stock exchange requirements.
(b) No Repricing of Options or SARs. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, distribution (whether in the form of cash, Common Shares, other securities or property), stock split, extraordinary cash dividend, recapitalization, change in control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Shares or other securities, or similar transactions), the Company may not, without obtaining shareholder approval, (i) amend the terms of outstanding Stock Options or SARs to reduce the Exercise Price of such outstanding Stock Options or base price of such SARs, (ii) cancel outstanding Stock Options or SARs in exchange for Stock Options or SARs with an Exercise Price or base price, as applicable, that is less than the Exercise Price or base price of the original Stock Options or SARs or (iii) cancel outstanding Stock Options or SARs with an Exercise Price or base price, as applicable, above the current stock price in exchange for cash or other securities.
(c) Termination of Plan. The Plan shall terminate on the day immediately preceding the tenth anniversary of its Effective Date, unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the shareholders.
(d) Termination and Amendment of Outstanding Grants. A termination or amendment of the Plan that occurs after a Grant is made shall not materially impair the rights of a Participant with respect to such Grant unless the Participant consents or unless the Committee acts under Section 18(f). The termination of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Grant. Whether or not the Plan has terminated, an outstanding Grant may be terminated or amended under Section 18(f) or may be amended by agreement of the Company and the Participant consistent with the Plan.
Section 18. Miscellaneous
(a) Grants in Connection with Corporate Transactions and Otherwise. Nothing contained in the Plan shall be construed to (i) limit the right of the Committee to make Grants under the Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Grants to employees thereof who become Employees, or (ii) limit the right of the Company to grant stock options or make other awards outside of the Plan. The Committee may make a Grant to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of securities or property, reorganization or liquidation involving the Company, in substitution for a stock option or Share Awards grant made by such corporation. Notwithstanding anything in the Plan to the contrary, the Committee may establish such terms and conditions of the new Grants as it deems appropriate, including setting the Exercise Price of Options or the base price of SARs at a price necessary to retain for the Participant the same economic value as the prior options or rights.
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(b) Governing Document. The Plan shall be the controlling document. No other statements, representations, explanatory materials or examples, oral or written, may amend the Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its successors and assigns.
(c) Funding of the Plan. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Grants under the Plan.
(d) Rights of Participants. Nothing in the Plan shall entitle any Employee, Non-Employee Director, Consultant or other person to any claim or right to receive a Grant under the Plan. Any Grant under the Plan shall be a one-time award that does not constitute a promise of future grants nor will it form part of a Participant’s standard compensation or be considered for the purpose of calculating any entitlements to vacation, benefits, notice of termination or payment in lieu of notice or as otherwise required by any other contract or applicable law. The Company, in its sole discretion, maintains the right to make available future Grants under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Employer or any other employment rights.
(e) No Fractional Shares. No fractional Common Shares shall be issued or delivered pursuant to the Plan or any Grant. Except as otherwise provided under the Plan, the Committee shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
(f) Compliance with Law.
(i) The Plan, the exercise of Options and SARs and the obligations of the Company to issue or transfer Common Shares under Grants shall be subject to all applicable laws and regulations, and to approvals by any governmental or regulatory agency as may be required. With respect to persons subject to Section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that Incentive Stock Options comply with the applicable provisions of Section 422 of the Code, and that, to the extent applicable, Grants comply with the requirements of 409A, to the extent applicable. To the extent that any legal requirement of Section 16 of the Exchange Act, 409A or Section 422 of the Code as set forth in the Plan ceases to be required under Section 16 of the Exchange Act, 409A or Section 422 of the Code, that Plan provision shall cease to apply. The Committee may revoke any Grant if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory government regulation. The Committee may also adopt rules regarding the withholding of taxes on payments to Participants. The Committee may, in its sole discretion, agree to limit its authority under this Section.
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(ii) The Plan is intended to comply with the requirements of 409A, to the extent applicable. Each Grant shall be construed and administered such that the Grant either (A) qualifies for an exemption from the requirements of 409A or (B) satisfies the requirements of 409A. If a Grant is subject to 409A, (I) distributions shall only be made in a manner and upon an event permitted under 409A, (II) payments to be made upon a termination of employment or service shall only be made upon a “separation from service” under 409A, (III) unless the Grant specifies otherwise, each installment payment shall be treated as a separate payment for purposes of 409A, and (IV) in no event shall a Participant, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with 409A.
(iii) Any Grant that is subject to 409A and that is to be distributed to a Key Employee (as defined below) upon separation from service shall be administered so that any distribution with respect to such Grant shall be postponed for six months following the date of the Participant’s separation from service, if required by 409A. If a distribution is delayed pursuant to 409A, the distribution shall be paid within 15 days after the end of the six-month period. If the Participant dies during such six-month period, any postponed amounts shall be paid within 90 days of the Participant’s death. The determination of Key Employees, including the number and identity of persons considered Key Employees and the identification date, shall be made by the Committee or its delegate each year in accordance with Section 416(i) of the Code and the “specified employee” requirements of 409A.
(iv) Notwithstanding anything in the Plan or any Grant agreement to the contrary, each Participant shall be solely responsible for the tax consequences of Grants under the Plan, and in no event shall the Company or any subsidiary or affiliate of the Company have any responsibility or liability if a Grant does not meet any applicable requirements of 409A. Although the Company intends to administer the Plan to prevent taxation under 409A, the Company does not represent or warrant that the Plan or any Grant complies with any provision of federal, state, local or other tax law.
(g) Establishment of Subplans. The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions outside the United States or Canada. The Board shall establish such sub-plans by adopting supplements to the Plan setting forth (i) such limitations on the Committee’s discretion under the Plan as the Board deems necessary or desirable and (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Employer shall not be required to provide copies of any supplement to Participants in any jurisdiction that is not affected.
(h) Clawback Rights. All Grants (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt of any Grant or upon the receipt or resale of any Common Shares underlying the Grant) under the Plan shall be subject to the provisions of any applicable policies implemented by the Board from time to time, including, any clawback or recoupment policies, share trading policies and other policies that may be implemented by the Board from time to time.
(i) Tax Act Elections. In the sole discretion of the Committee, the Company may make an election under subsection 110(1.1) of the Tax Act where applicable.
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(j) Waiver of Damages. A grantee, who is a Canadian Employee, waives any and all rights to any Grants and to any compensation or damages in respect or in lieu thereof as a consequence of termination of the Participant’s employment or service to the Employer for any reason, or otherwise for any reason whatsoever insofar as those rights arise or may arise from the Participant ceasing to have rights with respect to such Grants upon a termination such Participant’s employment or service to the Employer.
(k) Governing Law. The validity, construction, interpretation and effect of the Plan and Grant Instruments issued under the Plan shall be governed and construed by and determined in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein, without giving effect to the conflict of laws provisions thereof.
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Exhibit 10.21
ENGENE HOLDING CO. 2023 EQUITY INCENTIVE PLAN
NONQUALIFIED STOCK OPTION GRANT AGREEMENT
This NONQUALIFIED STOCK OPTION GRANT AGREEMENT (the “Agreement”), dated as of [•] (the “Date of Grant”), is delivered by enGene Holdings Inc., a company organized under the laws of British Columbia, Canada (the “Company”) to [•] (the “Participant”).
RECITALS
The enGene Holdings Inc. 2023 Equity Incentive Plan (the “Plan”) provides for the grant of stock options to purchase common shares of the Company (“Company Shares”). The Committee has decided to make this nonqualified stock option grant as an inducement for the Participant to promote the best interests of the Company and its shareholders. This Agreement is made pursuant to the Plan and is subject in its entirety to all applicable provisions of the Plan. Capitalized terms used herein and not otherwise defined will have the meanings set forth in the Plan.
1. Grant of Option. Subject to the terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants to the Participant a nonqualified stock option (the “Option”) to purchase [•] Company Shares (each a “Share”, and together the “Shares”) at an Exercise Price of $[•] per Share. The Option shall become exercisable according to Section 2 below.
2. Exercisability of Option.
(a) Subject to the terms of this Section 2, the Option shall become vested according to the following dates (each a “Vesting Date”), provided that the Participant continues to be employed by, or provide service to, the Employer from the Date of Grant until the applicable Vesting Date.
| VESTING DATE* |
VESTING AMOUNT | |
| * | Notwithstanding the earlier vesting of the Option, the Option shall not be exercisable, and no Shares shall be issuable, until on or after March 2, 2024. |
(b) The vesting and exercisability of the Option is cumulative, but shall not exceed 100% of the Shares subject to the Option. If the terms set forth in Section 2(a) would produce fractional Shares, the number of Shares for which the Option becomes vested and exercisable shall be rounded down to the nearest whole Share and the fractional Shares will be accumulated so that the resulting whole Shares will be included in the number of Shares for which the Option becomes vested and exercisable on the last Vesting Date.
(c) In the event of a Change of Control before the Option is fully vested and exercisable, the provisions of the Plan applicable to a Change of Control shall apply to the Option, and, in the event of a Change of Control, the Committee may take such actions with respect to the vesting and exercisability of the Option as it deems appropriate pursuant to the Plan.
3. Term of Option.
(a) The Option shall have a term of ten years from the Date of Grant and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan. Notwithstanding the foregoing, in the event that on the last business day of the term of the Option, the exercise of the Option is prohibited by applicable law, including a prohibition on purchases or sales of Company Shares under the Company’s insider trading policy, the term of the Option shall be extended for a period of 30 days following the end of the legal prohibition, unless the Committee determines otherwise.
(b) The Option shall automatically terminate upon the happening of the first of the following events:
(i) The expiration of the 90-day period after the Participant ceases to be employed by, or provide service to, the Employer, if the termination is for any reason other than Disability, death or Cause.
(ii) The expiration of the one-year period after the Participant ceases to be employed by, or provide service to, the Employer on account of the Participant’s Disability.
(iii) The expiration of the one-year period after the Participant ceases to be employed by, or provide service to, the Employer, if the Participant dies while employed by, or providing service to, the Employer or the Participant dies within 90 days after the Participant ceases to be so employed or to provide services to the Employer for any reason other than Disability, death or Cause.
(iv) The date on which the Participant ceases to be employed by, or provide service to, the Company for Cause. In addition, notwithstanding the prior provisions of this Section 3, if the Participant engages in conduct that constitutes Cause after the Participant’s employment or service terminates, the Option shall immediately terminate, and the Participant shall automatically forfeit all Shares underlying any exercised portion of the Option for which the Company has not yet delivered the Share certificates, upon refund by the Company of the Exercise Price paid by the Participant for such Shares.
Notwithstanding the foregoing, in no event may the Option be exercised after the date that is immediately before the tenth anniversary of the Date of Grant, except as provided under Section 3(a) above. Any portion of the Option that is not exercisable at the time the Participant ceases to be employed by, or provide service to, the Employer shall immediately terminate.
4. Exercise Procedures.
(a) Subject to the provisions of Sections 2 and 3 above, the Participant may exercise part or all of the exercisable Option by giving the Company or its delegate written notice of intent to exercise, specifying the number of Company Shares as to which the Option is to be exercised and such other information as the Company or its delegate may require.
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(b) At such time as the Committee shall determine, the Participant shall pay the Exercise Price (i) in cash, (ii) unless the Committee determines otherwise, by delivering Company Shares owned by the Participant, which shall be valued at their Fair Market Value on the date of exercise, or by attestation (in accordance with procedures prescribed by the Company) to ownership of Company Shares having a Fair Market Value on the date of exercise at least equal to the Exercise Price, (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, (iv) if permitted by the Committee, by withholding Company Shares subject to the exercisable Option, which have a Fair Market Value on the date of exercise equal to the Exercise Price, or (v) by such other method as the Committee may approve, to the extent permitted by applicable law. Company Shares used to exercise an Option shall have been held by the Participant for the requisite period of time necessary to avoid adverse accounting consequences to the Company with respect to the Option. The Committee may impose from time to time such limitations as it deems appropriate on the use of Company Shares to exercise the Option.
(c) The obligation of the Company to deliver Shares upon exercise of the Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Committee, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations.
(d) All obligations of the Company under this Agreement shall be subject to the rights of the Employer as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable. The Participant may be required to pay to the Employer, or make other arrangements satisfactory to the Employer to provide for the payment of, any federal, state, local or other taxes that the Employer is required to withhold with respect to the Option. At such time as the Committee may determine, the Participant may elect to satisfy any tax withholding obligation of the Employer with respect to the Option by having Shares withheld to satisfy the applicable withholding tax rate for FICA, federal, state, local and other tax liabilities.
(e) Upon exercise of the Option (or portion thereof), the Option (or portion thereof) will terminate and cease to be outstanding.
5. Restrictions on Exercise. Except as the Committee may otherwise permit pursuant to the Plan, only the Participant may exercise the Option during the Participant’s lifetime and, after the Participant’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Participant, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement.
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6. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan. The grant and exercise of the Option are subject to the provisions of the Plan and to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the Shares, (c) changes in capitalization of the Company and (d) other requirements of applicable law. The Committee shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.
7. No Employment or Other Rights. The grant of the Option shall not confer upon the Participant any right to be retained by or in the employ or service of the Employer and shall not interfere in any way with the right of the Employer to terminate the Participant’s employment or service at any time. The right of the Employer to terminate at will the Participant’s employment or service at any time for any reason is specifically reserved.
8. No Shareholder Rights. Neither the Participant, nor any person entitled to exercise the Participant’s rights in the event of the Participant’s death, shall have any of the rights and privileges of a shareholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option.
9. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the Plan, the rights and interests of the Participant under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Participant, by will or by the laws of descent and distribution. In the event of any attempt by the Participant to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Participant, and the Option and all rights hereunder shall thereupon become null and void. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Participant’s consent.
10. Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of British Columbia, Canada, without giving effect to the conflicts of laws provisions thereof.
11. Notice. Any notice to the Company provided for in this instrument shall be addressed to the Company in care of [●] and any notice to the Participant shall be addressed to such Participant at the current address shown on the payroll of the Company. Any notice shall be delivered by hand or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or by the postal authority of the country in which the Participant resides or to an internationally recognized expedited mail courier.
12. Recoupment Policy. The Participant agrees that, subject to the requirements of applicable law, the Option, and the right to receive and retain any Company Share or cash payments covered by this Agreement, shall be subject to rescission, cancellation or recoupment, in whole or part, if and to the extent so provided under the Dodd-Frank Recoupment Policy and any other “clawback” or similar policy of the Company in effect on the Date of Grant or that may be established thereafter
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(as applicable, the “Company Clawback Policy”). Further, to the extent permitted by applicable law, including without limitation Section 409A of the Code, this Agreement and all Options, cash or other value provided pursuant to this Agreement are subject to offset in the event that the Participant has an outstanding clawback, recoupment or forfeiture obligation to the Company under the terms of any applicable Company Clawback Policy. In the event of a clawback, recoupment or forfeiture event under an applicable Company Clawback Policy, the amount required to be clawed back, recouped or forfeited pursuant to such policy shall be deemed not to have been earned under the terms of this Agreement until such time as the Company Clawback Policy is no longer applicable.
13. Entire Agreement. This Agreement contains the entire understanding between the Company and Participant with respect to the matter set forth herein, and shall supersede all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused an officer to execute this Agreement, and the Participant has executed this Agreement, effective as of the Date of Grant.
| ENGENE HOLDINGS INC. |
|
|
| Name: |
| Title: |
I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement. I hereby further agree that all decisions and determinations of the Committee shall be final and binding.
| Participant: | ||
| Date: |
6
CANADIAN APPENDIX
Notwithstanding any other term of this Agreement, the following modifications to the Agreement apply to any Participant employed by the Employer in Canada.
| 1. | Termination Date |
For purposes of sections 2 and 3 of the Agreement, the Participant will be deemed to have ceased to provide services to the Employer on the date on which notice of termination is provided to the Participant or the Employer, as applicable, and for greater certainty shall, subject to applicable legislation, exclude any other period of non-working notice of termination or any period for which pay in lieu of notice, severance pay or any other monies in relation to the cessation of employment are paid or otherwise required by applicable law, regardless of whether the termination is with or without cause or with or without notice.
| 2. | No Employment or Other Rights |
Section 7 of this Agreement shall be read without reference to its final sentence.
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Exhibit 10.22
ENGENE HOLDINGS INC. 2023 EQUITY INCENTIVE PLAN
INCENTIVE STOCK OPTION GRANT AGREEMENT
This INCENTIVE STOCK OPTION GRANT AGREEMENT (the “Agreement”), dated as of [•] (the “Date of Grant”), is delivered by enGene Holdings Inc., a company organized under the laws of British Columbia, Canada (the “Company”) to [•] (the “Participant”).
RECITALS
The enGene Holdings Inc. 2023 Equity Incentive Plan (the “Plan”) provides for the grant of stock options to purchase common shares of the Company Shares (“Company Shares”). The Committee has decided to make this incentive stock option grant as an inducement for the Participant to promote the best interests of the Company and its shareholders. This Agreement is made pursuant to the Plan and is subject in its entirety to all applicable provisions of the Plan. Capitalized terms used herein and not otherwise defined will have the meanings set forth in the Plan.
1. Grant of Option.
(a) Subject to the terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants to the Participant an incentive stock option (the “Option”) to purchase [•] Company Shares (each a “Share”, and together the “Shares”) at an Exercise Price of $[•] per Share. The Option shall become exercisable according to Section 2 below.
(b) The Option is designated as an incentive stock option, as described in Section 5 below. However, if and to the extent the Option exceeds the limits for an incentive stock option, as described in Section 5, the Option shall be a nonqualified stock option.
2. Exercisability of Option.
(a) Subject to the terms of this Section 2, the Option shall become vested according to the following dates (each a “Vesting Date”), provided that the Participant continues to be employed by, or provide service to, the Employer from the Date of Grant until the applicable Vesting Date.
| VESTING DATE* |
VESTING AMOUNT | |
| * | Notwithstanding the earlier vesting of the Option, the Option shall not be exercisable, and no Shares shall be issuable, until on or after March 2, 2024. |
(b) The vesting and exercisability of the Option is cumulative, but shall not exceed 100% of the Shares subject to the Option. If the terms set forth in Section 2(a) would produce fractional Shares, the number of Shares for which the Option becomes vested and exercisable shall be rounded down to the nearest whole Share and the fractional Shares will be accumulated so that the resulting whole Shares will be included in the number of Shares for which the Option becomes vested and exercisable on the last Vesting Date.
(c) In the event of a Change of Control before the Option is fully vested and exercisable, the provisions of the Plan applicable to a Change of Control shall apply to the Option, and, in the event of a Change of Control, the Committee may take such actions with respect to the vesting and exercisability of the Option as it deems appropriate pursuant to the Plan.
3. Term of Option.
(a) The Option shall have a term of ten years from the Date of Grant and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.
(b) The Option shall automatically terminate upon the happening of the first of the following events:
(i) The expiration of the 90-day period after the Participant ceases to be employed by, or provide service to, the Employer, if the termination is for any reason other than Disability, death or Cause.
(ii) The expiration of the one-year period after the Participant ceases to be employed by, or provide service to, the Employer on account of the Participant’s Disability.
(iii) The expiration of the one-year period after the Participant ceases to be employed by, or provide service to, the Employer, if the Participant dies while employed by, or providing service to, the Employer or within 90 days after the Participant ceases to be so employed or provide such services on account of a termination described in subsection (i) above.
(iv) The date on which the Participant ceases to be employed by, or provide service to, the Employer for Cause. In addition, notwithstanding the prior provisions of this Section 3, if the Participant engages in conduct that constitutes Cause after the Participant’s employment or service terminates, the Option shall immediately terminate, and the Participant shall automatically forfeit all Shares underlying any exercised portion of the Option for which the Company has not yet delivered the Share certificates, upon refund by the Company of the Exercise Price paid by the Participant for such Shares.
Notwithstanding the foregoing, in no event may the Option be exercised after the date that is immediately before the tenth anniversary of the Date of Grant, except as provided under Section 3(a) above. Any portion of the Option that is not exercisable at the time the Participant ceases to be employed by, or provide service to, the Company shall immediately terminate.
4. Exercise Procedures.
(a) Subject to the provisions of Sections 2 and 3 above, the Participant may exercise part or all of the exercisable Option by giving the Company or its delegate written notice of intent to exercise, specifying the number of Company Shares as to which the Option is to be exercised and such other information as the Company or its delegate may require.
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(b) At such time as the Committee shall determine, the Participant shall pay the Exercise Price (i) in cash, (ii) unless the Committee determines otherwise, by delivering Company Shares owned by the Participant, which shall be valued at their Fair Market Value on the date of exercise, or by attestation (in accordance with procedures prescribed by the Company) to ownership of Company Shares having a Fair Market Value on the date of exercise at least equal to the Exercise Price, (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, (iv) if permitted by the Committee, by withholding Company Shares subject to the exercisable Option, which have a Fair Market Value on the date of exercise equal to the Exercise Price, or (v) by such other method as the Committee may approve, to the extent permitted by applicable law. Company Shares used to exercise an Option shall have been held by the Participant for the requisite period of time necessary to avoid adverse accounting consequences to the Company with respect to the Option. The Committee may impose from time to time such limitations as it deems appropriate on the use of Company Shares to exercise the Option.
(c) The obligation of the Company to deliver Shares upon exercise of the Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Committee, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations.
(d) All obligations of the Company under this Agreement shall be subject to the rights of the Employer as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable. The Participant may be required to pay to the Employer, or make other arrangements satisfactory to the Employer to provide for the payment of, any federal, state, local or other taxes that the Employer is required to withhold with respect to the Option. At such time as the Committee may determine, the Participant may elect to satisfy any tax withholding obligation of the Employer with respect to the Option by having Shares withheld to satisfy the applicable withholding tax rate for FICA, federal, state, local and other tax liabilities.
(e) Upon exercise of the Option (or portion thereof), the Option (or portion thereof) will terminate and cease to be outstanding.
5. Designation as Incentive Stock Option.
(a) This Option is designated an incentive stock option under Section 422 of the Code. If the aggregate Fair Market Value of the stock on the date of the grant with respect to which incentive stock options are exercisable for the first time by the Participant during any calendar year, under the Plan or any other stock option plan of the Company or a parent or subsidiary, exceeds $100,000, then the Option, as to the excess, shall be treated as a nonqualified stock option that does not meet the requirements of Section 422. If and to the extent that the Option fails to qualify as an incentive stock option under the Code, the Option shall remain outstanding according to its terms as a nonqualified stock option.
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(b) The Participant understands that favorable incentive stock option tax treatment is available only if the Option is exercised while the Participant is an employee of the Company or a parent or subsidiary of the Company or within a period of time specified in the Code after the Participant ceases to be an employee. The Participant understands that the Participant is responsible for the income tax consequences of the Option, and, among other tax consequences, the Participant understands that he or she may be subject to the alternative minimum tax under the Code in the year in which the Option is exercised. The Participant will consult with his or her tax adviser regarding the tax consequences of the Option.
(c) The Participant agrees that the Participant shall immediately notify the Company in writing if the Participant sells or otherwise disposes of any Shares acquired upon the exercise of the Option and such sale or other disposition occurs on or before the later of (i) two years after the Date of Grant or (ii) one year after the exercise of the Option. The Participant also agrees to provide the Company with any information requested by the Company with respect to such sale or other disposition.
6. Restrictions on Exercise. Except as the Committee may otherwise permit pursuant to the Plan, only the Participant may exercise the Option during the Participant’s lifetime and, after the Participant’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Participant, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement.
7. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan. The grant and exercise of the Option are subject to the provisions of the Plan and to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the Shares, (c) changes in capitalization of the Company and (d) other requirements of applicable law. The Committee shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.
8. No Employment or Other Rights. The grant of the Option shall not confer upon the Participant any right to be retained by or in the employ or service of the Employer and shall not interfere in any way with the right of the Employer to terminate the Participant’s employment or service at any time. The right of the Employer to terminate at will the Participant’s employment or service at any time for any reason is specifically reserved.
9. No Shareholder Rights. Neither the Participant, nor any person entitled to exercise the Participant’s rights in the event of the Participant’s death, shall have any of the rights and privileges of a shareholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option.
10. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the Plan, the rights and interests of the Participant under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Participant, by will or by the laws of descent and distribution. In the event of any attempt by the Participant to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as
4
provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Participant, and the Option and all rights hereunder shall thereupon become null and void. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Participant’s consent.
11. Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of British Columbia, Canada, without giving effect to the conflicts of laws provisions thereof.
12. Notice. Any notice to the Company provided for in this instrument shall be addressed to the Company in care of [•] and any notice to the Participant shall be addressed to such Participant at the current address shown on the payroll of the Company. Any notice shall be delivered by hand or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or by the postal authority of the country in which the Participant resides or to an internationally recognized expedited mail courier.
13. Recoupment Policy. The Participant agrees that, subject to the requirements of applicable law, the Option, and the right to receive and retain any Company Shares or cash payments covered by this Agreement, shall be subject to rescission, cancellation or recoupment, in whole or part, if and to the extent so provided under the Dodd-Frank Recoupment Policy and any other “clawback” or similar policy of the Company in effect on the Date of Grant or that may be established thereafter (as applicable, the “Company Clawback Policy”). Further, to the extent permitted by applicable law, including without limitation Section 409A of the Code, this Agreement and all Options, cash or other value provided pursuant to this Agreement are subject to offset in the event that the Participant has an outstanding clawback, recoupment or forfeiture obligation to the Company under the terms of any applicable Company Clawback Policy. In the event of a clawback, recoupment or forfeiture event under an applicable Company Clawback Policy, the amount required to be clawed back, recouped or forfeited pursuant to such policy shall be deemed not to have been earned under the terms of this Agreement until such time as the Company Clawback Policy is no longer applicable.
14. Entire Agreement. This Agreement contains the entire understanding between the Company and Participant with respect to the matter set forth herein, and shall supersede all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written.
[Signature Page Follows]
5
IN WITNESS WHEREOF, the Company has caused an officer to execute this Agreement, and the Participant has executed this Agreement, effective as of the Date of Grant.
| ENGENE HOLDINGS INC. |
|
|
| Name: |
| Title: |
I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement. I hereby further agree that all decisions and determinations of the Committee shall be final and binding.
|
Participant: |
|
Date: |
6
CANADIAN APPENDIX
Notwithstanding any other term of this Agreement, the following modifications to the Agreement apply to any Participant employed by the Employer in Canada.
| 1. | Termination Date |
For purposes of sections 2 and 3 of the Agreement, the Participant will be deemed to have ceased to provide services to the Employer on the date on which notice of termination is provided to the Participant or the Employer, as applicable, and for greater certainty shall, subject to applicable legislation, exclude any other period of non-working notice of termination or any period for which pay in lieu of notice, severance pay or any other monies in relation to the cessation of employment are paid or otherwise required by applicable law, regardless of whether the termination is with or without cause or with or without notice.
| 2. | No Employment or Other Rights |
Section 7 of this Agreement shall be read without reference to its final sentence.
7
Exhibit 10.23
ENGENE HOLDINGS INC. 2023 EQUITY INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT (the “Agreement”), dated as of [•] (the “Date of Grant”), is delivered by enGene Holdings Inc., a company organized under the laws of British Columbia, Canada (the “Company”) to [•] (the “Participant”).
RECITALS
The enGene Holdings Inc. 2023 Equity Incentive Plan (the “Plan”) provides for the grant of restricted stock with respect to common shares of the Company (“Company Shares”) in accordance with the terms and conditions of the Plan. The Committee has decided to make this grant of restricted stock as an inducement for the Participant to promote the best interests of the Company and its shareholders. This Agreement is made pursuant to the Plan and is subject in its entirety to all applicable provisions of the Plan. Capitalized terms used herein and not otherwise defined will have the meanings set forth in the Plan.
1. Restricted Stock Grant. Subject to the terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants the Participant [•] Company Shares, subject to the restrictions set forth below and in the Plan (“Restricted Stock”).
2. Vesting.
(a) Subject to the terms of this Section 2, the shares of Restricted Stock shall become vested according to the following dates (each, a “Vesting Date”), provided that the Participant continues to be employed by, or provide service to, the Employer from the Date of Grant until the applicable Vesting Date:
| Vesting Date |
Number of Vested Shares of Restricted Stock | |
(b) The vesting of the shares of Restricted Stock shall be cumulative, but shall not exceed 100% of the shares of Restricted Stock. If the foregoing schedule would produce fractional shares, the number of shares that vest shall be rounded down to the nearest whole share and the fractional shares will be accumulated so that the resulting whole shares will be included in the number of shares that become vested on the last Vesting Date.
(c) In the event of a Change of Control before all of the Restricted Stock vests in accordance with Section 2(a) above, the provisions of the Plan applicable to a Change of Control shall apply to the Restricted Stock, and, in the event of a Change of Control, the Committee may take such actions with respect to the vesting of the Restricted Stock as it deems appropriate pursuant to the Plan.
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3. Termination of Restricted Stock. Except as set forth in this Agreement, if the Participant ceases to be employed by, or provide service to, the Employer for any reason before the Restricted Stock is fully vested, the shares of Restricted Stock that are not then vested shall be forfeited as of the date of the Participant’s termination of employment or service and must be immediately returned to the Company.
4. Issuance of Certificates and Tax Withholding.
(a) Unless otherwise determined by the Committee, the Company will retain possession of certificates representing the shares of Restricted Stock. During the Restriction Period (as defined in Section 8), the Participant shall receive any cash dividends with respect to the shares of Restricted Stock, may vote the shares of Restricted Stock and may participate in any distribution pursuant to a plan of dissolution or complete liquidation of the Company, each subject to any restrictions deemed appropriate by the Committee. In the event of a dividend or distribution payable in stock or other property or a reclassification, split up or similar event during the Restriction Period, the shares or other property issued or declared with respect to the non-vested shares of Restricted Stock shall be subject to the same terms and conditions relating to vesting as the shares to which they relate.
(b) When the Participant obtains a vested right to shares of Restricted Stock, a certificate representing the vested shares shall be issued to the Participant, free of the restrictions under Section 2 of this Agreement.
(c) The obligation of the Company to deliver a certificate representing the vested shares of Restricted Stock upon the vesting of the shares of Restricted Stock shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Committee, including such actions as Company counsel shall deem necessary or appropriate, to comply with relevant securities laws and regulations.
(d) All obligations of the Company under this Agreement shall be subject to the rights of the Employer as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable. The Participant shall be required to pay to the Company, or make other arrangements satisfactory to the Employer to provide for the payment of amounts required to be withheld for any withholding taxes, if applicable, with respect to the grant or vesting of the shares of Restricted Stock. At such time as the Committee may determine in its discretion under the Plan, the Participant may elect to satisfy any withholding tax obligation of the Employer with respect to the shares of Restricted Stock by having shares withheld to satisfy an amount equal to the amount of any FICA, federal income, state, local and other tax liabilities required by law to be withheld with respect to the shares of Restricted Stock.
5. Tax Consequences. The Participant has reviewed with the Participant’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. The Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Participant understands that the Participant (and not the Company) shall be responsible for the Participant’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. The Participant understands that section 83 of the Internal Revenue Code of 1986,
2
as amended (the “Code”) taxes as ordinary income the difference between the amount paid for the shares underlying the Restricted Stock and the Fair Market Value of such shares as of the date any restrictions on the shares lapse pursuant to Section 2 of this Agreement. The Participant understands that the Participant may elect to be taxed at the time the shares of Restricted Stock are granted rather than when and as the Restriction Period expires by filing an election under section 83(b) of the Code with the Internal Revenue Service within 30 days from the Date of Grant. The form for making this election is attached as Exhibit A hereto.
THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b) OF THE CODE.
6. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan. This grant of Restricted Stock is subject to the provisions of the Plan and to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of Company Shares, (c) changes in capitalization of the Company, and (d) other requirements of applicable law. The Committee shall have the authority to interpret and construe the grant of Restricted Stock pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.
7. No Employment or Other Rights. This grant of Restricted Stock shall not confer upon the Participant any right to be retained by or in the employ or service of the Employer and shall not interfere in any way with the right of the Company to terminate the Participant’s employment or service at any time. The right of the Employer to terminate at will the Participant’s employment or service at any time for any reason is specifically reserved.
8. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the Plan, during the period before the shares of Restricted Stock vest in accordance with Section 2 (the “Restriction Period”), the non-vested shares of Restricted Stock may not be sold, assigned, encumbered, transferred, pledged or otherwise disposed of by the Participant. Any attempt by the Participant to assign, transfer, pledge or otherwise dispose of the shares of Restricted Stock contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the shares of Restricted Stock, shall be null, void and without effect. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Participant’s consent.
9. Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of British Columbia, Canada without giving effect to the conflicts of laws provisions thereof.
10. Entire Agreement. This Agreement contains the entire understanding between the Company and the Participant with respect to the matter set forth herein, and shall supersede all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written.
3
11. Notice. Any notice to the Company provided for in this Agreement shall be addressed to the Company in care of [•] at the corporate headquarters of the Company, and any notice to the Participant shall be addressed to such Participant at the current address shown on the payroll of the Company. Any notice shall be delivered by hand, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or by the postal authority of the country in which the Participant resides or to an internationally recognized expedited mail courier.
12. Recoupment Policy. The Participant agrees that, subject to the requirements of applicable law, the Restricted Stock, and the right to receive and retain any Company Shares or cash payments covered by this Agreement, shall be subject to rescission, cancellation or recoupment, in whole or part, if and to the extent so provided under the Dodd-Frank Recoupment Policy and any other “clawback” or similar policy of the Company in effect on the Date of Grant or that may be established thereafter (as applicable, the “Company Clawback Policy”). Further, to the extent permitted by applicable law, including without limitation Section 409A of the Code, this Agreement and all Restricted Stock, cash or other value provided pursuant to this Agreement are subject to offset in the event that the Participant has an outstanding clawback, recoupment or forfeiture obligation to the Company under the terms of any applicable Company Clawback Policy. In the event of a clawback, recoupment or forfeiture event under an applicable Company Clawback Policy, the amount required to be clawed back, recouped or forfeited pursuant to such policy shall be deemed not to have been earned under the terms of this Agreement until such time as the Company Clawback Policy is no longer applicable.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Agreement, and the Participant has executed this Agreement, effective as of the Date of Grant.
| ENGENE HOLDINGS INC. | ||
| By: |
| |
| Name: | ||
| Title: | ||
I hereby accept the grant of Restricted Stock described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement. I hereby agree that all decisions and determinations of the Committee shall be final and binding.
| PARTICIPANT | ||
|
| ||
| Name: |
| |
| Date: | ||
[SIGNATURE PAGE TO RESTRICTED STOCK GRANT AGREEMENT]
EXHIBIT A
Section 83(b) Election Form
The undersigned taxpayer hereby elects, pursuant to section 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares.
(1)
| Name of taxpayer who performed the services: |
||
| Address: | ||
| Social Security Number: | ||
| Tax Year for which election is being made: |
(2) The property which is the subject of this election is ________ shares of common stock (“Shares”) of enGene Holdings Inc. (the “Company”).
(3) Date the property was transferred to the undersigned taxpayer: ____________ ___, ____.
(4) Forfeiture provision: The Shares are subject to forfeiture to the Company if the taxpayer ceases to be employed by or provide service to the Company during the restriction period. The forfeiture restriction period lapses in a series of installments according to the following schedule:
| Vesting Date |
Number of Shares Vested |
(5) The fair market value of the Shares at the time of the transfer of the Shares (determined without regard to any restriction other than a nonlapse restriction as defined in section 1.83(h) of the Income Tax Regulations) is $_____ per Share x _____ Shares = $_______.
(6) The amount paid for the Shares is $_____ per Share x _____ Shares = $______ aggregate consideration.
(7) The amount to include in gross income is $_______. (Note: subtract amount in line 6 from amount in line 5.)
(8) This statement is executed as of ________________ __, 20_.
The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the property. A copy of the election also will be furnished to the Company. The undersigned is the person performing the services in connection with which the property was transferred.
| Taxpayer |
INSTRUCTIONS FOR FILING SECTION 83(B) ELECTION
Attached is a form of election under section 83(b) of the Internal Revenue Code of 1986, as amended. If you wish to make such an election, you should complete, sign and date the election and then proceed as follows:
1. Execute three counterparts of your completed election (plus one extra counterpart for each person other than you, if any who receives property that is the subject of your election), retaining at least one photocopy for your records.
2. Send one counterpart to the Internal Revenue Service Center with which you will file your federal income tax return for the current year via certified mail, return receipt requested.
THE ELECTION SHOULD BE SENT IMMEDIATELY, AS YOU ONLY HAVE 30 DAYS FROM THE ISSUANCE, PURCHASE OR GRANT DATE WITHIN WHICH TO MAKE THE ELECTION – NO WAIVERS, LATE FILINGS OR EXTENSIONS ARE PERMITTED.
3. Deliver one counterpart of the completed election to the Company for its files.
4. If anyone other than you (e.g., one of your family members) will receive property that is the subject of your election, deliver one counterpart of the completed election to each such person.
CANADIAN APPENDIX
Notwithstanding any other term of this Agreement, the following modifications to the Agreement apply to any Participant employed by the Employer in Canada.
| 1. | Termination Date |
For purposes of sections 2 and 3 of the Agreement, the Participant will be deemed to have ceased to provide services to the Employer on the date on which notice of termination is provided to the Participant or the Employer, as applicable, and for greater certainty shall, subject to applicable legislation, exclude any other period of non-working notice of termination or any period for which pay in lieu of notice, severance pay or any other monies in relation to the cessation of employment are paid or otherwise required by applicable law, regardless of whether the termination is with or without cause or with or without notice.
| 2. | No Employment or Other Rights |
Section 7 of this Agreement shall be read without reference to its final sentence.
Exhibit 10.24
ENGENE HOLDINGS INC. 2023 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
This RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”), dated as of [•] (the “Date of Grant”), is delivered by enGene Holdings Inc., a company organized under the laws of British Columbia, Canada (the “Company”) to [•] (the “Participant”).
RECITALS
The enGene Holdings Inc. 2023 Equity Incentive Plan (the “Plan”) provides for the grant of restricted stock units in accordance with the terms and conditions of the Plan. The Committee has decided to make this grant of restricted stock units as an inducement for the Participant to promote the best interests of the Company and its shareholders. This Agreement is made pursuant to the Plan and is subject in its entirety to all applicable provisions of the Plan. Capitalized terms used herein and not otherwise defined will have the meanings set forth in the Plan.
1. Grant of Stock Units. Subject to the terms and conditions set forth in this Agreement and in the Plan, the Company hereby grants the Participant [•] restricted stock units, subject to the restrictions set forth below and in the Plan (the “Stock Units”). Each Stock Unit represents the right of the Participant to receive a common share of the Company (“Company Shares”), an amount of cash based on the value of a share of Company Shares, or any combination of the foregoing, as determined by the Committee, if and when the specified conditions are met in Section 3 below, and on the applicable payment date set forth in Section 5 below.
2. Stock Unit Account. Stock Units represent hypothetical Company Shares, and not actual shares. The Company shall establish and maintain a Stock Unit account, as a bookkeeping account on its records, for the Participant and shall record in such account the number of Stock Units granted to the Participant. No Company Shares shall be issued to the Participant at the time the grant is made, and the Participant shall not be, and shall not have any of the rights or privileges of, a shareholder of the Company with respect to any Stock Units recorded in the Stock Unit account. The Participant shall not have any interest in any fund or specific assets of the Company by reason of this award or the Stock Unit account established for the Participant.
3. Vesting.
(a) Subject to the terms of this Section 3, the Stock Units shall become vested according to the following dates (each, a “Vesting Date”), provided that the Participant continues to be employed by, or provide service to, the Employer from the Date of Grant until the applicable Vesting Date:
| Vesting Date |
Number of Vested Stock Units | |||||
(b) The vesting of the Stock Units shall be cumulative, but shall not exceed 100% of the Stock Units. If the foregoing schedule would produce fractional Stock Units, the number of Stock Units that vest shall be rounded down to the nearest whole Stock Unit and the fractional Stock Units will be accumulated so that the resulting whole Stock Units will be included in the number of Stock Units that become vested on the last Vesting Date.
(c) In the event of a Change of Control before all of the Stock Units vest in accordance with Section 3(a) above, the provisions of the Plan applicable to a Change of Control shall apply to the Stock Units, and, in the event of a Change of Control, the Committee may take such actions with respect to the vesting of the Stock Units as it deems appropriate pursuant to the Plan.
4. Termination of Stock Units. If the Participant ceases to be employed by, or provide service to, the Employer for any reason before all of the Stock Units vest, any unvested Stock Units shall automatically terminate and shall be forfeited as of the date of the Participant’s termination of employment or service. No payment shall be made with respect to any unvested Stock Units that terminate as described in this Section 4.
5. Payment of Stock Units and Tax Withholding.
(a) If and when the Stock Units vest, the Company shall issue to the Participant one Company Share for each vested Stock Unit, or an amount of cash equal to the value of a Company Share for each vested Stock Unit, or a combination of the foregoing, subject to applicable tax withholding obligations. Subject to Sections 5(b) and 13 below, payment shall be made within 30 days after the applicable Vesting Date.
(b) All obligations of the Employer under this Agreement shall be subject to the rights of the Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable. [At such time as the Committee may determine in its discretion under the Plan, at the time of payment in accordance with Section 5(a) above, or if applicable, at the time the Stock Units vest, the number of shares issued to the Participant shall be reduced by a number of Company Shares with a Fair Market Value (measured as of the Vesting Date) equal to an amount of the FICA, federal income, state, local and other tax liabilities required by law to be withheld with respect to the payment of the Stock Units.] To the extent not withheld in accordance with the immediately preceding sentence, the Participant shall be required to pay to the Employer, or make other arrangements satisfactory to the Employer to provide for the payment of, any federal, state, local or other taxes that the Employer is required to withhold with respect to the Stock Units.
(c) The obligation of the Company to deliver Company Shares shall also be subject to the condition that if at any time the Committee shall determine in its discretion that the listing, registration or qualification of the shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of shares, the shares may not be issued in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The issuance of shares, if any, to the Participant pursuant to this Agreement is subject to any applicable taxes and other laws or regulations of the United States or of any state, municipality or other country having jurisdiction thereof.
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6. No Shareholder Rights; Dividend Equivalents. Neither the Participant, nor any person entitled to receive payment in the event of the Participant’s death, shall have any of the rights and privileges of a shareholder with respect to Company Shares, including voting or dividend rights, until certificates for shares have been issued upon payment of Stock Units. The Participant acknowledges that no election under Section 83(b) of the Code is available with respect to Stock Units. Notwithstanding the foregoing, the Committee may grant to the Participant Dividend Equivalents on the shares underlying the Stock Units prior to the Vesting Date, which shall be credited to the Stock Unit account for the Participant and will be paid or distributed in accordance with this Agreement and the Plan.
7. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan. The grant and payment of the Stock Units are subject to the provisions of the Plan and to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of Company Shares, (c) changes in capitalization of the Company and (d) other requirements of applicable law. The Committee shall have the authority to interpret and construe the Stock Units pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.
8. No Employment or Other Rights. The grant of the Stock Units shall not confer upon the Participant any right to be retained by or in the employ or service of the Employer and shall not interfere in any way with the right of the Employer to terminate the Participant’s employment or service at any time. The right of the Employer to terminate at will the Participant’s employment or service at any time for any reason is specifically reserved.
9. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the Plan, the rights and interests of the Participant under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Participant, by will or by the laws of descent and distribution. In the event of any attempt by the Participant to alienate, assign, pledge, hypothecate, or otherwise dispose of the Stock Units or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Stock Units by notice to the Participant, and the Stock Units and all rights hereunder shall thereupon become null and void. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Agreement may be assigned by the Company without the Participant’s consent.
10. Applicable Law. The validity, construction, interpretation and effect of this Agreement shall be governed by and construed in accordance with the laws of British Columbia, Canada, without giving effect to the conflicts of laws provisions thereof.
11. Notice. Any notice to the Company provided for in this instrument shall be addressed to the Company in care of [•] at the corporate headquarters of the Company, and any notice to the Participant shall be addressed to such Participant at the current address shown on the payroll of the Company. Any notice shall be delivered by hand, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service or by the postal authority of the country in which the Participant resides or to an internationally recognized expedited mail courier.
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12. Recoupment Policy. The Participant agrees that, subject to the requirements of applicable law, the Stock Units, and the right to receive and retain any Company Shares or cash payments covered by this Agreement, shall be subject to rescission, cancellation or recoupment, in whole or part, if and to the extent so provided under the Dodd-Frank Recoupment Policy and any other “clawback” or similar policy of the Company in effect on the Date of Grant or that may be established thereafter (as applicable, the “Company Clawback Policy”). Further, to the extent permitted by applicable law, including without limitation Section 409A of the Code, this Agreement and all Stock Units, cash or other value provided pursuant to this Agreement are subject to offset in the event that the Participant has an outstanding clawback, recoupment or forfeiture obligation to the Company under the terms of any applicable Company Clawback Policy. In the event of a clawback, recoupment or forfeiture event under an applicable Company Clawback Policy, the amount required to be clawed back, recouped or forfeited pursuant to such policy shall be deemed not to have been earned under the terms of this Agreement until such time as the Company Clawback Policy is no longer applicable.
13. Application of Section 409A of the Code. This Agreement is intended to be exempt from Section 409A of the Code under the “short-term deferral” exception and to the extent this Agreement is subject to Section 409A of the Code, it will in all respects be administered in accordance with Section 409A. Notwithstanding the foregoing, if the Stock Units constitute “deferred compensation” under Section 409A of the Code and the Stock Units become vested and settled upon the Participant’s termination of employment, payment with respect to the Stock Units shall be delayed for a period of six months after the Participant’s termination of employment if the Participant is a “specified employee” as defined under Section 409A of the Code and if required pursuant to Section 409A of the Code. If payment is delayed, the Stock Units shall be settled and paid within thirty (30) days after the date that is six (6) months following the Participant’s termination of employment. Payments with respect to the Stock Units may only be paid in a manner and upon an event permitted by Section 409A of the Code, and each payment under the Stock Units shall be treated as a separate payment, and the right to a series of installment payments under the Stock Units shall be treated as a right to a series of separate payments. In no event shall the Participant, directly or indirectly, designate the calendar year of payment. The Company may change or modify the terms of this Agreement without the Participant’s consent or signature if the Company determines, in its sole discretion, that such change or modification is necessary for purposes of compliance with or exemption from the requirements of Section 409A of the Code or any regulations or other guidance issued thereunder.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Agreement, and the Participant has executed this Agreement, effective as of the Date of Grant.
| ENGENE HOLDINGS INC. |
|
|
| Name: |
| Title: |
I hereby accept the award of Stock Units described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement. I hereby agree that all decisions and determinations of the Committee with respect to the Stock Units shall be final and binding.
| PARTICIPANT | ||
|
| ||
| Name: |
| |
| Date: |
5
CANADIAN APPENDIX
Notwithstanding any other term of this Agreement, the following modifications to the Agreement apply to any Participant employed by the Employer in Canada.
| 1. | Termination Date |
For purposes of sections 2 and 3 of the Agreement, the Participant will be deemed to have ceased to provide services to the Employer on the date on which notice of termination is provided to the Participant or the Employer, as applicable, and for greater certainty shall, subject to applicable legislation, exclude any other period of non-working notice of termination or any period for which pay in lieu of notice, severance pay or any other monies in relation to the cessation of employment are paid or otherwise required by applicable law, regardless of whether the termination is with or without cause or with or without notice.
| 2. | No Employment or Other Rights |
Section 7 of this Agreement shall be read without reference to its final sentence.
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Exhibit 10.25
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of [*].
B E T W E E N:
enGene Holdings Inc., a corporation incorporated under the Business Corporations Act (British Columbia)
(the “Company”)
- and -
[•]
(the “Indemnified Party”)
RECITALS:
| A. | The Business Corporations Act (British Columbia) (the “BCBCA”) permits, and in some cases requires, the Company to indemnify individuals who are or were directors and/or officers of the Company, or who act or acted at the Company’s request as directors and/or officers or in a similar capacity of other entities (an “Other Entity”, a term which, for the purposes of this indemnification agreement (the “Agreement”) shall include a corporation or other entity that becomes an Other Entity in the future). In this Agreement: |
| (i) | each such individual, duly elected or appointed as a director and/or officer of the Company and or an Other Entity, including acting in a capacity similar to a director and/or officer of an Other Entity and including an individual who has ceased to be a director and/or officer or to act in any such capacity, is referred to as a “Director” and/or “Officer”, as appropriate; |
| (ii) | unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders; and |
| (iii) | unless otherwise indicated, references to sections are to sections in this Agreement; |
| B. | The Indemnified Party is at present a Director or Officer or both of the Company and or an Other Entity; and |
| C. | The Company and the Indemnified Party wish to enter into this Agreement, and in so doing affirm that they intend that all the provisions of this Agreement be given legal effect to the full extent permitted by applicable law. |
NOW THEREFORE for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties agree as follows:
| 1. | For the purposes of this Agreement: |
1.1 “proceeding” shall include a claim, demand, suit, action, proceeding or investigation, whether threatened in writing, pending, commenced, continuing or completed, and any appeal or appeals therefrom;
1.2 “costs, charges and expenses” shall include:
1.2.1 subject to Section 10, an amount paid to settle an action or satisfy a judgment, except in respect of an action to which Section 4, below, is applicable;
1.2.2 a fine, penalty, levy or charge paid to any domestic or foreign government (federal, provincial, municipal or otherwise) or to any regulatory authority, agency, commission or board of any domestic or foreign government, or imposed by any court or any other law, regulation or rule-making entity having jurisdiction in the relevant circumstances (collectively, a “Governmental Authority”), including as a result of a breach or alleged breach of any statutory or common law duty imposed on directors or officers or of any law, statute, rule or regulation or of any provision of the articles or any resolution of the Company or an Other Entity;
1.2.3 an amount paid to satisfy a liability arising as a result of the failure of the Company or an Other Entity to pay wages, vacation pay and any other amounts that may be owing to employees or to make contributions that may be required to be made to any pension plan, retirement income plan or other benefit plan for employees or to remit to any Governmental Authority payroll deductions, income taxes or other taxes, or any other amounts payable by the Company or an Other Entity;
1.2.4 reasonable legal costs on a solicitor and his own client basis, including those incurred in enforcing the Indemnified Party’s rights under this Agreement;
1.2.5 costs, transcript costs, fees of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other out-of-pocket disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a proceeding or an appeal resulting from a proceeding; and
1.3 the Indemnified Party shall be considered to be “involved” in any proceeding if the Indemnified Party has any participation whatsoever in such proceeding, including merely as a witness.
| 2. | Subject to Sections 3 and 4, the Company agrees to indemnify and save harmless the Indemnified Party: |
2.1 from and against all costs, charges and expenses reasonably incurred by the Indemnified Party in respect of any civil, criminal, administrative, investigative or other proceeding to which the Indemnified Party is involved by reason of being or having been a Director and/or Officer; and
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2.2 to the extent such costs, charges and expenses are not otherwise paid by the Company or Other Entity, as appropriate, from and against all costs, charges and expenses that the Indemnified Party may reasonably incur as a result of carrying out duties as a Director and/or Officer in respect of the Indemnified Party’s reasonable and necessary travel, lodging or accommodation costs, charges or expenses.
| 3. | Indemnification under Section 2 shall be made only if the Indemnified Party: |
3.1 acted honestly and in good faith with a view to the best interests of either the Company or the Other Entity, as the case may be; and
3.2 in the case of a criminal or administrative proceeding, the Indemnified Party had reasonable grounds for believing that the Indemnified Party’s conduct was lawful.
Sections 3.1 and 3.2 are referred to in this Agreement as the “Standards of Conduct”. For the purposes of the Standards of Conduct and this Agreement generally:
| (a) | for the purposes of any determination hereunder, the Indemnified Party will be deemed, subject to compelling evidence to the contrary, to have acted in good faith and in the best interests of the Company or any Other Entity. The Company will have the burden of establishing the absence thereof; |
| (b) | the knowledge and/or actions, or failure to act, of any other director, officer, agent or employee of the Company or any Other Entity will not be imputed to the Indemnified Party for the purposes of determining the right to indemnification under this Agreement; |
| (c) | the Company will have the burden of establishing that any amount it wishes to challenge is not reasonable; and |
| (d) | the termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendre or its equivalent shall not, of itself, create a presumption that the Indemnified Party is not entitled to indemnification under this Agreement. |
| 4. | In respect of an action by or on behalf of the Company or an Other Entity to procure a judgment in its favour to which the Indemnified Party is made a party by reason of being or having been a Director and/or Officer, indemnification under Section 2 shall be made only after obtaining approval of the court having jurisdiction, provided that the Company shall or shall cause such Other Entity to seek and use its best efforts to obtain that approval as soon as reasonably possible in the circumstances. |
| 5. | Upon the Indemnified Party becoming aware of any proceeding which may give rise to indemnification under this Agreement, the Indemnified Party shall give written notice to the Company, directed to its (a) Chief Executive Officer and (b) Chief Financial Officer as soon as is practicable, provided however that failure to give notice in a timely fashion shall not disentitle the Indemnified Party to indemnification unless the Company suffers actual prejudice by reason of the delay. |
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| 6. | The Company may conduct any investigation it considers appropriate of any proceeding of which it receives notice under Section 5, and shall pay all costs of that investigation. |
| 7. | The parties wish to facilitate the payment by the Indemnified Party of ongoing costs in connection with matters for which indemnification under this Agreement is provided. Accordingly, the parties agree as follows: |
7.1 subject to Section 7.2, the Company shall, upon demand, make advances (“Expense Advances”) to the Indemnified Party of all reasonable amounts for which the Indemnified Party seeks indemnification under this Agreement before the final disposition of the relevant proceeding. In connection with such demand, the Indemnified Party shall provide the Company with sufficient particulars of the costs, charges and expenses to be covered by the proposed Expense Advance to enable the Company to make an assessment of their reasonableness;
7.2 the Company shall make Expense Advances to the Indemnified Party in accordance with the provisions of the BCBCA; and
7.3 the Indemnified Party shall execute a separate undertaking which shall set out the Indemnified Party’s acknowledgement and agreement to repay to the Company, upon demand, all Expense Advances in the event that it is subsequently determined by a judgment of a court that the Indemnified Party has not met the Standards of Conduct.
| 8. | The indemnities in Section 2 shall not apply in respect of any proceeding initiated by the Indemnified Party: |
8.1 against the Company or an Other Entity, unless it is brought to establish or enforce any right under this Agreement, any other right of indemnity or in connection with any directors’ and officers’ liability insurance or similar policy;
8.2 against any Director or Officer unless the Company or the Other Entity, as the case may be, has joined in or consented to the initiation of such proceeding; or
8.3 against any other corporation, partnership, trust, joint venture, unincorporated entity or person, unless it is a counterclaim.
| 9. | Notwithstanding any provision in this Agreement to the contrary, the Company shall not be obligated under this Agreement to provide the indemnities in Section 2: |
9.1 to indemnify for amounts otherwise indemnifiable hereunder (or for which advancement is provided hereunder) if and to the extent that the Indemnified Party has otherwise actually received such amounts under any insurance policy, contract, agreement or otherwise; provided that the foregoing shall not affect the rights of the Indemnified Party or the Secondary Indemnitors as set forth in Section 12 and Section 16.3;
9.2 to indemnify for an accounting of profits made from the purchase and sale (or sale and purchase) by the Indemnified Party of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law, or from the purchase or sale by the Indemnified Party of such securities in violation of Section 306 of the Sarbanes Oxley Act of 2002, as amended; or
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9.3 to provide any indemnification or advancement of costs, charges and expenses that is prohibited by applicable law (as such law exists at the time payment would otherwise be required pursuant to this Agreement).
| 10. | The Company shall be entitled to participate, at its own expense, in the defence of the Indemnified Party in any proceeding. If the Company so elects after receipt of notice of a proceeding, or the Indemnified Party in that notice so directs, the Company shall assume control of the negotiation, settlement or defence of the proceeding, in which case the defence shall be conducted by counsel chosen by the Company and reasonably satisfactory to the Indemnified Party. If the Company elects to assume control of the defence, the Indemnified Party shall have the right to participate in the negotiation, settlement or defence of the proceeding and to retain counsel to act on the Indemnified Party’s behalf, in which case the Company shall reimburse the Indemnified Party for any fees and disbursements of that counsel if a conflict of interest has arisen between the Company and the Indemnified Party. Notwithstanding anything contained herein, the Company shall not be responsible for fees and expenses of more than one counsel in each applicable jurisdiction separate from counsel for the Company for all Directors and Officers in connection with any action or separate but similar or related actions arising out of the same general allegations or circumstances. The Indemnified Party and the Company shall cooperate fully with each other and their respective counsel in the investigation related to, and defence of, any proceeding and shall make available to each other all relevant books, records, documents and files and shall otherwise use their best efforts to assist each other’s counsel to conduct a proper and adequate defence. |
| 11. | In respect of the settlement of any proceeding, the parties agree as follows: |
11.1 the Company may not, without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed) enter into an agreement to settle any proceeding involving the Indemnified Party;
11.2 if the Indemnified Party refuses after requested by the Company, acting reasonably, to give consent to the terms of a proposed settlement in accordance with Section 11.1 which is otherwise acceptable to the Company, the Company may require the Indemnified Party to negotiate or defend the proceeding independently of the Company. In that case, any amount recovered by the claimant in excess of the amount for which settlement could have been made by the Company shall not be recoverable under this Agreement, and the Company will only be responsible for costs, charges and expenses up to the time at which settlement could have been made;
11.3 the Company shall not be liable for any settlement of any proceeding effected without its prior written consent (which consent shall not be unreasonably withheld or delayed);
11.4 the Indemnified Party shall have the right to negotiate a settlement in respect of any proceeding, provided that unless the Company has approved the settlement, the Indemnified Party shall pay any compensation or other payment to be made under the settlement and the costs of negotiating and implementing the settlement, and shall not seek indemnity from the Company in respect of such compensation, payment or costs; and
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11.5 the settlement of a proceeding shall not create a presumption that the Indemnified Party did not meet or would not have met the Standards of Conduct.
| 12. | Should any payment made pursuant to this Agreement, including the payment of insurance premiums or any payment made by an insurer under an insurance policy, be deemed to constitute a taxable benefit or otherwise be or become subject to any tax or levy, then the Company shall pay any amount as may be necessary to ensure that the amount received by or on behalf of the Indemnified Party, after the payment of or withholding for such tax, fully reimburses the Indemnified Party for the actual cost, expense or liability incurred by or on behalf of the Indemnified Party. |
| 13. | Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable law, the parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. The parties shall engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces. |
| 14. | This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein. |
| 15. | The obligations of the Company under this Agreement, other than under Section 16, shall continue until the later of: |
| (i) | six (6) years after the Indemnified Party ceases to be a Director or Officer of the Company or any Other Entity; and |
| (ii) | one (1) year after the final termination of all proceedings with respect to which the Indemnified Party is entitled to claim indemnification under this Agreement. |
| 16. | In respect of insurance and right to indemnification from other parties, the parties agree as follows: |
16.1 The Company shall use its commercially reasonable efforts to ensure that it has in place at all times a directors’ and officers’ liability insurance policy no less favourable to the Indemnified Party (and that has been approved by the board of directors of the Company) under which the Indemnified Party is covered in his or her capacity as a current or former director or officer of the Company or its subsidiaries. In the event the Company is sold or enters into any business combination as a result of which the directors’ and officers’ liability insurance policy is terminated and not replaced with a substantially similar policy applicable to the Indemnified Party, the Company shall use its commercially reasonable efforts to cause run off “tail” insurance to be purchased for the benefit of the Indemnified Party with substantially the same coverage for not less than a
6
six (6) year term following such termination. The Company shall provide to the Indemnified Party a copy of each policy of insurance providing the coverages contemplated by this section forthwith after coverage is obtained, and shall forthwith notify the Indemnified Party if the insurer cancels, makes material changes to coverage or refuses to renew coverage (or any part of the coverage). In the event that an Indemnified Party is subject to a deductible under any insurance policy contemplated by this Section 16.1, the Company shall pay such deductible for and on behalf of the Indemnified Party.
16.2 In the event that the Director or Officer is covered under a separate insurance policy, that shall not avoid the need for a Company policy under Section 16.1, but the Company shall provide to the Indemnified Party a copy of such policy of insurance forthwith after coverage is obtained, and shall forthwith notify the Indemnified Party if the insurer cancels, makes material changes to coverage or refuses to renew coverage (or any part of the coverage). In the event that an Indemnified Party is subject to a deductible under any such insurance policy contemplated by this Section 16.2, the Company shall pay such deductible for and on behalf of the Indemnified Party.
16.3 The Company hereby acknowledges that the Indemnified Party may have certain rights to indemnification, advancement of costs, charges and expenses and/or insurance provided by an entity or entities other than the Company (collectively, the “Secondary Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the Indemnified Party are primary and any obligation of the Secondary Indemnitors to advance costs, charges and expenses or to provide indemnification for the same costs, charges and expenses or liabilities incurred by the Indemnified Party are secondary), (ii) that it shall be required to advance the full amount of costs, charges and expenses incurred by the Indemnified Party and shall be liable for the full amount of all costs, charges and expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement (or any other agreement between the Company and the Indemnified Party), without regard to any rights the Indemnified Party may have against the Secondary Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Secondary Indemnitors from any and all claims against the Secondary Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Secondary Indemnitors on behalf of the Indemnified Party with respect to any claim for which the Indemnified Party has sought indemnification from the Company shall affect the foregoing and the Secondary Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of the Indemnified Party against the Company. The Company and the Indemnified Party agree that the Secondary Indemnitors are express third party beneficiaries of the terms of this Section 16.3.
16.4 Except as provided in Section 16.3 above, in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnified Party (other than against the Secondary Indemnitors), who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
7
16.5 Except as provided in Section 16.3 above, the Company’s obligation to provide indemnification or advancement hereunder to the Indemnified Party who is or was serving at the request of the Company as a director, manager, partner, officer, employee, agent or trustee of any Other Entity shall be reduced by any amount the Indemnified Party has actually received as indemnification or advancement from such Other Entity.
| 17. | The Indemnified Party acknowledges having been advised to obtain independent legal advice with respect to entering into this Agreement, has obtained such independent legal advice or has expressly determined not to seek such advice, and that the Indemnified Party is entering into this Agreement with full knowledge of the contents hereof, of the Indemnified Party’s own free will and with full capacity and authority to do so. |
| 18. | Except as expressly provided in this Agreement, no amendment or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement shall constitute a waiver of any other provision nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. |
| 19. | This Agreement shall enure to the benefit of the Indemnified Party and the Indemnified Party’s heirs, administrators, executors and personal representatives and shall be binding upon the Company and its successors. |
| 20. | This Agreement shall not operate to abridge or exclude any other rights, in law or in equity, to which the Indemnified Party or the Company may be entitled. The right to be indemnified or to the reimbursement or advancement of costs, charges and expenses pursuant to this Agreement is intended to be retroactive and shall be available with respect to events occurring prior to the execution hereof. For greater certainty, the rights of the Indemnified Party hereunder shall vest irrevocably with respect to all activities of the Indemnified Party as a Director or Officer, as and from the date on which the Indemnified Party first became a director or officer of the Company or any Other Entity. |
| 21. | The Company and the Indemnified Party hereby acknowledge and agree that upon execution of this Agreement, any previous indemnity agreement entered into between the Company and or a subsidiary of the Company and the Indemnified Party (the “Previous Indemnity Agreement”) is terminated and no longer in force and effect and that this Agreement supersedes the Previous Indemnity Agreement and any other previous agreements between the parties hereto relating to the subject matters hereof. |
The remainder of the page was intentionally left blank
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
| INDEMNIFIED PARTY | ENGENE HOLDINGS INC. | |||||||
| by: | ||||||||
| Name: | Name: | |||||||
| Position: | Title: | |||||||
D & O Indemnity Agreement
Exhibit 21.1
enGene Holdings Inc.
Subsidiaries of the Registrant as of October 31, 2023
| Name of Subsidiary | Jurisdiction of Incorporation or Organization | |
| enGene Inc. | Canada | |
| enGene USA, Inc. | Delaware | |
| Forbion European Acquisition Corp. | Cayman Islands | |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined balance sheet as of July 31, 2023 and the unaudited pro forma condensed combined statements of operations for the nine months ended July 31, 2023 and for the fiscal year ended October 31, 2022 present the combination of the financial information of FEAC, New enGene and enGene, after giving effect to the Transactions, including Business Combination, PIPE Financing, the Non-Redemption Agreement, the Convertible Bridge Financing, the Working Capital Loans, the Sponsor and Insiders Letter Agreement, and the Extension Loans and related adjustments described in the accompanying notes. Subsequent to the Business Combination, FEAC, New enGene and enGene are collectively referred to herein as the “Combined Company.”
FEAC is a blank check company incorporated on August 9, 2021, as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Prior to executing the Business Combination Agreement, FEAC’s efforts were limited to organizational activities, completion of its IPO and the evaluation of possible business combinations. As of September 30, 2023, there was $138.8 million in investments and cash held in the Trust Account and $86,000 of cash held outside the Trust Account available for general corporate purposes.
enGene Inc., is a clinical-stage biotechnology company developing non-viral gene therapies based on localized delivery of nucleic acid payloads to mucosal tissues. enGene’s proprietary DDX platform has a high degree of payload flexibility, including DNA and various forms of RNA with broad tissue and disease application.
The unaudited pro forma condensed combined balance sheet as of July 31, 2023, reflects adjustments that depict the accounting of the Transactions as if they had been consummated on July 31, 2023. The unaudited pro forma condensed combined statements of operations for the nine months ended July 31, 2023 and the fiscal year ended October 31, 2022, give pro forma effect to the Transactions as if they had occurred on November 1, 2021, which is the beginning of the earliest period presented.
The unaudited pro forma condensed combined financial information are based on and should be read in conjunction with the historical financial statements of each of FEAC, New enGene, and enGene and the notes thereto, as well as the disclosures contained in the sections titled “FEAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “enGene’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Pproxy Sstatement/Pprospectus, which is incorporated herein by reference.
The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what the Combined Company’s financial condition or results of operations would have been had the Transactions occurred on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed.
The unaudited pro forma condensed combined financial information reflects the actual redemptions of 10,379,144 FEAC Class A Shares by FEAC’s public shareholders for an aggregate redemption payment of $114.3 million (approximately $11.01 per share), which amount includes Dutch dividend withholding tax of approximately $1.5 million remitted by FEAC to tax authorities as described in FEAC’s IPO registration statement, resulting in a net redemption payment to shareholders of $112.8 million (approximately $10.87 per share). The 2,000,000 FEAC Class A Shares held by the Sponsor that are subject to lock-up agreements and 166,665 FEAC Class A Shares held by public shareholders that are subject to non-redemption agreements are not subject to redemption. After the redemptions of $114.3 million out of the $138.8 million in the Trust Account, the available cash from the Trust Account at Closing is assumed to be approximately $24.5 million. The actual amount of cash in the Trust Account is subject to change, including for actual interest earned subsequent to September 30, 2023.
The Business Combination results in the combination of enGene and New enGene, with a fiscal year end of October 31, with FEAC, with a fiscal year end of December 31. The pro forma statement of operations for the nine months ended July 31, 2023 and the year ended October 31, 2022, presents the combination of financial information of New enGene, FEAC and enGene, after giving effect to the Transactions described in the accompanying notes. The unaudited pro forma statement of operations for the nine months ended July 31, 2023 includes enGene’s results of operations for the nine months ended July 31, 2023, FEAC’s results of operations for the nine months ended September 30, 2023, and New enGene’s results of operations for the period from April 24, 2023 (inception) to July 31, 2023. The unaudited pro forma statement of operations for the year ended
October 31, 2022 includes enGene’s results of operations for the year ended October 31, 2022, and FEAC’s statement of operations for the year ended December 31, 2022. The unaudited pro forma balance sheet as of July 31, 2023 is based on a historical New enGene balance sheet as of July 31, 2023, historical enGene balance sheet as of July 31, 2023, and a historical FEAC balance sheet as of September 30, 2023. The operations of New enGene in the unaudited pro forma condensed combined statements of operations for the period from April 24, 2023 (inception) to July 31, 2023 consist only of legal, accounting and audit fees incurred as part of the formation of the entity and regulatory requirements for the preparation of its financial statements. The operations of New enGene had not commenced in the unaudited pro forma condensed combined statements of operations for the fiscal year ended October 31, 2022.
UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
AS OF JULY 31, 2023
(In thousands, except share and per share amounts)
| Historical | Actual Redemptions into Cash | |||||||||||||||||||||||
| (A) | (B) | (C) | ||||||||||||||||||||||
| enGene Holdings Inc. |
enGene, Inc. |
FEAC | Transaction Accounting Adjustments |
Pro Forma Balance Sheet |
||||||||||||||||||||
| Assets |
||||||||||||||||||||||||
| Current assets: |
||||||||||||||||||||||||
| Cash and cash equivalents |
$ | — | $ | 37,594 | $ | 86 | $ | 24 | 5 | (a) | $ | 87,302 | ||||||||||||
| (3,176 | ) | 5 | (c) | |||||||||||||||||||||
| (600 | ) | 5 | (e) | |||||||||||||||||||||
| (5,504 | ) | 5 | (g) | |||||||||||||||||||||
| (949 | ) | 5 | (k) | |||||||||||||||||||||
| (2,680 | ) | 5 | (m) | |||||||||||||||||||||
| (49 | ) | 5 | (n) | |||||||||||||||||||||
| (1,710 | ) | 5 | (o) | |||||||||||||||||||||
| (7,549 | ) | 5 | (p) | |||||||||||||||||||||
| — | 5 | (q) | ||||||||||||||||||||||
| 20,819 | 5 | (s) | ||||||||||||||||||||||
| 50,996 | 5 | (u) | ||||||||||||||||||||||
| Restricted certificate of deposit |
— | 152 | — | — | 152 | |||||||||||||||||||
| Investment tax credit receivable |
— | 2,548 | — | — | 2,548 | |||||||||||||||||||
| Prepaid and other current assets |
— | 1,545 | 20 | (42 | ) | 5 | (f) | 1,523 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total current assets |
— | 41,839 | 106 | 49,580 | 91,525 | |||||||||||||||||||
| Cash and securities held in trust account |
— | — | 138,839 | (3,728 | ) | 5 | (l) | — | ||||||||||||||||
| (114,292 | ) | 5 | (r) | |||||||||||||||||||||
| (20,819 | ) | 5 | (s) | |||||||||||||||||||||
| Property and equipment, net |
— | 441 | — | — | 441 | |||||||||||||||||||
| Other assets |
— | 4,002 | — | (3,142 | ) | 5 | (g) | 860 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total assets |
$ | — | $ | 46,282 | $ | 138,945 | $ | (92,401 | ) | $ | 92,826 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Liabilities and shareholders’ equity (deficit) |
||||||||||||||||||||||||
| Current liabilities: |
||||||||||||||||||||||||
| Accounts payable |
$ | — | $ | 3,014 | $ | — | $ | (1,328 | ) | 5 | (g) | $ | 1,686 | |||||||||||
| Accrued expenses and other current liabilities |
30 | 1,424 | — | (418 | ) | 5 | (g) | 1,036 | ||||||||||||||||
| Accrued offering costs and expenses |
— | — | 7,413 | (949 | ) | 5 | (k) | — | ||||||||||||||||
| (6,464 | ) | 5 | (p) | |||||||||||||||||||||
| Due to related party |
42 | — | 49 | (49 | ) | 5 | (n) | — | ||||||||||||||||
| (42 | ) | 5 | (f) | |||||||||||||||||||||
| Promissory note - related party |
— | — | 2,680 | (2,680 | ) | 5 | (m) | — | ||||||||||||||||
| Convertible note - related party |
— | — | 1,500 | (1,500 | ) | 5 | (m) | — | ||||||||||||||||
| Current portion of notes payable |
— | 4,665 | — | — | 4,665 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total current liabilities |
72 | 9,103 | 11,642 | (13,430 | ) | 7,387 | ||||||||||||||||||
| Note payable, net of current portion |
— | 6,183 | — | — | 6,183 | |||||||||||||||||||
| Convertible debentures |
— | 59,443 | — | (16,692 | ) | 5 | (b) | — | ||||||||||||||||
| (39,985 | ) | 5 | (b) | |||||||||||||||||||||
| (2,766 | ) | 5 | (c) | |||||||||||||||||||||
| Convertible debenture embedded derivative liabilities |
— | 3,054 | — | (2,806 | ) | 5 | (b) | — | ||||||||||||||||
| (248 | ) | 5 | (c) | |||||||||||||||||||||
| Warrant liabilities |
— | 9,302 | — | (463 | ) | 5 | (b) | — | ||||||||||||||||
| (957 | ) | 5 | (b) | |||||||||||||||||||||
| (7,882 | ) | 5 | (h) | |||||||||||||||||||||
| Deferred underwriting commissions |
— | — | 3,728 | (3,728 | ) | 5 | (l) | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Liabilities |
72 | 87,085 | 15,370 | (88,957 | ) | 13,570 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| FEAC Class A ordinary shares, subject to possible redemption |
— | — | 138,839 | (114,292 | ) | 5 | (r) | — | ||||||||||||||||
| (24,547 | ) | 5 | (t) | |||||||||||||||||||||
| enGene Inc. Class A redeemable convertible preferred shares, no par value; unlimited shares authorized |
— | 1,899 | — | (1,899 | ) | 5 | (i) | — | ||||||||||||||||
| enGene Inc. Class B redeemable convertible preferred shares, no par value; unlimited shares authorized |
— | 1,554 | — | (1,554 | ) | 5 | (i) | — | ||||||||||||||||
| enGene Inc. Class C redeemable convertible preferred shares, no par value; unlimited shares authorized |
— | 49,665 | — | (49,665 | ) | 5 | (i) | — | ||||||||||||||||
| enGene Holdings Inc. Redeemable Class B common shares, no par value; unlimited shares authorized |
— | — | — | — | — | |||||||||||||||||||
| Shareholders’ equity (deficit) |
||||||||||||||||||||||||
| FEAC Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding |
— | — | — | — | — | |||||||||||||||||||
| FEAC Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none outstanding (excluding 12,650,000 shares subject to possible redemption issued) |
— | — | — | — | 5 | (t) | — | |||||||||||||||||
| — | 5 | (t) | ||||||||||||||||||||||
| FEAC Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 3,162,500 shares issued and outstanding |
— | — | — | — | 5 | (m) | — | |||||||||||||||||
| — | 5 | (t) | ||||||||||||||||||||||
| enGene Holdings Inc. common shares |
— | — | — | 122,180 | 5 | (j) | 177,847 | |||||||||||||||||
| — | 5 | (q) | ||||||||||||||||||||||
| 24,547 | 5 | (t) | ||||||||||||||||||||||
| (18,059 | ) | 5 | (t) | |||||||||||||||||||||
| 49,179 | 5 | (u) | ||||||||||||||||||||||
| enGene Inc. common shares |
— | 16,434 | — | 45 | 5 | (a) | — | |||||||||||||||||
| 19,498 | 5 | (b) | ||||||||||||||||||||||
| 39,985 | 5 | (b) | ||||||||||||||||||||||
| (6,900 | ) | 5 | (g) | |||||||||||||||||||||
| 53,118 | 5 | (i) | ||||||||||||||||||||||
| (122,180 | ) | 5 | (j) | |||||||||||||||||||||
| Additional paid-in capital |
— | 7,752 | — | (21 | ) | 5 | (a) | 15,653 | ||||||||||||||||
| 463 | 5 | (b) | ||||||||||||||||||||||
| 957 | 5 | (b) | ||||||||||||||||||||||
| 3,185 | 5 | (d) | ||||||||||||||||||||||
| — | 5 | (t) | ||||||||||||||||||||||
| 1,500 | 5 | (m) | ||||||||||||||||||||||
| 1,817 | 5 | (u) | ||||||||||||||||||||||
| Accumulated other comprehensive loss |
— | (1,016 | ) | — | — | (1,016 | ) | |||||||||||||||||
| Accumulated deficit |
(72 | ) | (117,091 | ) | (15,264 | ) | (162 | ) | 5 | (c) | (113,228 | ) | ||||||||||||
| (3,185 | ) | 5 | (d) | |||||||||||||||||||||
| (600 | ) | 5 | (e) | |||||||||||||||||||||
| 7,882 | 5 | (h) | ||||||||||||||||||||||
| 18,059 | 5 | (t) | ||||||||||||||||||||||
| (1,710 | ) | 5 | (o) | |||||||||||||||||||||
| (1,085 | ) | 5 | (p) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total shareholders’ equity (deficit) |
(72 | ) | (93,921 | ) | (15,264 | ) | 188,513 | 79,256 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total liabilities and shareholders’ equity (deficit) |
$ | — | $ | 46,282 | $ | 138,945 | $ | (92,401 | ) | $ | 92,826 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JULY 31, 2023
(In thousands, except share and per share amounts)
| Historical | Actual Redemptions into Cash | |||||||||||||||||||||||||||
| (A) | (B) | (C) | Transaction Accounting Adjustments |
Pro Forma Statement of Operations |
||||||||||||||||||||||||
| enGene Holdings Inc. |
enGene, Inc. | FEAC | ||||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||
| Research and development |
$ | — | $ | 10,787 | $ | — | $ | — | $ | 10,787 | ||||||||||||||||||
| General and administrative |
72 | 4,831 | — | (90 | ) | 6 | (g) | 3,883 | ||||||||||||||||||||
| (930 | ) | 6 | (e) | |||||||||||||||||||||||||
| Operating costs |
— | — | 8,624 | — | 8,624 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total operating expenses |
72 | 15,618 | 8,624 | (1,020 | ) | 23,294 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Loss from operations |
(72 | ) | (15,618 | ) | (8,624 | ) | 1,020 | (23,294 | ) | |||||||||||||||||||
| Other income (expense), net |
||||||||||||||||||||||||||||
| Interest income |
— | (710 | ) | — | — | (710 | ) | |||||||||||||||||||||
| Interest expense |
— | 3,794 | — | (2,223 | ) | 6 | (a) | 1,387 | ||||||||||||||||||||
| (184 | ) | 6 | (c) | |||||||||||||||||||||||||
| Interest earned from trust account |
— | — | (4,778 | ) | 4,778 | 6 | (h) | — | ||||||||||||||||||||
| Change in fair value of convertible debentures embedded derivative liabilities |
— | (753 | ) | — | 694 | 6 | (a) | — | ||||||||||||||||||||
| 59 | 6 | (c) | ||||||||||||||||||||||||||
| Change in fair value of warrant liabilities |
— | (3,995 | ) | — | 3,995 | 6 | (b) | — | ||||||||||||||||||||
| Change in fair value of convertible debentures |
— | 2,941 | — | (2,941 | ) | 6 | (a) | — | ||||||||||||||||||||
| Other expense, net |
— | 525 | — | — | 525 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total other income (expense), net |
— | (1,802 | ) | 4,778 | (4,178 | ) | (1,202 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net loss |
$ | (72 | ) | $ | (17,420 | ) | $ | (3,846 | ) | $ | (3,158 | ) | $ | (24,496 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Basic and diluted, net loss for the period attributable to equity holders |
$ | (72 | ) | $ | (21,146 | ) | $ | (3,846 | ) | $ | (3,158 | ) | $ | (24,496 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Weighted average common shares outstanding used in basic and diluted net loss per share |
10 | 3,808,008 | 3,162,500 | 16,227,458 | 23,197,976 | 6 | (k) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net loss per share of Combined Company - basic and diluted |
$ | (7,200 | ) | $ | (5.55 | ) | $ | (0.24 | ) | $ | (1.06 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2022
(In thousands, except share and per share amounts)
| Historical | Actual Redemptions into Cash | |||||||||||||||||||||||||||
| (D) | (E) | (F) | Transaction Accounting Adjustments |
Pro Forma Statement of Operations |
||||||||||||||||||||||||
| enGene Holdings Inc. |
enGene, Inc. | FEAC | ||||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||
| Research and development |
$ | — | $ | 15,467 | $ | — | $ | 637 | 6 | (d) | $ | 16,104 | ||||||||||||||||
| General and administrative |
— | 3,960 | — | 2,548 | 6 | (d) | 17,547 | |||||||||||||||||||||
| (120 | ) | 6 | (g) | |||||||||||||||||||||||||
| 930 | 6 | (e) | ||||||||||||||||||||||||||
| 600 | 6 | (f) | ||||||||||||||||||||||||||
| 1,710 | 6 | (i) | ||||||||||||||||||||||||||
| 7,919 | 6 | (j) | ||||||||||||||||||||||||||
| Formation and operating costs |
— | — | 1,831 | — | 1,831 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total operating expenses |
— | 19,427 | 1,831 | 14,224 | 35,482 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Loss from operations |
— | (19,427 | ) | (1,831 | ) | (14,224 | ) | (35,482 | ) | |||||||||||||||||||
| Other income (expense), net: |
||||||||||||||||||||||||||||
| Interest income |
— | (129 | ) | — | — | (129 | ) | |||||||||||||||||||||
| Interest expense |
— | 1,423 | — | (61 | ) | 6 | (a) | 1,513 | ||||||||||||||||||||
| 151 | 6 | (c) | ||||||||||||||||||||||||||
| Interest earned from trust account |
— | — | (1,862 | ) | 1,862 | 6 | (h) | — | ||||||||||||||||||||
| Change in fair value of convertible debentures embedded derivative liabilities |
— | (269 | ) | — | 269 | 6 | (c) | — | ||||||||||||||||||||
| Change in fair value of warrant liabilities |
— | 3,326 | — | (3,326 | ) | 6 | (b) | — | ||||||||||||||||||||
| Other expense, net |
— | 662 | — | — | 662 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total other income (expense), net |
— | (5,013 | ) | 1,862 | 1,105 | (2,046 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net income (loss) before provision for income taxes |
— | (24,440 | ) | 31 | (13,119 | ) | (37,528 | ) | ||||||||||||||||||||
| Provision for income taxes |
— | (22 | ) | — | — | (22 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net income (loss) |
$ | — | $ | (24,462 | ) | $ | 31 | $ | (13,119 | ) | $ | (37,550 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Basic and diluted, net income (loss) for the period attributable to equity holders |
$ | — | $ | (29,024 | ) | $ | 31 | $ | (13,119 | ) | $ | (37,550 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Weighted average common shares outstanding used in basic and diluted net loss per share |
— | 3,640,030 | 3,162,500 | 16,395,446 | 23,197,976 | 6 | (k) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net loss per share of Combined Company - basic and diluted |
$ | — | $ | (7.97 | ) | $ | — | $ | (1.62 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1. Description of the Transactions
On May 16, 2023, FEAC entered into the Business Combination Agreement. Under the terms of the Business Combination Agreement, the business combination of FEAC, enGene, and New enGene was completed through a series of transactions including Business Combination, PIPE Financing, the Non-Redemption Agreement, the Convertible Bridge Financing, the Working Capital Loans, the Sponsor and Insiders Letter Agreement, and the Extension Loans. The principal steps of the Transactions are described below; please see “Proposal No. 1 — The Business Combination Proposal” in the Proxy Statement/Prospectus for a full description of the Transactions.
Based on the actual redemptions, the cash components of the transaction (excluding transaction expenses) were funded by:
| • | FEAC cash in trust of $24.5 million, which includes non-redemption agreements of $1.7 million (the actual amount of cash in the Trust Account is subject to change, including for actual interest earned subsequent to September 30, 2023), and |
| • | private placements of common shares and warrants from various investors in convertible bridge and PIPE Financing of $113.3 million, as described below. |
Pursuant to the Business Combination Agreement, two entities were incorporated to effect the Transactions, Can Merger Sub, a Canadian corporation and a wholly owned subsidiary of FEAC and Cayman Merger Sub, a Cayman Islands exempt company and a direct wholly owned subsidiary of New enGene.
PIPE Financing
In connection with the Business Combination Agreement, FEAC and New enGene entered into Subscription Agreements with the PIPE Investors, pursuant to which Subscription Agreements, as modified by the Side Letter Agreements, PIPE Investors agreed to purchase FEAC Class A Shares and FEAC Warrants (or after the Assumption, New enGene Shares and New enGene Warrants) for an aggregate commitment amount of $56.9 million. The Subscription Agreements are subject to certain conditions, including, among other things, completing the steps of the Transactions. The purpose of the PIPE Financing is to fund general corporate expenses of New enGene. Refer to note 5(u) below.
Sponsor and Insiders Letter Agreement
Concurrent with the execution of the Business Combination Agreement, FEAC, the Sponsor, Forbion Growth Opportunities Fund I Cooperatief U.A. and the other holders of FEAC Class B Shares, enGene, New enGene and the other parties named therein (collectively, other than enGene and New enGene, the “Sponsor Parties”) entered into the Sponsor and Insiders Letter Agreement, pursuant to which the Sponsor agreed to surrender and in effect issue to PIPE Investors, after giving effect to the conversion of all or part of the principal amount outstanding under loans made by the Sponsor to FEAC into FEAC Private Placement Warrants, 1,789,004 FEAC Class B Shares and 5,463,381 FEAC Private Placement Warrants, effective immediately prior to the Class B Conversion on the day which is two business days prior to the Closing Date (the “Surrender”).
Non-Redemption Agreement
In connection with the execution of the Business Combination Agreement, FEAC and a FEAC shareholder that is the beneficial owner of 166,665 FEAC Class A Shares entered into a non-redemption agreement (the “Non-Redemption Agreement”), pursuant to which, FEAC agreed to issue additional FEAC Class A Shares and FEAC Warrants (which commitment was assumed by New enGene as part of the Transactions such that New enGene issued additional New enGene Shares and New enGene Warrants) to such FEAC shareholder in consideration of such FEAC shareholder’s commitment (i) to vote or cause to be voted all of its FEAC Shares in favor of the Transaction Proposals and (ii) not to redeem its FEAC Class A Shares in connection with the approval of the Business Combination by the shareholders of FEAC.
Convertible Bridge Financing
Prior to the execution and delivery of the Business Combination Agreement, enGene agreed to certain modifications of existing convertible indebtedness in an aggregate principal amount of $18.4 million (the “2022 Convertible Notes” and, together with the
enGene warrants to be issued by enGene as consideration for such modifications, the “Amended 2022 Financing”). On April 4, 2023, enGene entered into an interest-free debt agreement for aggregate cash proceeds of $8.0 million (the “2023 Subordinated Notes”). Concurrently with the execution and delivery of the Business Combination Agreement, enGene entered into agreements pursuant to which it issued new convertible indebtedness and enGene warrants (i) for cash in an aggregate principal amount of $30.0 million, which amount was funded in two tranches, comprising an initial $20.0 million on May 17, 2023 by Forbion Growth Sponsor FEAC I B.V. and a subsequent $10.0 million on June 15, 2023, and (ii) in repayment of the 2023 Subordinated Notes (such convertible notes, the “2023 Convertible Notes” and, together with the enGene warrants purchased concurrently, the “2023 Financing”; the 2023 Financing together with the Amended 2022 Financing, the “Convertible Bridge Financing”). The Convertible Bridge Financing indebtedness was converted in the Transactions into that number of enGene Common Shares that, when exchanged at the enGene Exchange Ratio, equal that number of FEAC Class A Shares (or after the Assumption, New enGene Shares) that the holders of such indebtedness would have received if they subscribed for FEAC Class A Shares (or after the Assumption, New enGene Shares) on the same terms as the PIPE Financing.
In relation to the Amended 2022 Financing, the holders of the 2022 Convertible Notes received warrants to purchase enGene Common Shares and the holders of the 2023 Convertible Notes were issued warrants in connection with the issuance of the 2023 Convertible Notes. These warrants converted through the transaction to warrants to purchase common shares of the Combined Company. These warrants have substantially similar terms as the warrants received by the PIPE investors and were equity classified upon the execution of the PIPE Financing at the close of the Business Combination (refer to Note 5(u) below).
Working Capital Loans
On March 24, 2023, the Sponsor and FEAC entered into an unsecured promissory note (the “First Loan Note”) under which the Sponsor agreed to extend to FEAC a loan of up to $900,000, to be used for FEAC’s general corporate purposes. The Sponsor funded the initial principal amount of $450,000 on March 24, 2023, and additionally funded $450,000 on April 26, 2023. On June 6, 2023, the Sponsor and FEAC entered into an additional unsecured promissory note (the “Second Loan Note”) under which the Sponsor agreed to extend to FEAC a loan of up to $300,000, to be used for FEAC’s general corporate purposes. The Sponsor funded the principal amount of $300,000 under the Second Loan Note on June 6, 2023. Also, on September 13, 2023, the Sponsor and FEAC entered into an additional unsecured promissory note (the “Third Loan Note” and, together with the First Loan Note and the Second Loan Note, the “Working Capital Loan Notes”) under which the Sponsor agreed to extend to FEAC a loan of up to $450,000, to be used for FEAC’s general corporate purposes. The Sponsor funded the principal amount of $450,000 under the Third Loan Note on September 13, 2023. The Working Capital Loan Notes bore no interest and were due and payable on the earlier of (i) the date of consummation of a business combination and (ii) December 14, 2023. Upon consummation of the Business Combination, the Sponsor elected to convert the outstanding principal amount under the First Loan Note into 600,000 additional FEAC Private Placement Warrants at a price of $1.50 per warrant, and the remaining principal amount outstanding under the Second Loan Note and the Third Loan Note was repaid by FEAC out of the proceeds of the Trust Account released to FEAC.
Extension Loans
On June 6, 2023, FEAC extended the period of time to consummate a business combination which required the Sponsor or its affiliates or designees to deposit into the Trust Account, $1.3 million ($0.10 per FEAC Class A Shares in either case) (the “First Extension Loan Note”).
On September 13, 2023, FEAC further extended the period of time to consummate a business combination which required the Sponsor to deposit into the Trust Account $1.3 million ($0.10 per FEAC Class A Share). The payment was made in the form of a non-interest bearing, unsecured promissory note (the “Second Extension Loan Note” and, together with the First Extension Loan Note, the “Extension Notes”). The Extension Notes bear no interest and were due and payable on the earlier of (i) the date of consummation of a business combination and (ii) December 14, 2023. Upon consummation of the Business Combination, the Sponsor elected to convert $600,000 of the principal amount outstanding under the First Extension Loan Note into 400,000 additional FEAC Private Placement Warrants at a price of $1.50 per warrant, and the remaining principal amount outstanding under the First Extension Loan Note and the amount outstanding under the Second Extension Loan Note were repaid by FEAC out of the proceeds of the Trust Account released to FEAC.
These additional FEAC Private Placement Warrants were issued by FEAC to the Sponsor immediately prior to the Surrender on the day which was two business days prior to the Closing Date, in accordance with the FEAC Warrant Agreement and the relevant promissory note governing the First Loan Note and/or the First Extension Loan Note, as applicable.
2. Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X, as amended by the final rule, Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses. Release No. 33-10786 replaced the previous pro forma adjustment criteria with simplified requirements to depict the accounting for business combinations (“Transaction Accounting Adjustments”) and permitted the presentation of reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Management of enGene and FEAC (collectively “Management”) has elected not to present Management’s Adjustments and only presents Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The transaction accounting adjustments presented in the pro forma financial information are made to provide relevant information necessary for an understanding of the Combined Company reflecting the accounting for the Business Combination, the PIPE Financing, the Non-Redemption Agreement, the Convertible Bridge Financing, the Working Capital Loans, the Sponsor and Insiders Letter Agreement, and the Extension Loans.
The unaudited pro forma condensed combined financial statements are based on the FEAC historical financial statements, the New enGene historical financial statements, and the enGene historical consolidated financial statements as adjusted to give effect to the Transactions. The unaudited pro forma condensed combined balance sheet gives pro forma effect to the Transactions as if they had been consummated on July 31, 2023. The unaudited pro forma condensed combined statement of operations for the nine months ended July 31, 2023 and for the year ended October 31, 2022, gives effect to the Transactions as if they had occurred on November 1, 2021.
The Business Combination results in the combination of enGene and New enGene, with a fiscal year end of October 31, with FEAC, with a fiscal year end of December 31. The pro forma statement of operations for the nine months ended July 31, 2023 and for the year ended October 31, 2022, present the combination of financial information of New enGene, FEAC and enGene, after giving effect to the Business Combination and related adjustments described in the accompanying notes. The unaudited pro forma statement of operations for the nine months ended July 31, 2023 includes enGene’s statement of operations for the nine months ended July 31, 2023, FEAC’s results of operations for the nine months ended September 30, 2023, and New enGene’s results of operations for the period from April 24, 2023 (inception) to July 31, 2023. The unaudited pro forma annual statement of operations includes enGene’s statement of operations for the year ended October 31, 2022, and FEAC’s statement of operations for the year ended December 31, 2022. The operations of New enGene in the unaudited pro forma condensed combined statements of operations for the period from April 24, 2023 (inception) to July 31, 2023 consist only of legal, accounting and audit fees incurred as part of the formation of the entity and regulatory requirements for the preparation of its financial statements. The operations of New enGene had not commenced in the unaudited pro forma condensed combined statement of operations for the fiscal year ended October 31, 2022. The unaudited pro forma balance sheet as of July 31, 2023 is based on a historical New enGene balance sheet as of July 31, 2023, historical enGene balance sheet as of July 31, 2023, and a historical FEAC balance sheet as of September 30, 2023.
Management has made significant estimates and assumptions in its determination of the pro forma adjustments. The pro forma adjustments reflecting the Transactions are based on certain currently available information and certain assumptions and methodologies that Management believes are reasonable under the circumstances. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the difference may be material. Management believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Transactions based on information available at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined financial statements do not give effect to any operating efficiencies or cost savings that may be associated with the Business Combination. FEAC and enGene have not had any historical relationship prior to the Business Combination, with the exception of a shareholder investment in enGene by Forbion Capital Fund III, an affiliate of the Sponsor. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
The unaudited pro forma condensed combined financial information has been prepared assuming actual redemptions of 10,379,144 FEAC Class A Shares by FEAC’s public shareholders for an aggregate redemption payment of $114.3 million (approximately $11.01 per share), which amount includes Dutch dividend withholding tax of approximately $1.5 million remitted by FEAC to tax authorities as described in FEAC’s IPO registration statement, resulting in a net redemption payment to shareholders of $112.8 million (approximately $10.87 per share). The 2,000,000 FEAC Class A Shares held by the Sponsor that are subject to lock-up agreements and 166,665 FEAC Class A Shares held by public shareholders that are subject to non-redemption agreements are not subject to redemption. After the redemptions of $114.3 million out of the $138.8 million in the Trust Account, the available cash from the Trust Account at Closing is assumed to be approximately $24.5 million. The actual amount of cash in the Trust Account is subject to change, including for actual interest earned subsequent to September 30, 2023.
As a result of the Transactions, enGene shareholders (including shares owned by Forbion Capital Fund III, an existing enGene shareholder) own approximately 42% of the shares of New enGene Shares, FEAC public shareholders (excluding Sponsor shares) own approximately 1% of the shares of New enGene Shares, the Sponsor and FGOF together own approximately 25% of the shares of New enGene Shares, and PIPE investors (excluding Sponsor portion) own approximately 32% of the shares of New enGene Shares. At Closing, shares outstanding of New enGene as presented in the unaudited pro forma condensed combined financial information include the following:
| Number of Shares Owned | % Ownership | |||||||
| enGene shareholders |
9,698,082 | 42 | % | |||||
| FEAC public shareholders |
270,856 | 1 | % | |||||
| Sponsor and FGOF |
5,765,932 | 25 | % | |||||
| PIPE investors |
7,463,106 | 32 | % | |||||
|
|
|
|
|
|||||
| Total New enGene shares (1) |
23,197,976 | 100 | % | |||||
|
|
|
|
|
|||||
| (1) | Represents the total number of outstanding New enGene Shares that New enGene issued upon the consummation of the Transactions. This total does not include 10,411,667 outstanding New enGene Warrants and 5,314,884 New enGene share options to be issued or available to be issued upon the consummation of the Transactions. |
The Business Combination Agreement and the Plan of Arrangement together provide that all outstanding enGene Shares were exchanged directly for New enGene Shares in the Business Combination (without prior conversion into enGene Common Shares) at the enGene Exchange Ratio. Solely for ease of presentation and understanding, the unaudited pro forma condensed combined financial adjustments presented below assumes that all enGene Non-Voting Common Shares and the enGene Preferred Shares are first converted into enGene Common Shares prior to the exchange of such shares in the Business Combination for New enGene Shares, which assumption has no impact on the Combined Company Pro Forma Balance Sheet or Statement of Operations.
These unaudited pro forma condensed combined financial statements and related notes have been derived from and should be read in conjunction with:
| • | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
| • | the historical unaudited condensed consolidated financial statements of FEAC as of and for the nine months ended September 30, 2023, and the related notes included elsewhere in this Current Report on Form 8-K; |
| • | the historical unaudited consolidated financial statements of enGene Inc. as of and for the nine months ended July 31, 2023, and the related notes included elsewhere in the Proxy Statement/Prospectus, |
| • | the historical audited financial statements of FEAC as of and for the year ended December 31, 2022, and the related notes included elsewhere in the Proxy Statement/Prospectus, |
| • | the historical audited consolidated financial statements of enGene Inc. as of and for the year ended October 31, 2022, and the related notes included elsewhere in the Proxy Statement/Prospectus, |
| • | the historical audited financial statements of enGene Holdings Inc. as of July 31, 2023 and for the period from April 24, 2023 (inception) to July 31, 2023 and the related notes included elsewhere in the Proxy Statement/Prospectus, and |
| • | the sections entitled “FEAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “enGene’s Management’s Discussion and Analysis of Financial Condition and Results of Operation,” and other financial information relating to FEAC and enGene included elsewhere in the Proxy Statement/Prospectus. |
The unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and are not necessarily indicative of what the actual results of operations and financial position would have been had the Transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Combined Company.
3. Accounting for the Business Combination
Notwithstanding the legal form, the Business Combination is accounted for as a reverse recapitalization in accordance with US GAAP. Under this method of accounting, FEAC is treated as the acquired company for financial reporting purposes, whereas enGene is treated as the accounting acquirer. In accordance with this accounting method, New enGene is considered to be a continuation of enGene, with the net identifiable assets of FEAC deemed to have been acquired by enGene in exchange for enGene Common Shares accompanied by a recapitalization. The net assets of FEAC are stated at historical cost, with no goodwill or other intangible assets recorded, and operations prior to the Business Combination are those of enGene.
enGene has been determined to be the accounting acquirer based on an evaluation of the following facts and circumstances, and accordingly the Business Combination is treated as an equivalent to an acquisition of FEAC accompanied by a recapitalization.
| • | Senior management of enGene continues as senior management of the Combined Company; |
| • | enGene identifies a majority of the members of the Board of Directors of the Combined Company; |
| • | The name of the Combined Company is enGene Holdings Inc. and it utilizes enGene’s current headquarters; and |
| • | enGene’s operations comprise the ongoing operations of the Combined Company. |
4. Common shares of enGene Inc.
The enGene Exchange Ratio is calculated in accordance with the terms of the Business Combination Agreement as a quotient obtained by dividing the enGene Per Share Value by the Reference Price of $10.25. The enGene Per Share Value is determined as (i) $96,543,554, which is the reference value of $90,000,000 plus the exercise value of enGene Inc.’s outstanding share-based awards, divided by (ii) 52,187,971, which is the sum of enGene’s outstanding common shares immediately prior to the closing of the Business Combination and the number of common shares issued or issuable upon exercise or settlement of enGene Inc.’s outstanding share-based awards and excludes any shares issuable for the conversion of enGene Inc.’s convertible debt. The defined terms are presented in full in the Business Combination Agreement and included elsewhere in the Proxy Statement/Prospectus.
| Number of enGene Inc. shares prior to the closing of the Business Combination |
Number of shares issued on conversion of enGene Inc. 2022 and 2023 Convertible Notes (2) |
enGene common shares outstanding prior to the closing of the Business Combination |
||||||||||
| Common shares |
4,036,656 | 35,349,238 | 39,385,894 | |||||||||
| Preferred shares (1) |
33,152,399 | — | 33,152,399 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total |
37,189,055 | 35,349,238 | 72,538,293 | |||||||||
|
|
|
|
|
|
|
|||||||
| enGene Inc. common shares outstanding prior to the closing of the Business Combination |
72,538,293 | |||||||||||
| enGene Exchange Ratio |
0.1804799669 | |||||||||||
|
|
|
|||||||||||
| New enGene common shares issued to enGene shareholders upon closing of the Transactions |
13,091,608 | |||||||||||
|
|
|
|||||||||||
| (1) | Presentation assumes that enGene Inc.’s outstanding classes of preferred shares convert to enGene Inc.’s common shares at a ratio of 1:1 immediately prior to the close of the Business Combination. |
| (2) | Refer to Note 5(b) for the calculation of the number of shares that were issued on conversion of enGene’s 2022 and 2023 Convertible Notes. |
5. Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet
The pro forma notes and adjustments, based on preliminary estimates that could change materially as additional information is obtained, are as follows:
Pro forma notes:
| 5(A) | Derived from the audited balance sheet of New enGene as of July 31, 2023. |
| 5(B) | Derived from the unaudited condensed consolidated balance sheet of enGene as of July 31, 2023. |
| 5(C) | Derived from the unaudited condensed consolidated balance sheet of FEAC as of September 30, 2023. |
Pro forma Transaction Accounting Adjustments:
| 5(a) | To record the exercise of enGene share options subsequent to July 31, 2023 for cash proceeds of $24,000. As the shares issued have no par value, share-based compensation expense recorded to additional paid-in capital of $21,000 is reclassified to common shares. |
| 5(b) | To reflect the conversion of the outstanding principal balance of $18.4 million of the 2022 Convertible Notes and $38.0 million of the 2023 Convertible Notes issued by enGene, including the associated derivative liability, into 35,349,238 enGene Common Shares as follows: |
| 2022 Convertible Notes |
2023 Convertible Notes |
|||||||
| (in thousands, except share amounts and ratios) |
||||||||
| Principal balance of the convertible notes |
$ | 18,400 | $ | 38,000 | ||||
| Purchase price paid for the warrants |
— | 1,805 | ||||||
|
|
|
|
|
|||||
| Purchase price allocated to the convertible notes (A) |
$ | 18,400 | $ | 36,195 | ||||
|
|
|
|
|
|||||
| enGene Inc. common shares issued at redemption price of $10.25 |
1,795,122 | 3,707,317 | ||||||
| Additional enGene Inc. common shares issued in connection with PIPE financing |
286,238 | 591,145 | ||||||
|
|
|
|
|
|||||
| Total enGene Inc. shares issued upon conversion of the convertible notes prior to reflecting the conversion ratio (B) |
2,081,360 | 4,298,462 | ||||||
|
|
|
|
|
|||||
| Conversion ratio (C=A*1000/B) |
8.84 | 8.42 | ||||||
| enGene Exchange Ratio (D) |
0.1804799669 | 0.1804799669 | ||||||
|
|
|
|
|
|||||
| enGene common shares issued to enGene convertible note holders upon conversion of the 2022 Convertible Notes and 2023 Convertible Notes (E=A*1000/(C*D)) |
11,532,375 | 23,816,863 | ||||||
|
|
|
|
|
|||||
These enGene Common Shares converted to 6,379,822 New enGene Shares after exchange pursuant to the terms of the Business Combination Agreement. The corresponding offsets related to the conversion have been recorded as the derecognition of the 2022 Convertible Notes of $16.7 million and $2.8 million of the related derivative liability, totaling $19.5 million, the derecognition of the 2023 Convertible Notes recorded at $40.0 million as of July 31, 2023, and the increase in New enGene Shares of $59.5 million. Additionally, the pro forma adjustments reflect the change in classification of warrants associated with the 2022 and 2023 Convertible Notes from liability to equity with the derecognition of warrant liability of $1.4 million and the increase in additional paid-in capital of $1.4 million because the number of warrants issued are fixed upon the execution of the PIPE Financing and these warrants have substantially similar terms as the warrants received by the PIPE investors (refer to Note 5(u)). The transaction is not expected to have a recurring impact.
| 5(c) | To reflect the repayment of term notes entered into by enGene Inc. that were repaid, with the proceeds of the Transactions, with outstanding principal of $2.8 million, as of July 31, 2023, and associated fees of $433,000 through cash payment and the recognition of the remaining deferred issuance costs. The corresponding offsets related to the repayment are the derecognition of $2.8 million of convertible debt liability, $248,000 of derivative liability and an increase in accumulated deficit of $162,000. The transaction is not expected to have a recurring impact. |
| 5(d) | To reflect the automatic acceleration of vesting of certain enGene’s unvested share options upon closing of the Transactions as of July 31, 2023. Unvested share-based compensation expense relating to options existing at July 31, 2023 excluding the July 7, 2023 grant is $0.4 million, which is recorded as a pro forma expense as these options accelerated and vested upon closing of the Transactions. Of the 5.8 million options issued July 7, 2023, 4.4 million options vest upon closing of the Transactions and a registration statement on Form S-8 and the remaining options will vest over time. For the 4.4 million options that vested upon closing of the Transactions and a registration statement on Form S-8, the stock-based compensation expense is estimated at $2.4 million and recorded as a pro forma expense. For the 1.4 million options that will vest over time, no pro forma adjustment is included. In addition, 332,036 options were granted on October 17, 2023, which is recorded as a pro forma adjustment as these options accelerated and vested upon closing of the Transactions. Stock-based compensation expense related to these options is estimated at $0.4 million, determined based on the following inputs: fair value of common shares at grant date of C$2.23 ($1.64), expected life of 6.08 years, volatility of 79.9% and risk-free interest rate of 4.9%. |
| 5(e) | To reflect the payment of $600,000 for the Directors & Officers (“D&O”) insurance tail policy of enGene that was |
| required to be purchased pursuant to the Business Combination Agreement. The policy does not cover any claims incurred after the consummation of the Business Combination. The transaction is not expected to have a recurring impact. |
| 5(f) | To reflect the elimination of intercompany amounts due from New enGene to enGene of $42,000 relating to expenses paid by enGene on behalf of New enGene as these intercompany transactions are eliminated upon consolidation of the Combined Company. The transaction is not expected to have a recurring impact. |
| 5(g) | To reflect the remaining payment of $5.5 million for estimated transaction costs, including banking, printing, legal and accounting services. $6.9 million of the total estimated transaction costs incurred by enGene were deemed to be direct and incremental costs of the Business Combination and recorded as an offset to common shares as the shares issued have no par value. The $930,000 of issuance costs of the 2023 Subordinated Notes and the 2023 Convertible Notes, which were accounted for in accordance with the fair value option election, was included in accumulated deficit in the July 31, 2023 enGene historical financial statements. Additionally, the corresponding remaining offset was recorded as a $3.1 million decrease in deferred costs which was included in other assets on the pro forma balance sheet, a decrease in accounts payable of $1.3 million, and a decrease in accrued expenses and other current liabilities of $418,000. This estimate may change as additional information becomes known and there may also be increased costs not directly related to the Transactions. The transaction is not expected to have a recurring impact. |
| 5(h) | To reflect the cancellation of warrants to purchase enGene Class C preferred shares through the derecognition of the remaining warrant liability, and recognition of the offsetting amount in accumulated deficit of $7.9 million. As part of the Transactions, all warrants to purchase Class C preferred shares were either cancelled or were not exercised because the exercise price of the warrants are below the expected share price. The transaction is not expected to have a recurring impact. |
| 5(i) | To reflect the assumed automatic conversion, on a one-to-one basis, of all outstanding shares of enGene Preferred Shares, with a carrying amount of $53.1 million, into 33,152,399 enGene Common Shares. enGene Preferred Shares outstanding shares are comprised the following: |
| Preferred Shares Classes Shares |
||||
| Class A preferred shares |
1,477,715 | |||
| Class B preferred shares |
864,570 | |||
| Class C preferred shares |
30,810,114 | |||
|
|
|
|||
| Total Preferred Shares issued and outstanding converted to enGene Common Shares |
33,152,399 | |||
|
|
|
|||
| 5(j) | To reflect the recapitalization of enGene and New enGene pursuant to the Business Combination Agreement, the recapitalization of enGene through the contribution of all the common shares of enGene of 72,538,293 to New enGene and the issuance of 13,091,608 shares of New enGene Shares, reflecting the exchange ratio of 0.1804799669. The recapitalization amount is determined as follows: |
| (in thousands) |
Amount | |||
| Common shares of enGene Inc. as of July 31, 2023 |
$ | 16,434 | ||
| Share options exercised subsequent to July 31, 2023 per Note 5(a) |
45 | |||
| Conversion of 2022 Convertible Notes per Note 5(b) |
19,498 | |||
| Conversion of 2023 Convertible Notes per Note 5(b) |
39,985 | |||
| enGene estimated transaction costs per Note 5(g) |
(6,900 | ) | ||
| Total enGene Inc. preferred shares issued and outstanding converted to enGene Inc. common shares per Note 5(i) |
53,118 | |||
|
|
|
|||
| Total amount of enGene Inc. common shares contributed to New enGene as part of the recapitalization entry |
$ | 122,180 | ||
|
|
|
|||
| 5(k) | To record the cash settlement of $0.9 million related to FEAC’s accrued expenses. Upon the close of the Business Combination, FEAC is obligated to pay off its accrued expenses balances pursuant to the Business Combination Agreement and reflected the settlement as an elimination of the accrued expenses. The transaction is not expected to have a recurring impact. |
| 5(l) | To record the cash settlement of $3.7 million from the funds available in the Trust Account related to deferred underwriting commissions incurred during FEAC’s IPO. FEAC recorded these costs in 2021 by crediting its |
| deferred underwriting commissions liability accounts and debiting additional paid in capital. Upon the close of the Business Combination, FEAC settled the balances pursuant to the Business Combination Agreement and reflected the settlement as an elimination of the deferred legal costs liabilities. The transaction is not expected to have a recurring impact. |
| 5(m) | To record the settlement of the Working Capital Loan Notes of $1.7 million and the Extension Notes of $2.5 million recorded as convertible note – related party of $1.5 million and promissory note – related party of $2.7 million in the September 30, 2023 FEAC historical financial statements, through the issuance of 1.0 million FEAC Private Placement Warrants of $1.5 million and $2.7 million of cash. |
| 5(n) | To reflect the settlement of $49,000 representing amounts due to related parties for FEAC’s independent board members and FEAC’s office space, secretarial, and administrative fees. The transaction is not expected to have a recurring impact. |
| 5(o) | To reflect the payment of $1.7 million for the D&O insurance tail policy of FEAC that was required to be purchased pursuant to the Business Combination Agreement. The policy does not cover any claims incurred after the consummation of the business combination. The transaction is not expected to have a recurring impact. |
| 5(p) | To reflect the remaining payment of FEAC’s total estimated advisory, legal, accounting and auditing fees and other professional fees incurred in consummating the Business Combination of $7.5 million, as accrued offering costs and expenses and subsequent reclassification to accumulated deficit upon the close of the Business Combination. Costs of $6.5 million were accrued in the historical financial statements. This estimate may change as additional information becomes known and there may also be increased costs not directly related to the Transactions. The transaction is not expected to have a recurring impact. |
| 5(q) | To reflect the redemption of the initial shares issued at inception of New enGene at the consummation of the Business Combination for an amount equal to the capital initially contributed of $7. |
| 5(r) | To reflect the redemption of 10,379,144 FEAC Class A Shares that were subject to possible redemption at a redemption price of $11.01 for an aggregate redemption price of $114.3 million, which included the withholding of the 15% Dutch dividend withholding tax of $1.5 million as described in FEAC’s IPO registration statement. |
| 5(s) | To reflect the release of $20.8 million from the Trust Account to cash upon the completion of the Business Combination after giving effect to FEAC public shareholders that exercised their redemption rights to have their FEAC Class A Shares redeemed for their pro rata share of the Trust Account. Refer to adjustment 5(r). |
| 5(t) | After reflecting the actual redemption of 10,379,144 FEAC Class A Shares, this adjustment is to reflect the reclassification of the remaining 2,270,856 FEAC Class A Shares from temporary equity to permanent equity of FEAC upon the close of the Business Combination. New enGene then issued its shares to those FEAC shareholders on a one-for-one basis, resulting in $24.5 million recorded in enGene Holdings Inc. common shares as the shares issued have no par value. |
In addition, this adjustment reflects the conversion of 1,373,496 FEAC Class B Shares outstanding, after reflecting the surrender of 1,789,004 FEAC Class B Shares pursuant to the Sponsor and Insiders Letter Agreement, to FEAC Class A Shares. New enGene then issued its shares to the Sponsor at the time of the Business Combination on a one-for-one basis, resulting in $137 recorded in enGene Holdings Inc. common shares as the shares issued have no par value.
The historical accumulated deficit of FEAC was derecognized and reversed to common shares as common shares of New enGene have no par value. The pro forma adjustment of $18.1 million comprises the historical FEAC accumulated deficit of $15.3 million and the impact to accumulated deficit of pro forma adjustments related to the $1.7 million purchase of D&O insurance tail policy for FEAC and recognition of $1.1 million of FEAC transaction costs (see adjustments 5(o) and 5(p)).
| 5(u) | To reflect the issuance and sale of 6,435,441 New enGene Shares to the PIPE investors pursuant to Subscription Agreements entered into concurrent with the completion of the Business Combination (as modified by the Side Letter Agreements), for an aggregate commitment amount of $56.9 million. Warrants issued with the PIPE Financing have terms that are substantially similar to the terms of the FEAC Public Warrants, which were determined to be equity classified by FEAC and accounted for as such within FEAC’s previously issued financial statements, as they do not meet the liability classification requirements under ASC 480, and are considered to be |
| indexed to the issuer’s stock and meet all other conditions for equity classification under ASC 815-40. The portion of the PIPE proceeds allocated to the PIPE warrants issued is approximately $2.0 million based on the FEAC Public Warrant price on the issuance date. The proceeds of the PIPE investment were recorded net of transaction costs deemed to be direct and incremental costs of the equity financing in the amount of approximately $5.9 million, of which $210,000 was allocated to the PIPE warrants. FEAC entered into the subscription agreements and the commitment to issue shares was assumed by New enGene as part of the Business Combination. The PIPE Financing was recorded as the issuance of New enGene Shares, with no par value, of $49.2 million and the issuance of PIPE warrants of $1.8 million, which was recorded in additional paid-in capital. |
6. Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations
The pro forma notes and adjustments, based on preliminary estimates that could change materially as additional information is obtained, are as follows:
Pro forma notes:
| 6(A) | Derived from the statement of operations and comprehensive loss of New enGene for the period from April 24, 2023 (incorporation) to July 31, 2023. |
| 6(B) | Derived from the unaudited condensed consolidated statement of operations and comprehensive loss of enGene for the nine months ended July 31, 2023. |
| 6(C) | Derived from the unaudited condensed consolidated statement of operations of FEAC for the nine months ended September 30, 2023. |
| 6(D) | There was no statement of operations prepared for New enGene as it was incorporated on April 24, 2023, and had no operations in the period ended October 31, 2022. |
| 6(E) | Derived from the consolidated statement of operations and comprehensive loss of enGene for the year ended October 31, 2022. |
| 6(F) | Derived from the statement of operations of FEAC for the year ended December 31, 2022. |
enGene and FEAC are both non-taxable entities and no pro forma adjustments have an impact on associated income tax.
Pro forma Transaction Accounting Adjustments:
| 6(a) | To eliminate the interest expense and to reflect the derecognition of change in fair value of the 2023 Convertible Notes and the change in fair value of the embedded derivative liability associated with the 2022 Convertible Notes, as it is assumed that the 2022 and 2023 Convertible Notes were converted to equity as if the Business Combination had occurred on November 1, 2021. The change in fair value of the warrant liability associated with the 2022 and 2023 Convertible Notes is nominal for enGene’s nine months ended July 31, 2023 historical financial statements. The interest adjustment was based on the total interest expense on the 2022 Convertible Notes recorded for the nine months ended July 31, 2023 and the year ended October 31, 2022. These transactions are not expected to have a recurring impact. |
| 6(b) | To eliminate the change in fair value of enGene Warrants to purchase Class C preferred shares as the warrants were cancelled as part of the Transactions, as if the Business Combination had occurred on November 1, 2021. The transaction is not expected to have a recurring impact. |
| 6(c) | To reflect the fees associated with the repayment of the convertible debenture to the Business Development Bank of Canada and eliminate the interest expense recognized on the convertible debenture and the associated change in fair value of the embedded derivative liability, given the convertible debenture to the Business Development Bank of Canada was repaid at the time of closing of the Business Combination. The transaction is not expected to have a recurring impact. |
| 6(d) | To reflect the automatic acceleration of vesting of certain enGene’s unvested share options as of July 31, 2023. Unvested share-based compensation expense for these options at July 31, 2023 excluding the July 7, 2023 grant is $0.4 million, which is recorded as a pro forma expense as these options accelerated and vested upon closing of the Transactions. Of the 5.8 million options issued July 7, 2023, 4.4 million options vested upon closing of the |
| Transactions and a registration statement on Form S-8 and the remaining options will vest over time. For the 4.4 million options that vested upon closing of the Transactions, the stock-based compensation expense is estimated at $2.4 million and recorded as a pro forma expense. For the 1.4 million options that will vest over time, no pro forma adjustment is included. In addition, 332,036 options were granted on October 17, 2023, which is recorded as a pro forma adjustment as these options accelerated and vested upon closing of the Transactions. Stock-based compensation expense related to these options is estimated at $0.4 million, determined based on the following inputs: fair value of common shares at grant date of C$2.23 ($1.64), expected life of 6.08 years, volatility of 79.9% and risk-free interest rate of 4.9%. Any share-based compensation expense recognized in the historical financial statements is not adjusted. |
| 6(e) | To reflect enGene’s issuance costs of the 2023 Subordinated Notes and the 2023 Convertible Notes. Issuance costs associated with the 2023 Subordinated Notes and the 2023 Convertible Notes of $930,000 included in the historical financial statements are derecognized in the pro forma statement of operations for the nine months ended July 31, 2023. Total estimated issuance costs of $930,000 associated with the 2023 Subordinated Notes and the 2023 Convertible Notes are recognized as expense in the pro forma statement of operations for the year ended October 31, 2022 as the notes were accounted for in accordance with the fair value option election. The transaction is not expected to have a recurring impact. |
| 6(f) | To reflect an adjustment to recognize $600,000 for the D&O insurance tail policy of enGene that was required to be purchased pursuant to the Business Combination Agreement. The policy does not cover any claims incurred after the consummation of the business combination. The transaction is not expected to have a recurring impact. |
| 6(g) | To reflect an adjustment to eliminate FEAC’s administrative support fees of $10,000 per month as if the Business Combination had occurred on November 1, 2021. The transaction is not expected to have a recurring impact. |
| 6(h) | To reflect the derecognition of investment income related to the investments held in the Trust Account in as if the Business Combination had occurred on November 1, 2021. The transaction is not expected to have a recurring impact. |
| 6(i) | To reflect an adjustment to recognize $1.7 million of general and administrative expense in the pro forma statement of operations for the year ended October 31, 2022 related to the D&O insurance tail policy of FEAC that was required to be purchased pursuant to the Business Combination Agreement. The policy does not cover any claims incurred after the consummation of the business combination. The transaction is not expected to have a recurring impact. |
| 6(j) | To reflect FEAC’s estimated incremental advisory, legal, accounting, and other professional fees related to the Business Combination that are not recorded in its historical financial statements as an increase to general and administrative expense in the pro forma statement of operations for the year ended October 31, 2022 as if the transactions had occurred on November 1, 2021. The transaction is not expected to have a recurring impact. |
| 6(k) | The pro forma basic and diluted net loss per share amounts presented in the unaudited pro forma condensed combined statement of operations are based upon the number of New enGene Shares outstanding at the closing of the Transactions, assuming the Transactions occurred on November 1, 2021. The calculation of weighted-average shares outstanding for pro forma basic and diluted net loss per share assumes that the shares issuable in connection with the Transactions have been outstanding for the entirety of the period presented. Pro forma basic and diluted net loss per share is calculated as follows for the nine months ended July 31, 2023 and year ended October 31, 2022: |
| Nine Months Ended July 31, 2023 |
||||
| Combined (Actual Redemptions into Cash) |
||||
| (in thousands, except share and per share amounts) |
||||
| Numerator: |
||||
| Net loss - basic and diluted |
$ | (24,496 | ) | |
| Denominator: |
||||
| New enGene common shares owned by public shareholders that were subject to redemption upon closing |
104,191 | |||
| New enGene common shares owned by public shareholders that were not subject to redemption upon closing |
3,373,496 | |||
| New enGene common shares owned by enGene shareholders (excluding the conversion of the 2022 Convertible Notes and the 2023 Convertible Notes) |
6,711,786 | |||
| New enGene common shares owned by enGene shareholders derived from the conversion of the 2022 Convertible Notes and the 2023 Convertible Notes |
6,379,822 | |||
| New enGene common shares owned by PIPE investors |
6,435,441 | |||
| New enGene common shares owned by shareholders that were subject to non-redemption agreement (1) |
193,240 | |||
|
|
|
|||
| Weighted average common shares outstanding used in basic and diluted net loss per share (2) |
23,197,976 | |||
|
|
|
|||
| Net loss per share of Combined Company - basic and diluted |
$ | (1.06 | ) | |
|
|
|
|||
| Year Ended October 31, 2022 |
||||
| Combined (Actual Redemptions into Cash) |
||||
| (in thousands, except share and per share amounts) |
||||
| Numerator: |
||||
| Net loss - basic and diluted |
$ | (37,550 | ) | |
| Denominator: |
||||
| New enGene common shares owned by public shareholders that were subject to redemption upon closing |
104,191 | |||
| New enGene common shares owned by public shareholders that were not subject to redemption upon closing |
3,373,496 | |||
| New enGene common shares owned by enGene shareholders (excluding the conversion of the 2022 Convertible Notes and the 2023 Convertible Notes) |
6,711,786 | |||
| New enGene common shares owned by enGene shareholders derived from the conversion of the 2022 Convertible Notes and the 2023 Convertible Notes |
6,379,822 | |||
| New enGene common shares owned by PIPE investors |
6,435,441 | |||
| New enGene common shares owned by shareholders that were subject to non-redemption agreement (1) |
193,240 | |||
|
|
|
|||
| Weighted average common shares outstanding used in basic and diluted net loss per share (2) |
23,197,976 | |||
|
|
|
|||
| Net loss per share of Combined Company - basic and diluted |
$ | (1.62 | ) | |
|
|
|
|||
| (1) | Represents 166,665 FEAC Class A Shares associated with the Non-Redemption Agreement and 26,575 additional FEAC Class A Shares that were issued to the same FEAC shareholder in consideration for the Non-Redemption Agreement. |
| (2) | Represents the total number of outstanding New enGene Shares that New enGene issued as of the consummation of the Transactions. The number of outstanding New enGene Warrants of 10,411,667 and New enGene share options of 5,314,884 to be issued or available to be issued, respectively, upon the consummation of the Transactions have been excluded from the computation of diluted net loss per share attributable to common shareholders for the nine months ended July 31, 2023 and the year ended October 31, 2022 because including them would have been antidilutive. |
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