Exhibit 3.1

 

Execution Version

 

EIGHTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
RAPID MICRO BIOSYSTEMS, INC.

 

(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)

 

Rapid Micro Biosystems, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”),

 

DOES HEREBY CERTIFY:

 

1.            That the name of this corporation is Rapid Micro Biosystems, Inc., and that this corporation was originally incorporated pursuant to the General Corporation Law on December 29, 2006 under the name Rapid Micro Biosystems, Inc. An Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 1, 2009. A Second Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on June 25, 2013. A Third Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 1, 2014. A Fourth Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 21, 2015. A Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation was filed on August 3, 2015. A Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation was filed on March 3, 2016. A Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation was filed effective as of July 24, 2017. A Fifth Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 24, 2017. A Sixth Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 11, 2018. A Seventh Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 28, 2020. A Certificate of Amendment to the Seventh Amended and Restated Certificate of Incorporation was filed on May 14, 2020.

 

2.            That the Board of Directors of this corporation duly adopted resolutions proposing to amend and restate the Seventh Amended and Restated Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows:

 

RESOLVED, that the Seventh Amended and Restated Certificate of Incorporation of this corporation be amended and restated in its entirety to read as follows:

 

FIRST: The name of this corporation is Rapid Micro Biosystems, Inc. (the “Corporation”).

 

 

SECOND: The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of its registered agent at such address is The Corporation Trust Company.

 

THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.

 

FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is 384,368,950, consisting of (i) 200,000,000 shares of Common Stock, $0.01 par value per share (“Common Stock”), and (ii) 184,368,950 shares of Preferred Stock, $0.01 par value per share (“Preferred Stock”).

 

The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

 

A.

COMMON STOCK

 

1.            General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.

 

2.            Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings); provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to the Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Certificate of Incorporation or pursuant to the General Corporation Law. There shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Certificate of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law.

 

3.            Redemption. The Common Stock is not redeemable at the option of the holder.

 

4.            Dividends. Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall be entitled to receive, when, as and if declared by the Board of Directors of the Corporation (the “Board of Directors”), out of any assets of the Corporation legally available therefor, any dividends as may be declared from time to time by the Board of Directors.

 

 

B.

PREFERRED STOCK

 

22,563,639 of the authorized shares of Preferred Stock of the Corporation are hereby designated “Series A1 Preferred Stock”, 61,217,425 of the authorized and unissued shares of Preferred Stock of the Corporation are hereby designated “Series B1 Preferred Stock”, 57,372,796 of the authorized shares of Preferred Stock of the Corporation are hereby designated “Series C1 Preferred Stock”, 20,301,829 of the authorized shares of Preferred Stock of the Corporation are hereby designated “Series C2 Preferred Stock”, 22,499,993 of the authorized shares of Preferred Stock of the Corporation are hereby designated “Series D1 Preferred Stock”, and 413,268 of the authorized shares of Preferred Stock of the Corporation are hereby designated “Series D2 Preferred Stock”, in each case with the following rights, preferences, powers, privileges, restrictions, qualifications and limitations. Unless otherwise indicated, references to “Sections” or “Subsections” in this Part B of this Article Fourth refer to sections and subsections of Part B of this Article Fourth.

 

1.            Dividends.

 

1.1            From and after the date of issuance of any shares of Series A1 Preferred Stock, dividends at the rate per annum of $0.04 per share shall accrue on such shares of Series A1 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A1 Preferred Stock) (the “Series A1 Accruing Dividends”). The Series A1 Accruing Dividends shall accrue ratably on a quarterly basis, whether or not declared; provided however, that except as set forth in Subsection 1.5, Section 2 and Section 6, such Series A1 Accruing Dividends shall be payable only when, as, and if declared by the Board of Directors and the Corporation shall be under no obligation to pay such Series A1 Accruing Dividends.

 

1.2            From and after the date on which the first share of Series B1 Preferred Stock was issued, dividends at the rate per annum of $0.04 per share shall accrue on such shares of Series B1 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B1 Preferred Stock) (the “Series B1 Accruing Dividends”). Notwithstanding the foregoing, if the Series B1 Preferred Stock is not redeemed by the Corporation on the General Redemption Date (as defined below) following the delivery of a General Redemption Request (as defined below) for any reason, then the Series B1 Accruing Dividends shall automatically be increased to $0.10 per share of Series B1 Preferred Stock per annum (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B1 Preferred Stock) until such time as the Series B1 Preferred Stock has been redeemed in full by the Corporation. The Series B1 Accruing Dividends shall accrue ratably on a quarterly basis, whether or not declared; provided however, that except as set forth in Subsection 1.5, Section 2 and Section 6, such Series B1 Accruing Dividends shall be payable only when, as, and if declared by the Board of Directors and the Corporation shall be under no obligation to pay such Series B1 Accruing Dividends, subject to such payments having been ratified by the Board of Directors at the time of declaration, payment or set aside, as applicable (including by the approval of the Board of Directors of such payment).

 

 

1.3            From and after the date on which the first share of Series C1 Preferred Stock was issued (the “Series C1 Original Issue Date”), dividends at the rate per annum of $0.046 per share shall accrue on the shares of Series C1 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C1 Preferred Stock) (the “Series C1 Accruing Dividends”). Notwithstanding the foregoing, if the Series C1 Preferred Stock is not redeemed by the Corporation on the General Redemption Date following the delivery of a General Redemption Request for any reason, then the Series C1 Accruing Dividends shall automatically be increased to $0.115 per share of Series C1 Preferred Stock per annum (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C1 Preferred Stock) until such time as the Series C1 Preferred Stock has been redeemed in full by the Corporation. The Series C1 Accruing Dividends shall accrue ratably on a quarterly basis, whether or not declared; provided however, that except as set forth in Subsection 1.5, Section 2 and Section 6, such Series C1 Accruing Dividends shall be payable only when, as, and if declared by the Board of Directors and the Corporation shall be under no obligation to pay such Series C1 Accruing Dividends, subject to such payments having been ratified by the Board of Directors at the time of declaration, payment or set aside, as applicable (including by the approval of the Board of Directors of such payment).

 

1.4            From and after the Series C1 Original Issue Date, dividends at the rate per annum of $0.046 per share shall accrue on the shares of Series C2 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C2 Preferred Stock) (the “Series C2 Accruing Dividends” and, together with the Series A1 Accruing Dividends, the Series B1 Accruing Dividends and the Series C1 Accruing Dividends, the applicable “Accruing Dividends”). Notwithstanding the foregoing, if the Series C2 Preferred Stock is not redeemed by the Corporation on the General Redemption Date following the delivery of a General Redemption Request for any reason, then the Series C2 Accruing Dividends shall automatically be increased to $0.115 per share of Series C2 Preferred Stock per annum (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C2 Preferred Stock) until such time as the Series C2 Preferred Stock has been redeemed in full by the Corporation. The Series C2 Accruing Dividends shall accrue ratably on a quarterly basis, whether or not declared; provided however, that except as set forth in Subsection 1.5, Section 2 and Section 6, such Series C2 Accruing Dividends shall be payable only when, as, and if declared by the Board of Directors and the Corporation shall be under no obligation to pay such Series C2 Accruing Dividends, subject to such payments having been ratified by the Board of Directors at the time of declaration, payment or set aside, as applicable (including by the approval of the Board of Directors of such payment).

 

1.5            The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to obtaining any consents required elsewhere in the Certificate of Incorporation): (i) first, the holders of Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock then outstanding shall receive, or simultaneously receive, on a pari passu basis, a dividend on each outstanding share of Series C1 Preferred Stock, Series C2 Preferred Stock or Series B1 Preferred Stock, respectively, in an amount equal to the amount of the aggregate Series C1 Accruing Dividends, Series C2 Accruing Dividends or Series B1 Accruing Dividends, respectively, then accrued on such applicable share and not previously paid; and (ii) second, after payment in full of the dividends referred to in clause (i) hereof, the holders of Series A1 Preferred Stock then outstanding shall receive, or simultaneously receive, a dividend on each outstanding share of Series A1 Preferred Stock in an amount equal to the amount of the aggregate Series A1 Accruing Dividends then accrued on such share of Series A1 Preferred Stock and not previously paid. After payment of the dividends in the preceding sentence, any additional dividends or distributions shall be distributed among all holders of Common Stock and Preferred Stock in proportion to the number of shares of Common Stock that would be held by each such holder if all shares of Preferred Stock were converted to Common Stock at the then effective conversion rate.

 

 

2.            Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.

 

2.1            Payments to Holders of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock.

 

2.1.1            Payments to Holders of Series D1 Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the holders of shares of Series D1 Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, on a pari passu basis with the payment of the Series D2 Liquidation Preference to the holders of Series D2 Preferred Stock pursuant to Subsection 2.1.2, the payment of the Series C1 Liquidation Preference to the holders of shares of Series C1 Preferred Stock pursuant to Subsection 2.1.3, the payment of the Series C2 Liquidation Preference to the holders of shares of Series C2 Preferred Stock pursuant to Subsection 2.1.4, and the payment of the Series B1 Liquidation Preference to the holders of shares of Series B1 Preferred Stock pursuant to Subsection 2.1.5, but before any payment shall be made to the holders of Series A1 Preferred Stock or Common Stock or any other class or series of capital stock ranking on liquidation junior to the Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) $3.60, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series D1 Preferred Stock (the “Series D1 Original Issue Price”), plus any dividends declared but unpaid on the Series D1 Preferred Stock, and (ii) such amount per share of Series D1 Preferred Stock as would have been payable in respect of each share of Series D1 Preferred Stock had each share of Series D1 Preferred Stock converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the greater of clauses (i) and (ii), the “Series D1 Liquidation Preference”); provided that if any such payments require approval by the Board of Directors (the “Series D1 Qualified Payments”), then such Series D1 Qualified Payments shall have been ratified by the Board of Directors at the time of declaration, payment or set aside, as applicable (including by the approval of the Board of Directors of such payment), and in any event such Series D1 Qualified Payments shall be made pursuant to and in accordance with this Subsection 2.1.1 of the Certificate of Incorporation, which has been approved by the Board of Directors, and any amendments or changes to this Subsection 2.1.1 shall require, in addition to any stockholder approval required under the Certificate of Incorporation, the approval of the Board of Directors. If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series D1 Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1.1, the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

 

2.1.2            Payments to Holders of Series D2 Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the holders of shares of Series D2 Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, on a pari passu basis with the payment of the Series D1 Liquidation Preference to the holders of Series D1 Preferred Stock pursuant to Subsection 2.1.1, the payment of the Series C1 Liquidation Preference to the holders of shares of Series C1 Preferred Stock pursuant to Subsection 2.1.3, the payment of the Series C2 Liquidation Preference to the holders of shares of Series C2 Preferred Stock pursuant to Subsection 2.1.4, and the payment of the Series B1 Liquidation Preference to the holders of shares of Series B1 Preferred Stock pursuant to Subsection 2.1.5, but before any payment shall be made to the holders of Series A1 Preferred Stock or Common Stock or any other class or series of capital stock ranking on liquidation junior to the Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) $3.60, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series D2 Preferred Stock (the “Series D2 Original Issue Price”), plus other dividends declared but unpaid on the Series D2 Preferred Stock, and (ii) such amount per share of Series D2 Preferred Stock as would have been payable in respect of each share of Series D2 Preferred Stock had each share of Series D2 Preferred Stock converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the greater of clauses (i) and (ii), the “Series D2 Liquidation Preference”); provided that if any such payments require approval by the Board of Directors (the “Series D2 Qualified Payments”), then such Series D2 Qualified Payments shall have been ratified by the Board of Directors at the time of declaration, payment or set aside, as applicable (including by the approval of the Board of Directors of such payment), and in any event such Series D2 Qualified Payments shall be made pursuant to and in accordance with this Subsection 2.1.2 of the Certificate of Incorporation, which has been approved by the Board of Directors, and any amendments or changes to this Subsection 2.1.2 shall require, in addition to any stockholder approval required under the Certificate of Incorporation, the approval of the Board of Directors. If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series D2 Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1.2, the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

 

2.1.3            Payments to Holders of Series C1 Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the holders of shares of Series C1 Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, on a pari passu basis with the payment of the Series D1 Liquidation Preference to the holders of shares of Series D1 Preferred Stock pursuant to Subsection 2.1.1, the payment of the Series D2 Liquidation Preference to the holders of shares of Series D2 Preferred Stock pursuant to Subsection 2.1.2, the payment of the Series C2 Liquidation Preference to the holders of shares of Series C2 Preferred Stock pursuant to Subsection 2.1.4 and the payment of the Series B1 Liquidation Preference to the holders of shares of Series B1 Preferred Stock pursuant to Subsection 2.1.5, but before any payment shall be made to the holders of Series A1 Preferred Stock or Common Stock or any other class or series of capital stock ranking on liquidation junior to the Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) $1.725, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C1 Preferred Stock, and (ii) the sum of (x) $1.15, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C1 Preferred Stock (the “Series C1 Original Issue Price”), (y) any Series C1 Accruing Dividends accrued but unpaid on the Series C1 Preferred Stock, and (z) any other dividends declared but unpaid on the Series C1 Preferred Stock (the greater of clauses (i) and (ii), the “Series C1 Liquidation Preference”); provided that if any such payments require approval by the Board of Directors (the “Series C1 Qualified Payments”), then such Series C1 Qualified Payments shall have been ratified by the Board of Directors at the time of declaration, payment or set aside, as applicable (including by the approval of the Board of Directors of such payment), and in any event such Series C1 Qualified Payments shall be made pursuant to and in accordance with this Subsection 2.1.3 of the Certificate of Incorporation, which has been approved by the Board of Directors, and any amendments or changes to this Subsection 2.1.3 shall require, in addition to any stockholder approval required under the Certificate of Incorporation, the approval of the Board of Directors. If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series C1 Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1.1, the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

2.1.4            Payments to Holders of Series C2 Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the holders of shares of Series C2 Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, on a pari passu basis with the payment of the Series D1 Liquidation Preference to the holders of shares of Series D1 Preferred Stock pursuant to Subsection 2.1.1, Series D2 Liquidation Preference to the holders of shares of Series D2 Preferred Stock pursuant to Subsection 2.1.2, Series C1 Liquidation Preference to the holders of shares of Series C1 Preferred Stock pursuant to Subsection 2.1.3 and the payment of the Series B1 Liquidation Preference to the holders of shares of Series B1 Preferred Stock pursuant to Subsection 2.1.5, but before any payment shall be made to the holders of Series A1 Preferred Stock or Common Stock or any other class or series of capital stock ranking on liquidation junior to the Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) $1.725, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C2 Preferred Stock, and (ii) the sum of (x) $1.15, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C2 Preferred Stock (the “Series C2 Original Issue Price”), (y) any Series C2 Accruing Dividends accrued but unpaid on the Series C2 Preferred Stock, and (z) any other dividends declared but unpaid on the Series C2 Preferred Stock (the greater of clauses (i) and (ii), the “Series C2 Liquidation Preference”); provided that if any such payments require approval by the Board of Directors (the “Series C2 Qualified Payments”), then such Series C2 Qualified Payments shall have been ratified by the Board of Directors at the time of declaration, payment or set aside, as applicable (including by the approval of the Board of Directors of such payment), and in any event such Series C2 Qualified Payments shall be made pursuant to and in accordance with this Subsection 2.1.4 of the Certificate of Incorporation, which has been approved by the Board of Directors, and any amendments or changes to this Subsection 2.1.4 shall require, in addition to any stockholder approval required under the Certificate of Incorporation, the approval of the Board of Directors. If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series C2 Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1.2, the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

 

2.1.5            Payments to Holders of Series B1 Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the holders of shares of Series B1 Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, on a pari passu basis with the payment of the Series D1 Liquidation Preference to the holders of shares of Series D1 Preferred Stock pursuant to Subsection 2.1.1, Series D2 Liquidation Preference to the holders of shares of Series D2 Preferred Stock pursuant to Subsection 2.1.2, Series C1 Liquidation Preference to the holders of shares of Series C1 Preferred Stock pursuant to Subsection 2.1.3 and the payment of the Series C2 Liquidation Preference to the holders of shares of Series C2 Preferred Stock pursuant to Subsection 2.1.4, but before any payment shall be made to the holders of Series A1 Preferred Stock or Common Stock or any other class or series of capital stock ranking on liquidation junior to the Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) $1.50, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B1 Preferred Stock, and (ii) the sum of (x) $1.00, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B1 Preferred Stock (the “Series B1 Original Issue Price”), (y) any Series B1 Accruing Dividends accrued but unpaid on the Series B1 Preferred Stock, and (z) any other dividends declared but unpaid on the Series B1 Preferred Stock (the greater of clauses (i) and (ii), the “Series B1 Liquidation Preference”); provided that if any such payments require approval by the Board of Directors (the “Series B Qualified Payments”), then such Series B Qualified Payments shall have been ratified by the Board of Directors at the time of declaration, payment or set aside, as applicable (including by the approval of the Board of Directors of such payment), and in any event such Series B Qualified Payments shall be made pursuant to and in accordance with this Subsection 2.1.5 of the Certificate of Incorporation, which has been approved by the Board of Directors, and any amendments or changes to this Subsection 2.1.5 shall require, in addition to any stockholder approval required under the Certificate of Incorporation, the approval of the Board of Directors. If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series B1 Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1.5, the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

2.2            Payments to Holders of Series A1 Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the holders of shares of Series A1 Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, after payment of the Series D1 Liquidation Preference, the Series D2 Liquidation Preference, the Series C1 Liquidation Preference, the Series C2 Liquidation Preference, the Series B1 Liquidation Preference and other payments to the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock pursuant to Subsection 2.1 but before any payment shall be made to the holders of Common Stock or any other class or series of capital stock ranking on liquidation junior to the Series A1 Preferred Stock by reason of their ownership thereof, an amount per share equal to $1.00, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A1 Preferred Stock (the “Series A1 Original Issue Price” and, together with the Series B1 Original Issue Price, the Series C1 Original Issue Price, the Series C2 Original Issue Price, the Series D1 Original Issue Price and the Series D2 Original Issue Price, the applicable “Original Issue Price”), plus any Series A1 Accruing Dividends accrued but unpaid on the Series A1 Preferred Stock, plus any other dividends declared but unpaid on the Series A1 Preferred Stock (collectively, the “Series A1 Liquidation Preference”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series A1 Preferred Stock the full amount to which they shall be entitled under this Subsection 2.2, the holders of shares of Series A1 Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

 

2.3            Distribution of Remaining Assets. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, after the payment of (i) the Series D1 Liquidation Preference, the Series D2 Liquidation Preference, the Series C1 Liquidation Preference, the Series C2 Liquidation Preference and the Series B1 Liquidation Preference, and other payments to the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock pursuant to Subsection 2.1, and (ii) the Series A1 Liquidation Preference to the holders of shares of Series A1 Preferred Stock pursuant to Subsection 2.2, the remaining assets of the Corporation available for distribution to its stockholders shall next be distributed in the following order of priority:

 

2.3.1            first, among the holders of shares of Series A1 Preferred Stock and Common Stock, on a pari passu basis and pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of the Certificate of Incorporation immediately prior to such dissolution, liquidation or winding up of the Corporation or Deemed Liquidation Event, until the holders of shares of Series A1 Preferred Stock have received a per share amount equal to (i) the amount payable in respect of one share of Series B1 Preferred Stock pursuant to Subsection 2.1.5 minus (ii) the Series A Liquidation Preference; provided, however, that, if upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series A1 Preferred Stock and Common Stock the full amount to which they shall be entitled under this Subsection 2.3.1, the holders of shares of Series A1 Preferred Stock and Common Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full;

 

2.3.2            second, among the holders of shares of Series B1 Preferred Stock, Series A1 Preferred Stock and Common Stock, on a pari passu basis and pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of the Certificate of Incorporation immediately prior to such dissolution, liquidation or winding up of the Corporation or Deemed Liquidation Event, until the holders of shares of Series B1 Preferred Stock have received a per share amount equal to (i) the amount payable in respect of one share of Series C1 Preferred Stock pursuant to Subsection 2.1.3 minus (ii) the Series B Liquidation Preference; provided, however, that, if upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series B1 Preferred Stock, Series A1 Preferred Stock and Common Stock the full amount to which they shall be entitled under this Subsection 2.3.2, the holders of shares of Series B1 Preferred Stock, Series A1 Preferred Stock and Common Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full; and

 

2.3.3            third, among the holders of shares of Series C1 Preferred Stock, Series C2 Preferred Stock, Series B1 Preferred Stock, Series A1 Preferred Stock and Common Stock, on a pari passu basis and pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of the Certificate of Incorporation immediately prior to such dissolution, liquidation or winding up of the Corporation or Deemed Liquidation Event.

 

 

The aggregate amount that a holder of a share of Series A1 Preferred Stock is entitled to receive under Subsection 2.2 and this Subsection 2.3 is hereinafter referred to as the “Series A1 Liquidation Amount”, the aggregate amount that a holder of a share of Series B1 Preferred Stock is entitled to receive under Subsection 2.1 and this Subsection 2.3 is hereinafter referred to as the “Series B1 Liquidation Amount”, the aggregate amount that a holder of a share of Series C1 Preferred Stock is entitled to receive under Subsection 2.1 and this Subsection 2.3 is hereinafter referred to as the “Series C1 Liquidation Amount”, the aggregate amount that a holder of a share of Series C2 Preferred Stock is entitled to receive under Subsection 2.1 and this Subsection 2.3 is hereinafter referred to as the “Series C2 Liquidation Amount”, the aggregate amount that a holder of a share of Series D1 Preferred Stock is entitled to receive under Subsection 2.1 is hereinafter referred to as the “Series D1 Liquidation Amount” and the aggregate amount that a holder of a share of Series D2 Preferred Stock is entitled to receive under Subsection 2.1 is hereinafter referred to as the “Series D2 Liquidation Amount”.

 

2.4            Deemed Liquidation Events.

 

2.4.1            Definition. Each of the following events shall be considered a “Deemed Liquidation Event” unless the holders of (i) a majority of the then outstanding shares of Preferred Stock, voting together as a single class on an as-converted basis (the “Requisite Holders”), which for the purpose of this Subsection 2.4.1 is not subject to the Series C2/D2 Voting Restriction (as defined below) with respect to Subsection 2.4.1(b) and Subsection 2.4.1(c) below and (ii) a majority of the then outstanding shares of Series D1 Preferred Stock and Series D2 Preferred Stock, voting together as a separate class (the “Requisite Series D1/D2 Holders”) (which for the purpose of this Subsection 2.4.1 is not subject to the Series C2/D2 Voting Restriction with respect to Subsection 2.4.1(b) and Subsection 2.4.1(c) below), elect otherwise by written notice sent to the Corporation at least 5 days prior to the effective date of any such event:

 

(a)

a merger or consolidation in which

 

(i)

the Corporation is a constituent party or

 

(ii)

a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation,

 

except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation (provided that, for the purpose of this Subsection 2.4.1, all shares of Common Stock issuable upon exercise of Options (as defined below) outstanding immediately prior to such merger or consolidation or upon conversion of Convertible Securities (as defined below) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged);

 

 

(b)            the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole (including, without limitation, the Corporation’s intellectual property), or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation; or

 

(c)            the sale, exchange or transfer by the Corporation’s stockholders of the Corporation’s voting stock, in a single transaction or series of related transactions, to a person or group of affiliated persons pursuant to which such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Corporation (or the surviving or acquiring entity).

 

For purposes of clarity, a business combination of the Corporation with a publicly listed “special purpose acquisition company” or its subsidiary (a “SPAC”), whether by merger, consolidation, stock purchase, share exchange, asset sale or otherwise (a “SPAC Transaction”), shall not be a Deemed Liquidation Event for any purpose hereunder.

 

2.4.2        Effecting a Deemed Liquidation Event.

 

(a)            The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in Subsection 2.4.1(a)(i) unless the agreement or plan of merger or consolidation for such transaction (the “Merger Agreement”) provides that the consideration payable to the stockholders of the Corporation shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 through 2.3.

 

 

(b)            In the event of a Deemed Liquidation Event referred to in Subsection 2.4.1(a)(ii) or 2.4.1(b), if the Corporation does not effect a dissolution of the Corporation under the General Corporation Law within 90 days after such Deemed Liquidation Event, then (i) the Corporation shall send a written notice to each holder of Preferred Stock no later than the 90^th day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause (ii) to require the redemption of such shares of Preferred Stock, and (ii) if the Requisite Holders (which, for the purpose of this Subsection 2.4.2(b), is not subject to the Series C2/D2 Voting Restriction) so request in a written instrument delivered to the Corporation not later than 120 days after such Deemed Liquidation Event, the Corporation shall use the consideration received by the Corporation for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors), together with any other assets of the Corporation available for distribution to its stockholders (the “Available Proceeds”), to the extent legally available therefor, on the 150^th day after such Deemed Liquidation Event (the “Initial Liquidation Redemption Date”), to redeem all outstanding shares of Series A1 Preferred Stock at a price per share equal to the Series A1 Liquidation Amount (the “Liquidation Series A1 Redemption Price”), all outstanding shares of Series B1 Preferred Stock at a price per share equal to the Series B1 Liquidation Amount (the “Liquidation Series B1 Redemption Price”), all outstanding shares of Series C1 Preferred Stock at a price per share equal to the Series C1 Liquidation Amount (the “Liquidation Series C1 Redemption Price”) all outstanding shares of Series C2 Preferred Stock at a price per share equal to the Series C2 Liquidation Amount (the “Liquidation Series C2 Redemption Price”), all outstanding shares of Series D1 Preferred Stock at a price per share equal to the Series D1 Liquidation Amount (the “Liquidation Series D1 Redemption Price”), and all outstanding shares of Series D2 Preferred Stock at a price per share equal to the Series D2 Liquidation Amount (the “Liquidation Series D2 Redemption Price” and, together with the Liquidation Series A1 Redemption Price, the Liquidation Series B1 Redemption Price, the Liquidation Series C1 Redemption Price, the Liquidation Series C2 Redemption Price and the Liquidation Series D1 Redemption Price, the “Liquidation Redemption Prices”). Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Preferred Stock that are required to then be redeemed, the Corporation shall redeem a pro rata portion of each holder’s shares of Preferred Stock to the fullest extent of such Available Proceeds (in the case of the Series A1 Preferred Stock, the Available Proceeds remaining after the complete redemption of Series D1 Preferred Stock by payment in full of the Series D1 Liquidation Amount, Series D2 Preferred Stock by payment in full of the Series D2 Liquidation Amount, Series C1 Preferred Stock by payment in full of the Series C1 Liquidation Amount, Series C2 Preferred Stock by payment in full of the Series C2 Liquidation Amount, and Series B1 Preferred Stock by payment in full of the Series B1 Liquidation Amount), based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the Available Proceeds were sufficient to redeem all such shares, and shall redeem the remaining shares to have been redeemed as soon as practicable after the Corporation has funds legally available therefor (together with the Initial Liquidation Redemption Date, the “Liquidation Redemption Dates”). Prior to the distribution or redemption provided for in this Subsection 2.4.2(b), the Corporation shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses approved by the Requisite Holders incurred in connection with such Deemed Liquidation Event or in the ordinary course of business.

 

2.4.3        Amount Deemed Paid or Distributed. The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer, exclusive license, other disposition or redemption shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the Board of Directors, including the Applicable Directors (as defined below).

 

 

2.4.4        Allocation of Contingent Consideration. In the event of a Deemed Liquidation Event pursuant to Subsection 2.4.1(a)(i), if any portion of the consideration payable to the stockholders of the Corporation is payable only upon satisfaction of contingencies (the “Additional Consideration”), the Merger Agreement shall provide that (a) the portion of such consideration that is not Additional Consideration (such portion, the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 through 2.3 as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation Event and (b) any Additional Consideration that becomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 through 2.3 after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Subsection 2.4.4, consideration placed into escrow or retained as holdback to be available for satisfaction of indemnification or similar obligations in connection with such Deemed Liquidation Event shall be deemed to be Additional Consideration.

 

3.            Voting.

 

3.1           General. Except as provided by law or by the other provisions of the Certificate of Incorporation, including the Series C2/D2 Voting Restriction, on any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock (subject to Subsection 3.2) shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Certificate of Incorporation, and subject to Subsection 3.2, holders of Preferred Stock shall vote together with the holders of Common Stock, and with the holders of any other series of Preferred Stock the terms of which so provide, as a single class.

 

3.2           Series C2 Preferred Stock and Series D2 Preferred Stock. Except as provided by law or Subsections 2.4.1, 2.4.2(b), 3.4(a), 3.7(a), 3.7(c), 3.8(a), 3.8(c), 3.8(d), 4.4.2, and 4.10 or clause (c) of the proviso in Subsection 8 (collectively, the “Series C2/D2 Matters”), the holders of Series C2 Preferred Stock and Series D2 Preferred Stock shall not be entitled to (a) vote on any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting) or (b) consent to provide a waiver for any matters for which the holders of Preferred Stock must provide their consent or waiver (the “Series C2/D2 Voting Restriction”). In no event shall any Series C2 Preferred Stock or Series D2 Preferred Stock be redesignated or reconstituted as a voting security at any time prior to a Restriction Removal Event (as defined in that certain amended and restated letter agreement entered into on the Series D2 Original Issue Date between the purchasers of shares of Series C2 Preferred Stock and Series D2 Preferred Stock, together with their respective affiliates (collectively, the “Series C2/D2 Initial Holders”), and the Corporation, (the “Series C2/D2 Letter Agreement”)).

 

 

3.3           Election of Directors. The holders of record of the shares of Series A1 Preferred Stock, exclusively as a separate class on an as-converted basis, shall be entitled to elect one (1) director of the Corporation (the “Series A1 Director”), the holders of record of the shares of Series B1 Preferred Stock, exclusively as a separate class on an as-converted basis, shall be entitled to elect two (2) directors of the Corporation (the “Series B1 Directors”) and the holders of record of the shares of Series C1 Preferred Stock, exclusively as a separate class on an as-converted basis, shall be entitled to elect one (1) director of the Corporation (the “Series C1 Director”, together with the Series A1 Director, the Series B1 Directors, the “Preferred Directors”). Any director elected as provided in the preceding sentence may be removed without cause by, and only by, the affirmative vote of the holders of the shares of the class or series of capital stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders. If the holders of shares of Series A1 Preferred Stock, Series B1 Preferred Stock or Series C1 Preferred Stock fail to elect a sufficient number of directors to fill all directorships for which they are entitled to elect directors, voting exclusively and as a separate class, pursuant to the first sentence of this Subsection 3.2, then any directorship not so filled shall remain vacant until such time as the holders of the applicable series of Preferred Stock elect a person to fill such directorship by vote or written consent in lieu of a meeting; and no such directorship may be filled by stockholders of the Corporation other than by the stockholders of the Corporation that are entitled to elect a person to fill such directorship, voting exclusively and as a separate class on an as-converted basis. The holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Preferred Stock), exclusively and voting together as a single class on an as converted basis, shall, be entitled to elect the balance of the total number of directors of the Corporation. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director. Except as otherwise provided in this Subsection 3.2, a vacancy in any directorship filled by the holders of any class or series shall be filled only by vote or written consent in lieu of a meeting of the holders of such class or series or by any remaining director or directors elected by the holders of such class or series pursuant to this Subsection 3.2. The rights of the holders of the Series A1 Preferred Stock shall terminate on the first date following the Series D1 Original Issue Date (as defined below) on which there are issued and outstanding less than 4,000,000 shares of Series A1 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization that affects such shares). The rights of the holders of the Series B1 Preferred Stock shall terminate on the first date following the Series D1 Original Issue Date on which there are issued and outstanding less than 10,000,000 shares of Series B1 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization that affects such shares). The rights of the holders of the Series C1 Preferred Stock to elect a Series C1 Director shall terminate on the first date following the Series D1 Original Issue Date on which there are issued and outstanding less than (a) 10,000,000 shares of Series C1 Preferred Stock or (b) following such time as all shares of Series C2 Preferred Stock have been converted into shares of Series C1 Preferred Stock pursuant to the terms hereof, 20,000,000 shares of Series C1 Preferred Stock(in each case, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization that affects such shares).

 

3.4           Preferred Stock Protective Provisions. At any time when at least an aggregate of 4,000,000 shares of Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization that affects such shares) are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the Requisite Holders (subject to the Series C2/D2 Voting Restriction except in respect of a Deemed Liquidation Event set out in Subsections 2.4.1(b) or 2.4.1(c)):

 

 

(a)            liquidate, dissolve or wind-up the business and affairs of the Corporation, effect any Deemed Liquidation Event, consummate a SPAC Transaction that is not a Qualified SPAC Transaction (as defined below), or consent to any of the foregoing;

 

(b)            amend, alter or repeal in any material respect any provision of the Certificate of Incorporation or Bylaws of the Corporation;

 

(c)            create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock unless the same ranks junior to each series of Preferred Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends and redemption rights, or increase the authorized number of shares of any series of Preferred Stock or increase the authorized number of shares of any additional class or series of capital stock unless the same ranks junior to each series of Preferred Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends and redemption rights;

 

(d)            (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with any series of Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to such series of Preferred Stock in respect of any such right, preference or privilege, or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to any series of Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to or pari passu with such series of Preferred Stock in respect of any such right, preference or privilege;

 

(e)            purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock of the Corporation (other than on the Preferred Stock) other than (i) redemptions of or dividends or distributions on the Preferred Stock as expressly authorized herein, (ii) dividends or other distributions payable on the Common Stock solely in the form of additional shares of Common Stock, (iii) repurchases of stock from former employees, officers, directors, consultants or other persons who performed services for the Corporation or any subsidiary in connection with the cessation of such employment or service at or below the original purchase price or as approved by the Board of Directors, including the approval of a majority of the Preferred Directors (collectively, the “Applicable Directors”), or (iii) repurchases pursuant to that certain Seventh Amended and Restated Right of First Refusal and Co-Sale Agreement, dated on or about the Series D1 Original Issue Date, by and among the Corporation and the other parties named therein, as such may be amended from time to time;

 

(f)            create, or authorize the creation of, or issue, or authorize the issuance of any debt security, or permit any subsidiary to take any such action with respect to any debt security, if the aggregate indebtedness of the Corporation and its subsidiaries for borrowed money following such action would exceed $1,000,000, unless such debt security arises from commercial bank loans, loans from institutional or other third-party lenders, equipment leases, bank lines of credit and similar arrangements approved by the Board of Directors, including the approval of the Applicable Directors;

 

 

(g)           increase or decrease (other than by redemption or conversion) the total number of authorized shares of Common Stock or Preferred Stock or designated shares of any series of Preferred Stock;

 

(h)           increase or decrease the authorized number of directors constituting the Board of Directors;

 

(i)            acquire or sell any entity or assets of the Corporation in one or a series of related transactions if the purchase or sale price (as applicable) exceeds $1,000,000 in the aggregate (other than sales of the Corporation’s products in the ordinary course of business);

 

(j)            acquire any entity or assets if the target entity is not, or the acquired assets are not, as applicable, related to the principal product or products of the Corporation;

 

(k)           issue loans to, or make investments in, any of the Corporation’s joint ventures, partnerships or any other entity in which the Corporation holds equity securities, other than a wholly-owned subsidiary of the Corporation;

 

(l)            adopt, or materially amend, any employee equity incentive plan or other incentive or profit-sharing program;

 

(m)           issue stock options or warrants to purchase Common Stock or Preferred Stock (other than options or warrants issued to employees, consultants, directors or other service providers in accordance with the Corporation’s equity incentive plans approved by the Board of Directors, including the approval of the Applicable Directors);

 

(n)            materially change or alter the nature of the Corporation’s business; or

 

(o)           agree to do any of the foregoing.

 

3.5           Series A1 Preferred Stock Protection Provisions. At any time when at least 4,000,000 shares of Series A1 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization that affects such shares) are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation so as to adversely affect the powers, preferences or rights of the Series A1 Preferred Stock in a manner that is adverse and disproportionate relative to the effect on any other series of Preferred Stock without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of a majority of the outstanding Series A1 Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class.

 

 

3.6           Series B1 Preferred Stock Protection Provisions. At any time when at least 10,000,000 shares of Series B1 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization that affects such shares) are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of holders of at least 59% of the then outstanding shares of Series B1 Preferred Stock, voting as a separate class on an as-converted basis (the “Requisite Series B1 Holders”), given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class:

 

(a)            amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation so as to adversely affect the powers, preferences or rights of the Series B1 Preferred Stock in a manner that is adverse and disproportionate relative to the effect on any other series of Preferred Stock, including, but not limited to, any amendments, alterations or repeals of the definition of “Requisite Series B1 Holders”; or

 

(b)            (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with the Series B1 Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to the Series B1 Preferred Stock in respect of any such right, preference or privilege, or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to the Series B1 Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to or pari passu with the Series B1 Preferred Stock in respect of any such right, preference or privilege.

 

3.7           Series C1/C2 Preferred Stock Protection Provisions. At any time when at least 20,000,000 shares of Series C1 Preferred Stock and/or Series C2 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization that affects such shares) are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of holders of a majority of the then outstanding shares of Series C1 Preferred Stock (and Series C2 Preferred Stock, together with the Series C1 Preferred Stock, with respect to clauses (a) and (c) only), voting as a separate class on an as-converted basis, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class:

 

(a)            amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation so as to adversely affect the powers, preferences or rights of the Series C1 Preferred Stock and Series C2 Preferred Stock in a manner that is adverse and disproportionate relative to the effect on any other series of Preferred Stock, or amend any provision in Subsection 3.2 (including with respect to the Series C2/D2 Matters and the Series C2/D2 Voting Restriction);

 

(b)            increase or decrease the authorized number of shares of Series C1 Preferred Stock and/or Series C2 Preferred Stock; or

 

 

(c)            (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with the Series C1 Preferred Stock and Series C2 Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to the Series C1 Preferred Stock and Series C2 Preferred Stock in respect of any such right, preference or privilege, or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to the Series C1 Preferred Stock and Series C2 Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to or pari passu with the Series C1 Preferred Stock and Series C2 Preferred Stock in respect of any such right, preference or privilege.

 

3.8           Series D1/D2 Preferred Stock Protection Provisions. At any time when at least 4,500,000 shares of Series D1 Preferred Stock and/or Series D2 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization that affects such shares) are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of holders of a majority of the then outstanding shares of Series D1 Preferred Stock (and Series D2 Preferred Stock, together with the Series D1 Preferred Stock, with respect to clause (a), (c) and (d) only), voting as a separate class on an as-converted basis, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class:

 

(a)            amend, alter or repeal any provision of the Certificate of Incorporation or Bylaws of the Corporation so as to adversely affect the powers, preferences or rights of the Series D1 Preferred Stock and Series D2 Preferred Stock in a manner that is adverse and disproportionate relative to the effect on any other series of Preferred Stock;

 

(b)            increase or decrease the authorized number of shares of Series D1 Preferred Stock and/or Series D2 Preferred Stock;

 

(c)            (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with the Series D1 Preferred Stock and Series D2 Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to the Series D1 Preferred Stock and Series D2 Preferred Stock in respect of any such right, preference or privilege, or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to the Series D1 Preferred Stock and Series D2 Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to or pari passu with the Series D1 Preferred Stock and Series D2 Preferred Stock in respect of any such right, preference or privilege;

 

(d)            enter into or consummate any SPAC Transaction unless the agreement or plan of merger or consolidation or related agreements pursuant to which such SPAC Transaction is to be consummated provides that the consideration payable to the holders of the Series D1 Preferred Stock and/or Series D2 Preferred Stock in respect thereof shall be equal to or greater than the Series D1 Liquidation Preference or Series D2 Liquidation Preference, as applicable; or

 

 

 

    (e)            amend this Subsection 3.8.

 

4.         Optional Conversion. The holders of the Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

 

    4.1       Right to Convert.

 

4.1.1    Conversion Ratio. Each share of Series A1 Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing (x) the Series A1 Original Issue Price by (y) the Series A1 Conversion Price (as defined below) in effect at the time of conversion. Each share of Series B1 Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing (x) the Series B1 Original Issue Price by (y) the Series B1 Conversion Price (as defined below) in effect at the time of conversion. Each share of Series C1 Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing (x) the Series C1 Original Issue Price by (y) the Series C1 Conversion Price (as defined below) in effect at the time of conversion. Each share of Series D1 Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing (x) the Series D1 Original Issue Price by (y) the Series D1 Conversion Price (as defined below) in effect at the time of conversion. The Series C2/D2 Initial Holders (as defined in the Series C2/D2 Letter Agreement) shall have the right, at any time, to convert any shares of Series C2 Preferred Stock or Series D2 Preferred Stock then held by the Series C2/D2 Initial Holders into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing (x) the Series C2 Original Issue Price or Series D2 Original Issue Price, as applicable, by (y) the Series C2 Conversion Price or Series D2 Conversion Price (each as defined below), respectively, in effect at the time of conversion; provided, however, that, notwithstanding the foregoing, such conversion shall only be permitted if and to the extent that, following such conversion, all of the voting securities of the Corporation held by the Series C2/D2 Initial Holders would in the aggregate represent less than ten percent (10%) of the combined voting power of the Corporation’s outstanding voting securities. The “Series A1 Conversion Price” shall initially be equal to $1.00, the “Series B1 Conversion Price” shall initially be equal to $1.00, the “Series C1 Conversion Price” and “Series C2 Conversion Price” shall each initially be equal to $1.15, and the “Series D1 Conversion Price” and “Series D2 Conversion Price” shall each initially be equal to $3.60. The Series A1 Conversion Price, Series B1 Conversion Price, Series C1 Conversion Price, Series C2 Conversion Price, Series D1 Conversion Price and Series D2 Conversion Price are sometimes referred to herein, individually, as a/the “Conversion Price.” The initial Series A1 Conversion Price, Series B1 Conversion Price, Series C1 Conversion Price, Series C2 Conversion Price, Series D1 Conversion Price and Series D2 Conversion Price, and the rates at which shares of such series of Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided below.

 

 

4.1.2    Series C2/D2 Conversion. The Series C2/D2 Initial Holders shall have the right, at any time, to convert any shares of Series C2 Preferred Stock or Series D2 Preferred Stock held by the Series C2/D2 Initial Holders into an equal number of shares of Series C1 Preferred Stock or Series D1 Preferred Stock, respectively; provided, that, notwithstanding the foregoing, such conversion shall only be permitted if, following such conversion, all of the voting securities held by the Series C2/D2 Initial Holders would in the aggregate represent less than ten percent (10%) of the combined voting power of the Corporation’s outstanding voting securities. If there is more than one (1) Series C2/D2 Initial Holder, the conversion set out in this Subsection 4.1.2 shall be pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of the Certificate of Incorporation immediately prior to conversion.

 

4.1.3    Termination of Conversion Rights. In the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Preferred Stock.

 

   4.2      Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board of Directors of the Corporation, including the Applicable Directors. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.

 

    4.3       Mechanics of Conversion.

 

4.3.1    Notice of Conversion. In order for a holder of Preferred Stock to voluntarily convert shares of Preferred Stock into shares of Common Stock, such holder shall surrender the certificate or certificates for such shares of Preferred Stock (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any number of the shares of the Preferred Stock represented by such certificate or certificates and, if applicable, any event on which such conversion is contingent. Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such certificates (or lost certificate affidavit and agreement) and notice shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time, (i) issue and deliver to such holder of Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (ii) pay in cash such amount as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (iii) pay all declared but unpaid dividends on the shares of Preferred Stock converted.

 

 

4.3.2    Reservation of Shares. The Corporation shall at all times when any shares of Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation. Before taking any action which would cause an adjustment reducing one or more Conversion Prices below the then par value of the shares of Common Stock issuable upon conversion of the applicable series of Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price(s).

 

4.3.3    Effect of Conversion. All shares of Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Subsection 4.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly.

 

4.3.4    No Further Adjustment. Upon any such conversion, no adjustment to the applicable Conversion Price shall be made for any declared but unpaid dividends on the applicable series of Preferred Stock surrendered for conversion or on the Common Stock delivered upon conversion.

 

 

4.3.5    Taxes. The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Preferred Stock pursuant to this Section 4. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

 

    4.4       Adjustments to Conversion Prices for Diluting Issues.

 

4.4.1    Special Definitions. For purposes of this Article Fourth, the following definitions shall apply:

 

    (a)   “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

 

    (b)       “Series D1 Original Issue Date” shall mean the date on which the first share of Series D1 Preferred Stock was issued.

 

    (c)   “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.

 

    (d)       “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or, pursuant to Subsection 4.4.3 below, deemed to be issued) by the Corporation after the Series D1 Original Issue Date, other than (1) the following shares of Common Stock and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) and (2), collectively, “Exempted Securities”):

 

(i)

shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on Preferred Stock;

 

(ii)

shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Subsection 4.5, 4.6, 4.7 or 4.8;

 

(iii)

shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors;

 

(iv)

shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security;

 

 

(v)

shares of Common Stock, Options or Convertible Securities issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by the Board of Directors, including the Applicable Directors;

 

(vi)

shares of Common Stock, Options or Convertible Securities issued to suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions approved by the Board of Directors, including the Applicable Directors;

 

(vii)

shares of Common Stock, Options or Convertible Securities issued pursuant to the acquisition of another corporation by the Corporation by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, provided, that such issuances are approved by the Board of Directors, including the Applicable Directors;

 

(viii)

shares of Common Stock, Options or Convertible Securities issued in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by the Board of Directors, including the Applicable Directors;

 

(ix)

shares of Common Stock issued in transactions approved by the Board of Directors of the Corporation, including the Applicable Directors, which specifically states that such shares of Common Stock shall be Exempted Securities;

 

(x)

shares of Common Stock issued pursuant to the Corporation’s first underwritten public offering of its Common Stock under the Securities Act of 1933, as amended; or

 

 

(xi)

shares of Series D1 Preferred Stock or Series D2 Preferred Stock issued pursuant to the terms of the Series D1/D2 Preferred Stock Purchase Agreement, dated on or about the Series D1 Original Issue Date, by and among the Corporation and the purchasers of Series D1 Preferred Stock and/or Series D2 Preferred Stock party thereto.

 

4.4.2    No Adjustment of Conversion Price. No adjustment in the Series A1 Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from the holders of a majority of the outstanding shares of Series A1 Preferred Stock agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock. No adjustment in the Series B1 Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from the Requisite Series B1 Holders agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock. No adjustment in the Series C1 Conversion Price or Series C2 Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from holders of a majority of the outstanding shares of Series C1 Preferred Stock and Series C2 Preferred Stock, voting together as a single class, agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock. No adjustment in the Series D1 Conversion Price or Series D2 Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from holders of a majority of the outstanding shares of Series D1 Preferred Stock and Series D2 Preferred Stock, voting together as a single class, agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock.

 

4.4.3    Deemed Issue of Additional Shares of Common Stock.

 

    (a)       If the Corporation at any time or from time to time after the Series D1 Original Issue Date shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.

 

 

    (b)       If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to a Conversion Price pursuant to the terms of Subsection 4.4.4, are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Corporation upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the applicable Conversion Price computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such Conversion Price as would have been obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this clause (b) shall have the effect of increasing a Conversion Price to an amount which exceeds the lower of (i) the applicable Conversion Price in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (ii) the applicable Conversion Price that would have resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.

 

    (c)       If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to a Conversion Price pursuant to the terms of Subsection 4.4.4 (either because the consideration per share (determined pursuant to Subsection 4.4.5) of the Additional Shares of Common Stock subject thereto was equal to or greater than the applicable Conversion Price then in effect, or because such Option or Convertible Security was issued before the Series D1 Original Issue Date), are revised after the Series D1 Original Issue Date as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Subsection 4.4.3(a)) shall be deemed to have been issued effective upon such increase or decrease becoming effective.

 

    (d)       Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to a Conversion Price pursuant to the terms of Subsection 4.4.4, the applicable Conversion Price shall be readjusted to such Conversion Price as would have been obtained had such Option or Convertible Security (or portion thereof) never been issued.

 

 

    (e)       If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to a Conversion Price provided for in this Subsection 4.4.3 shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in clauses (b) and (c) of this Subsection 4.4.3). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to a Conversion Price that would result under the terms of this Subsection 4.4.3 at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the applicable Conversion Price that such issuance or amendment took place at the time such calculation can first be made.

 

4.4.4    Adjustment of Conversion Prices Upon Issuance of Additional Shares of Common Stock. In the event the Corporation shall at any time after the Series D1 Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Subsection 4.4.3), without consideration or for a consideration per share less than a Conversion Price in effect immediately prior to such issue, then the applicable Conversion Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest one-hundredth of a cent) determined in accordance with the following formula:

 

CP₂ = CP₁* (A + B) ÷ (A + C).

 

For purposes of the foregoing formula, the following definitions shall apply:

 

   (a)       “CP₂” shall mean the applicable Conversion Price in effect immediately after such issue of Additional Shares of Common Stock

 

   (b)     “CP₁” shall mean the applicable Conversion Price in effect immediately prior to such issue of Additional Shares of Common Stock;

 

    (c)       “A” shall mean the number of shares of Common Stock outstanding immediately prior to such issue of Additional Shares of Common Stock (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issue or upon conversion or exchange of Convertible Securities (including the Preferred Stock) outstanding (assuming exercise of any outstanding Options therefor) immediately prior to such issue);

 

    (d)       “B” shall mean the number of shares of Common Stock that would have been issued if such Additional Shares of Common Stock had been issued at a price per share equal to CP₁ (determined by dividing the aggregate consideration received by the Corporation in respect of such issue by CP₁); and

 

 

    (e)       “C” shall mean the number of such Additional Shares of Common Stock issued in such transaction.

 

4.4.5    Determination of Consideration. For purposes of Subsection 4.4.4, the consideration received by the Corporation for the issue of any Additional Shares of Common Stock shall be computed as follows:

 

    (a)       Cash and Property: Such consideration shall:

 

(i)

insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest;

 

(ii)

insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors of the Corporation, including the Applicable Directors; and

 

(iii)

in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (i) and (ii) above, as determined in good faith by the Board of Directors.

 

    (b)    Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Subsection 4.4.3, relating to Options and Convertible Securities, shall be determined by dividing

 

(i)

the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by

 

 

(ii)

the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.

 

4.4.6    Multiple Closing Dates. In the event the Corporation shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to a Conversion Price pursuant to the terms of Subsection 4.4.4, and such issuance dates occur within a period of no more than 90 days from the first such issuance to the final such issuance, then, upon the final such issuance, the applicable Conversion Price shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).

 

    4.5       Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the Series D1 Original Issue Date effect a subdivision of the outstanding Common Stock, the Conversion Prices in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Series D1 Original Issue Date combine the outstanding shares of Common Stock, the Conversion Prices in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

    4.6       Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Series D1 Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Prices in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the applicable Conversion Price then in effect by a fraction:

 

    (a)       the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

 

 

    (b)       the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing, (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Prices shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Prices shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (b) that no such adjustment shall be made if the holders of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Preferred Stock had been converted into Common Stock on the date of such event.

 

    4.7       Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Series D1 Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 1 do not apply to such dividend or distribution, then and in each such event the holders of Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Preferred Stock had been converted into Common Stock on the date of such event, subject to such dividend or other distribution having been ratified by the Board of Directors at the time of such dividend or distribution, as applicable (including by the approval of the Board of Directors of such dividend or distribution).

 

    4.8      Adjustment for Merger or Reorganization, etc. Subject to the provisions of Section 2, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not the Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Subsections 4.5, 4.6 or 4.7), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in the application of the provisions in this Section 4 with respect to the rights and interests thereafter of the holders of the Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the Conversion Prices) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Preferred Stock.

 

 

    4.9       Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of a Conversion Price pursuant to this Section 4, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than 10 days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of each applicable series of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which the applicable series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Preferred Stock (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the applicable Conversion Price then in effect, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of the applicable series of Preferred Stock.

 

    4.10     Notice of Record Date. In the event:

 

  (a)     the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

 

   (b)     of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or

 

    (c)       of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,

 

then, and in each such case, the Corporation will send or cause to be sent to the holders of the Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Unless waived by the Requisite Holders (which, for the purpose of this Subsection 4.10, is not subject to the Series C2/D2 Voting Restriction), such notice shall be sent at least 10 days prior to the record date or effective date for the event specified in such notice.

 

 

5.         Mandatory Conversion.

 

    5.1       Trigger Events.

 

    (a)      Immediately prior to (i) the closing of the sale of shares of Common Stock to the public at a price of at least $3.60 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock) in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $100,000,000 of gross proceeds to the Corporation (a “Qualified Public Offering”) or (ii) the consummation of a Qualified SPAC Transaction, (A) each share of Preferred Stock then outstanding shall automatically be converted into a number of shares of Common Stock at the then effective conversion rate as calculated pursuant to Subsection 4.1.1 and (B) such shares may not be reissued by the Corporation. As used herein, a “Qualified SPAC Transaction” shall mean a SPAC Transaction (i) that ascribes a pre-transaction equity value of the Common Stock of at least $3.60 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock), (ii) that results in gross proceeds to the Company, the SPAC or its successor entity in such transaction (through an equity financing transaction, including a “PIPE” transaction, consummated in connection with the closing of the transaction or from the cash held by the SPAC, after taking into account any redemptions from the SPAC’s trust account) of at least $100,000,000, and (iii) immediately following which the common stock or share capital of the SPAC or its successor entity is listed on the Nasdaq Stock Market, the New York Stock Exchange or another exchange or marketplace approved by the Board of Directors.

 

    (b)      With respect to all shares of Preferred Stock, upon the date and time, or the occurrence of an event, specified by vote or written consent of (i) the Requisite Holders (subject to the Series C2/D2 Voting Restriction) and (ii) the Requisite Series D1/D2 Holders (subject to the Series C2/D2 Voting Restriction) (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”), (A) all outstanding shares of Preferred Stock shall automatically be converted into shares of Common Stock, at the then effective conversion rate as calculated pursuant to Subsection 4.1.1 and (B) such shares may not be reissued by the Corporation (an automatic conversion event pursuant to Subsection 5.1(a) or this Subsection 5.1(b), an “Automatic Conversion Event”).

 

    (c)       For the avoidance of doubt, upon automatic conversion of all outstanding shares of Preferred Stock into shares of Common Stock immediately prior to the consummation of a Qualified SPAC Transaction pursuant to Subsection 5.1(a), all rights of the Preferred Stock under Section 2 with respect to preferential payments (or any other payments that may otherwise differ from distributions to Common Stock) will terminate.

 

   (d)      Notwithstanding the foregoing provisions of Subsection 5.1(a) or 5.1(b), no shares of Series C2 Preferred Stock or Series D2 Preferred Stock shall automatically convert into any other class of capital stock of the Corporation unless and until the Corporation has authorized a sufficient number of shares of Non-Voting Common Stock (as defined in the Series C2/D2 Letter Agreement) to support the conversion of all such shares of Series C2 Preferred Stock and Series D2 Preferred Stock into Non-Voting Common Stock.

 

 

    (e)       If the voting securities held by the Series C2/D2 Initial Holders would otherwise represent at any time prior to a Restriction Removal Event ten percent (10%) or more of the combined voting power of the Corporation’s outstanding voting securities, then, upon such occurrence, the minimum whole number of shares of Series C1 Preferred Stock and/or D1 Preferred Stock held by the Series C2/D2 Initial Holder as is required to be converted into shares of Series C2 Preferred Stock or Series D2 Preferred Stock, respectively, such that the voting securities held by the Series C2/D2 Initial Holders after such conversion would represent less than ten percent (10%) of the combined voting power of the Corporation’s outstanding voting securities at any time prior to a Restriction Removal Event, shall be automatically converted into an equal number of fully paid and non-assessable shares of Series C2 Preferred Stock or Series D2 Preferred Stock, as applicable. If there is more than one (1) Series C2/D2 Initial Holder, the conversion set out in this Subsection 5.1(e) shall be pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of the Certificate of Incorporation immediately prior to conversion.

 

    (f)        With respect to the Series C2 Preferred Stock and Series D2 Preferred Stock:

 

(i)

Upon the sale, assignment, transfer or other disposition of any shares of Series C2 Preferred Stock to a person or entity other than the Series C2/D2 Initial Holder, each such outstanding share of Series C2 Preferred Stock shall be automatically converted into one fully paid and non-assessable share of Series C1 Preferred Stock. Upon the occurrence of a Restriction Removal Event, each share of Series C2 Preferred Stock then outstanding shall be automatically converted into one fully paid and non-assessable share of Series C1 Preferred Stock.

 

(ii)

Upon the sale, assignment, transfer or other disposition of any shares of Series D2 Preferred Stock to a person or entity other than the Series C2/D2 Initial Holders, each such outstanding share of Series D2 Preferred Stock shall be automatically converted into one fully paid and non-assessable share of Series D1 Preferred Stock. Upon the occurrence of a Restriction Removal Event, each share of Series D2 Preferred Stock then outstanding shall be automatically converted into one fully paid and non-assessable share of Series D1 Preferred Stock.

 

 

    5.2       Procedural Requirements. All holders of record of shares of Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to this Section 5. Such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of shares of Preferred Stock shall surrender his, her or its certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice. If so required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his, her or its attorney duly authorized in writing. All rights with respect to the Preferred Stock converted pursuant to Subsection 5.1, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender the certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of their certificate or certificates (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Subsection 5.2. As soon as practicable after the Mandatory Conversion Time and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall issue and deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof, together with cash as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such converted Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly.

 

6.         Redemption.

 

    6.1       General. Unless prohibited by Delaware law governing distributions to stockholders, shares of Preferred Stock shall be redeemed by the Corporation (the “General Redemption”) at a price equal to, in the case of Series A1 Preferred Stock, the Series A1 Liquidation Preference per share (the “General Series A1 Redemption Price”), in the case of Series B1 Preferred Stock, the Series B1 Liquidation Preference per share (the “General Series B1 Redemption Price”), in the case of the Series C1 Preferred Stock, the Series C1 Liquidation Preference per share (the “General Series C1 Redemption Price”), in the case of the Series C2 Preferred Stock, the Series C2 Liquidation Preference per share (the “General Series C2 Redemption Price”), in the case of the Series D1 Preferred Stock, the Series D1 Liquidation Preference per share (the “General Series D1 Redemption Price”), and in the case of the Series D2 Preferred Stock, the Series D2 Liquidation Preference per share (the “General Series D2 Redemption Price” and, together with the General Series A1 Redemption Price, the General Series B1 Redemption Price, the General Series C1 Redemption Price and the General Series D1 Redemption Price, the “General Redemption Prices”), in three annual installments commencing not more than sixty (60) days after receipt by the Corporation of written notice, at any time on or after the fifth (5^th) anniversary of the Series D1 Original Issue Date, from the Requisite Holders (subject to the Series C2/D2 Voting Restriction), requesting redemption of all shares of Preferred Stock (the “General Redemption Request”); provided that, if such redemption requires approval of the Board of Directors, then such redemption shall have been ratified by the Board of Directors at the time of redemption (including by the approval of the Board of Directors of such redemption), and in any event such redemption shall be made pursuant to and in accordance with this Subsection 6.1, Subsection 6.3 and Subsection 6.4 of the Certificate of Incorporation, which has been approved by the Board of Directors, and any amendments or changes to this Subsection 6.1, Subsection 6.3 or Subsection 6.4 shall require, in addition to any stockholder approval required under the Certificate of Incorporation, the approval of the Board of Directors. Upon receipt of the General Redemption Request, the Corporation shall apply all of its assets to any such redemption, and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders. The date of each such installment shall be referred to as a “General Redemption Date”. On the first General Redemption Date, the Corporation shall redeem the shares of Preferred Stock in the amount equal to one-third (1/3) of the aggregate amount of the General Redemption Prices payable calculated as of the date of the first General Redemption Date. On the second General Redemption Date, the Corporation shall redeem the shares of Preferred Stock in the amount equal to fifty percent (50%) of the aggregate amount of the General Redemption Prices unpaid calculated as of the second General Redemption Date. On the third General Redemption Date, the Corporation shall redeem the shares of Preferred Stock in the amount equal to the aggregate amount of the General Redemption Prices unpaid calculated as of the third General Redemption Date. The Corporation shall redeem the shares of Preferred Stock in the following order of priority:

 

 

6.1.1    on each General Redemption Date, first among the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock, on a pari passu basis and pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of the Certificate of Incorporation immediately prior to such General Redemption Date, until (v) the holders of shares of Series D1 Preferred Stock have received an aggregate per share amount equal to the General Series D1 Redemption Price, (w) the holders of shares of Series D2 Preferred Stock have received an aggregate per share amount equal to the General Series D2 Redemption Price, (x) the holders of shares of Series C1 Preferred Stock have received an aggregate per share amount equal to the General Series C1 Redemption Price, (y) the holders of shares of Series C2 Preferred Stock have received an aggregate per share amount equal to the General Series C2 Redemption Price and (z) the holders of shares of Series B1 Preferred Stock have received an aggregate per share amount equal to the General Series B1 Redemption Price. If upon any such General Redemption Date, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock the full amount to which they shall be entitled under this Subsection 6.1.1, the holders of shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

 

6.1.2    second, on (x) each General Redemption Date commencing on such General Redemption Date in which all of the shares of Series D1 Preferred Stock, Series D2 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock and Series B1 Preferred Stock have been redeemed in full pursuant to Subsection 6.1.1, and (y) each subsequent General Redemption Date (if applicable), among the holders of shares of Series A1 Preferred Stock, on a pari passu basis and pro rata based on the number of shares held by each such holder, until the holders of shares of Series A1 Preferred Stock have received an aggregate per share amount equal to the General Series A1 Redemption Price. If upon any General Redemption Date, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series A1 Preferred Stock the full amount to which they shall be entitled under this Subsection 6.1.2, the holders of shares of Series A1 Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

If, on any General Redemption Date, Delaware law governing distributions to stockholders prevents the Corporation from redeeming all shares of Preferred Stock to be redeemed, the Corporation shall ratably redeem the maximum number of shares that it may redeem consistent with such law, and shall redeem the remaining shares as soon as it may lawfully do so under such law.

 

    6.2     Special Redemption Right. In addition to the redemption right provided in Subsection 6.1, and unless prohibited by Delaware law governing distributions to stockholders, in the event that (i) the Corporation breaches any of the Specified Conditions (as defined in the amended and restated letter agreement between Colony Harvest Ltd (“Colony Harvest”) and the Corporation, entered into on the April 28, 2020 (the “Colony Harvest Letter”)) and (ii) the Corporation has not cured such breach by the date that is one (1) year following written notice to the Corporation specifying that such breach has occurred (the “Cure Period”), then Colony Harvest shall have the right to request in writing (the “Special Redemption Request”) redemption of all shares of Preferred Stock outstanding and held by Colony Harvest as of the first day following the Cure Period (the “Special Redemption”) at a price equal to two times (2x) the applicable Original Issue Price, plus any applicable Accruing Dividends accrued but unpaid on such shares of Preferred Stock, plus any other dividends declared but unpaid on such shares of Preferred Stock (collectively, the “Special Redemption Price” and, together with the General Redemption Prices and the Liquidation Redemption Prices, each a “Redemption Price”). The Special Redemption Price shall be payable in three annual installments commencing not more than sixty (60) days after receipt by the Corporation of the Special Redemption Request. The date of each such installment shall be referred to as a “Special Redemption Date” (and, together with the General Redemption Date and the Liquidation Redemption Dates, each a “Redemption Date”). In the event the Special Redemption Request is made in accordance with the terms of this Subsection 6.2, the Corporation shall notify all other holders of Preferred Stock of the Special Redemption Request (the “Special Redemption Notice”) within ten (10) days after receipt of such request. The Requisite Holders (subject to the Series C2/D2 Voting Restriction) may elect for all holders of Preferred Stock to participate in the Special Redemption by delivering notice (the “Participation Notice”) to the Corporation and each other holder of Preferred Stock within ten (10) days after the Corporation’s delivery of the Special Redemption Notice. In such case, subject to the next sentence, all holders of Preferred Stock then outstanding shall participate in the Special Redemption alongside Colony Harvest on a pari passu basis pursuant to the applicable provisions of this Section 6. Notwithstanding the foregoing, if the Corporation receives, on or prior to the tenth (10^th) day following the date of delivery of the Participation Notice to a holder of Preferred Stock, written notice from such holder that such holder elects to be excluded from the Special Redemption provided in this Subsection 6.2, then the shares of Preferred Stock registered on the books of the Corporation in the name of such holder at the time of the Corporation’s receipt of such notice shall not be redeemed pursuant to the provisions of this Subsection 6.2. If on any Special Redemption Date Delaware law governing distributions to stockholders prevents the Corporation from redeeming all shares of Preferred Stock to be redeemed, the Corporation shall ratably redeem the maximum number of shares that it may redeem consistent with such law, and shall redeem the remaining shares as soon as it may lawfully do so under such law.

 

 

    6.3       Redemption Notice. The Corporation shall send written notice of the mandatory redemption (the “Redemption Notice”) to each holder of record of Preferred Stock not less than 40 days prior to each Redemption Date. Each Redemption Notice shall state:

 

   (a)     the number of shares of Preferred Stock held by the holder that the Corporation shall redeem on the Redemption Date specified in the Redemption Notice;

 

    (b)       the Redemption Date and the applicable Redemption Price(s);

 

    (c)       the date upon which the holder’s right to convert such shares terminates (as determined in accordance with Subsection 4.1); and

 

    (d)       that the holder is to surrender to the Corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares of Preferred Stock to be redeemed.

 

    6.4       Interest. If any shares of Preferred Stock are not redeemed for any reason on any Redemption Date, all such unredeemed shares shall remain outstanding and entitled to all the rights and preferences provided herein, and the Corporation shall pay interest on the Redemption Price applicable to such unredeemed shares at an aggregate per annum rate equal to ten percent (10%), with such interest to accrue daily in arrears and be compounded annually; provided, however, that in no event shall such interest exceed the maximum permitted rate of interest under applicable law (the “Maximum Permitted Rate”), provided, however, that the Corporation shall take all such actions as may be necessary, including without limitation, making any applicable governmental filings, to cause the Maximum Permitted Rate to be the highest possible rate. In the event any provision hereof would result in the rate of interest payable hereunder being in excess of the Maximum Permitted Rate, the amount of interest required to be paid hereunder shall automatically be reduced to eliminate such excess; provided, however, that any subsequent increase in the Maximum Permitted Rate shall be retroactively effective to the applicable Redemption Date to the extent permitted by law.

 

    6.5       Surrender of Certificates; Payment. On or before the applicable Redemption Date, each holder of shares of Preferred Stock to be redeemed on such Redemption Date, unless such holder has exercised his, her or its right to convert such shares as provided in Section 4, shall surrender the certificate or certificates representing such shares (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the applicable Redemption Price for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof. In the event less than all of the shares of Preferred Stock represented by a certificate are redeemed, a new certificate representing the unredeemed shares of Preferred Stock shall promptly be issued to such holder.

 

 

    6.6       Rights Subsequent to Redemption. If the Redemption Notice shall have been duly given, and if on the applicable Redemption Date the applicable Redemption Price payable upon redemption of the shares of Preferred Stock to be redeemed on such Redemption Date is paid or tendered for payment or deposited with an independent payment agent so as to be available therefor in a timely manner, then notwithstanding that the certificates evidencing any of the shares of Preferred Stock so called for redemption shall not have been surrendered, dividends with respect to such shares of Preferred Stock shall cease to accrue after such Redemption Date and all rights with respect to such shares shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the applicable Redemption Price without interest upon surrender of their certificate or certificates therefor.

 

    6.7       Suspension of Redemption Rights. Notwithstanding anything in this Certificate of Incorporation to the contrary, no shares of Preferred Stock shall have any rights of redemption until, and no Redemption Notice may be delivered, before the date that is 180 days after the date on which all Obligations (as defined in that certain loan and security agreement among the Corporation, Kennedy Lewis Management LP, in its capacity as collateral agent for the lenders party thereto (in such capacity, the “Collateral Agent”), and the other parties thereto, dated on or about May 14, 2020 (as amended and/or restated, supplemented or otherwise modified from time to time, the “Loan Facility”)) have been paid in full in cash and the Loan Facility has been terminated pursuant to the terms therein (the “Loan Restriction Qualification”). For the avoidance of doubt, all shares of Preferred Stock, including any such shares that may be issued or subsequently transferred or assigned following May 14, 2020, shall be subject to the Loan Restriction Qualification. The holders of Preferred Stock and the Corporation acknowledge that the foregoing provisions are for the benefit of the Collateral Agent and that the Collateral Agent shall have rights as a third party beneficiary hereunder.

 

7.         Redeemed or Otherwise Acquired Shares. Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following redemption.

 

 

8.         Waiver. Except as otherwise expressly set forth herein, any of the rights, powers, preferences and other terms of the Preferred Stock set forth herein may be waived on behalf of all holders of Preferred Stock by the affirmative written consent or vote of the Requisite Holders (subject to the Series C2/D2 Voting Restriction); provided that (a) any waiver that would adversely affect the Series A1 Preferred Stock in a manner differently from the other series of Preferred Stock shall require the affirmative written consent of holders of a majority of the outstanding shares of Series A1 Preferred Stock, (b) any waiver that would adversely affect the Series B1 Preferred Stock in a manner differently from the other series of Preferred Stock shall require the affirmative written consent of the Requisite Series B1 Holders, (c) any waiver that would adversely affect the Series C1 Preferred Stock and Series C2 Preferred Stock in a manner differently from the other series of Preferred Stock shall require the affirmative written consent of holders of a majority of the Series C1 Preferred Stock and Series C2 Preferred Stock, voting together as a single class, (d) any waiver that would adversely affect the Series D1 Preferred Stock and Series D2 Preferred Stock in a manner differently from the other series of Preferred Stock shall require the affirmative written consent of holders of a majority of the Series D1 Preferred Stock and Series D2 Preferred Stock, voting together as a single class, and (e) any waiver of Subsection 6.2 hereof shall require the prior written consent of each of the parties to the Colony Harvest Letter.

 

9.         Notices. Any notice required or permitted by the provisions of this Article Fourth to be given to a holder of shares of Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and shall be deemed sent upon such mailing or electronic transmission.

 

    FIFTH: Subject to any additional vote required by the Certificate of Incorporation or Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

 

   SIXTH: Subject to any additional vote required by the Certificate of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation.

 

    Unless otherwise required by applicable law or this Certificate of Incorporation, each director shall have one vote on all matters presented to the Board of Directors for consideration and voting by the directors. If the Board of Directors has an even number of directors then in office and considers and votes on any matter at a duly-convened meeting to consider such matter and (i) all of the directors then in office are present and vote at such duly convened meeting, (ii) such vote results in an equal number of the directors voting in favor of such matter and against such matter (a “Deadlock”), and (iii) approval of such matter requires a majority vote in favor of such matter by the directors present at such meeting, then in such case the director then serving as the Corporation’s Chief Executive Officer shall have the power and authority to cast an additional vote on such matter for the purpose of breaking the Deadlock.

 

    With respect to any committee established by the Board of Directors, unless otherwise required by applicable law, each director serving on such committee shall have one vote on all matters presented to such committee for its consideration and voting by the directors who are members of such committee.

 

    SEVENTH: Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

 

    EIGHTH: Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

 

 

    NINTH: To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article Ninth to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended.

 

    Any repeal or modification of the foregoing provisions of this Article Ninth by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

 

    TENTH: To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law.

 

    Any amendment, repeal or modification of the foregoing provisions of this Article Tenth shall not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification.

 

    ELEVENTH: The Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any Excluded Opportunity. An “Excluded Opportunity” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any partner, member, director, stockholder, employee or agent of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, “Covered Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person in such Covered Person’s capacity as a director of the Corporation.

 

* * *

 

    3.        That the foregoing amendment and restatement was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the General Corporation Law.

 

 

    4.        That this Eighth Amended and Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation’s Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law.

 

[Remainder of Page Intentionally Left Blank]

 

 

    IN WITNESS WHEREOF, this Eighth Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on this 9th day of March, 2021.

 

	By:	/s/ Robert Spignesi
		President and Chief Executive Officer

 

Exhibit 3.2

 

BYLAWS

 

OF

 

RAPID MICRO BIOSYSTEMS, INC.

 

ARTICLE 1

 

OFFICES

 

SECTION 1.01.    Registered Office. The registered office of Rapid Micro Biosystems, Inc., a Delaware corporation (the "Corporation"), in the State of Delaware shall be located at 1209 Orange Street, in the City of Wilmington, County of New Castle. The name and of the Corporation's registered agent at such address is The Corporation Trust Company.

 

SECTION 1.02.    Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

 

SECTION 1.03.    Books. The books of the Corporation may be kept within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

 

ARTICLE 2

 

MEETINGS OF STOCKHOLDERS

 

SECTION 2.01.   Time and Place of Meetings. (a) All meetings of stockholders shall be held at such place, either within or without the State of Delaware, on such date and at such time as may be determined from time to time by the Board of Directors ( or the Chairman in the absence of a designation by the Board of Directors).

 

(b)       The Board of Directors, in its sole discretion, may determine that such meetings be held solely by means of remote communication. For any meeting of stockholders to be held by remote communication, the Corporation shall (i) implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by remote communication is a stockholder or proxyholder, (ii) implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

 

 

SECTION 2.02.    Annual Meetings. An annual meeting of stockholders, commencing with the year 2007 shall be held for the election of directors and for the transaction of such other business as may properly be brought before such meeting. Stockholders may, unless the Certificate of Incorporation otherwise provides, act by written consent to elect directors; provided, however, that, if such consent is less than unanimous, such action by written consent may be in lieu of holding an annual meeting only if all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.

 

SECTION 2.03.    Special Meetings. Special meetings of stockholders for any proper purpose or purposes may be called at any time by the Board of Directors or the Chairman of the Board of Directors and shall be called by the Secretary of the Corporation whenever the stockholders of record owning a majority of the then issued and outstanding capital stock of the Corporation entitled to vote on matters to be submitted to stockholders of the Corporation shall request therefor (either by written instrument signed by a majority, by resolution adopted by a vote of the majority or by a ballot submitted by electronic transmission, provided that any such electronic transmission shall set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxyholder). Any such written request shall state a proper purpose or purposes of the meeting and shall be delivered to the President or Secretary of the Corporation.

 

SECTION 2.04.    Notice of Meetings and Adjourned Meetings; Waivers of Notice. (a) Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting of stockholders shall be given which shall state the hour, means of remote communication, if any, date and place, if any, thereof, and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall, and in the case of an annual meeting may, also be stated in such notice. Unless otherwise provided by law, such notice shall be delivered either personally or by mail, not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder of record entitled to vote at such meeting. Unless these bylaws otherwise require, when a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

(b)         A written waiver of any such notice signed by the person entitled thereto, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of an individual at a meeting in person, by proxy, or by remote communication shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

 

 

SECTION 2.05.    Quorum. Unless otherwise provided under the Certificate of Incorporation or these bylaws and subject to Delaware Law, the presence, in person, by proxy, or by remote communication, of the holders of record of a majority of the then issued and outstanding capital stock of the Corporation entitled to vote at a meeting of stockholders shall be necessary and sufficient to constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, any officer entitled to preside at or act as secretary of a meeting of stockholders shall adjourn the meeting, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified.

 

SECTION 2.06.   Voting and Proxies. (a) Unless otherwise provided in the Certificate of Incorporation and subject to Delaware Law, the holder of Common Stock of the Corporation shall be entitled to one vote for each then issued and outstanding share of Common Stock held by such stockholder. Any share of Preferred Stock of the Corporation, unless otherwise provided for in the Certificate of Incorporation or a certificate of designation, and any share of capital stock of the Corporation held by the Corporation shall have no voting rights. Unless otherwise provided in Delaware Law, the Certificate of Incorporation or these bylaws, the affirmative vote of a majority of the shares of Common Stock of the Corporation present, in person, by means of remote communication, or by written proxy, at a meeting of stockholders and entitled to vote on the subject matter shall be the act of the stockholders.

 

(b)         Any stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to a corporate action in writing without a meeting may authorize another person or persons to act for him by written proxy, provided that the instrument authorizing such proxy to act shall have been executed in writing (which shall include faxing, telegraphing or cabling) or by electronic transmission by the stockholder himself or by such stockholder's duly authorized attorney and no such proxy shall be voted or acted upon after three (3) years from its date of authorization, unless the proxy provides for a longer period.

 

SECTION 2.07.    Action by Consent. (a) Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding capital stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to the Corporation as provided in Section 2.07(b).

 

 

(b)         Every written consent shall bear the date of signature of each stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section and Delaware Law to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested.

 

(c)         A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purpose of this Section 2.07, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (i) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder, and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the Corporation by delivery to its registered office, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office for written consents shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram or other electronic transmission may be otherwise delivered to the principal place of business of the Corporation or to an office or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the Board of Directors.

 

(d)        Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

 

SECTION 2.08.    Organization. At each meeting of stockholders, the Chairman of the Board of Directors, if one shall have been elected, or in his absence or if one shall not have been elected, the director designated by the vote of the majority of the shareholders present at such meeting, shall act as chairman of the meeting. The Secretary of the Corporation (or in his absence or inability to act, the person whom the chairman of the meeting shall appoint secretary of the meeting) shall act as secretary of the meeting and keep the minutes thereof.

 

SECTION 2.09.    Order of Business. The order of business at all meetings of stockholders shall be as determined by the chairman of the meeting.

 

 

SECTION 2.10.   Inspectors of Election. (a) The Board of Directors, in advance of any meeting of the stockholders, may appoint one or more inspectors to act at the meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act or if inspectors shall not have been so appointed, the person presiding at a meeting of the stockholders may, and on the request of any stockholder entitled to vote thereat shall, appoint one or more inspectors. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his or her ability.

 

(b)         The inspectors, if so appointed, shall determine the number of shares of capital stock outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the person presiding at the meeting or any stockholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, question or matter determined by them and execute a certificate of any fact found by them. No director or candidate for office shall act as an inspector of an election of directors.

 

SECTION 2.11.    Lists of Stockholders. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the address of each stockholder and the number and class of shares held by each. Nothing contained in this Section 2.11 shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

 

 

ARTICLE 3

 

DIRECTORS

 

SECTION 3.01.    General Powers. Except as otherwise provided in Delaware Law or the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

 

SECTION 3.02.    Number, Election and Term of Office. (a) The number of directors which shall constitute the whole Board shall be fixed from time to time by resolution of the Board of Directors but shall not be fewer than one (1) nor more than twelve (12). The directors shall be elected at the annual meeting of the stockholders, and each director so elected shall hold office until his successor is elected and qualified or until his earlier death, resignation or removal. Directors need not be stockholders.

 

(b)         All elections of directors shall be held by written ballot, except as provided in the Certificate of Incorporation, or Section 2.02 and Section 3.12 herein; if authorized by the Board of Directors, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxy holder.

 

SECTION 3.03.    Quorum and Manner of Acting. Unless the Certificate of Incorporation or these bylaws require a greater number, a majority of the total number of directors shall constitute a quorum for the transaction of business, and the affirmative vote of a majority of the directors deemed to be present at a meeting at which a quorum is present shall be the act of the Board of Directors. When a meeting is adjourned to another time or place, if any (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Board of Directors may transact any business which might have been transacted at the original meeting. If a quorum shall not be present at any meeting of the Board of Directors the directors present thereat shall adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

 

SECTION 3.04.   Time and Place of Meetings. The Board of Directors shall hold its meetings at such place, either within or without the State of Delaware, or by remote communication, and at such time as may be determined from time to time by the Board of Directors (or the Chairman in the absence of a determination by the Board of Directors).

 

SECTION 3.05.   Annual Meeting. The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each annual meeting of stockholders, on the same day and at the same place where such annual meeting shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such place either within or without the State of Delaware, or by remote communication, on such date and at such time as shall be specified in a notice thereof given as hereinafter provided in Section 3.07 herein or in a waiver of notice thereof signed by any director who chooses to waive the requirement of notice.

 

 

SECTION 3.06.    Regular Meetings. After the place and time of regular meetings of the Board of Directors shall have been determined and notice thereof shall have been once given to each member of the Board of Directors, regular meetings may be held without further notice being given. Regular meetings shall be held at least quarterly for each calendar year.

 

SECTION 3.07.   Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board or the President and shall be called by the Chairman of the Board, President or Secretary on the written request of a majority of the directors. Notice of special meetings of the Board of Directors shall be given to each director at least one (1) day before the date of the meeting in such manner as is determined by the Board of Directors. A written waiver of any such notice, signed by the director entitled hereto, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

 

SECTION 3.08.   Committees. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors shall establish and maintain a compensation committee, a budget committee and an audit committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by Delaware Law to be submitted to the stockholders for approval, (ii) adopting, amending or repealing any bylaw of the Corporation, (iii) amending the Certificate of Incorporation, (iv) adopting an agreement of merger or consolidation, (v) recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, or (vi) recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution and unless the resolution of the Board of Directors or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

 

 

SECTION 3.09.    Action by Consent. Unless otherwise restricted by the Certificate of Incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of the Board, or committee. Such filings shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

SECTION 3.10.   Telephonic or Electronic Meetings. Unless otherwise restricted by the Certificate of Incorporation or these bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or such committee, as the case may be, by means of conference telephone, remote communication, or similar communications equipment by means of which all persons participating in the meeting can hear, speak, and/or communicate with each other, and such participation in a meeting shall constitute presence in person at the meeting.

 

SECTION 3.11.    Resignation. Any director may resign at any time by giving written notice to the Board of Directors or to the Secretary of the Corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

SECTION 3.12.    Vacancies. Unless otherwise provided in the Certificate of Incorporation, vacancies and newly created directorships resulting from any increase in the authorized number of directors to be elected by all the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Each director so chosen shall hold office until his successor is elected and qualified, or until his earlier death, resignation or removal. If there are no directors in office, then an election of directors may be held in accordance with Delaware Law. Unless otherwise provided in the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in the filling of other vacancies.

 

SECTION 3.13.    Removal. Any director or the entire Board of Directors may be removed, with or without cause, at any time by the affirmative vote of the holders of a majority of the outstanding capital stock of the Corporation entitled to vote and the vacancies thus created may be filled in accordance with Section 3.12 herein.

 

SECTION 3.14.   Compensation. Unless otherwise restricted by the Certificate of Incorporation or these bylaws, the Board of Directors shall have authority to fix the compensation of directors, including fees and reimbursement of expenses.

 

 

ARTICLE  4

 

OFFICERS

 

SECTION 4.01.    Title. The principal officers of the Corporation shall be a President, one or more Vice Presidents, a Treasurer and a Secretary, and such other officers with such other titles as the Board of Directors shall determine. One person may hold the offices and perform the duties of any two or more of said offices.

 

SECTION 4.02.    Election, Term of Office and Remuneration. The principal officers of the Corporation shall be elected annually by the Board of Directors at the annual meeting thereof. Each such officer shall hold office until his successor is elected and qualified, or until his earlier death, resignation or removal. The remuneration of all officers of the Corporation shall be fixed by the Board of Directors. Any vacancy in any office shall be filled in such manner as the Board of Directors shall determine.

 

SECTION 4.03.    Subordinate Officers. In addition to the principal officers enumerated in Section 4.01 herein, the Corporation may have one or more Assistant Treasurers, Assistant Secretaries and Assistant Controllers and such other subordinate officers, agents and employees as the Board of Directors may deem necessary, each of whom shall hold office for such period as the Board of Directors may from time to time determine. The Board of Directors may delegate to any principal officer the power to appoint and to remove any such subordinate officers, agents or employees.

 

SECTION 4.04.    Removal. Except as otherwise permitted with respect to subordinate officers, any officer may be removed, with or without cause, at any time, by resolution adopted by the Board of Directors.

 

SECTION 4.05.    Resignations. Any officer may resign at any time by giving written notice to the Board of Directors ( or to a principal officer if the Board of Directors has delegated to such principal officer the power to appoint and to remove such officer). The resignation of any officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

SECTION 4.06.    Powers and Duties. The officers of the Corporation shall have such powers and perform such duties incident to each of their respective offices and such other duties as may from time to time be conferred upon or assigned to them by the Board of Directors.

 

SECTION 4.07.    President and Vice-Presidents. The President shall be the chief executive officer of the Corporation, shall preside at all meetings of the stockholders and the Board of Directors unless a Chairman or Vice-chairman of the Board is elected by the Board, empowered to preside, and present at such meeting, shall have general and active management of the business of the Corporation and general supervision of its officers, agents and employees, and shall see that all orders and resolutions of the Board of Directors are carried into effect. In the absence of the President or in the event of his or her inability or refusal to act, the Vice-President if any (or if there be more than one Vice-President, the Vice-Presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice-President the title of Executive Vice-President, Senior Vice-President or any other title selected by the Board of Directors.

 

 

SECTION 4.08.    Secretary and Assistant Secretaries. The Secretary shall attend all meetings of the Board of Directors and of the stockholders and record all the proceedings of such meetings in a book to be kept for that purpose, shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, shall maintain a stock ledger and prepare lists of stockholders and their addresses as required and shall have custody of the corporate seal which the Secretary or any Assistant Secretary shall have authority to affix to any instrument requiring it and attest by any of their signatures. The Board of Directors may give general authority to any other officer to affix and attest the seal of the Corporation. The Assistant Secretary if any ( or if there by more than one, the Assistant Secretaries in the order determined by the Board of Directors or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of the Secretary's inability or refusal to act, perform the duties and exercise the powers of the Secretary.

 

SECTION 4.09.    Treasurer and Assistant Treasurers. The Treasurer shall have the custody of the corporate funds and securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors or the President, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or whenever they may require it, an account of all transactions and of the financial condition of the Corporation. The Assistant Treasurer if any ( or if there be more than one, the Assistant Treasurers in the order determined by the Board of Directors or if there be no such determination, then in the order of their election) shall, in the absence of the Treasurer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Treasurer.

 

SECTION 4.10.    Bonded Officers. The Board of Directors may require any officer to give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors upon such terms and conditions as the Board of Directors may specify, including without limitation a bond for the faithful performance of the duties of such officer and for the restoration to the Corporation of all property in his or her possession or control belonging to the Corporation.

 

 

ARTICLE 5

 

EXECUTION OF INSTRUMENTS AND DEPOSIT OF CORPORATE FUNDS

 

SECTION 5.01.    Execution of Instruments Generally. The Board of Directors may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation, and such authorization may be general or confined to specific instances.

 

SECTION 5.02.    Borrowing. No loans or advance shall be obtained or contracted for, by or on behalf of the Corporation and no negotiable paper shall be issued in its name, unless and except as authorized by the Board of Directors. Such authorization may be general or confined to specific instances. Any officer or agent of the Corporation thereunto so authorized may obtain loans and advances for the Corporation, and for such loans and advances may make, execute and deliver promissory notes, bonds, or other evidences of indebtedness of the Corporation. Any officer or agent of the Corporation thereunto so authorized may pledge, hypothecate or transfer as security for the payment of any and all loans, advances, indebtedness and liabilities of the Corporation, any and all stocks, bonds, other securities and other personal property at any time held by the Corporation, and to that end may endorse, assign and deliver the same and do every act and thing necessary or proper in connection therewith.

 

SECTION 5.03.    Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to its credit in such banks or trust companies or with such bankers or other depositories as the Board of Directors may select, or as may be selected by any officer or officers or agent or agents authorized so to do by the Board of Directors. Endorsements for deposit to the credit of the Corporation in any of its duly authorized depositories shall be made in such manner as the Board of Directors from time to time may determine.

 

SECTION 5.04.    Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, and all notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers or agent or agents of the Corporation, and in such manner, as from time to time shall be determined by the Board of Directors.

 

SECTION 5.05.    Proxies. Proxies to vote with respect to shares of stock of other corporations owned by or standing in the name of the Corporation may be executed and delivered from time to time on behalf of the Corporation by the President or by any other person or persons thereunto authorized by the Board of Directors.

 

SECTION 5.06.    Other Contracts and Instruments. All other contracts and instruments binding the Corporation shall be executed in the name and on the behalf of the Corporation by those officers, employees or agents of the Corporation as may be authorized by the Board of Directors. That authorization may be general or confirmed to specific instances.

 

 

ARTICLE 6

 

CERTIFICATES OF STOCK

 

SECTION 6.01.    Form and Execution of Certificates. The interest of each stockholder of the Corporation shall be evidenced by a certificate or certificates for shares of stock in such form as the Board of Directors may from time to time prescribe. The certificates of stock of each class shall be consecutively numbered and signed by the Chairman of the Board or the Chief Executive Officer and by the President or the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, and shall bear the corporate seal or a printed or engraved facsimile thereof. Any or all of the signatures on the certificate may be a facsimile. The Board of Directors shall have the power to appoint one or more transfer agents and/or registrars for the transfer or registration of certificates of stock of any class, and may require stock certificates to be countersigned or registered by one or more of such transfer agents and/or registrars.

 

SECTION 6.02.    Transfer of Shares. The shares of the stock of the Corporation shall be transferrable on the books of the Corporation by the holder thereof in person or by his or her attorney lawfully constituted, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof or guaranty of the authenticity of the signature as the Corporation or its agents may reasonably require. A record shall be made of each transfer. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented, both the transferor and transferee request the Corporation to do so. The Board of Directors shall have the power and authority to make such rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of certificates for shares of stock of the Corporation.

 

SECTION 6.03.    Closing of Transfer Books. The stock transfer books of the Corporation may, if deemed appropriate by the Board of Directors, be closed for such length of time not exceeding fifty (50) days as the Board may determine, preceding the date of any meeting of stockholders or the date for the payment of any dividend or the date for the allotment of rights or the date when the issuance, change, conversion or exchange of capital stock shall go into effect, during which time no transfer of stock on the books of the Corporation may be made.

 

SECTION 6.04.    Fixing the Record Date. (a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided that the Board of Directors may fix a new record date for the adjourned meeting.

 

 

(b)         In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by Delaware Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by Delaware Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

 

(c)         In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

SECTION 6.05.    Lost or Destroyed Certificates. A new certificate of stock may be issued in the place of any certificate previously issued by the Corporation, alleged to have been lost, stolen, destroyed or mutilated, and the Board of Directors may, in its discretion, require the owner of such lost, stolen, destroyed or mutilated certificate, or his or her legal representative, to give the Corporation a bond, in such sum as the Board of Directors may direct, in order to indemnify the Corporation against any claims that may be made against it in connection therewith.

 

ARTICLE 7

 

INDEMNIFICATION

 

SECTION 7.01     Indemnification. (a)  A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by Delaware Law. The foregoing shall not eliminate or limit any liability that may exist with respect to (i) a breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) liability under Section 174 of Delaware Law, or (iv) a transaction from which the director derived an improper personal benefit.

 

 

(b)        (1)  Each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware Law. The right to indemnification conferred in this Article 7 shall also include the right to be paid by the Corporation the expenses incurred in connection with any such proceeding in advance of its final disposition to the fullest extent authorized by Delaware Law. The right to indemnification conferred in this Article 7 shall be a contract right.

 

(2)         The Corporation may, by action of its Board of Directors, provide indemnification to such of the employees and agents of the Corporation to such extent and to such effect as the Board of Directors shall determine to be appropriate and authorized by Delaware Law.

 

(c)        The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss incurred by such person in any such capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under Delaware Law.

 

(d)         The rights and authority conferred in this Article 7 shall not be exclusive of any other right which any person may otherwise have or hereafter acquire.

 

(e)         Neither the amendment nor repeal of this Article 7 nor the adoption of any provision of these By-Laws or the Certificate of Incorporation of the Corporation, nor, to the fullest extent permitted by Delaware Law, any modification of law, shall eliminate or reduce the effect of this Article 7 in respect of any acts or omissions occurring prior to such amendment, repeal, adoption or modification.

 

ARTICLE 8

 

GENERAL PROVISIONS

 

SECTION 8.01.    Dividends. Subject to limitations contained in Delaware Law and the Certificate of Incorporation, the Board of Directors may declare and pay dividends upon the shares of capital stock of the Corporation, which dividends may be paid either in cash, in property or in shares of the capital stock of the Corporation.

 

SECTION 8.02.    Year. The fiscal year of the Corporation shall commence on January 1 and end on December 31 of each year.

 

 

SECTION 8.03.    Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

 

SECTION 8.04.    Voting of Stock Owned by the Corporation. The Board of Directors may authorize any person, on behalf of the Corporation, to attend, vote at and grant proxies to be used at any meeting of stockholders of any Corporation (except this Corporation) in which the Corporation may hold stock.

 

SECTION 8.05.    Amendments. These bylaws or any of them, may be altered, amended or repealed, or new bylaws may be made, by the stockholders entitled to vote thereon at any annual or special meeting thereof or by the Board of Directors.

 

SECTION 8.06     Notice. (a) Whenever notice is required to be given by law, the Certificate of Incorporation or these bylaws, such notice may be mailed or given by a form of electronic transmission consented to by the person to whom the notice is given. Any such consent shall be revocable by such person by written notice to the Corporation. Any such consent shall be deemed revoked if (a) the Corporation is unable to deliver by electronic transmission two consecutive notices in accordance with such consent and (b) such inability becomes known to the secretary or an assistant secretary of the Corporation or to the transfer agent or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

 

(b)        Notice given pursuant to these bylaws shall be deemed given: (i) if mailed, when deposited in the United States mail, postage pre-paid, addressed to the person entitled to such notice at his or her address as it appears on the books and records of the Corporation, (ii) if by facsimile telecommunication, when directed to a number at which such person has consented to receive notice; (iii) if by electronic mail, when directed to an electronic mail address at which such person has consented to receive notice; (iv) if by a posting on an electronic network together with separate notice to such person of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (v) if by any other form of electronic transmission, when directed to such person. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated herein.

 

(c)         For purposes of these bylaws, "electronic transmission" means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

 

 

SECTION 8.07.    Waiver of Notice. Whenever notice is required to be given by law, the Certificate of Incorporation or these bylaws, a waiver thereof submitted by electronic transmission or in writing signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of an individual at a meeting, in person, by written proxy, or by means of remote communication, shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and the execution by a person of a consent in writing or by electronic transmission in lieu of meeting shall constitute a waiver of notice of the action taken by such consent. Neither the business to be transacted at, nor the purpose of, any meeting of the stockholders, directors, or members of a committee of the Board of Directors need be specified in any such waiver or notice.

 

 

Exhibit 4.3

 

Schedule of Holders

of

Warrants to Purchase Series A1 Preferred Stock

Of Rapid Micro Biosystems, Inc.

 

Holder		Number of Shares				Issuance Date		Expiration Date
Foster & Foster Capital V LLC			39,266			July 24, 2017		July 24, 2027
Longitude Venture Partners II, L.P.			2,500,000			July 24, 2017		July 24, 2027
Mellon Family Investment Company V			273,227			July 24, 2017		July 24, 2027
Quaker Bioventures II, L.P.			410,051			July 24, 2017		July 24, 2027
Richard King Mellon Foundation			273,227			July 24, 2017		July 24, 2027
TVM Life Science Ventures VI GmbH & Co. K.G.			244,093			July 24, 2017		July 24, 2027
TVM Life Science Ventures VI, L.P.			83,660			July 24, 2017		July 24, 2027

 

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

 

Date of Issuance: July 24, 2017

Void after July 24, 2027, unless earlier terminated pursuant to the terms hereof

 

RAPID MICRO BIOSYSTEMS, INC.
WARRANT TO PURCHASE SHARES OF SERIES A1 PREFERRED STOCK

 

This Warrant (this “Warrant”) is issued to [                          ] or his, her or its assigns (the “Holder”) by Rapid Micro Biosystems, Inc., a Delaware corporation (the “Company”), pursuant to that certain Series A1 Preferred Stock Purchase Agreement dated as of July 24, 2017 among the Company, the Holder and certain other investors, as the same may be amended, restated or otherwise modified from time to time (the “Purchase Agreement” and all warrants issued under the Purchase Agreement collectively, the “Warrants”).

 

Unless otherwise defined herein or in the Purchase Agreement, capitalized terms shall have the following meanings:

 

“Corporate Transaction” shall mean (A) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets, (B) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity), or (C) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of this corporation’s securities), of the Company’s securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of this corporation (or the surviving or acquiring entity); provided, however, that a transaction shall not constitute a Corporate Transaction if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction. Notwithstanding the prior sentence, the sale of shares of Preferred Stock in a bona fide financing transaction shall not be deemed a Corporate Transaction.

 

“Exercise Price” shall mean $0.01 per Share.

 

 

“Original Date of Issuance” shall mean July 24, 2017.

 

“Preferred Stock” shall mean the Company’s Series A1 Preferred Stock, $0.01 par value per share.

 

“Shares” shall mean shares of Preferred Stock.

 

1.            Purchase of Shares; Number of Shares and Exercise Price. Subject to the terms and conditions set forth herein, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the Holder in writing), to purchase from the Company up to [                    ] fully paid and nonassessable Shares. The Shares and the Exercise Price of the Shares shall be subject to adjustment pursuant to Section 6 hereof.

 

2.            Exercise Period; Termination. Unless earlier terminated pursuant to the terms hereof, this Warrant shall be exercisable, in whole or in part, during the period commencing on the Original Date of Issuance and ending at 5:00 p.m. pacific time on July 24, 2027 (the “Exercise Period”). In the event that this Warrant has not been otherwise terminated pursuant to this Section 2, upon the expiration of the Exercise Period, if the fair market value of one Conversion Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 4 below is greater than the Exercise Price in effect on such date, then this Warrant, to the extent then exercisable, shall automatically be deemed on and as of such date to be exercised pursuant to Section 4 below as to all Shares (or such other securities) for which it shall not have been previously exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder.

 

3.            Method of Exercise.

 

(a)          While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by:

 

(i)          the surrender of the Warrant, together with a duly executed copy of the Notice of Exercise attached hereto, to the Secretary of the Company at its principal office (or at such other place as the Company shall notify the Holder in writing); and

 

(ii)          the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased.

 

(b)          Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant is surrendered to the Company as provided in Section 3(a) above. At such time, the person or persons in whose name or names any certificate for the Shares shall be issuable upon such exercise as provided in Section 3(c) below shall be deemed to have become the holder or holders of record of the Shares represented by such certificate.

 

 

(c)          As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within twenty (20) days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct:

 

(i)          a certificate or certificates for the number of Shares to which such Holder shall be entitled, and

 

(ii)          in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of Shares equal to the number of such Shares called for on the face of this Warrant minus the number of Shares purchased by the Holder upon all exercises made in accordance with Section 3(a) above or Section 4 below.

 

4.            Net Exercise. In lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with notice of such election (a “Net Exercise”). A Holder who Net Exercises shall have the rights described in Sections 3(b) and 3(c) hereof, and the Company shall issue to such Holder a number of Shares computed using the following formula:

 

 

 

Where

 

X =

The number of Shares to be issued to the Holder.

 

Y =

The number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being cancelled (at the date of such calculation).

 

A =

The fair market value of one (1) Conversion Share (at the date of such calculation).

 

B =

The Exercise Price (as adjusted to the date of such calculations).

 

For purposes of this Section 4, the fair market value of a Conversion Share shall mean the average of the closing price of the Shares (or equivalent shares of Common Stock underlying the Shares) quoted in the over-the-counter market in which the Shares (or equivalent shares of Common Stock underlying the Shares) are traded or the closing price quoted on any exchange or electronic securities market on which the Shares (or equivalent shares of Common Stock underlying the Warrant) are listed, whichever is applicable, as published in The Wall Street Journal for the five (5) trading days prior to the date of determination of fair market value (or such shorter period of time during which such Shares were traded over-the-counter or on such exchange). In the event that this Warrant is exercised pursuant to this Section 4 in connection with the Company’s first underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “IPO”), the fair market value per Conversion Share shall be the product of (a) the per share offering price to the public of the IPO, and (b) the number of shares of Common Stock into which each Conversion Share is convertible at the time of such exercise or, if the Shares are shares of Common Stock, one. In the event that this Warrant is exercised not in connection with the IPO and the Shares are not traded on the over-the-counter market, an exchange or an electronic securities market, the fair market value shall be the price per Conversion Share that the Company could obtain from a willing buyer for Shares sold by the Company from authorized but unissued Shares, as such prices shall be determined in reasonable good faith by the Company’s Board of Directors.

 

 

5.            Covenants of the Company.

 

(a)          Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters or a stock dividend) or other distribution, the Company shall mail to the Holder, at least ten (10) days prior to such record date, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

 

(b)          Covenants as to Exercise Shares. The Company covenants and agrees that all Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance in accordance with the terms hereof, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Preferred Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Preferred Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Preferred Stock to such number of shares as shall be sufficient for such purposes.

 

6.            Adjustment of Exercise Price and Number of Shares. The number and kind of Shares purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

 

(a)          Subdivisions, Combinations and Other Issuances. If the Company shall at any time after the issuance but prior to the expiration of this Warrant subdivide its Preferred Stock, by split-up or otherwise, or combine its Preferred Stock, or issue additional shares of its Preferred Stock or Common Stock as a dividend with respect to any shares of its Preferred Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the Exercise Price payable per share, but the aggregate Exercise Price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 6(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.

 

 

(b)          Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization or change in the capital stock of the Company (other than as a result of a subdivision, combination or stock dividend provided for in Section 6(a) above), then, as a condition of such reclassification, reorganization or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities or property receivable in connection with such reclassification, reorganization or change by a holder of the same number and type of securities as were purchasable as Shares by the Holder immediately prior to such reclassification, reorganization or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities or property deliverable upon exercise hereof, and appropriate adjustments shall be made to the Exercise Price per Conversion Share payable hereunder, provided the aggregate Exercise Price shall remain the same.

 

(c)          Corporate Transaction. In the event of a Corporate Transaction, pursuant to which the Holder would have been entitled to receive cash consideration per Conversion Share in an amount greater than the Exercise Price if the Holder had exercised his, her or its rights pursuant to this Warrant immediately prior thereto, the Company shall pay to the Holder, at the closing of such transaction, an amount equal to (i) the number of Shares issuable hereunder, multiplied by (ii) the difference of (A) the cash consideration per Conversion Share that the Holder would have received if he, she or it had exercised his, her or its rights pursuant to this Warrant immediately prior to the closing of such transaction, minus (B) the Exercise Price. This Warrant, and all rights of the Holder hereunder, shall automatically be terminated immediately upon delivery of such payment. If the Holder would have been entitled to receive cash consideration per Share in an amount equal to or less than the Exercise Price if the Holder had exercised his, her or its rights pursuant to this Warrant immediately prior to any such transaction, then this Warrant, and all rights of the Holder hereunder, shall automatically be terminated upon the closing of any such transaction.

 

(d)          Adjustments for Diluting Issuances. Without duplication of any adjustment otherwise provided for in this Section 6, the number of shares of common stock issuable upon conversion of the Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Company’s Certificate of Incorporation as if the Shares were issued and outstanding on and as of the date of any such required adjustment.

 

(e)          Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of Shares or other securities or property thereafter purchasable upon exercise of this Warrant.

 

(f)          Conversion of Preferred Stock. In the event that all outstanding shares of Preferred Stock are converted to Common Stock, or any other security, in accordance with the terms of the Restated Certificate in connection with the IPO, a Corporate Transaction or other event, this Warrant shall become exercisable for Common Stock or such other security.

 

 

7.            No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

 

8.            No Stockholder Rights. Other than in respect of the adjustments provided in Section 6 hereof, prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and except as otherwise provided in this Warrant or the Purchase Agreement, such Holder shall not be entitled to any stockholder notice or other communication concerning the business or affairs of the Company.

 

9.            Notice of Certain Events. If the Company proposes at any time to:

 

(a)          declare any dividend or distribution upon the outstanding shares of the Company’s capital stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

 

(b)          effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Company’s capital stock;

 

(c)          effect a Corporate Transaction or to liquidate, dissolve or wind up; or

 

(d)          effect the IPO;

 

then, in connection with each such event, the Company shall give Holder:

 

(i)          at least seven (7) business days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Company’s capital stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) above;

 

(ii)         in the case of the matters referred to in (b) and (c) above at least seven (7) business days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Company’s capital stock will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event and such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such event giving rise to the notice); and

 

(iii)        with respect to the IPO, at least seven (7) business days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith.

 

The Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.

 

 

10.            Transfer of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. Within a reasonable time after the Company’s receipt of an executed Assignment Form in the form attached hereto, the transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the new holders one or more appropriate new warrants.

 

11.            Successors and Assigns. The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the holders hereof and their respective successors and assigns.

 

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

 

13.            Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the holders of Warrants holding a majority of the Shares issuable upon exercise of the Warrants issued pursuant to the Purchase Agreement; provided that such amendment affects each such holder in materially the same manner. Any waiver or amendment effected in accordance with this Section 13 shall be binding upon each holder of a Warrant at the time outstanding and each future holder of all such Warrants.

 

14.            Governing Law. This Warrant and any controversy arising out of or relating to this Warrant shall be governed by, and construed in accordance with, the internal laws of the State of Delaware.

 

15.            Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 15):

 

If to the Company:

 

RAPID MICRO BIOSYSTEMS, INC.

1001 Pawtucket Blvd.

Lowell, MA 01854

Attention: Chief Executive Officer

 

 

If to Holders:

 

At the addresses shown on the signature pages hereto.

 

16.            Severability. If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

[Remainder of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first written above.

 

	RAPID MICRO BIOSYSTEMS, INC.
	By:	/s/ Robert Spignesi
	Name:	Robert Spignesi
	Title:	President and Chief Executive Officer

 

 

IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first written above.

 

	[ l ]
	By:
	Name:
	Title:
	Address:

 

 

NOTICE OF EXERCISE

 

RAPID MICRO BIOSYSTEMS, INC.

 

Attention: Corporate Secretary

 

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

 

¨

_____________ Shares pursuant to the terms of the attached Warrant, and tenders herewith payment in cash of the Exercise Price of such Shares in full, together with all applicable transfer taxes, if any.

 

¨

Net Exercise the attached Warrant with respect to __________ Shares.

 

The undersigned hereby represents and warrants that Representations and Warranties of the undersigned in Section 3 of the Purchase Agreement are true and correct as of the date hereof.

 

				HOLDER:
Date:				By:
			Address:
Name in which shares should be registered:

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute

this form and supply required information.

Do not use this form to purchase shares.)

 

For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

 

Name:
	(Please Print)

 

 

Address:
	(Please Print)

 

Dated:

 

 

Holder’s
Signature:

 

 

Holder’s
Address:

 

 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant. Officers of corporations and those acting in a fiduciary or other representative capacity should provide proper evidence of authority to assign the foregoing Warrant.

 

 

 

Exhibit 4.4

 

Schedule of Holders

of

Warrants to Purchase Series B1 Preferred Stock

Of Rapid Micro Biosystems, Inc.

 

Holder		Number of Shares				Issuance Date		Expiration Date
Foster & Foster Capital V LLC			19,354			December 6, 2017		December 6, 2027
Foster & Foster Capital V LLC			19,354			January 17, 2018		January 17, 2028
Longitude Venture Partners II, L.P.			322,580			December 6, 2017		December 6, 2027
Longitude Venture Partners II, L.P.			322,580			January 17, 2018		January 17, 2028
Mellon Family Investment Company V			64,516			December 6, 2017		December 6, 2027
Mellon Family Investment Company V			64,516			January 17, 2018		January 17, 2028
Quaker Bioventures II, L.P.			64,516			December 6, 2017		December 6, 2027
Quaker Bioventures II, L.P.			64,516			January 17, 2018		January 17, 2028
Richard King Mellon Foundation			64,516			December 6, 2017		December 6, 2027
Richard King Mellon Foundation			64,516			January 17, 2018		January 17, 2028
TVM Life Science Ventures VI GmbH & Co. K.G.			48,048			December 6, 2017		December 6, 2027
TVM Life Science Ventures VI GmbH & Co. K.G.			48,048			January 17, 2018		January 17, 2028
TVM Life Science Ventures VI, L.P.			16,467			December 6, 2017		December 6, 2027
TVM Life Science Ventures VI, L.P.			16,467			January 17, 2018		January 17, 2028

 

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

 

Date of Issuance: [               ]

Void after [           ], unless earlier terminated pursuant to the terms hereof

 

RAPID MICRO BIOSYSTEMS, INC.
WARRANT TO PURCHASE SHARES OF PREFERRED STOCK

 

This Warrant is issued to [                ] or its assigns (the “Holder”) by Rapid Micro Biosystems, Inc., a Delaware corporation (the “Company”), pursuant to that certain Note and Warrant Purchase Agreement dated December 6, 2017 among the Company, the Holder and certain other investors, as the same may be amended, restated or otherwise modified from time to time (the “Purchase Agreement”). Unless otherwise defined herein or in the Purchase Agreement, capitalized terms shall have the following meanings:

 

“Conversion Shares” shall mean (a) shares of such series of Preferred Stock as are issued in the Next Equity Financing if the Next Equity Financing is consummated on or prior to December 6, 2018; or (b) shares of Series A1 Preferred Stock if the Next Equity Financing has not been consummated on or prior to December 6, 2018.

 

“Corporate Transaction” shall mean (A) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets, (B) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity), or (C) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of this corporation’s securities), of the Company’s securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of this corporation (or the surviving or acquiring entity); provided, however, that a transaction shall not constitute a Corporate Transaction if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction. Notwithstanding the prior sentence, the sale of shares of Preferred Stock in a bona fide financing transaction shall not be deemed a Corporate Transaction.

 

 

“Exercise Price” shall mean $0.01 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar event with respect to the Preferred Stock).

 

 

“Next Equity Financing” shall mean the next sale (or series of related sales) by the Company of its Preferred Stock following the Original Date of Issuance from which the Company receives aggregate gross proceeds of not less than $10,000,000 (excluding the aggregate amount of any indebtedness of the Company converted into Preferred Stock in the Next Equity Financing).

 

“Next Round Price” shall mean the price per share of Preferred Stock paid by the investors in the Next Equity Financing (excluding, if applicable, any discounts applied to the purchase price of any Preferred Stock issued in the Next Equity Financing upon conversion or cancellation of indebtedness).

 

“Original Date of Issuance” shall mean December 6, 2017.

 

“Preferred Stock” shall mean the Company’s preferred stock, $0.01 par value per share.

 

“Series A1 Preferred Stock” shall mean the Company’s Series A1 Preferred Stock, $0.01 par value per share.

 

Warrant Price” shall mean: (a) if this Warrant is exercised or converted into Preferred Stock in the Next Equity Financing, the Next Round Price; or (b) if this Warrant is exercised or converted into Series A1 Preferred Stock, $1.00 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar event with respect to the Series A1 Preferred Stock).

 

1.          Purchase of Shares; Number of Conversion Shares and Exercise Price. Subject to the terms and conditions set forth herein, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the Holder in writing), to purchase from the Company up to a number of fully paid and nonassessable Conversion Shares equal to $[             ] divided by the Warrant Price. The Conversion Shares and the Exercise Price of the Conversion Shares shall be subject to adjustment pursuant to Section 6 hereof.

 

2.          Exercise Period; Termination. Unless earlier terminated pursuant to the terms hereof, this Warrant shall be exercisable, in whole or in part, during the period commencing on the Original Date of Issuance and ending at 5:00 p.m. pacific time on December 6, 2027 (the “Exercise Period”). In the event that this Warrant has not been otherwise terminated pursuant to this Section 2, upon the expiration of the Exercise Period, if the fair market value of one Conversion Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 4 below is greater than the Exercise Price in effect on such date, then this Warrant, to the extent then exercisable, shall automatically be deemed on and as of such date to be exercised pursuant to Section 4 below as to all Conversion Shares (or such other securities) for which it shall not have been previously exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Conversion Shares (or such other securities) issued upon such exercise to Holder.

 

 

3.            Method of Exercise.

 

(a)          While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by:

 

(i)           the surrender of the Warrant, together with a duly executed copy of the Notice of Exercise attached hereto, to the Secretary of the Company at its principal office (or at such other place as the Company shall notify the Holder in writing); and

 

(ii)          the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Conversion Shares being purchased.

 

(b)           Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant is surrendered to the Company as provided in Section 3(a) above. At such time, the person or persons in whose name or names any certificate for the Conversion Shares shall be issuable upon such exercise as provided in Section 3(c) below shall be deemed to have become the holder or holders of record of the Conversion Shares represented by such certificate.

 

(c)           As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within twenty (20) days thereafter, the Company at its expense will cause to be issued in the name of, and delivered to, the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct:

 

(i)             a certificate or certificates for the number of Conversion Shares to which such Holder shall be entitled, and

 

(ii)           in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of Conversion Shares equal to the number of such Conversion Shares called for on the face of this Warrant minus the number of Conversion Shares purchased by the Holder upon all exercises made in accordance with Section 3(a) above or Section 4 below.

 

4.           Net Exercise. In lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with notice of such election (a “Net Exercise”). A Holder who Net Exercises shall have the rights described in Sections 3(b) and 3(c) hereof, and the Company shall issue to such Holder a number of Conversion Shares computed using the following formula:

 

 

 

Where

 

X =

The number of Conversion Shares to be issued to the Holder.

 

Y =

The number of Conversion Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being cancelled (at the date of such calculation).

 

A =

The fair market value of one (1) Conversion Share (at the date of such calculation).

 

B =

The Exercise Price (as adjusted to the date of such calculations).

 

For purposes of this Section 4, the fair market value of a Conversion Share shall mean the average of the closing price of the Conversion Shares (or equivalent shares of Common Stock underlying the Conversion Shares) quoted in the over-the-counter market in which the Conversion Shares (or equivalent shares of Common Stock underlying the Conversion Shares) are traded or the closing price quoted on any exchange or electronic securities market on which the Conversion Shares (or equivalent shares of Common Stock underlying the Warrants) are listed, whichever is applicable, as published in The Wall Street Journal for the five (5) trading days prior to the date of determination of fair market value (or such shorter period of time during which such Conversion Shares were traded over-the-counter or on such exchange). In the event that this Warrant is exercised pursuant to this Section 4 in connection with the Company’s first underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “IPO”), the fair market value per Conversion Share shall be the product of (a) the per share offering price to the public of the IPO, and (b) the number of shares of Common Stock into which each Conversion Share is convertible at the time of such exercise or, if the Conversion Shares are shares of Common Stock, one. In the event that this Warrant is exercised not in connection with the IPO and the Conversion Shares are not traded on the over-the-counter market, an exchange or an electronic securities market, the fair market value shall be the price per Conversion Share that the Company could obtain from a willing buyer for Conversion Shares sold by the Company from authorized but unissued Conversion Shares, as such prices shall be determined in reasonable good faith by the Company’s Board of Directors.

 

5.           Covenants of the Company.

 

(a)           Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters or a stock dividend) or other distribution, the Company shall mail to the Holder, at least ten (10) days prior to such record date, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

 

(b)          Covenants as to Exercise Shares. The Company covenants and agrees that all Conversion Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance in accordance with the terms hereof, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Preferred Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Preferred Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Preferred Stock to such number of shares as shall be sufficient for such purposes.

 

 

6.           Adjustment of Exercise Price and Number of Conversion Shares. The number and kind of Conversion Shares purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

 

(a)           Subdivisions, Combinations and Other Issuances. If the Company shall at any time after the issuance but prior to the expiration of this Warrant subdivide its Preferred Stock, by split-up or otherwise, or combine its Preferred Stock, or issue additional shares of its Preferred Stock or Common Stock as a dividend with respect to any shares of its Preferred Stock, the number of Conversion Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the Exercise Price payable per share, but the aggregate Exercise Price payable for the total number of Conversion Shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 6(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.

 

(b)           Reclassification, Reorganization and Consolidation. In case of any reclassification, capital reorganization or change in the capital stock of the Company (other than as a result of a subdivision, combination or stock dividend provided for in Section 6(a) above), then, as a condition of such reclassification, reorganization or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities or property receivable in connection with such reclassification, reorganization or change by a holder of the same number and type of securities as were purchasable as Conversion Shares by the Holder immediately prior to such reclassification, reorganization or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities or property deliverable upon exercise hereof, and appropriate adjustments shall be made to the Exercise Price per Conversion Share payable hereunder, provided the aggregate Exercise Price shall remain the same.

 

(c)           Corporate Transaction. In the event of a Corporate Transaction, pursuant to which the Holder would have been entitled to receive cash consideration per Conversion Share in an amount greater than the Exercise Price if the Holder had exercised its rights pursuant to this Warrant immediately prior thereto, the Company shall pay to the Holder, at the closing of such transaction, an amount equal to (i) the number of Conversion Shares issuable hereunder, multiplied by (ii) the difference of (A) the cash consideration per Conversion Share that the Holder would have received if it had exercised its rights pursuant to this Warrant immediately prior to the closing of such transaction, minus (B) the Exercise Price. This Warrant, and all rights of the Holder hereunder, shall automatically be terminated immediately upon delivery of such payment. If the Holder would have been entitled to receive cash consideration per Share in an amount equal to or less than the Exercise Price if the Holder had exercised its rights pursuant to this Warrant immediately prior to any such transaction, then this Warrant, and all rights of the Holder hereunder, shall automatically be terminated upon the closing of any such transaction.

 

 

(d)          Adjustments for Diluting Issuances. Without duplication of any adjustment otherwise provided for in this Section 6, the number of shares of common stock issuable upon conversion of the Conversion Shares shall be subject to anti-dilution adjustment from time to time in the manner set forth in the Restated Certificate as if the Conversion Shares were issued and outstanding on and as of the date of any such required adjustment.

 

(e)           Notice of Adjustment. When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of Conversion Shares or other securities or property thereafter purchasable upon exercise of this Warrant.

 

(f)            Conversion of Preferred Stock. In the event that all outstanding shares of Preferred Stock are converted to Common Stock, or any other security, in accordance with the terms of the Restated Certificate in connection with the IPO, a Corporate Transaction or other event, this Warrant shall become exercisable for Common Stock or such other security.

 

7.           No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

 

8.           No Stockholder Rights. Other than in respect of the adjustments provided in Section 6 hereof, prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a stockholder with respect to the Conversion Shares, including (without limitation) the right to vote such Conversion Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of stockholder meetings, and except as otherwise provided in this Warrant or the Purchase Agreement, such Holder shall not be entitled to any stockholder notice or other communication concerning the business or affairs of the Company.

 

9.            Notice of Certain Events. If the Company proposes at any time to:

 

(a)            declare any dividend or distribution upon the outstanding shares of the Company’s capital stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;

 

(b)           effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Company’s capital stock;

 

(c)            effect a Corporate Transaction or to liquidate, dissolve or wind up; or

 

(d)            effect the IPO;

 

 

then, in connection with each such event, the Company shall give Holder:

 

 

(i)          at least seven (7) business days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Company’s capital stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) above;

 

(ii)            in the case of the matters referred to in (b) and (c) above at least seven (7) business days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Company’s capital stock will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event and such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such event giving rise to the notice); and

 

(iii)            with respect to the IPO, at least seven (7) business days prior written notice of the date on which the Company proposes to file its registration statement in connection therewith.

 

Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.

 

10.         Transfer of Warrant. Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder are transferable in whole or in part by the Holder to any person or entity upon written notice to the Company. Within a reasonable time after the Company’s receipt of an executed Assignment Form in the form attached hereto, the transfer shall be recorded on the books of the Company upon the surrender of this Warrant, properly endorsed, to the Company at its principal offices, and the payment to the Company of all transfer taxes and other governmental charges imposed on such transfer. In the event of a partial transfer, the Company shall issue to the new holders one or more appropriate new warrants.

 

11.            Successors and Assigns. The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the holders hereof and their respective successors and assigns.

 

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

 

13.           Amendments and Waivers; Resolution of Controversies; Notices. The amendment or waiver of any term of this Warrant, the resolution of any controversy or claim arising out of or relating to this Warrant and the provision of any notices under this Warrant shall be conducted pursuant to the terms of the Purchase Agreement.

 

14.           Severability. If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

 

IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first written above.

 

		RAPID MICRO BIOSYSTEMS, INC.
		By:	/s/ Robert Spignesi
			Robert Spignesi
			President and Chief Executive Officer

 

 

IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first written above.

 

		[ l ]
		By:
		Name:
		Title:

 

 

NOTICE OF EXERCISE

 

RAPID MICRO BIOSYSTEMS, INC.

 

Attention: Corporate Secretary

 

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

 

¨

_____________ Conversion Shares pursuant to the terms of the attached Warrant, and tenders herewith payment in cash of the Exercise Price of such Conversion Shares in full, together with all applicable transfer taxes, if any.

 

¨

Net Exercise the attached Warrant with respect to __________ Conversion Shares.

 

The undersigned hereby represents and warrants that “Representations and Warranties” of the undersigned in Section 5 of the Purchase Agreement are true and correct as of the date hereof.

 

				HOLDER:
Date:				By:
			Address:
Name in which shares should be registered:

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

Name:
	(Please Print)

 

 

Address:
	(Please Print)

 

Dated:

 

 

Holder’s
Signature:

 

 

Holder’s
Address:

 

 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant. Officers of corporations and those acting in a fiduciary or other representative capacity should provide proper evidence of authority to assign the foregoing Warrant.

 

 

Exhibit 4.5

 

Execution Version

 

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND APPLICABLE LAWS.

 

 

Warrant No. 2020-1

Number of Shares: 1,195,652

(subject to adjustment)

 

Date of Issuance: May 14, 2020

 

RAPID MICRO BIOSYSTEMS, INC.

 

PREFERRED STOCK PURCHASE WARRANT
(as amended and restated)

 

Rapid Micro Biosystems, Inc., a Delaware corporation (the “Company”), for value received, hereby certifies that Kennedy Lewis Capital Partners Master Fund II LP and its Affiliates (collectively, “KLIM”) and/or any of their respective assigns (the “Registered Holder”), is entitled, subject to the terms and conditions set forth in this agreement (this “Agreement”), to purchase from the Company, in whole or in part, at any time and from time to time on or after the Date of Issuance and prior to the expiration hereof, 1,195,652 shares of Series C1 Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”), at an exercise price of $1.15 per share. The shares of Preferred Stock purchasable upon exercise of this warrant issued to the Registered Holder (this “Warrant”) and the exercise price per share, each as adjusted from time to time pursuant to the provisions of this Warrant, are hereinafter referred to as the “Warrant Shares” and the “Exercise Price,” respectively. “Affiliates” shall mean, as applied to any person, any other person who controls, is controlled by, or is under common control with, such person. For purposes of this definition, “control” means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a person, whether through the ownership of equity, by contract, or otherwise. “Common Stock” shall mean the Company’s common stock, par value $0.01 and “Convertible Common Stock” shall mean the shares of Common Stock issuable upon the conversion of the Warrant Shares into shares of Common Stock on the terms set forth in the Seventh Amended and Restated Certificate of Incorporation of the Company (as amended, amended and restated, or otherwise modified from time to time, the “Charter”). The Company and KLIM acknowledge and agree that this Warrant amends and restates in its entirety and replaces that certain Preferred Stock Purchase Warrant originally issued by the Company to KLIM on May 14, 2020.

 

1.            Exercise.

 

(a)            This Warrant may be exercised, in whole or in part at any time and from time to time, by the Registered Holder by surrendering this Warrant, along with the purchase form appended hereto as Exhibit A duly executed and completed by the Registered Holder or by the Registered Holder’s duly authorized representative, at the principal office of the Company, or at such other office or agency as the Company may designate by notice in writing to the Registered Holder, accompanied by either (i) cash or certified cashier’s check payable to the Company (or wire transfer of immediately available funds), in lawful money of the United States, of the Exercise Price payable in respect of the number of Warrant Shares purchased upon such exercise (the “Aggregate Exercise Price”); or (ii) a written notice to the Company that the Registered Holder is exercising this Warrant on a “cashless” exercise basis by authorizing the Company to withhold from issuance a number of shares of Preferred Stock issuable upon such exercise of the Warrant which, when multiplied by the Fair Market Value of the Preferred Stock (or Common Stock, as applicable), is equal to the Aggregate Exercise Price (and such withheld shares shall no longer be issuable under this Warrant).

 

 

(b)            Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 1(a) above (the “Exercise Date”), and the party entitled to receive the Preferred Stock issuable upon such exercise shall be treated for all purposes as the holder of record of such Preferred Stock (or, if the Registered Holder elects to immediately convert the Warrant Shares into shares of Convertible Common Stock, the holder of record of such shares of Convertible Common Stock) as of the close of business on such date.

 

(c)           Within three (3) business days after the date of exercise of this Warrant, the Company, at its expense, will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Registered Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct, a certificate or certificates for the number of full Warrant Shares to which the Registered Holder shall be entitled upon such exercise plus, in lieu of any fractional share to which the Registered Holder would otherwise be entitled, cash in an amount determined pursuant to Section 4 hereof; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involving the issuance and delivery of any such certificate upon exercise in a name other than that of the Registered Holder. Notwithstanding the foregoing, the Registered Holder shall be solely responsible for any income taxes payable and arising from the issuance or exercise of this Warrant, or any ad valorem property or intangible tax assessed against the Registered Holder.

 

(d)        The Company shall assist and cooperate with any Registered Holder required to make any governmental filings or obtain any governmental approvals prior to or in connection with any exercise of this Warrant (including, without limitation, making any filings required to be made by the Company, which shall be at the Company’s sole cost and expense).

 

(e)            Notwithstanding any other provision of this Warrant, if the exercise of all or any portion of this Warrant is to be made in connection with an IPO (as defined below), Change of Control (as defined below), or any other transaction or event, such exercise may, at the election of the Registered Holder, be conditioned upon consummation of such transaction or event and in which case such exercise shall not be deemed effective until the consummation of such transaction or event.

 

2.          Adjustments. The Exercise Price and number of Warrant Shares purchasable hereunder (and as a result the number of shares of the Convertible Common Stock issuable hereunder in lieu of Warrant Shares) shall be subject to adjustment from time to time as provided in this Section 2.

 

 

(a)            Adjustment for Reclassification, Exchange and Substitution. If the Company shall at any time on or after the date on which this Warrant was first issued to the Registered Holder (the “Original Issue Date”), while this Warrant remains outstanding in whole or in part, by reclassification of securities or otherwise, change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change, and the Exercise Price shall be appropriately adjusted, subject to further adjustment as provided in this Section 2. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

(b)           Adjustment for Stock Splits and Combinations. If the Company shall at any time on or after the Original Issue Date, while this Warrant remains outstanding in whole or in part, (i) split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, or (ii) issue additional securities as a dividend with respect to any shares of its Preferred Stock, the number of shares of Preferred Stock subject hereto shall be proportionately adjusted and the Exercise Price, in the case of a split or subdivision, shall be proportionately decreased and, in the case of a combination or issuance of dividends, shall be proportionately increased, such that this Warrant shall represent the right to acquire the same number of shares of Preferred Stock (or, for the avoidance of doubt, if elected by the Registered Holder, the same number of shares of Convertible Common Stock) as would have been issuable immediately prior to such part, split, subdivision, combination, or issuance of dividends, without any increase in the amount of consideration paid therefor.

 

(c)             Conversion Rate. Without duplication of any adjustment otherwise provided for in this Section 2, any events or circumstances that result in an adjustment to (i) the Series C1 Conversion Price (as defined in the Charter) of the Preferred Stock or (ii) the number of shares of Convertible Common Stock, in each case as provided for in Article Fourth, Part B, Section 4 of the Charter, shall be given effect upon the exercise of this Warrant as if the Warrant Shares were issued and outstanding on and as of the date of any such required adjustment.

 

(d)             Conversion of Preferred Stock. In the event that all outstanding shares of Preferred Stock are converted to Common Stock, or any other security, in accordance with the terms of the Charter in connection with the Company’s first underwritten public offering pursuant to an effective registration statement under the Act (an “IPO”), Change of Control, or other event, this Warrant shall automatically become exercisable for Common Stock or such other security.

 

(e)             Certificates as to Adjustments.

 

(i)            Upon the occurrence of each adjustment or readjustment of the Exercise Price and number of Warrant Shares pursuant to this Section 2, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and promptly furnish to the Registered Holder a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property for which this Warrant shall be exercisable and the Exercise Price) and showing in detail the facts upon which such adjustment or readjustment is based, and shall cause a copy of such certificate to be sent by electronic mail or mailed (by first-class mail, postage prepaid) to the Registered Holder in accordance with the notice provisions of Section 13 hereof.

 

 

(ii)            The Company shall, upon the written request at any time of the Registered Holder, promptly furnish or cause to be furnished to the Registered Holder a certificate setting forth (A) the Exercise Price then in effect and (B) the number of shares of Preferred Stock, Convertible Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the exercise of this Warrant and any rights under the Preferred Stock, and shall cause a copy of such certificate to be distributed to the Registered Holder.

 

3.            Treatment of Warrant Upon a Change of Control. The Company shall give the Registered Holder written notice at least ten (10) business days prior to the closing of a Change of Control. In such event, notwithstanding any other provision of this Warrant to the contrary, the Company may terminate this Warrant in exchange for issuing to the Registered Holder substitute rights (which may be provided in the purchase or merger agreement governing the Change of Control or in a separate instrument) to receive the net economic benefits of this Warrant. Such net economic benefits shall be determined by deducting the aggregate exercise price of this Warrant from the aggregate proceeds which would be payable on account of the Warrant Shares (or, if elected by the Registered Holder, the Convertible Common Stock), including any post-closing payments or adjustments to the consideration received by the Company or its stockholders, as if this Warrant and/or any of the rights under the Preferred Stock had been fully exercised by the Registered Holder immediately before the Change of Control (but without requiring such exercise). Such substitute rights shall provide the Registered Holder the right to receive such net economic benefits when and as the correlative proceeds in excess of the aggregate exercise price would become payable on account of the Warrant Shares (or, if elected by the Registered Holder, the Convertible Common Stock). For the avoidance of doubt (i) to the extent the consideration to be provided in the Change of Control is a security that is not listed on a national securities exchange, the Registered Holder shall be entitled to elect to receive either (1) cash in an amount equal to the Fair Market Value of the net economic benefits of this Warrant or (2) an amount of such securities having deal value equal to the net economic benefit of this Warrant and (ii) at any time prior to the Change of Control, the Registered Holder may exercise this Warrant in accordance with the terms hereof, in which case such Registered Holder shall be entitled to receive any consideration to be received by holders of Preferred Stock (or Convertible Common Stock if elected by the Registered Holder).

 

4.           Fractional Shares. The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the fair market value (“Fair Market Value”) per share of Preferred Stock (or Common Stock, as applicable), such Fair Market Value to be determined as follows:

 

(a)            If traded on a national securities exchange or through the Nasdaq Capital Market, the Fair Market Value shall be deemed to be the average of the closing prices of the securities on such exchanges over the thirty (30) day period ending three (3) days prior to the closing. If actively traded over the counter, the value shall be deemed to be the average of the closing bid or sales prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the closing;

 

 

(b)          In the event that this Warrant is exercised in connection with the IPO, the Fair Market Value shall be the per share offering price to the public of the IPO; or

 

(c)          If at any time such security is not listed on any national securities exchange or the Nasdaq Capital Market or quoted in the over-the-counter markets, and this Warrant is not being exercised in connection with the IPO, the Fair Market Value shall be the fair value thereof, as determined jointly and in good faith by the Company’s Board of Directors and the Registered Holder of the Warrants then remaining outstanding. If such parties are unable to reach agreement on such fair value within a reasonable period of time, such fair value shall be determined by an independent appraiser experienced in valuing securities jointly and in good faith selected by the Company’s Board of Directors and the Registered Holder of the Warrants then remaining outstanding. The determination of the appraiser shall be final and binding upon the parties and the Company shall pay the fees and expenses of such appraiser.

 

5.            Requirements for Transfer.

 

(a)          This Warrant and the Warrant Shares shall not be sold or transferred unless either (i) they first shall have been registered under the Act or (ii) such sale or transfer is exempt from the registration requirements of the Act. A transferring Registered Holder will cause any proposed transferee of this Warrant to agree to take and hold this Warrant subject to the provisions of and upon the conditions specified in this Warrant.

 

(b)          Each certificate representing Warrant Shares shall bear a legend substantially in the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH SECURITIES ARE REGISTERED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO AN EXEMPTION THEREFROM, OR EXCEPTION THERETO, AND IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS.”

 

The foregoing legend shall be removed from the certificates representing any Warrant Shares, at the request of the holder thereof, at such time as all of the applicable conditions of Rule 144 (then in effect) are met (other than the information requirements thereof, which shall be the responsibility of the Company to maintain and make available to prospective investors).

 

 

6.           No Impairment. The Company will not, by amendment of the Charter or through reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Registered Holder against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any shares of Preferred Stock or Convertible Common Stock obtainable upon the exercise of this Warrant or any of the rights under the Preferred Stock and (b) take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Preferred Stock upon the exercise of this Warrant and Convertible Common Stock upon the exercise of any rights under the Preferred Stock.

 

7.            Notices of Record Date, etc. In the event:

 

(a)           the Company shall propose at any time to (i) declare any dividend or other distribution upon the outstanding shares of Preferred Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) or (ii) grant to the holders of Preferred Stock (or other stock or securities at the time deliverable upon the exercise of this Warrant) any right to subscribe for or purchase any shares of stock of any class or any other securities (other than pursuant to contractual right held by such holders), or to receive any other right; or

 

(b)            any sale, license, or other disposition of all or substantially all of the Company’s assets (including intellectual property) (a “Sale”), or any reorganization, consolidation, merger, sale of the voting securities of the Company or other transaction or series of related transactions where the holders of the Company’s securities before the transaction or series of related transactions beneficially own less than forty-nine percent (49%) of the outstanding voting securities of, or economic interests in, the surviving entity after the transaction or series of related transactions (an “Acquisition” and together with a Sale, a “Change of Control”);

 

(c)            the Company proposes to file a registration statement in connection with an IPO;

 

(d)            of any capital reorganization of the Company or any reclassification of the Company’s capital stock; or

 

(e)            of the voluntary or involuntary dissolution, liquidation or winding-up of the Company,

 

then, and in each such case, the Company will mail or cause to be distributed to the Registered Holder at least seven (7) days prior to the record date specified therein (or such shorter period approved by the Registered Holder) and at least seven (7) days prior to the effective date of such event specified in clause (b) or (c) hereof a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such Change of Control, dissolution, liquidation or winding-up is to take place, and the time, if any is to be fixed, as of which the holders of record of Preferred Stock (or such other stock or securities at the time deliverable upon the exercise of this Warrant) shall be entitled to exchange their shares of Preferred Stock (or such other stock or securities) for securities or other property deliverable upon such Change of Control, dissolution, liquidation or winding-up. Nothing herein shall prohibit the Registered Holder from exercising this Warrant during the seven (7) day period commencing on the date of such notice.

 

 

8.          Reservation of Stock. The Company covenants that, for as long as this Warrant remains outstanding, the Company will at all times (a) reserve and keep available, from its authorized and unissued Preferred Stock solely for issuance and delivery upon the exercise of this Warrant and free of preemptive rights, such number of Warrant Shares and other securities, cash and/or property, as from time to time shall be issuable upon the exercise of this Warrant, (b) from time to time, take all steps necessary to increase the authorized number of shares of its Preferred Stock if at any time the authorized number of shares of Preferred Stock remaining unissued is insufficient to permit the exercise of this Warrant, (c) reserve from its authorized and unissued shares of Common Stock a sufficient number of shares of Common Stock to provide for the Convertible Common Stock and (iv) take all steps necessary to increase the number of shares of Common Stock to provide sufficient reserves of shares of Convertible Common Stock.

 

9.             Issuance Upon Exercise. All shares of Preferred Stock and Convertible Common Stock issuable upon exercise of this Warrant or any rights under the Preferred Stock, as applicable, will be duly and validly issued, fully paid and nonassessable and will be free of restrictions on transfer, other than restrictions on transfer under any agreement between the Registered Holder and the Company and under applicable state and federal securities laws, and will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein). The Company shall take all such actions as may be necessary to ensure that all such shares of Preferred Stock and Convertible Common Stock may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic stock exchange upon which shares of Preferred Stock or Convertible Common Stock may be listed (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

 

10.          Exchange of Warrants. Upon the surrender by the Registered Holder to the Company, the Company will, subject to the provisions of Section 5 hereof, issue and deliver to or upon the order of such Registered Holder, at the Company’s expense, a new Warrant or Warrants of like tenor, in the name of the Registered Holder or as the Registered Holder may direct (in which case such transferee shall become a Registered Holder), calling in the aggregate on the face or faces thereof for the number of shares of Preferred Stock (or other securities, cash and/or property) then issuable upon exercise of this Warrant, in each case as the Registered Holder may direct.

 

11.            Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of a Registered Holder shall be satisfactory) of the ownership and loss, theft, destruction or mutilation of any certificate evidencing this Warrant and in the case of loss, theft or destruction, upon delivery of an unsecured indemnity agreement of the Registered Holder, or in the case of mutilation, upon surrender and cancellation of such certificate, the Company shall, at its expense, execute and deliver in lieu of such certificate, a new certificate of like kind representing the same rights represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

 

12.             Transfers, etc.

 

(a)            The Company shall keep and properly maintain a register (the “Warrant Register”) at its principal executive office containing the name and address of the Registered Holder of this Warrant. The Registered Holder may change its or his address as shown on the warrant register by written notice to the Company requesting such change.

 

 

(b)           Subject to the provisions of Section 5 hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant with a properly executed assignment (in the form of Exhibit B hereto) at the principal executive office of the Company.

 

(c)            Until any transfer of this Warrant is made in the Warrant Register, the Company may treat the Registered Holder as the absolute owner hereof for all purposes; provided, however, that if and when this Warrant is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

(d)             The Company shall not close its books against the transfer of this Warrant or any share of Preferred Stock issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely exercise of this Warrant. The Company shall from time to time take all such action as may be necessary to ensure that the par value per share of the unissued Preferred Stock acquirable upon exercisable of this Warrant is at all times equal to or less than the Exercise Price then in effect.

 

13.          Distributing of Notices, etc. Any notice, request, demand or other communication required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed given under this Agreement on the earliest of: (a) the date of personal delivery, (b) the date of transmission by electronic mail and (c) two (2) days after deposit with a nationally-recognized courier or overnight service such as Federal Express, and shall in all cases be accompanied by an electronic mail notice. All notices not delivered personally, by facsimile or by electronic mail will be sent with postage and other charges prepaid and properly addressed to the party to be notified at the address set forth for such party:

 

If to a Registered Holder:

 

KENNEDY LEWIS CAPITAL PARTNERS MASTER FUND II LP

80 Broad Street

22^nd Floor

New York, NY 10004

Attention: Richard Gumer

Email: [XXX]

 

With a copy to (which does not constitute notice):

 

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

Bank of America Tower

New York, NY 10036-6745

Phone: 212-872-1000

Attn: Daniel Fisher

Email: [XXX]

 

 

If to the Company:

 

RAPID MICRO BIOSYSTEMS, INC.

1001 Pawtucket Blvd. West

Lowell, MA 01854

Attn: Chief Financial Officer

Email: [XXX]

 

With a copy to (which does not constitute notice):

 

Latham & Watkins LLP

200 Clarendon Street, 27^th Floor

Boston, MA 02116

Phone: 617-948-6083

Attn: Stephen W. Ranere

Email: [XXX]

 

Any party hereto (and such party’s permitted assigns) may change such party’s address for receipt of future notices hereunder by giving written notice to the Company and the other parties hereto.

 

14.            No Rights or Liabilities as Stockholder; Lock-Up Agreement.

 

(a)            Other than as otherwise provided in this Warrant, prior to exercise of this Warrant, the Registered Holder shall not be entitled to any rights of a stockholder with respect to the Warrant Shares, including (without limitation) the right to vote such shares, receive dividends or other distributions thereon, exercise preemptive rights, be notified of stockholder meetings, or be entitled to any stockholder notice or other communication concerning the business or affairs of the Company.

 

(b)             In the event (i) (x) the Company effects a split of the Common Stock or Preferred Stock by means of a stock dividend and (y) the Exercise Price of the Warrants and the number of any of the securities as to which purchase rights under this Warrant exist are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), and (ii) the Registered Holder exercises this Warrant between the record date and the distribution date for such stock dividend, then the Registered Holder shall be entitled to receive, on the distribution date, the stock dividend with respect to any shares of the securities as to which purchase rights under this Warrant or the Preferred stock, as applicable, exist and are or could be acquired upon the exercise of this Warrant and the exercise of any rights under the Preferred Stock, as applicable, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

 

 

(c)            The Registered Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the IPO, and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days, which period may be extended upon the request of the managing underwriter, but only to the extent required by any FINRA rules, for an additional period of up to thirty-four (34) days if the Company issues or proposes to issue an earnings or other public release within thirty-four (34) days of the expiration of the 180-day lockup period), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 14(c) shall apply only to the IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall be applicable to the Registered Holder only if all officers, directors and stockholders who individually own more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding shares of the Company’s preferred stock) are subject to the same restrictions. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to the Registered Holder, based on the number of shares subject to such agreements. The underwriters in connection with such registration are intended third-party beneficiaries of this Section 14(c) and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto. The Registered Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 14(c) or that are necessary to give further effect thereto.

 

15.            Amendment or Waiver; Expiration. Any term of this Warrant may be amended or waived upon the written consent of the Company, on the one hand, and KLIM, on the other hand. Unless earlier exercised in full or terminated in accordance with the terms hereof, this Warrant shall automatically expire and be of no further force or effect on the tenth anniversary of the Date of Issuance.

 

16.            Successors and Assigns. This Warrant shall be binding upon and inure to the benefit of the Registered Holder and its assigns, and shall be binding upon any entity succeeding to the Company by consolidation, merger or acquisition of all or substantially all of the Company’s assets. The Company may not assign this Warrant or any rights or obligations hereunder without the prior written consent of the Registered Holder. The Registered Holder may assign this Warrant without the Company’s prior written consent.

 

17.            Remedies. In the event of a breach by either party of any of its obligations under this Warrant, the non-breaching party, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. Each party agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of its breach of any of the provisions of this Warrant and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

 

 

18.            Section Headings. The section headings in this Warrant are for the convenience of the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of the parties.

 

19.         Counterparts. This Warrant may be executed and delivered by facsimile or portable document format (.pdf) and may be executed in counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.

 

20.             Severability. The provisions of this Warrant will be deemed severable and the invalidity or unenforceability of any provision hereof will not affect the validity or enforceability of the other provisions hereof; provided that if any provision of this Warrant, as applied to any party or to any circumstance, is adjudged by a court, governmental body, arbitrator, or mediator not to be enforceable in accordance with its terms, the parties agree that the court, governmental body, arbitrator, or mediator making such determination will have the power to modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced.

 

21.            Titles and Subtitles. The article and section headings contained in this Warrant are inserted for convenience only and will not affect in any way the meaning or interpretation of this Warrant.

 

22.           Third Parties. Nothing in this Warrant, express or implied, is intended to confer upon any person other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Warrant.

 

23.            Governing Law and Jurisdiction. This Warrant and the performance of the transactions and the obligations of the parties hereunder will be governed by and construed and enforced in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law principles.

 

24.            Representations and Warranties of the Company. The Company hereby represents and warrants to the Registered Holder that (i) it has the corporate power and authority to execute this Agreement and consummate the transactions contemplated by this Agreement, (ii) there are no statutory or contractual stockholders’ preemptive rights or rights of refusal with respect to the issuance of any Warrants that have not been satisfied or waived and (iii) the execution and delivery by the Company of this Agreement and the issuance of the shares of Preferred Stock upon exercise of any Warrant and the Convertible Common Stock do not and shall not (A) conflict with or result in a breach of the terms, conditions or provisions of, (B) constitute a default under, (C) result in the creation of any lien, security interest, charge or encumbrance upon the Company’s capital stock or assets pursuant to, (D) result in a violation of, or (E) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant to, the Company’s governing documents or any law in effect as of the date hereof to which the Company is subject, or any agreement, instrument, order, judgment or decree to which the Company is subject as of the date hereof, except for any such authorization, consent, approval, notice or exemption required under applicable securities laws.

 

 

25.            Representations and Warranties of the Holder. The Registered Holder represents and warrants to the Company as follows:

 

(a)            This Warrant and the Warrant Shares to be acquired upon exercise of this Warrant by the Registered Holder will be acquired for investment for the Registered Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Act.

 

(b)            The Registered Holder has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. The Registered Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to the Registered Holder or to which the Registered Holder has access.

 

(c)            The Registered Holder understands that the acquisition of this Warrant and its underlying securities involves substantial risk. The Registered Holder has experience as an investor in securities of companies of a similar size and stage of development as the Company and acknowledges that the Registered Holder can bear the economic risk of such Registered Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that the Registered Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables the Registered Holder to be aware of the character, business acumen and financial circumstances of such persons.

 

(d)             The Registered Holder is an “accredited investor” as such term is defined under Rule 501 of Regulation D promulgated under the Act.

 

(e)           The Registered Holder understands that this Warrant and the Warrant Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Registered Holder’s investment intent as expressed herein. The Registered Holder understands that this Warrant and the Warrant Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the parties have executed this Warrant as of the Date of Issuance.

 

	/s/ Robert Spignesi
	Name:	Robert Spignesi
	Title:	President and Chief Executive Officer

 

[Signature Page to Series C1 Warrant Agreement]

 

 

IN WITNESS WHEREOF, the parties have executed this Warrant as of the Date of Issuance.

 

	REGISTERED HOLDER: KENNEDY LEWIS CAPITAL PARTNERS MASTER FUND II LP
	By: KENNEDY LEWIS GP II, LLC, its general partner
	By: /s/ Anthony Pasqua
	Name:	Anthony Pasqua
	Title:	Authorized Signatory

 

[Signature Page to Series C1 Warrant Agreement]

  

 

EXHIBIT A

 

PURCHASE FORM

 

To:

Dated:

 

The undersigned, pursuant to the provisions set forth in the attached Warrant (No. ___), hereby irrevocably elects to purchase _____ shares of the Preferred Stock covered by such Warrant.

 

The undersigned herewith makes payment of the full exercise price for such shares at the price per share provided for in such Warrant.

 

By its execution below and for the benefit of the Company, the undersigned hereby restates each of the representations and warranties in Section 25 of such Warrant as of the date hereof.

 

[

]

 

 

	Name:
	Title:

 

	Address:

 

 

EXHIBIT B

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, ________________________________________ hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant (No. ____) with respect to the number of shares of Preferred Stock covered thereby set forth below, unto:

 

Name of Assignee	Address	No. of Shares

 

Dated:

 

[

]

 

	Name:
	Title:

 

 

Exhibit 10.5

 

Execution Version

 

RAPID MICRO BIOSYSTEMS, INC.

 

SEVENTH AMENDED AND RESTATED
INVESTORS’ RIGHTS AGREEMENT

 

March 9, 2021

 

 

TABLE OF CONTENTS

 

Page

 

1.	Definitions		1
2.	Registration Rights		6
	2.1	Demand Registration	6
	2.2	Company Registration	7
	2.3	Underwriting Requirements	7
	2.4	Obligations of the Company	9
	2.5	Furnish Information	10
	2.6	Expenses of Registration	10
	2.7	Delay of Registration	10
	2.8	Indemnification	11
	2.9	Reports Under Exchange Act	13
	2.10	Limitations on Subsequent Registration Rights	13
	2.11	“Market Stand-off” Agreement	14
	2.12	Restrictions on Transfer	14
	2.13	Termination of Registration Rights	15
3.	Information and Observer Rights		16
	3.1	Delivery of Financial Statements	16
	3.2	Board Notice of Material Events and Occurrences	17
	3.3	Inspection	17
	3.4	Observer Rights	17
	3.5	Termination of Information and Observer Rights	18
	3.6	Confidentiality	18
4.	Rights to Future Stock Issuances		18
	4.1	Right of First Offer	18
	4.2	Termination	20
5.	Additional Covenants		20
	5.1	Insurance	20
	5.2	Employee Agreements	20
	5.3	Employee Stock	20
	5.4	Board Matters	20
	5.5	Successor Indemnification	21
	5.6	Matters Requiring Investor Director Approval	21
	5.7	Matters Requiring Supermajority Director Approval	22
	5.8	Termination of Covenants	22

 

 

6.	Miscellaneous		22
	6.1	Successors and Assigns	22
	6.2	Governing Law	23
	6.3	Counterparts; Facsimile	23
	6.4	Titles and Subtitles	23
	6.5	Notices	23
	6.6	Amendments and Waivers	24
	6.7	Severability	24
	6.8	Aggregation of Stock	24
	6.9	Additional Investors	25
	6.10	Entire Agreement	25
	6.11	Dispute Resolution	25
	6.12	Delays or Omissions	25
	6.13	Acknowledgment from the Company	25

 

Schedule A      -      Schedule of Investors

Schedule B      -      Schedule of Key Holders

 

 

SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

THIS SEVENTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made as of the 9th day of March, 2021 by and among Rapid Micro Biosystems, Inc., a Delaware corporation (the “Company”), each of the investors listed on Schedule A hereto, each of which is referred to in this Agreement as an “Investor,” each of the stockholders listed on Schedule B hereto, each of whom is referred to herein as a “Key Holder” and any additional purchaser that becomes a party to this Agreement in accordance with Section 6.9 hereof.

 

RECITALS

 

WHEREAS, certain of the Investors (the “Existing Investors”) possess registration rights, information rights, rights of first offer, and other rights pursuant to a Sixth Amended and Restated Investors’ Rights Agreement dated as of April 28, 2020, between the Company and the other parties thereto (the “Prior Agreement”);

 

WHEREAS, the Existing Investors represent the Requisite Holders (as defined in the Prior Agreement) and desire to amend and restate the Prior Agreement in its entirety and to accept the rights created pursuant to this Agreement in lieu of the rights granted to them under the Prior Agreement; and

 

WHEREAS, certain of the Investors are parties to that certain Series D1/D2 Preferred Stock Purchase Agreement dated as of the date hereof, between the Company and such Investors (the “Purchase Agreement”), under which certain of the Company’s and such Investors’ obligations are conditioned upon the execution and delivery of this Agreement by such Investors and the Requisite Holders (as defined in the Prior Agreement).

 

NOW, THEREFORE, the Existing Investors hereby agree that the Prior Agreement shall be amended and restated in its entirety, and the parties to this Agreement further agree as follows:

 

1.            Definitions. For purposes of this Agreement:

 

1.1            “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund or other investment fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company or investment adviser with, such Person.

 

1.2            “Common Stock” means shares of the Company’s Common Stock, par value $0.01 per share.

 

1.3            “Convertible Securities” means any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.

 

 

1.4            “Damages” means any loss, damage, or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

1.5            “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants.

 

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

 

1.7           “Excluded Registration” means (i) a registration relating-to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; (iv) a registration relating to the IPO or a SPAC Transaction or (v) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

 

1.8            “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

1.9            “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

1.10           “GAAP” means generally accepted accounting principles in the United States.

 

1.11           “Holder” means any holder of Registrable Securities who is a party to this Agreement.

 

1.12          “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, of a natural person referred to herein.

 

 

1.13            “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

1.14            “IPO” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.

 

1.15            “Key Employee” means any executive-level employee (including division director and vice president-level positions) as well as any employee or consultant who, either alone or in concert with others, develops, invents, programs, or designs any material intellectual property owned or held for use by the Company.

 

1.16            “Key Holder Registrable Securities” means (i) the shares of Common Stock acquired prior to the earlier of (A) the IPO or (B) a SPAC Transaction and held by the Key Holders, and (ii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of such shares.

 

1.17            “Major Holder” means (i) with respect to any Investor, any Investor that, individually or together with such Investor’s Affiliates, holds at least 500,000 Registrable Securities (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof), excluding shares of Common Stock issued to such Investor in connection with the July 24, 2017 conversion of all then-outstanding shares of the Company’s preferred stock into Common Stock, and (ii) with respect to any Key Holder (other than Straus Holdings, Inc. for purpose of Section 3 hereof), any Key Holder that, individually or together with such Key Holder’s Affiliates, holds at least 884 shares of Key Holder Registrable Securities (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof).

 

1.18           “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

 

1.19          “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

 

1.20            “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

1.21            “Preferred Stock” means, collectively, all shares of Series A1 Preferred Stock, Series B1 Preferred Stock, Series C1 Preferred Stock, Series C2 Preferred Stock, Series D1 Preferred Stock and Series D2 Preferred Stock.

 

1.22             “Qualified Public Offering” shall have the meaning given to such term in the Restated Certificate.

 

 

1.23         “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock (including, without limitation, Preferred Stock issuable or issued upon exercise of any warrants to purchase Preferred Stock); (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, held by the Investors as of the date hereof or acquired by the Investors after the date hereof and prior to the earlier of (A) the IPO or (B) a SPAC Transaction; (iii) the Key Holder Registrable Securities, provided, however, that such Key Holder Registrable Securities shall not be deemed Registrable Securities and the Key Holders shall not be deemed Holders for the purposes of Section 2.10; and (iv) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; excluding, however, (a) any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Section 6.1, and (b) for purposes of Section 2 (and following the earlier of (A) the IPO or (B) a SPAC Transaction, for all purposes under this Agreement) any shares for which registration rights have terminated pursuant to Section 2.13 of this Agreement.

 

1.24        “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.

 

1.25            “Requisite Directors” shall mean a majority of the Preferred Directors (as defined in the Restated Certificate).

 

1.26         “Requisite Holders” shall mean the Investors holding a majority of the shares of Common Stock issued or issuable upon conversion of the shares of Preferred Stock held by the Investors (voting together as a single class (on an-as-converted basis) and in accordance with the provisions of the Restated Certificate (including the Series C2/D2 Voting Restriction (as defined in the Restated Certificate), unless otherwise specified). For purposes of clarity, no shares of Series C2 Preferred Stock or Series D2 Preferred Stock held by any Investors shall be counted for purposes of the foregoing definition until and unless a Restriction Removal Event has occurred (as such term is used in the Restated Certificate).

 

1.27           “Restated Certificate” shall mean the Company’s Eighth Amended and Restated Certificate of Incorporation, as may be amended and/or restated from time to time.

 

1.28            “Restricted Securities” means the securities of the Company required to bear the legend set forth in Section 2.12(b) hereof.

 

1.29            “Right of First Refusal and Co-Sale Agreement” means the Seventh Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of the date hereof, by and among the Company and the other parties thereto, as may be amended and/or restated from time to time.

 

1.30            “SEC” means the Securities and Exchange Commission.

 

1.31            “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

 

1.32            “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

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

 

1.34         “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.6.

 

1.35            “Series A1 Preferred Stock” means shares of the Company’s Series A1 Preferred Stock, par value $0.01 per share.

 

1.36            “Series B1 Preferred Stock” means shares of the Company’s Series B1 Preferred Stock, par value $0.01 per share.

 

1.37            “Series C1 Preferred Stock” means shares of the Company’s Series C1 Preferred Stock, par value $0.01 per share.

 

1.38            “Series C2 Preferred Stock” means shares of the Company’s Series C2 Preferred Stock, par value $0.01 per share.

 

1.39            “Series D1 Preferred Stock” means shares of the Company’s Series D1 Preferred Stock, par value $0.01 per share.

 

1.40            “Series D2 Preferred Stock” means shares of the Company’s Series D2 Preferred Stock, par value $0.01 per share.

 

1.41            “SPAC” means a publicly-traded special purpose acquisition company.

 

1.42            “SPAC Transaction” means a transaction or series of related transactions by merger, consolidation, share exchange or otherwise, of the Company with a SPAC or a subsidiary or affiliate thereof.

 

1.43            “Voting Agreement” means the Seventh Amended and Restated Voting Agreement, dated as of the date hereof, by and among the Company and the other parties thereto, as may be amended and/or restated from time to time.

 

 

2.            Registration Rights. The Company covenants and agrees as follows:

 

2.1            Demand Registration.

 

(a)            Form S-1 Demand. If at any time after the earlier of (i) three (3) years after the date hereof or (ii) one hundred eighty (180) days after the effective date of the registration statement for the earlier of (A) the IPO or (B) a SPAC Transaction, the Company receives a request from Holders of a majority of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to Registrable Securities having an anticipated aggregate offering price of at least $50 million, then the Company shall (A) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (B) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Section 2.1(c) and Section 2.3.

 

(b)            Form S-3 Demand. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders of at least twenty percent (20%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price of at least $3 million, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within forty-five (45) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Section 2.1(c) and Section 2.3.

 

(c)            Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors (the “Board”) it would be materially detrimental to the Company and its stockholders for such registration statement to be filed and it is therefore necessary to defer the filing of such registration statement because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided further, that the Company shall not register any securities for its own account or that of any other stockholder during such ninety (90) day period other than an Excluded Registration.

 

 

(d)           The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a) (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two registrations pursuant to Section 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b) (x) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (y) if the Company has effected two registrations pursuant to Section 2.1(b) within the twelve (12) month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Section 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Section 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 2.1(d).

 

2.2          Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its securities under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.

 

2.3          Underwriting Requirements.

 

(a)            If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Section 2.3, if the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares.

 

 

(b)            In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced below twenty percent (20%) of the total number of securities included in such offering, unless such offering is a Qualified Public Offering, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering. For purposes of the provision in this Section 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

 

 

2.4            Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)            prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to sixty (60) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;

 

(b)            prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

 

(c)            furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

 

(d)            use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(e)            in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

(f)            use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(g)           provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(h)         promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(i)            notify each selling Holder, 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; and

 

 

(j)            after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

2.5          Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.

 

2.6       Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed $30,000 for each such registration, filing or qualification, of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities then outstanding agree to forfeit their right to one registration pursuant to Section 2.1(a) or Section 2.1(b), as the case may be; provided further, that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any such expenses and shall not forfeit their right to one registration pursuant to Section 2.1(a) or Section 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.7        Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

 

2.8          Indemnification. If any Registrable Securities are included in a registration statement under this Section 2:

 

(a)            To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

 

(b)            To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further, that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Sections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

 

(c)          Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

 

(d)            To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (i) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (ii) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further, that in no event shall a Holder’s liability pursuant to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

(e)           Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

 

(f)          Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement.

 

2.9            Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:

 

(a)             make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;

 

(b)            use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and

 

(c)           furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company; and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

 

2.10            Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Requisite Holders (which for purpose of this Section 2.10 is not subject to the Series C2/D2 Voting Restriction), enter into any agreement with any holder or prospective holder of any securities of the Company that would provide to such holder the right to include securities in any registration on other than a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of Registrable Securities that they wish to so include; provided, that this limitation shall not apply to any additional Investor who becomes a party to this Agreement in accordance with Section 6.9.

 

 

2.11         “Market Stand-off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter (in connection with the IPO) or the SPAC (in connection with a SPAC Transaction), during the period commencing on the date of (a) the final prospectus relating to the IPO or (b) the closing of the SPAC Transaction, and ending on the date specified by the Company or the managing underwriter (for the IPO) or the Company and the SPAC (for a SPAC Transaction) (such period not to exceed one hundred eighty (180) days, (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock (or, in the case of a SPAC Transaction, any shares of the common stock or other share capital of the SPAC or any securities convertible into or exercisable or exchangeable, directly or indirectly, for such common stock or other share capital) held immediately before the effective date of the registration statement for such offering or transaction or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock, the common stock or share capital of the SPAC, as applicable, or other securities, in cash, or otherwise. The foregoing provisions of this Section 2.11 (A) shall apply only to the IPO or the SPAC Transaction, as applicable, (B) shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and (C) shall be applicable to the Holders only if all officers, directors and stockholders individually owning more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock) are subject to the same restrictions. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements. The underwriters in connection with the IPO, and the SPAC in connection with a SPAC Transaction, are intended third-party beneficiaries of this Section 2.11 and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the Company or the underwriters (in connection with the IPO) and the Company or the SPAC (in connection with a SPAC Transaction) that are consistent with this Section 2.11 or that are necessary to give further effect thereto.

 

2.12         Restrictions on Transfer.

 

(a)            The Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.

 

(b)            Each certificate or instrument representing (i) the Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Section 2.12(c)) be stamped or otherwise imprinted with a legend substantially in the following form:

 

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

 

THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Section 2.12.

 

(c)            The holder of each certificate representing Restricted Securities, by acceptance thereof, agrees to comply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a legal opinion or “no action” letter (A) in any transaction in compliance with SEC Rule 144 or (B) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided, that each transferee agrees in writing to be subject to the terms of this Section 2.12. Each certificate or instrument evidencing the Restricted Securities transferred as above provided shall bear, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Section 2.12(b), except that such certificate shall not bear such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act.

 

2.13         Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.1 or Section 2.2 shall terminate upon the earliest to occur of:

 

  (a)            the closing of (i) a Deemed Liquidation Event, as such term is defined in the Restated Certificate or (ii) a SPAC Transaction;

 

 

 

(b)             such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation during a three-month period without registration; and

 

(c)             the third anniversary of the Qualified Public Offering.

 

3.              Information and Observer Rights.

 

3.1            Delivery of Financial Statements. The Company shall deliver to each Major Holder:

 

(a)             as soon as practicable, but in any event on or before September 30 following the end of each fiscal year of the Company, (i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and a comparison between (A) the actual amounts as of and for such fiscal year and (B) the comparable amounts for the prior year and as included in the Budget (as defined in Section 3.1(d)) for such year, with an explanation of any material differences between such amounts and a schedule as to the sources and applications of funds for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and certified by independent public accountants of nationally recognized standing selected by the Board, including the Requisite Directors;

 

(b)             as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, unaudited statements of income and of cash flows for such fiscal quarter, and an unaudited balance sheet as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(c)             as soon as practicable, but in any event within thirty (30) days of the end of each month, unaudited statements of income and of cash flows for such month, and an unaudited balance sheet as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(d)             as soon as practicable, but in any event before the end of each fiscal year, a budget and business plan for the next fiscal year (collectively, the “Budget”), prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any other budgets or revised budgets prepared by the Company;

 

(e)             with respect to the financial statements called for in Section 3.1(a), Section 3.1(b) and Section 3.1(c), an instrument executed by the chief financial officer and chief executive officer of the Company certifying that such financial statements were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (except as otherwise set forth in Section 3.1(b) and Section 3.1(c)) and fairly present the financial condition of the Company and its results of operation for the periods specified therein; and

 

 

(f)             such other information and materials as the Board may determine to distribute to the Major Holders from time to time.

 

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

Notwithstanding anything else in this Section 3.1 to the contrary, the Company may cease providing the information set forth in this Section 3.1 during the period starting with the date sixty (60) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided, that the Company’s covenants under this Section 3.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.

 

3.2            Board Notice of Material Events and Occurrences. The Company shall provide each member of the Board notification of the existence of any known material breach by the Company of any covenant in this Agreement, the Right of First Refusal and Co-Sale Agreement or the Voting Agreement.

 

3.3            Inspection. The Company shall permit each Major Holder, at such Major Holder’s expense, to: request a copy of the most recent capitalization table of the Company; visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Major Holder; provided, however, that the Company shall not be obligated pursuant to this Section 3.3 to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

3.4            Observer Rights. For so long as Investors affiliated with each of Longitude Venture Partners II, L.P., Quaker Bioventures II, L.P., TVM Capital, Asahi Kasei Medical Co., Ltd., Bain Capital Life Sciences Fund, L.P. (“BCLS”) and D1 Master Holdco I LLC (“D1 Capital”) own not less than 500,000 shares of the Preferred Stock (or an equivalent amount of Common Stock issued upon conversion thereof) (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof), the Company shall invite one (1) representative of each such Investor and/or Key Holder (as applicable) to attend all meetings of the Board in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors. For so long as Investors affiliated with Colony Harvest Ltd (“Colony Harvest”) own, collectively, not less than 500,000 shares of the Preferred Stock (or an equivalent amount of Common Stock issued upon conversion thereof) (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof), the Company shall invite one (1) representative designated by Colony Harvest to attend all meetings of the Board in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors. Each representative referred to in the preceding two sentences (each an “Observer”) shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information provided to such Observer. Notwithstanding the foregoing, the Company reserves the right to withhold any information and to exclude any such Observer from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in a conflict of interest, or if such Investor and/or Key Holder or its Observer is a competitor of the Company.

 

 

3.5            Termination of Information and Observer Rights. The covenants set forth in Section 3.1, Section 3.2, Section 3.3 and Section 3.4 shall terminate and be of no further force or effect (a) immediately before the consummation of the IPO, (b) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, (c) upon a Deemed Liquidation Event, as such term is defined in the Restated Certificate, or (d) upon the closing of a SPAC Transaction, whichever event occurs first.

 

3.6            Confidentiality. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement or any information provided in connection with a request for a waiver under or an amendment of any term of this Agreement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 3.6 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 3.6; (iii) to any current or prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided, that such Person is bound by an enforceable non-disclosure agreement with such Investor obligating such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided, that (A) if such required disclosure is specifically targeted at information regarding the Company, the Investor promptly notifies the Company of such disclosure and (B) the Investor takes reasonable steps to minimize the extent of any such required disclosure; or (v) as routinely or periodically requested by a regulator or self-regulatory organization.

 

4.              Rights to Future Stock Issuances.

 

4.1            Right of First Offer. Subject to the terms and conditions of this Section 4.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Major Holder. A Major Holder shall be entitled to apportion the right of first offer hereby granted to it among itself and its Affiliates in such proportions as it deems appropriate.

 

(a)             The Company shall give notice (the “Offer Notice”) to each Major Holder, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.

 

 

(b)             By notification to the Company within twenty (20) days after the Offer Notice is given, each Major Holder may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the Common Stock then held (including all shares of Common Stock then issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held by such Major Holder) bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Preferred Stock and outstanding Derivative Securities, but excluding Derivative Securities reserved for issuance pursuant to the Company’s stock and option plans that have been approved by the Board). At the expiration of such twenty (20) day period, the Company shall promptly notify each Major Holder that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Holder”) of any other Major Holder’s failure to do likewise. During the ten (10) day period commencing after the Company has given such notice, each Fully Exercising Holder may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Major Holders were entitled to subscribe but that were not subscribed for by the Major Holders which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Holder bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held by all Fully Exercising Holders who wish to purchase such unsubscribed shares. The closing of any sale pursuant to this Section 4.1(b) shall occur within the later of one hundred and twenty (120) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Section 4.1(c).

 

(c)             If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section 4.1(b), the Company may, during the ninety (90) day period following the expiration of the periods provided in Section 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Major Holders in accordance with this Section 4.1.

 

(d)             The right of first offer in this Section 4.1 shall not be applicable to: (i) Exempted Securities (as defined in the Restated Certificate), (ii) shares of Common Stock issued in the IPO or SPAC Transaction; and (iii) the issuance of shares of Preferred Stock after the date hereof pursuant to the Purchase Agreement.

 

 

4.2            Termination. The covenants set forth in Section 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, (iii) upon a Deemed Liquidation Event, as such term is defined in the Restated Certificate, or (iv) upon the closing of a SPAC Transaction, whichever event occurs first.

 

5.              Additional Covenants.

 

5.1            Insurance. The Company shall use commercially reasonable efforts to cause its Directors and Officers liability insurance policy to be maintained in an amount and on terms and conditions satisfactory to the Board, until such time as the Board determines that such insurance should be discontinued.

 

5.2            Employee Agreements. The Company will cause (i) each person previously, now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment agreement and (ii) each Key Employee to enter into a one (1) year noncompetition and nonsolicitation agreement on substantially the Company’s customary form of agreement. In addition, the Company shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and any employee, without the approval of a majority of the Board, including the Requisite Directors.

 

5.3            Employee Stock. Unless otherwise approved by the Board, all future employees and consultants of the Company who purchase, receive options to purchase, or receive awards of shares of the Company’s capital stock after the date hereof shall be required to execute restricted stock or option agreements, as applicable, providing for (i) vesting of shares over a four (4) year period, with the first twenty-five percent (25%) of such shares vesting following twelve (12) months of continued employment or service, and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months, (ii) a market stand-off provision substantially similar to that in Section 2.11 and (iii) no transfers of shares prior to vesting of such shares. In addition, unless otherwise approved by the Board, the Company shall retain a “right of first refusal” on employee transfers until the IPO or a SPAC Transaction and shall have the right to repurchase unvested shares at cost upon termination of employment of a holder of restricted stock. All option grants by the Company shall have an exercise price equal to the fair market value on the date of grant, as determined by the Board and pursuant to a Section 409A valuation report completed by an outside valuation firm. The Company shall condition the receipt of any shares of Common Stock in connection with the exercise of stock options granted to any employees and consultants of the Company under the Company’s 2010 Stock Option and Grant Plan, as may be amended and/or restated from time to time, to the execution and delivery by such employees or consultants of a stockholders agreement granting to the Company a right of first refusal on such shares of Common Stock.

 

5.4            Board Matters. The Company shall reimburse the nonemployee directors and observers appointed pursuant to Section 3.4 hereof for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board and committees thereof. The Investor Designees (as defined in the Voting Agreement) shall have the right to serve on all committees of the Board. The Board shall meet at least once every three months, unless otherwise approved by a majority of the Board, including the approval of the Requisite Directors.

 

 

5.5            Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, the Restated Certificate, or elsewhere, as the case may be.

 

5.6            Matters Requiring Investor Director Approval. The Company hereby covenants and agrees that it shall not, without approval of the Board, which approval must include the affirmative vote of the Requisite Directors, take any action that would, or would reasonably be expected to, have a material effect on the Company, its business or its operations, including without limitation:

 

(a)             make, or permit any subsidiary to make, any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity unless it is wholly owned by the Company;

 

(b)             make, or permit any subsidiary to make, any loan or advance to any Person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board;

 

(c)             guarantee, directly or indirectly, or permit any subsidiary to guarantee, directly or indirectly, any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;

 

(d)             make any investment inconsistent with any investment policy approved by the Board;

 

(e)             otherwise enter into or be a party to any transaction with any director, officer, or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such Person, except for transactions contemplated by this Agreement, the Purchase Agreement, and the Transaction Agreements (as defined in the Purchase Agreement); transactions resulting in payments to or by the Company in an aggregate amount less than $60,000 per year; or transactions made in the ordinary course of business and pursuant to reasonable requirements of the Company’s business and upon fair and reasonable terms that are approved by a majority of the Board, including the approval of the Requisite Directors;

 

(f)             hire, terminate, or change the compensation of the executive officers, including approving any option grants or stock awards to executive officers;

 

(g)             change the principal business of the Company, enter new lines of business, or exit the current line of business;

 

 

(h)            sell, assign, license, pledge, or encumber material technology or intellectual property, other than licenses granted in the ordinary course of business;

 

(i)             enter into any corporate strategic relationship involving the payment, contribution, or assignment by the Company or to the Company of money or assets greater than $250,000;

 

(j)             enter into any transaction pursuant to which the Company or any of its subsidiaries would incur Term Debt (as defined below) in which the aggregate principal amount outstanding of all Term Debt would be in excess of $5,000,000; or

 

(k)             take any action that, pursuant to the Restated Certificate, expressly requires approval of or ratification by the Board.

 

For purposes hereof, “Term Debt” shall mean indebtedness for borrowed money but shall exclude (i) trade payables incurred in the ordinary course of business and (ii) indebtedness pursuant to any accounts receivable facility or other revolving debt facility of the Company.

 

5.7            Matters Requiring Supermajority Director Approval. The Company hereby covenants and agrees that it shall not incur, and shall procure that none of its subsidiaries will incur, any Additional Term Debt (as defined below), pursuant any new or existing facility of the Company or any of its subsidiaries, without approval of the Requisite Directors, which approval must include the affirmative vote of the director then elected by the holders of Series C1 Preferred Stock. For purposes hereof, “Additional Term Debt” shall mean each additional incurrence or drawdown of Term Debt that, if incurred or drawn down, would result in aggregate principal amount outstanding under all Term Debt of the Company and its subsidiaries to be more than $35,000,000.

 

5.8            Termination of Covenants. The covenants set forth in this Section 5, except for Section 5.5, shall terminate and be of no further force or effect (a) immediately before the consummation of the IPO or the closing of a SPAC Transaction, (b) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (c) upon a Deemed Liquidation Event, as such term is defined in the Restated Certificate, whichever event occurs first.

 

6.              Miscellaneous.

 

6.1            Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (a) is an Affiliate of a Holder; (b) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (c) acquires at least 1,000,000 shares of Registrable Securities (as adjusted for any stock combination, stock split, stock dividend, recapitalization or other similar transaction) held by the Holder at the time of the transfer or, if less, all of the Registrable Securities held by such Holder; provided, however, that (i) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (ii) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Section 2.11. For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee (A) that is an Affiliate or stockholder of a Holder; (B) who is a Holder’s Immediate Family Member; or (C) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder; provided further, that all transferees who would not qualify individually for assignment of rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

 

6.2            Governing Law. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law principles that would result in the application of any law other than the law of the Commonwealth of Massachusetts.

 

6.3            Counterparts; Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed and delivered by facsimile or electronic mail signature in PDF or similar format and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

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

 

6.5            Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified; (b) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A or Schedule B (as applicable) hereto, or to the principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Section 6.5. If notice is given to the Company, a copy shall also be sent to Latham & Watkins LLP, 200 Clarendon Street, 27^th Floor, Boston, Massachusetts 02116, Attention: Stephen W. Ranere, and if notice is given to Investors, a copy shall also be given to Morrison & Foerster LLP, Edinburgh Tower, 33/F The Landmark, 15 Queen’s Road Central, Hong Kong, China, Attention: Thomas T.H. Chou; Cooley LLP, 500 Boylston Street, 14th Floor, Boston, MA 02116, Attention: Ryan Sansom; and Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, Attention: Geoff Levin.

 

 

6.6            Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the Requisite Holders; provided, that the Company may in its sole discretion waive compliance with Section 2.12(c) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Section 2.12(c) shall be deemed to be a waiver); and provided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing, (i) this Agreement may not be amended, and no provision hereof may be waived, in each case, in any way which would adversely affect the rights of the Key Holders hereunder in a manner disproportionate to any adverse effect such amendment or waiver would have on the rights of the Investors hereunder, without also the written consent of the holders of at least a majority of the Key Holder Registrable Securities, (ii) Section 3.4 of this Agreement or this clause (ii) may not be amended, and no portion thereof may be waived, as to any of Longitude Venture Partners II, L.P., Quaker Bioventures II, L.P., TVM Capital, Colony Harvest, Asahi Kasei Medical Co., Ltd., BCLS and/or D1 Capital without the consent of such party (for as long as such party is eligible to appoint an Observer pursuant to the terms thereof), (iii) this Agreement may not be amended, modified or terminated and the observance of any term hereunder may not be waived with respect to any Investor (including any Series C2/D2 Initial Holder (as defined in the Restated Certificate), as applicable) without the prior written consent of such Investor if (and only if) such amendment, modification, termination or waiver would adversely affect the rights of such Investor under this Agreement in a manner disproportionate to any adverse effect such amendment, modification, termination or waiver would have on the rights of the other Investors under this Agreement (it being agreed that a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction) and (iv) neither this clause (iv) of this sentence nor the definition of “Requisite Directors” shall be amended, terminated or waived without the prior written consent of each of Endeavour Medtech Growth II LP, BCLS and Colony Harvest. The Company shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this Section 6.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

6.7            Severability. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

 

6.8            Aggregation of Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

 

 

6.9            Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Preferred Stock after the date hereof, any purchaser of such shares of Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor” for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder.

 

6.10          Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. Upon the effectiveness of this Agreement, the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Agreement, and shall be of no further force or effect.

 

6.11          Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the federal and state courts located within the geographic boundaries of the United States District Court for the District of Massachusetts for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal and state courts located within the geographic boundaries of the United States District Court for the District of Massachusetts, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled. Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the District of Massachusetts or any court of the Commonwealth of Massachusetts having subject matter jurisdiction.

 

6.12          Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

6.13          Acknowledgment from the Company. The Company acknowledges that the Investors are in the business of venture capital investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company. Nothing in this Agreement shall preclude or in any way restrict the Investors from investing or participating in any particular enterprise whether or not such enterprise has products or services which compete with those of the Company.

 

[Remainder of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	COMPANY:
	RAPID MICRO BIOSYSTEMS, INC.
	By:	/s/ Robert Spignesi
	Name:	Robert Spignesi
	Title:	President and Chief Executive Officer
	Address:
	RAPID MICRO BIOSYSTEMS, INC.
	1001 Pawtucket Blvd. West
	Lowell, MA 01854
	Attention: Chief Financial Officer

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	D1 MASTER HOLDCO I LLC
	By: D1 Capital Partners Master LP,
	its Managing Member
	By: D1 Capital Partners GP Sub LLC,
	its General Partner
	By:	/s/ Dan Sundheim
	Name:	Daniel Sundheim
	Title:	Authorized Signatory
	Address:
	c/o D1 Capital Management LC
	9 West 57th Street
	36th Floor
	New York, NY 10019

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	ABG WTT-RAPID LIMITED
	By:	/s/ Charles Chon
	Name:	Charles Chon
	Title:	Director

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	ENDEAVOUR MEDTECH GROWTH II LP
	By: Endeavour Medtech II GP Limited
	its General Partner
	By:	/s/ Nick Barton
	Name:	Nick Barton
	Title:	Director
	ENDEAVOUR MEDTECH GROWTH II PARALLEL LP
	By: Endeavour Medtech II GP Limited
	its General Partner
	By:	/s/ Nick Barton
	Name:	Nick Barton
	Title:	Director

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	LONGITUDE VENTURE PARTNERS II, L.P.,
	a Delaware Limited Partnership
	By:	Longitude Capital Partners II, LLC
		its General Partner
	By:	/s/ Juliet Tammenoms Bakker
	Name:	Juliet Tammenoms Bakker
	Title:	Managing Director

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	QUAKER BIOVENTURES II, L.P.
	By: QUAKER BIOVENTURES CAPITAL II, L.P., its general partner
	By: QUAKER BIOVENTURES CAPITAL II, LLC, its general partner
	By:	/s/ Richard S. Kollender
	Name:	Richard S. Kollender
	Title:	Executive Manager

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	BAIN CAPITAL LIFE SCIENCES FUND, LP.
	By: Bain Capital Life Sciences Partners, LP,
	its general partner
	By: Bain Capital Life Sciences Investors, LLC,
	its general partner
	By:	/s/ Jeffrey Schwartz
	Name:	Jeffrey Schwartz
	Title:	Managing Director
	BCIP LIFE SCIENCES ASSOCIATES, LP
	By: Boylston Coinvestors, LLC,
	its general partner
	By:	/s/ Jeffrey Schwartz
	Name:	Jeffrey Schwartz
	Title:	Authorized Signatory

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	COLONY HARVEST LTD
	By:	/s/ Fares Zahir
	Name:	Fares Zahir
	Title:	Authorized Signatory

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	/s/ Robert Spignesi
	Robert Spignesi

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	BLACKROCK HEALTH SCIENCES TRUST II
	By: BlackRock Advisors, LLC, its Investment Adviser
	By:	/s/ Hongying Erin Xie
	Name:	Hongying Erin Xie
	Title:	Managing Director
	BLACKROCK HEALTH SCIENCES MASTER UNIT TRUST
	By: BlackRock Capital Management, Inc., its Investment Adviser
	By:	/s/ Hongying Erin Xie
	Name:	Hongying Erin Xie
	Title:	Managing Director

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	T. Rowe Price Health Sciences Fund, Inc.
	TD Mutual Funds - TD Health Sciences Fund
	T. Rowe Price Health Sciences Portfolio
	Each account, severally not jointly
	By: T. Rowe Price Associates, Inc., Investment Adviser or Subadviser, as applicable
	By:	/s/ Andrew Baek
	Name:	Andrew Baek
	Title:	Vice President, Senior Legal Counsel
	Address:
	T. Rowe Price Associates, Inc.
	100 East Pratt Street
	Baltimore, MD 21202
	Attn.: Andrew Baek, Vice President and Senior Legal Counsel
	Phone: 410-345-2090
	Email: [XXX]

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	ADAGE CAPITAL PARTNERS, LP
	By: Adage Capital Partners, GP, LLC, it's General Partner
	By: Adage Capital Advisors, LLC, it's Managing Member
	By:	/s/ Dan Lehan
	Name:	Dan Lehan
	Title:	Chief Operating Officer

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	SUNLEY HOUSE CAPITAL MASTER LIMITED PARTNERSHIP
	By: Sunley House Capital GP LP, its General Partner
	By: Sunley House Capital GP LLC, its General Partner
	By:	/s/ Mohammed Anjarwala
	Name:	Mohammed Anjarwala
	Title:	Managing Director

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	CaaS Opportunity LLC
	By: CaaS Capital Management its Manager
	By:	/s/ Semi Gogliormella
	Name:	Semi Gogliormella
	Title:	COO

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	/s/ Gurinder Grewal
	Gurinder Grewal

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Seventh Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	INVESTORS:
	ALLY BRIDGE MEDALPHA MASTER FUND L.P.
	By: Ally Bridge Group (NY) LLC, its manager
	By:	/s/ Anna Yaeger
	Name:	Anna Yaeger
	Title:	Portfolio Manager and President

 

SIGNATURE PAGE TO SEVENTH AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

 

 

 

Schedule A

 

Investors

 

Investor Name and Address

 

D1 Master Holdco I LLC

c/o D1 Capital Management LC

9 West 57th Street

36th Floor

New York, NY 10019

 

T. Rowe Price Health Sciences Fund, Inc.

TD Mutual Funds - TD Health Sciences Fund

T. Rowe Price Health Sciences Portfolio

c/o T. Rowe Price Associates, Inc.

101 East Pratt Street

Baltimore, MD 21202

Attn.: Andrew Baek, Vice President and Senior

Legal Counsel

Phone: 410-345-2090

Email: [XXX]

 

BlackRock Health Sciences Trust II

BlackRock Health Sciences Master Unit Trust

c/o BlackRock

60 State Street, 19th/20th Floor

Boston, MA 02109

Attn: Erin Xie

Email: [XXX]

FEPMAssistantsUS@blackrock.com

With a copy (which shall not constitute notice) to:

c/o BlackRock

Office of the General Counsel

40 East 52nd Street

New York, NY 10022

Attn: David Maryles and Reid Fitzgerald

Email: legaltransactions@blackrock.com

 

Adage Capital Partners, LP

c/o Adage Capital Management

200 Clarendon St, 52nd St

Boston, MA 02116

Attn: Dan Lehan

 

 

Investor Name and Address

 

Sunley House Capital Master Limited Partnership

c/o Sunley House Capital Management LLC

Prudential Tower

800 Boylston Street, Suite 3300

Boston, MA 02199

 

CaaS Opportunity LLC

800 Third Avenue, 26th Floor

New York, NY 10022

 

Ally Bridge MedAlpha Master Fund L.P.

c/o Ally Bridge Group (NY) LLC

430 Park Avenue, 12th Floor

New York, NY 10022

Telephone: 646-829-9373

Contact Person: Daniel Johnson

E-mail: [XXX]

 

Gurinder Grewal

[XXX]

[XXX]

 

ABG WTT-Rapid Limited

c/o: Ally Bridge Group

Room 3002-4

30/F Gloucester Tower

The Landmark

15 Queen’s Road Central

Hong Kong

 

Endeavour Medtech Growth II LP

P.O Box 656

East Wing Trafalgar Court

Les Banques, St Peter Port,

Guernsey, GY1 3PP

Email: [XXX]

Email: [XXX]

 

Endeavour Medtech Growth II Parallel LP

P.O Box 656

East Wing Trafalgar Court

Les Banques, St Peter Port,

Guernsey, GY1 3PP

Email: [XXX]

Email: [XXX]

 

 

Investor Name and Address

 

Bain Capital Life Sciences

Attn: Jeffrey Schwartz, Managing Director

200 Clarendon Street

Boston, MA 02116

Phone: (617) 516-2585

Fax: (617) 652-3585

Email: [XXX]

 

BCIP Life Sciences Associates, LP

Attn: Jeffrey Schwartz, Managing Director

200 Clarendon Street

Boston, MA 02116

Phone: (617) 516-2585

Fax: (617) 652-3585

Email: [XXX]

 

Asahi Kasei Medical Co., Ltd.

1-105 Kanda Jinbocho, Chiyoda-ku

Tokyo 101-8101, Japan

 

Colony Harvest Ltd

2nd Floor, The Grand Pavilion Commercial Centre

PO. Box 10338, Grand Cayman KY1-1003
Cayman Islands

 

KPCB Holdings, Inc., as nominee

Kleiner Perkins Caufield & Byers

2750 Sand Hill Road

Menlo Park, CA 94025

 

TVM Life Science Ventures VI GmbH & Co. KG

c/o TVM Capital

Ottostr. 4

80333 München Germany

Attn: Stefan Fischer

Phone: 011 49 89 998992-0

Fax: 011 49 89 998992-55

 

TVM Life Science Ventures VI, L.P.

c/o TVM Capital

Ottostr. 4

80333 München Germany

Attn: Stefan Fischer

Phone: 011 49 89 998992-0

Fax: 011 49 89 998992-55

 

 

Investor Name and Address

 

Fletcher Spaght Ventures II, L.P.

222 Berkeley Street

20th Floor

Boston, MA 02116

 

FSV II, L.P.

222 Berkeley Street

20th Floor

Boston, MA 02116

 

FSV II-B, L.P.

222 Berkeley Street

20th Floor

Boston, MA 02116

 

Quaker BioVentures II, L.P.

150 Monument Road, Suite 205

Bala Cynwyd, PA 19004

 

TPG RAMB Holdings, L.P.

301 Commerce

Suite 3300

Fort Worth, Texas 76102

United States

Attention: Matthew Coleman

 

Longitude Venture Partners II, L.P.

545 Steamboat Road

Greenwich, Connecticut 06830

Attention: David Hirsch

 

Robert Spignesi

[XXX]

[XXX]

 

Christopher Cashman

[XXX]

[XXX]

 

Philip Stewart

[XXX]
[XXX]

 

 

Julie Sperry

[XXX]

[XXX]

 

Manbro P.E. IV, LP

1000 Lakeside Avenue

Cleveland, OH 44114

 

Foundation Investments of Ohio Ltd.

1000 Lakeside Avenue

Cleveland, OH 44114

 

MSF Private Equity Fund LLC

25701 Science Park Drive

Cleveland, OH 44122

With a copy to:

Investments

c/o Parkwood LLC

1000 Lakeside Avenue

Cleveland, OH 44114

 

Mellon Family Investment Company V

Legal and U.S. Mail:

P.O. Box RKM

Ligonier, PA 15658

Attn: Douglas L. Sisson

Overnight only for physical address:

[XXX]

[XXX]

 

Richard King Mellon Foundation

Legal and U.S. Mail:

BNY Mellon Center

500 Grant St., Suite 4106

Pittsburgh, PA 15219

With a copy to:

P.O. Box RKM

Ligonier, PA 15658

Attn: Douglas L. Sisson

Overnight only for physical address:

[XXX]

[XXX]

 

 

Foster & Foster Capital V LLC

10 Westport Road, Suite C 205

Wilton, CT 06897

 

Hepalink USA Inc.

Drake Oak Brook Plaza

2215 York Road, Suite 205

Oak Brook, IL 60523

 

Biomedical Sciences Investment Fund Pte Ltd

250 North Bridge Road #20-02

Raffles City Tower

Singapore 179101

 

Andrew Khouri

[XXX]

[XXX]  

 

Margaret Blake Garvan Trust Margaret B. Garvan

and Thomas P. Monath Co-Trustees UA 11/1/2001

[XXX]

[XXX]

 

Waycross Ventures LLC

2750 Sand Hill Road

Menlo Park, CA 94025

Attn: Brook Byers

 

 

Schedule B

 

Key Holders

 

Key Holder Name and Address

Straus Holdings, Inc.

1 Oak Park Drive

Bedford, MA 01730

 

 

 

Exhibit 21.1

 

Subsidiaries of Rapid Micro Biosystems, Inc.

 

Legal Name of Subsidiary		Jurisdiction of Organization
Rapid Micro Biosystems Europe GmbH		Germany
Rapid Micro Biosystems Services Switzerland LLC		Switzerland