CERTIFICATE OF INCORPORATION TO PERMIT STOCKHOLDER ACTION BY WRITTEN CONSENT AND TO REQUIRE STOCKHOLDER APPROVAL FOR
ISSUANCES OF PREFERRED STOCK
We are asking you to adopt our Proposed Charter to grant stockholders the right to act by written consent and to require stockholder approval for
issuances of preferred stock. The Current Charter prohibits stockholders from acting by written consent and permits the Board to issue preferred stock without stockholder approval. The Purchase Agreement requires us to use our reasonable best efforts
to solicit stockholder approval of the Proposed Charter, including these amendments, which is attached as an exhibit to the Purchase Agreement and includes this proposed amendment. If, despite the Company’s reasonable best efforts, stockholder approval
is not obtained, the Company shall cause an additional stockholder meeting to be held every three months thereafter until such stockholder approval is obtained. Stockholder approval is a condition to the closing of the Purchase Agreement.
Accelmed requested this amendment in connection with the Private Placement. As a result of granting stockholders the right to act by written
consent and requiring stockholder approval for issuances of preferred stock, following the Private Placement, Accelmed would be able to give majority stockholder approval of corporate actions through written consent without holding a special meeting of
stockholders and would be able to prevent the issuance of preferred stock.
This description of the effect of Proposal 5 is a summary and is qualified by the full text of the Proposed Charter, which is attached to this
Proxy Statement as Appendix C and incorporated herein by reference (subject to revision as described under “Partial Stockholder Approval of Recommended Charter Amendments” if our stockholders approve only some of the amendments in the Proposed
Charter recommended by the Board in this Proxy Statement). The attached Proposed Charter is marked to show the amendments to the Current Charter, with deletions indicated by strike-outs and additions indicated by underlining.
Except as set out below, our directors and executive officers have no substantial interests, directly or indirectly, in
the Private Placement except to the extent of their beneficial ownership of shares of our common stock. Each of our directors and executive officers have signed a Voting Side Letter to vote in favor of each of the proposals set forth in this Proxy
Statement.
Approval of Proposal 5 is a condition to closing the Private Placement. Ali Behbahani is a member of the Board and is
affiliated with New Enterprise Associates, which is participating in the Private Placement. New Enterprise Associates holds approximately 33.5% of our outstanding shares of common stock (based on 29,816,161 shares outstanding as of December 31, 2022)
and at the closing of the Private Placement, will purchase an additional 24,437,927 shares and hold approximately 19.5% of our outstanding shares of common stock (based on 29,816,161 shares outstanding as of December 31, 2022 and 146,627,565 shares
issued pursuant to the Private Placement). Dr. Behbahani is a general partner of New Enterprise Associates. Dr. Behbahani and New Enterprise Associates have each signed a Voting Side Letter to vote in favor of the proposals set forth in this Proxy
Statement.
Ross A. Jaffe is also a member of the Board and a part-time advisor to New Enterprise Associates. Dr. Jaffe is a managing
director of Versant Ventures, whose affiliates held approximately 5.6% of our outstanding shares of common stock as of December 31, 2022. None of Dr. Jaffe, Versant Ventures or its affiliates are purchasing shares in the Private Placement but Dr. Jaffe
and Versant Ventures have each signed a Voting Side Letter to vote in favor of the proposals set forth in this Proxy Statement.
Approval of Proposal 5 requires FOR votes from the holders of a 66⅔% of the outstanding voting securities of the Company, voting together as a
single class. Abstentions and broker non-votes will have the same effect as a vote AGAINST the proposal. Approval of Proposal 5 is also conditioned on the approval of the Private Placement Proposal. If the Private Placement Proposal is not approved,
our Board will not implement Proposal 4, even if it is approved by the requisite vote of our stockholders.
If the Private Placement Proposal and any of the Proposed Charter Proposals are approved by the requisite number of our stockholders, we expect to
file the applicable Approved Proposed Charter Proposal Amendment with the Secretary of State of the State of Delaware at such time when the other conditions to closing the Private Placement are either satisfied or duly waived, which Approved Proposed
Charter Proposal Amendment will become effective at the time of filing.
Notwithstanding the foregoing, at any time prior to the effectiveness of the filing of an Approved Proposed Charter Proposal Amendment with the
Secretary of State of the State of Delaware, our Board reserves the right to abandon the Approved Proposed Charter Proposal Amendment and not to file the Proposed Charter, even if one or more of the Proposed Charter Proposals are approved by our
stockholders, if our Board, in its discretion, determines that the Approved Proposed Charter Proposal Amendment is no longer in the best interests of our Company or our stockholders.
If none of (1) the Private Placement Proposal and (2) any of the Proposed Charter Proposals is approved by the requisite vote of our stockholders,
then no Approved Proposed Charter Proposal Amendment will be filed with the Secretary of State of the State of Delaware and our Current Charter will remain in place and stockholders will continue to be prohibited from acting by written consent and the
Board will remain permitted to issue preferred stock without stockholder approval.
We are asking you to adopt our Proposed Charter to increase the number of authorized shares of our
common stock from 100,000,000 to 300,000,000 and proportional increase in the number of our preferred stock from 5,000,000 to 15,000,000 (which amounts are not otherwise affected by the Reverse Split Proposals). As a matter of Delaware law,
implementation of a reverse stock split does not require a change in the total number of authorized shares of our common stock or preferred stock under our Proposed Charter. The increase in the authorized number of shares of common stock is designed to
ensure there is sufficient capacity to fulfill our obligations to issue shares as part of our Private Placement. In addition to the shares of common stock to be issued as part of the Private Placement, an increase in the authorized number of shares of
our common stock will also allow us the flexibility to issue shares of common stock for other purposes, including in connection with the proposed increase in the share reserves under our 2021 Plan (Proposal 9) and under our ESPP (Proposal 10) and any
additional equity financing that we may undertake in the future. The increase in the number of authorized shares of preferred stock is designed to be proportional to the increase in the number of authorized shares of common stock. Our Board may also
choose to issue shares of common stock or preferred stock in connection with future capital raising transactions, strategic partnerships and collaborations or acquisitions, and for other purposes, although we do not currently have any commitments or
plans to do so.
The Purchase Agreement requires us to use our reasonable best efforts to solicit stockholder approval of the Proposed Charter, including these
amendments, which is attached as an exhibit to the Purchase Agreement and includes this proposed amendment. If, despite the Company’s reasonable best efforts, stockholder approval is not obtained, the Company shall cause an additional stockholder
meeting to be held every three months thereafter until such stockholder approval is obtained. Stockholder approval is a condition to the closing of the Purchase Agreement.
This description of Proposal 6 is a summary and is qualified by the full text of the Proposed Charter, which is attached to this Proxy Statement as
Appendix C and incorporated herein by reference (subject to revision as described under “Partial Stockholder Approval of Recommended Charter Amendments” if our stockholders approve only some of the amendments in the Proposed Charter recommended
by the Board in this Proxy Statement). The attached Proposed Charter is marked to show the amendments to the Current Charter, with deletions indicated by strike-outs and additions indicated by underlining.
Assuming stockholder approval of the Share Increase Proposal and the Reverse Stock Split Proposal, at the time of the reverse
stock split, the number of authorized shares of the Company’s common stock would be increased to 300,000,000 and the number of authorized shares of the Company’s preferred stock would be increased to 15,000,000. The par value per share of our each of
our common stock and our preferred stock would remain unchanged at $0.001 per share after the reverse stock split.
On a post-split basis we anticipate that the proportion of our shares of common stock outstanding or reserved for issuance
would decrease as compared to our authorized but unissued and unreserved shares of common stock. For example, as of December 31, 2022, the 29,816,161 shares of our common stock outstanding represented approximately 29.8% of the 100,000,000 total shares
of common stock authorized under our Current Charter, while the 33,784,427 fully-diluted outstanding shares of our common stock equal to the sum of (i) 29,816,161 shares of outstanding common stock, plus (ii) 77,842 shares issuable upon exercise of
outstanding warrants, plus (iii) 3,537,655 shares that are allocated or reserved for issuance under outstanding awards under our 2021 Plan and our ESPP, plus (iv) 352,769 shares that are unallocated or reserved for issuance under outstanding awards
under our 2021 Plan and our ESPP represented approximately 33.8% of the 100,000,000 total shares of common stock authorized under our Current Charter. By way of example, were our Board to elect to effect a 1-for-25 reverse stock split, (i) our
outstanding share count would decrease from 29,816,161 (on a pre-split basis) to approximately 1,192,646 shares (on a post-split basis) and (ii) our fully-diluted share count would decrease from 33,784,427 (on a pre-split basis) to
approximately 1,351,377 shares (on a post-split basis), while the total number of authorized shares common stock of the Company would increase from 100,000,000 to 300,000,000. The number of shares to be issued in the Private Placement after such a
stock split would be 5,865,103 shares.
For example, as of December 31, 2022, assuming the shares issued in the Private Placement are issued and outstanding and a
reverse stock split on a 1-for-25 basis, our outstanding share count would be approximately 7,057,749 (on a post-split basis) and would represent approximately 7.1% of the 100,000,000 total shares of common stock authorized under our Current Charter,
while the 7,216,480 (on a post-split basis) fully-diluted outstanding shares of our common stock would represent 7.2% of the 100,000,000 total shares of common stock authorized under our Current Charter.
Thus, after the reverse stock split and increase in the number of our authorized shares of common stock, we may have a
substantially greater proportion of authorized but unissued and unreserved shares available to us after the Proposed Charter is approved and filed, even after taking into account the shares that would be issued in the Private Placement. See “—Tabular Illustration of Effect of Stock Split” below for hypothetical amounts of unissued and unreserved shares based on the reverse stock split ratio that is ultimately selected by our Board.
Assuming stockholders approve the Share Increase Proposal but do not approve the Reverse Stock Split Proposal the number of
authorized shares of the Company’s common stock would be increased to 300,000,000 and the number of authorized shares of the Company’s preferred stock would be increased to 15,000,000. The par value per share of each of our common stock and preferred
stock would remain unchanged at $0.001 per share.
Upon filing of the Proposed Charter increasing the number of authorized shares of common stock and the number of authorized
shares of preferred stock, the proportion of our shares of common stock outstanding or reserved for issuance will decrease as compared to our authorized but unissued and unreserved shares of common stock. For example, as of December 31, 2022, the
29,816,161 shares of our common stock outstanding represented approximately 29.8% of the 100,000,000 total shares of common stock authorized under our Current Charter, while the 33,784,427 fully-diluted outstanding shares of our common stock (as
calculated above) represented approximately 33.8% of the 100,000,000 total shares of common stock authorized under our Current Charter. After the increase in the number of authorized shares of common stock to 300,000,000 (i) our outstanding share count
as a percentage of our authorized common stock would decrease to 9.9% and (ii) our fully-diluted share count as a percentage of our authorized common stock would decrease to 11.3%.
For example, as of December 31, 2022, assuming the shares issued in the Private Placement are issued and assuming stockholders approve the Share Increase
Proposal but do not approve the Reverse Stock Split Proposal, our outstanding share count would be approximately 176,443,726 and would represent approximately 58.8% of the 300,000,000 total shares of common stock authorized under our Proposed Charter,
while the 180,411,992 fully-diluted outstanding shares of our common stock would represent 60.1% of the 300,000,000 total shares of common stock authorized under our Proposed Charter.
We anticipate that we may use a portion of any authorized and unreserved/unissued shares to help consummate future financing
transactions subsequent to the Private Placement, although we do not currently have any commitments or plans to do so. However, any such financing would likely be dilutive to the stockholders unless it is structured as an offering in which all current
stockholders could participate.
Further, the increase in the number of authorized shares of unissued/unreserved common stock and preferred stock could have an
‘anti-takeover effect’ by permitting the issuance of a proportionately greater number shares on a post-split basis (as compared to pre-split) to purchasers who might oppose a hostile takeover bid or oppose any efforts to amend or repeal certain
provisions of our certificate of incorporation or our amended and restated bylaws, as amended. The increased number of available authorized and unissued/unreserved shares as a result of the reverse stock split would give our management more flexibility
to resist or impede a third-party takeover bid that provides an above-market premium that is favored by a majority of the independent stockholders. Any such anti-takeover effect of a reverse stock split would be in addition to existing anti-takeover
provisions of our certificate of incorporation and our bylaws.
Except as set out below, our directors and executive officers have no substantial interests, directly or indirectly, in
the Share Increase Proposal except to the extent of their beneficial ownership of shares of our common stock. Each of our directors and executive officers have signed a Voting Side Letter to vote in favor of the Share Increase Proposal and certain
other proposals as described in more detail in the Private Placement Proposal.
Approval of the Share Increase Proposal is required to issue the Shares to be sold in the Private Placement and is a
condition to the closing of the Private Placement. Ali Behbahani is a member of the Board and is affiliated with New Enterprise Associates, which is participating in the Private Placement. New Enterprise Associates holds approximately 33.5% of our
outstanding shares of common stock (based on 29,816,161 shares outstanding as of December 31, 2022) and at the closing of the Private Placement, will purchase an additional 24,437,927 shares and hold approximately 19.5% of our outstanding shares of
common stock (based on 29,816,161 shares outstanding as of December 31, 2022 and 146,627,565 shares issued pursuant to the Private Placement). Dr. Behbahani is a general partner of New Enterprise Associates. Dr. Behbahani and New Enterprise Associates
have each signed a Voting Side Letter to vote in favor of the proposals set forth in this Proxy Statement.
Ross A. Jaffe is also a member of the Board and a part-time advisor to New Enterprise Associates. Dr. Jaffe is a managing
director of Versant Ventures, whose affiliates held approximately 5.6% of our outstanding shares of common stock as of December 31, 2022. None of Dr. Jaffe, Versant Ventures or its affiliates are purchasing shares in the Private Placement but Dr. Jaffe
and Versant Ventures have each signed a Voting Side Letter to vote in favor of the proposals set forth in this Proxy Statement.
Approval of Proposal 6 requires FOR votes from the holders of at least a majority of the total outstanding shares entitled to vote, regardless of
whether such shares are present in person or represented by proxy at the Special Meeting. You may vote FOR or AGAINST these proposals, or you may indicate that you wish to ABSTAIN from voting on these proposals. Abstentions and broker non-votes will be
counted for purposes of determining the presence or absence of a quorum and will have the same effect as a vote AGAINST these proposals. Approval of Proposal 6 is also conditioned on the approval of the Private Placement Proposal. If the Private
Placement Proposal is not approved, our Board will not implement Proposal 6, even if it is approved by the requisite vote of our stockholders.
If the Private Placement Proposal and any of the Proposed Charter Proposals are approved by the requisite number of our stockholders, we expect to
file the applicable Approved Proposed Charter Proposal Amendment with the Secretary of State of the State of Delaware at such time when the other conditions to closing the Private Placement are either satisfied or duly waived, which Approved Proposed
Charter Proposal Amendment will become effective at the time of filing.
Notwithstanding the foregoing, at any time prior to the effectiveness of the filing of an Approved Proposed Charter Proposal Amendment with the
Secretary of State of the State of Delaware, our Board reserves the right to abandon the Approved Proposed Charter Proposal Amendment and not to file the Proposed Charter, even if one or more of the Proposed Charter Proposals are approved by our
stockholders, if our Board, in its discretion, determines that the Approved Proposed Charter Proposal Amendment is no longer in the best interests of our Company or our stockholders.
If none of (1) the Private Placement Proposal and (2) any of the Proposed Charter Proposals is approved by the requisite vote of our stockholders,
then no Approved Proposed Charter Proposal Amendment will be filed with the Secretary of State of the State of Delaware and our Current Charter will remain in place and our number of authorized shares will remain unchanged.
A VOTE “FOR” PROPOSAL 6.
We are asking you to adopt a proposed certificate of amendment to our Current Charter (the “Stock Split Certificate”), to effect a reverse stock split (the “Reverse
Stock Split”) of the Company’s common stock, with a ratio in the range of 1-for-5 and 1-for-25, such ratio to be determined by the Board in its discretion, with respect to the issued and outstanding common stock of the Company. The Reverse Stock Split
will also affect outstanding options and restricted stock units (“RSUs”), as described in “—Effect on Equity Compensation Plans, Outstanding Options and RSUs” below.
This description of Proposal 7 is a summary and is qualified by the full text of the Stock Split Certificate is attached to this Proxy Statement as Appendix D and incorporated herein by
reference. The text of the Stock Split Certificate is subject to revision to include such changes as may be required by the Secretary of State of the State of Delaware to effect the proposed Reverse Stock Split.
Approval of Proposal 7 (the “Reverse Stock Split Proposal”) will grant our Board the authority, without further action by the stockholders, to carry out the
Reverse Stock Split, with the exact Reverse Stock Split ratio and timing to be determined at the discretion of the Board and set forth in a public announcement within 6 months after stockholder approval at the Special Meeting. Even if our stockholders
approve this proposal, our Board may determine in its discretion not to effect the Reverse Stock Split prior to the time the Stock Split Certificate is filed and becomes effective. In addition, our Board may determine to effect the Reverse Stock Split
even if the trading price of our common stock is at or above the $1.00 per share minimum bid price required for continued listing under Nasdaq rules.
The Reverse Stock Split would not change the number of authorized shares of common stock or preferred stock, the par value of common stock or preferred stock or
the relative voting power of our stockholders. Also, the Reverse Stock Split, if effected, would affect all of our holders of common stock uniformly.
The Reverse Stock Split is not being proposed in response to any effort of which we are aware to accumulate our shares of common stock or obtain control of the
Company, nor is it part of a plan by management to recommend a series of similar actions to our Board or our stockholders.
There are certain risks associated with a Reverse Stock Split, and we cannot accurately predict or assure that the Reverse Stock Split will produce or maintain
the desired results (for more information on the risks see the section below entitled “Certain Risks Associated with the Reverse Stock Split”). However, our Board believes that the benefits to the Company and our stockholders outweigh the risks and
recommends that you vote in favor of granting the Board the discretionary authority to effect the Reverse Stock Split.
Our common stock is currently listed on Nasdaq under the symbol “UTRS.” The continued listing requirements of Nasdaq provide, among other things, that our
common stock must maintain a closing bid price of at least $1.00 per share. On October 31, 2022, we received a notification from the Listing Qualifications Department of Nasdaq indicating that for the last 30 consecutive business days, the closing bid
price of our common stock was below $1.00 per share, which is the minimum required closing bid price for continued listing on the Nasdaq Global Market pursuant to Listing Rule 5450(a)(1). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the
Company has 180 calendar days, or until May 1, 2023 to regain compliance. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days. If the Company does not regain
compliance by May 1, 2023, the Company may be eligible for a second 180-calendar-day period, provided that the Company meets the continued listing requirement for market value of publicly held shares and all other initial listing requirements for
Nasdaq, other than the minimum bid price requirement, and the Company provides written notice to Nasdaq of its intention to cure the deficiency during the second compliance period. To qualify for this additional compliance period, the Company would
also need to apply to transfer the listing of its common stock to The Nasdaq Capital Market.
If the Company is not eligible for the second compliance period or Nasdaq concludes that the Company will not be able to cure the deficiency during the second
compliance period, Nasdaq will provide written notice to the Company that the Company’s common stock will be subject to delisting. In the event of such notification, the Company may appeal Nasdaq’s determination to delist its securities, but there can
be no assurance that Nasdaq would grant the Company’s request for continued listing.
As of January 12, 2023, the closing bid price per share of our common stock was $0.2499. There can be no assurance that the trading price of our common stock
will not remain below $1.00 per share in the future, including as a result of the Private Placement. In order to ensure continued compliance with Nasdaq listing rules, and listing on Nasdaq, our Board believes it is in the best interests of the Company
and its stockholders to effect the proposed Reverse Stock Split.
Our Board determined that the continued listing of our common stock on Nasdaq is beneficial for our stockholders. The delisting of our common stock from Nasdaq
would likely have very serious consequences for the Company and our stockholders. If our common stock is delisted from Nasdaq, our Board believes that the trading market for our common stock could become significantly less liquid, which could reduce
the trading price of our common stock and increase the transaction costs of trading in shares of our common stock.
The purpose of the Reverse Stock Split is to decrease the total number of shares of common stock outstanding and proportionately increase the market price of
the common stock in order to meet the continuing listing requirements of Nasdaq. Our Board intends to effect the Reverse Stock Split only if it believes that a decrease in the number of shares outstanding is in the best interests of the Company and our
stockholders and is likely to improve the trading price of our common stock and improve the likelihood that we will be allowed to maintain our continued listing on Nasdaq. Accordingly, our Board approved and recommended the Reverse Stock Split Proposal
in order to help ensure that the share price of our common stock meets Nasdaq’s continued listing requirements.
The Reverse Stock Split will affect outstanding options and RSUs, as described in “—Effect on Equity Compensation Plans,
Outstanding Options and RSUs” below. Approval of the Reverse Stock Split Proposal will grant our Board the authority, without further action by the stockholders, to carry out the Reverse Stock Split, with the exact Reverse Stock Split ratio
and timing to be determined at the discretion of the Board and set forth in a public announcement within 6 months after stockholder approval at the Special Meeting. Even if our stockholders approve this proposal, our Board may determine in its
discretion not to effect the Reverse Stock Split prior to the time an Approved Proposed Charter Proposal Amendment is filed and becomes effective. In addition, our Board may determine to effect the Reverse Stock Split even if the trading price of our
common stock is at or above the $1.00 per share minimum bid price required for continued listing under Nasdaq rules.
As part of its determination of the exact Reverse Stock Split ratio and timing of the Reverse Stock Split, the Board may consider, among other things, the
number of shares of common stock expected to be issued and outstanding following the contemplated Private Placement.
The principal purpose of the Reverse Stock Split is to decrease the total number of shares of common stock outstanding and proportionately increase the market
price of the common stock in order to meet the continuing listing requirements of Nasdaq. Accordingly, our Board approved the Reverse Stock Split Proposal in order to help ensure that the share price of our common stock meets Nasdaq’s continued listing
requirements. Our Board intends to effect the Reverse Stock Split only if it believes that a decrease in the number of shares outstanding is in the best interests of the Company and our stockholders and is likely to improve the trading price of our
common stock and improve the likelihood that we will be allowed to maintain our continued listing on Nasdaq. Our Board may determine to effect the Reverse Stock Split even if the trading price of our common stock is at or above the $1.00 per share
minimum bid price required for continued listing under Nasdaq rules.
Our Board believes that stockholder approval of a range of Reverse Stock Split ratios (rather than a single Reverse Stock Split ratio) is in the best interests
of our stockholders because it provides the Board with the flexibility to achieve the desired results of the Reverse Stock Split at the time it is effected and because it is not possible to predict market conditions at the time the Reverse Stock Split
would be implemented. If stockholders approve this proposal, the Board would carry out the Reverse Stock Split only upon its determination that the Reverse Stock Split would be in the best interests of our stockholders at that time. The Board would
then set the ratio for the Reverse Stock Split within the range approved by stockholders and in an amount it determines is advisable and in the best interests of the stockholders considering relevant market conditions at the time the Reverse Stock
Split is to be implemented. In determining the Reverse Stock Split ratio, following receipt of stockholder approval, the Board may consider numerous factors including:
Our Board intends to select a reverse stock split ratio that it believes would be most likely to achieve the anticipated benefits of the Reverse Stock Split.
Before voting on this proposal, stockholders should consider the following risks associated with effecting the Reverse Stock Split:
If the Reverse Stock Split is approved and effected with respect to the issued and outstanding common stock, each holder of common stock outstanding immediately
prior to the effectiveness of the Reverse Stock Split will own a reduced number of shares of common stock upon effectiveness of the Reverse Stock Split. The Reverse Stock Split would be effected simultaneously for all outstanding shares of common stock
at the same Reverse Stock Split ratio. Except for adjustments that may result from the treatment of fractional shares (as described below), the Reverse Stock Split would affect all stockholders uniformly and would not change any stockholder’s
percentage ownership interest in the Company. The relative voting rights and other rights and preferences that accompany the shares of common stock will not be affected by the Reverse Stock Split. Shares of common stock issued pursuant to the Reverse
Stock Split will remain fully paid and nonassessable. The Reverse Stock Split would not affect our securities law reporting and disclosure obligations, and we would continue to be subject to the periodic reporting requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). We have no current plans to take the Company private. Accordingly, the Reverse Stock Split is not related to a strategy to do so.
To the extent the Private Placement Proposal is approved by stockholders, the Reverse Stock Split could, in the Board’s discretion, occur prior to or subsequent
to the increase in the number of shares of common stock outstanding resulting from the issuance of Shares in the Private Placement. As a result, the adoption by the stockholders of the Reverse Stock Split Proposal is not expected to impact the
Company’s ability to complete the Private Placement and will be in addition to the other proposals being considered at the Special Meeting.
The Reverse Stock Split will have no effect on the number of authorized shares of common stock or preferred stock or the par value of the common stock or
preferred stock.
Although the Reverse Stock Split will not, by itself, have any immediate dilutive effect on stockholders, the proportion of shares owned by stockholders
relative to the number of shares authorized for issuance will decrease. Such proportion of shares owned by stockholders relative to the number of shares authorized for issuance will decrease by a greater margin if the Share Increase Proposal is also
approved.
The following table contains approximate information relating to our common stock immediately following the Reverse Stock Split under certain possible Reverse
Stock Split ratios, based on share information as of December 31, 2022, without giving effect to the treatment of fractional shares, and under the two potential scenarios of the Share Increase Proposal being approved and the Share Increase Proposal NOT
being approved.
(1) Includes 77,842 shares (on a pre-split basis) issuable upon exercise of outstanding warrants.
If the Reverse Stock Split is approved and effected, the total number of shares of common stock reserved for issuance under our 2021 Plan and our ESPP would be
reduced in proportion to the ratio selected by our Board. As of December 31, 2022, there were a total of (i) 3,537,655 shares of common stock reserved for issuance upon the exercise of stock options and the settlement of RSUs outstanding under the 2021
Plan and 2008 Plan, (ii) 352,707 shares remained available for future awards under our 2021 Plan, and (iii) 62 shares reserved for issuance under the ESPP. Following the Reverse Stock Split, if any, such reserves would be reduced to (i) between 707,531
and 141,506 shares reserved for issuance upon the exercise of stock options and the settlement of RSUs outstanding under the 2021 Plan, (ii) between 70,541 and 14,108 shares would be available for future awards under our 2021 Plan and (iii) between 12
and 2 shares would be reserved for issuance under the ESPP.
Under the terms of our outstanding options and RSUs, the Reverse Stock Split would adjust and proportionately reduce the number of shares of common stock
issuable upon exercise or settlement, as applicable, of such options and RSUs in the same ratio of the Reverse Stock Split and, correspondingly, would proportionately increase the exercise price of such options. The number of shares of common stock
issuable upon exercise or settlement of outstanding options and RSUs and the exercise or purchase price related thereto, as applicable, would be equitably adjusted in accordance with the terms of the Plans, which may include rounding the number of
shares of common stock issuable to the nearest whole share.
The Reverse Stock Split would result in an increase in the proportion of authorized but unissued shares of common stock relative to our outstanding shares,
which could be construed as having an anti-takeover effect. Our Board has not proposed the Reverse Stock Split with the intention of discouraging tender offers or takeover attempts of the Company. However, the availability of additional authorized
shares for issuance as a result of the Reverse Stock Split could, under certain circumstances, discourage or make more difficult efforts to obtain control of our Company. This proposal is not being presented with the intent that it be used to prevent
or discourage any acquisition attempt, but nothing would prevent our Board from taking any appropriate actions consistent with its fiduciary duties.
Other than the potential acquisition of a controlling interest in the Company by Accelmed discussed in the Private Placement, our Board is not presently aware
of any attempt, or contemplated attempt, to acquire control of the Company, and the Reverse Stock Split Proposal is not part of any plan by our Board to recommend or implement a series of anti-takeover measures.
The Reverse Stock Split will not affect the par value per share of common stock, which will remain unchanged at $0.001 per share. As a result of the Reverse
Stock Split, at the effective time, the stated capital on our balance sheet attributable to the common stock, which consists of the par value per share of the common stock multiplied by the aggregate number of shares of the common stock issued and
outstanding, will be reduced in proportion to the ratio of the Reverse Stock Split. Correspondingly, the additional paid-in capital account, which consists of the difference between the stated capital and the aggregate amount paid upon issuance of all
currently outstanding shares of common stock, will be credited with the amount by which the stated capital is reduced. The stockholders’ equity, in the aggregate, will remain unchanged. In addition, the per share net income or loss of common stock, for
all periods, will be restated because there will be fewer outstanding shares of common stock. We do not anticipate any other material accounting consequences would arise as a result of a reverse stock split.
Upon the Reverse Stock Split, we intend to treat common stock held by stockholders in “street name,” through a bank, broker or other nominee, in the same manner
as stockholders whose shares are registered in their own names. Banks, brokers or other nominees will be instructed to effect the Reverse Stock Split for their customers holding common stock in “street name.” However, these banks, brokers or other
nominees may have different procedures than registered stockholders for processing the Reverse Stock Split. If you hold shares of common stock with a bank, broker or other nominee and have any questions in this regard, you are encouraged to contact
your bank, broker or other nominee.
Holders of common stock may hold some or all of their common stock electronically in book-entry form with our transfer agent. These stockholders will not have
stock certificates evidencing their ownership of common stock. They are, however, provided with a statement reflecting the number of shares of common stock registered in their accounts. If you hold registered common stock in book-entry form, you do not
need to take any action to receive your post-split shares, if applicable. If a stockholder is entitled to post-reverse stock split shares, a transaction statement will automatically be sent to the stockholder’s address of record indicating the number
of shares of common stock held following the Reverse Stock Split.
Holders of common stock may hold stock certificates representing some or all of their common stock. As of the effective date of the Reverse Stock Split, each
certificate representing pre-split shares of common stock will, until surrendered and exchanged, be deemed to represent only the relevant number of post-split shares of common stock as a result and at the time of the Reverse Stock Split. As soon as
practicable after the effective date of the Reverse Stock Split, our transfer agent, American Stock Transfer & Trust Company, LLC, will mail you a letter of transmittal. Upon receipt of your properly completed and executed letter of transmittal and
your stock certificate(s), you will be issued the appropriate number of shares of the Company’s common stock either as stock certificates (including legends, if appropriate) or electronically in book-entry form, as determined by the Company.
We will not issue fractional shares in connection with the Reverse Stock Split. Instead, any fractional share that would otherwise result from the Reverse Stock
Split because the stockholder owns a number of shares not evenly divisible by the ratio would instead settle in cash. The cash amount to be paid to each stockholder would be equal to the resulting fractional interest in one share of our common stock to
which the stockholder would otherwise be entitled, multiplied by the closing trading price of our common stock on the trading day immediately preceding the effective date of the Reverse Stock Split. We do not anticipate that the aggregate cash amount
paid by the Company for fractional interests will be material to the Company.
Under the Delaware General Corporation Law, our stockholders are not entitled to any dissenters’ or appraisal rights with respect to the Reverse Stock Split,
and we will not independently provide stockholders with any such right.
The following is a summary of certain U.S. federal income tax consequences of the Reverse Stock Split to stockholders that hold their shares of common stock as
capital assets for U.S. federal income tax purposes. This summary is based upon the provisions of the U.S. Internal Revenue Code, or the Code, Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as in effect
as of the date hereof, and all of which are subject to change and differing interpretations, possibly with retroactive effect. Changes in these authorities or their interpretation may result in the U.S. federal income tax consequences of the Reverse
Stock Split differing substantially from the consequences summarized below.
This summary is for general information purposes only and does not address all aspects of U.S. federal income taxation that may be relevant to stockholders in
light of their particular circumstances or to stockholders that may be subject to special tax rules, including, without limitation: (i) persons subject to the alternative minimum tax; (ii) banks, insurance companies, or other financial institutions;
(iii) tax-exempt organizations; (iv) dealers in securities or commodities; (v) regulated investment companies or real estate investment trusts; (vi) partnerships (including entities or arrangements treated as partnerships for U.S. federal income tax
purposes and their partners or members); (vii) traders in securities that elect to use the mark-to-market method of accounting; (viii) persons whose “functional currency” is not the U.S. dollar; (ix) persons holding our common stock in a hedging
transaction, “straddle,” “conversion transaction” or other risk reduction transaction; (x) persons who acquired our common stock in connection with employment or the performance of services; (xi) retirement plans; (xii) persons who are not U.S. Holders
(defined below); or (xiii) certain former citizens or long-term residents of the United States.
In addition, this summary of certain U.S. federal income tax consequences does not address the tax consequences arising under the laws of any foreign, state or
local jurisdiction or any U.S. federal tax consequences other than U.S. federal income taxation (such as U.S. federal estate and gift tax consequences). If a partnership (including any entity or arrangement treated as a partnership for U.S. federal
income tax purposes) holds shares of our common stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner, the activities of the partnership, and certain determinations made at the partner level.
Partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the tax consequences to them of the Reverse Stock Split.
We have not sought, and will not seek, an opinion of counsel or a ruling from the Internal Revenue Service, or the IRS, regarding the U.S. federal income tax
consequences of the Reverse Stock Split, and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or that a court would not sustain any such challenge.
EACH STOCKHOLDER SHOULD CONSULT ITS TAX ADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO SUCH STOCKHOLDER.
This summary addresses only stockholders that are U.S. Holders. For purposes of this discussion, a “U.S. Holder” is any beneficial owner of our common stock
that, for U.S. federal income tax purposes, is or is treated as any of the following:
The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes. As a recapitalization, except as described below with
respect to cash received in lieu of fractional shares, a stockholder should not recognize gain or loss as a result of the Reverse Stock Split. A stockholder’s aggregate tax basis in the shares of the common stock received pursuant to the Reverse Stock
Split should equal the stockholder’s aggregate tax basis in the shares of the common stock surrendered (excluding any portion of such basis that is allocated to any fractional share of our common stock), and such stockholder’s holding period in the
shares of the common stock received should include the holding period of the shares of the common stock surrendered. Treasury regulations promulgated under the Code provide detailed rules for allocating the tax basis and holding period of shares of
common stock surrendered pursuant to the Reverse Stock Split to shares of common stock received pursuant to the Reverse Stock Split. Stockholders holding shares of common stock that were acquired on different dates and at different prices should
consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
A stockholder who receives cash in lieu of a fractional share of common stock should be treated as first receiving such fractional share and then receiving cash
in redemption of such fractional share. A stockholder who receives cash in lieu of a fractional share in the Reverse Stock Split should recognize capital gain or loss equal to the difference between the amount of the cash received in lieu of the
fractional share and the portion of the stockholder’s adjusted tax basis allocable to the fractional share. Stockholders should consult their tax advisors regarding the tax effects to them of receiving cash in lieu of fractional shares based on their
particular circumstances.
A stockholder may be subject to information reporting with respect to any cash received in exchange for a fractional share interest in a new share in the
Reverse Stock Split. Stockholders who are subject to information reporting and who do not provide a correct taxpayer identification number and other required information (such as by submitting a properly completed Internal Revenue Service Form W-9) may
also be subject to backup withholding at the applicable rate. Any amount withheld under such rules is not an additional tax and may be refunded or credited against the stockholder’s U.S. federal income tax liability, provided that the required
information is properly furnished in a timely manner to the Internal Revenue Service.
The approval of Proposal 7 requires the affirmative vote of at least a majority of the total outstanding shares entitled to vote, regardless of whether such shares are present in person
or represented by proxy at the Special Meeting. You may vote FOR or AGAINST this proposal, or you may indicate that you wish to ABSTAIN from voting on this proposal. Abstentions and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum and will have the same effect as a vote AGAINST these proposals. Proposal 7 is considered a routine proposal, and therefore we do not expect any broker non-votes with respect to this proposal.
If Proposal 7 is approved by the requisite number of our stockholders, we expect to file the Stock Split Certificate with the Secretary of State of the State of Delaware following the
Special Meeting (with the exact Reverse Stock Split ratio and timing to be determined at the discretion of the Board and set forth in a public announcement), which Stock Split Certificate will become effective at the time of filing and amend our then
existing certificate of incorporation.
Notwithstanding the foregoing, at any time prior to the effectiveness of the filing of the Stock Split Certificate with the Secretary of State of the State of Delaware, our Board
reserves the right to abandon the Stock Split Certificate and not to file the Stock Split Certificate, even if the Stock Split Certificate is approved by our stockholders, if our Board, in its discretion, determines that the Stock Split Certificate is
no longer in the best interests of our Company or our stockholders.
If Proposal 7 is not approved by the requisite vote of our stockholders, then the Stock Split Certificate will not be filed with the Secretary of State of the State of Delaware and our
Current Charter will not be amended thereby.
Stockholders are urged to vote FOR Proposal 7. If we do not receive approval of the Stock Split Certificate, we will not be able to effect the reverse stock split. As discussed above,
if we do not effect the reverse stock split, it is likely that we will not be able to meet the $1 minimum closing bid price continued listing requirement of Nasdaq, and, consequently, our common stock would be delisted from the Nasdaq.
A VOTE “FOR” PROPOSAL 7.
On December 26, 2022, our Board approved, effective as of immediately prior to the closing of the Private Placement, an amendment and restatement of our existing amended and restated
bylaws (our “Current Bylaws”), in order to, among other things, remove (i) the provisions regarding a classified board (the “Classified Board Bylaw Amendment”), (ii) the prohibition on stockholders acting by written consent (the “Written Consent Bylaw
Amendment”), and (iii) the requirement to obtain a supermajority vote in order for our stockholders to amend our bylaws (the “Supermajority Vote Bylaw Amendment,” and collectively, the “Proposed Bylaw Amendments,” and such amended and restated bylaws,
the “Proposed Bylaws”).
This description of the effect of our Proposed Bylaws is a summary and is qualified by the full text of the Proposed Bylaws, which are attached to this Proxy Statement as Appendix E and
incorporated herein by reference. The attached Proposed Bylaws are marked to show the Proposed Bylaw Amendments, with deletions indicated by strike-outs and additions indicated by underlining.
Approval of Proposal 8 requires FOR votes from the holders of a 66⅔% of the total voting power of outstanding voting securities of the Company, voting together as a single class.
Abstentions and broker non-votes will have the same effect as a vote AGAINST the proposal. Approval of Proposal 8 is also conditioned on the approval of the Private Placement Proposal and the approval of at least one of Proposal 2, Proposal 4 and
Proposal 5. If either (1) the Private Placement Proposal is not approved or (2) none of Proposal 2, Proposal 4 or Proposal 5 are approved, our Board will not implement Proposal 8.
If the requisite number of stockholders approve this Proposal 8 and the Private Placement Proposal, our Board shall effect (i) the Classified Board Bylaw Amendment to the extent
Proposal 2 is approved, (ii) the Written Consent Bylaw Amendment to the extent Proposal 5 is approved, and (iii) the Supermajority Vote Bylaw Amendment to the extent Proposal 4 is approved.
If the Private Placement Proposal and any of the Proposed Charter Proposals are approved by the requisite number of our stockholders, we expect the closing of the Private Placement to
occur when the other conditions to closing the Private Placement are either satisfied or duly waived, whereupon our Board will adopt the Proposed Bylaw Amendments to the extent necessary to conform to the approved Proposed Charter Proposals, whether or
not the requisite number of stockholders approve this Proposal 8 pursuant to the Board’s authority to amend our bylaws.
Notwithstanding the foregoing, at any time prior to the effectiveness of the filing of the Approved Charter Proposal Amendment with the Secretary of State of the State of Delaware, our
Board reserves the right to abandon the adoption of the approved Proposed Bylaw Amendments, if our Board, in its discretion, determines that the approved Proposed Bylaw Amendments are no longer in the best interests of our Company or our stockholders.
The Company adopted, and our stockholders approved, our 2021 Equity Incentive Plan (the “2021 Plan”) in connection with our initial public offering (the “IPO”) in October 2021. The
Company’s stockholders are being asked to approve an amendment to the 2021 Plan which would increase the number of shares of common stock reserved for issuance under the 2021 Plan by 36,440,192 shares, and to increase the maximum annual number of
shares that may be added to the 2021 Plan pursuant to annual automatic share reserve increases from 5,730,915 shares to 91,100,480 shares. A copy of the 2021 Plan, as amended by this proposal, is set forth in this proxy statement as Appendix F. Our
executive officers and directors have an interest in this proposal as they are eligible to receive equity awards under the 2021 Plan. Unless provided otherwise, all numerical share numbers referenced in this proposal are measured on a current,
pre-split basis. See “Proposal 7: Approval of Reverse Stock Split—Effect on Equity Compensation Plans, Outstanding Options and RSUs” for additional information regarding the effect of the Reverse Stock Split.
In addition to the 2021 Plan, the Company established its 2008 Stock Plan in November 2008 (as amended, the “2008 Plan”) which provided for the granting of
stock options to employees, directors, and consultants of the Company. The 2008 Plan was terminated when the 2021 Plan became effective.
Subject to the adjustment provisions contained in the 2021 Plan, a total of 3,154,967 shares of our common stock are currently reserved for issuance pursuant to
the 2021 Plan, plus any shares of our common stock subject to awards granted under the 2008 Plan that, on or after the effective date of the Company’s IPO, expire or otherwise terminate without having been exercised in full, are tendered to or withheld
by the Company for payment of an exercise price for tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest, with the maximum number of shares to be added to the 2021 Plan from the 2008 Plan equal to
1,873,496 shares.
The 2021 Plan provides for an automatic share reserve increase feature, whereby the share reserve will be increased automatically annually on the first day of the fiscal year beginning
with the 2023 fiscal year of the Company, in an amount equal to the least of (a) 5,730,915 shares (subject to the adjustment provisions contained in the 2021 Plan), (b) a number of shares equal to 5% of the total number of shares of all classes of the
Company’s common stock outstanding on the last day of the immediately preceding fiscal year, and (c) such number of shares as determined by the administrator. The automatic share reserve feature will cease immediately on the tenth anniversary of the
date the 2021 Plan was adopted by the Board. On January 1, 2023, 1,490,808 shares were added to the share reserve pursuant to such automatic share reserve increase feature.
The 2021 Plan is the only equity plan of the Company currently available for grant of equity awards to employees, directors and consultants of the Company. If our stockholders approve
the amendment, the total number of shares of our common stock that will be reserved for issuance under the 2021 Plan will be 39,595,159, plus shares subject to awards under the 2008 Plan that become available as described above and shares that are
added to the share reserve through the automatic annual share reserve increase feature. We anticipate that these shares (including the automatic annual increase) will be enough to meet our expected needs for the term of the 2021 Plan; however, future
circumstances and business needs may dictate a different result and our proposed increase in the share reserve under the 2021 Plan is designed to give us flexibility to address those circumstances and needs as they may arise. This number of shares
reserved for issuance (39,595,159) is equal to % of our common stock outstanding as of , 2023. Our Board considered the following when determining the number of shares to reserve for issuance under the 2021 Plan:
If our stockholders approve the proposed amendment to the 2021 Plan, based on our current forecasts we expect that the share reserve under the 2021 Plan will allow us to continue to
grant equity-based compensation at levels we deem appropriate for the term of the 2021 Plan, and that we will not have to restructure our existing compensation programs for reasons that are not directly related to the achievement of our business
objectives. To remain competitive without equity-based compensation arrangements, it likely will be necessary to replace components of compensation previously awarded in equity with cash. We do not believe increasing cash compensation to make up for
any shortfall in equity compensation would be practical or advisable, because we believe that a combination of equity awards and cash compensation provide a more effective compensation strategy than cash alone for attracting, retaining and motivating
our employees long-term and aligning employees’ and stockholders’ interests. In addition, any significant increase in cash compensation in lieu of equity awards could substantially increase our operating expenses and reduce our cash flow from
operations, which could adversely affect our business results and could adversely affect our business strategy, including using cash flow for strategic acquisitions, research and development of innovative new products, and improvements in the quality
and performance of existing products.
If this proposed amendment to the 2021 Plan is not approved, then the remaining shares available for grants under the 2021 Plan, and the annual number of shares added to the 2021 Plan
pursuant to its annual automatic share reserve feature, will be insufficient to meet the Company’s expected grant needs for new employee, ongoing employee and consultant grants for the remainder of 2023 and beyond.
The following paragraphs provide a summary of the principal features of the 2021 Plan, as amended, and its operation. However, this summary is not a complete
description of all of the provisions of the 2021 Plan and is qualified in its entirety by the specific language of the 2021 Plan. A copy of the 2021 Plan is provided as Appendix F of this Proxy Statement.
The purposes of our 2021 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional
incentive to our employees, directors and consultants, and to promote the success of the Company’s business.
Our 2021 Plan permits the grant of incentive stock options, within the meaning of Section 422 of the Code to our employees and any parent and subsidiary
corporations’ employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, and performance awards to our employees, directors and consultants and our parent and subsidiary
corporations’ employees and consultants. The recipient of an award is referred to as a “participant,” and participants under the 2021 Plan are chosen by the administrator (as described below in “—Plan Administration”).
As of , 2023, there were approximately employees (including executive officers), consultants, and non-employee Board members who would
be eligible to be granted awards under the 2021 Plan.
Subject to the adjustment provisions contained in the 2021 Plan, a total of 3,154,967 shares of our common stock are currently reserved for issuance pursuant to
the 2021 Plan, plus any shares of our common stock subject to awards granted under the 2008 Plan that, on or after the effective date of the Company’s IPO, expire or otherwise terminate without having been exercised in full, are tendered to or withheld
by the Company for payment of an exercise price for tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest, with the maximum number of shares to be added to the 2021 Plan from the 2008 Plan equal to
1,873,496 shares (the “2008 Plan Share Recycle Provision”).
The 2021 Plan provides for an automatic share reserve increase feature, whereby the share reserve will be increased automatically annually on the first day of the fiscal year beginning
with the 2023 fiscal year of the Company, in an amount equal to the least of (a) 5,730,915 shares (subject to the adjustment provisions contained in the 2021 Plan), (b) a number of shares equal to 5% of the total number of shares of all classes of the
Company’s common stock outstanding on the last day of the immediately preceding fiscal year, and (c) such number of shares as determined by the administrator. The automatic annual share reserve increase feature will cease immediately on the tenth
anniversary of the date the 2021 Plan was adopted by the Board. On January 1, 2023, 1,490,808 shares were added to the share reserve pursuant to such automatic share reserve increase feature.
Our stockholders are being asked to approve (i) an increase of 36,440,192 shares to the maximum number of shares that may be issued pursuant to awards granted
under the 2021 Plan, and (ii) an increase to the maximum annual number of shares that may be added to the 2021 Plan pursuant to the automatic annual share reserve increase feature from 5,730,915 shares to 91,100,480 shares. If our stockholders approve
this amendment, then the maximum number of shares that may be issued pursuant to awards under the 2021 Plan will be increased to 39,595,159 shares, plus any shares that are added to the 2021 Plan from the 2008 Plan or pursuant to the automatic annual
share reserve increase feature.
The shares may be authorized, but unissued, or reacquired common stock of the Company. As of , 2023, the closing price of a share of our
common stock on the Nasdaq Global Market was $ .
If an award expires or becomes exercisable without having been exercised in full, is surrendered pursuant to an exchange program, or, with respect to restricted
stock, restricted stock units, and performance awards, is forfeited or repurchased due to failure to vest, the unpurchased shares (or for awards other than stock options or stock appreciation rights, the forfeited or repurchased shares) will become
available for future grant or sale under our 2021 Plan. With respect to stock appreciation rights, the net shares issued will cease to be available under the 2021 Plan and all remaining shares will remain available for future grant or sale under the
2021 Plan (unless our 2021 Plan has terminated). Only shares actually issued pursuant to a stock appreciation right will cease to be available under our 2021 Plan; all remaining shares will remain available for future grant or sale under our 2021 Plan
(unless our 2021 Plan has terminated). Shares that actually have been issued under the 2021 Plan under any award will not be returned to the 2021 Plan and will not become available for future distribution under the 2021 Plan, provided that if shares
issued pursuant to awards of restricted stock, restricted stock units, or performance awards are repurchased by the Company or are forfeited to the Company, such shares will become available for future grant under the 2021 Plan. Shares used to pay the
exercise price of an award or satisfy the tax withholding obligations related to an award will become available for future grant or sale under our 2021 Plan. To the extent an award is paid out in cash rather than shares, such cash payment will not
result in reducing the number of shares available for issuance under our 2021 Plan.
Our Board or one or more committees appointed by our Board administers the 2021 Plan (referred to as the “administrator”). In addition, if we determine it is
desirable to qualify transactions under the 2021 Plan as exempt under Rule 16b-3 of the Securities and Exchange Act of 1934, as amended (referred to as Rule 16b-3), such transactions will be structured to satisfy the requirements for exemption under
Rule 16b-3. Subject to the provisions of our 2021 Plan, the administrator has the power to administer the plan, including but not limited to, the power to interpret the terms of our 2021 Plan and awards granted under it, to establish, amend and rescind
rules and regulations relating to our 2021 Plan, including sub-plans, and to construe and interpret the terms of our 2021 Plan and awards granted under the 2021 Plan. The administrator has the power to select the employees, directors and consultants to
whom awards may be granted, and to determine the terms and conditions of such awards, including the exercise price, the number of shares subject to each such award, and the time or times when awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any award or the shares relating to the award. The administrator may approve forms of award agreement for use under our 2021 Plan. The
administrator may modify or amend an award in accordance with the 2021 Plan, including but not limited to extend the post-termination exercisability period of an award and to extend the maximum term of an option (subject to the terms of our 2021 Plan).
The administrator may allow participants to satisfy tax withholding obligations in such manner as prescribed in the 2021 Plan. The administrator also has the authority to institute and determine the terms of conditions of an exchange program, under
which existing awards are surrendered or cancelled in exchange for awards of the same type (which may have higher or lower exercise prices and different terms), awards of a different type, and/or cash, participants have the opportunity to transfer any
awards to a financial institution or other person or entity selected by the administrator, and/or exercise price of an outstanding award is increased or reduced. The administrator has the power to make all other determinations deemed necessary or
advisable for administering our 2021 Plan.
Stock options may be granted under our 2021 Plan. Stock options allow the participant to purchase shares at a specified exercise price. Each option is evidenced
by an award agreement that specifies the number of shares subject to the stock option, the exercise price, the term of the option, whether the option is intended to be an incentive stock option, the vesting requirements, and such other terms and
conditions as the administrator determines.
Except in certain situations in which we are assuming or replacing options granted by another company that we are acquiring or granting options to non-U.S.
taxpayers, the exercise price of options granted under our 2021 Plan must at least be equal to the fair market value of our common stock on the date of grant, provided that with respect to any participant who owns more than 10% of the voting power of
all classes of our outstanding stock, the exercise price of incentive stock options granted to such participants must equal at least 110% of the fair market value on the grant date.
Options will be exercisable at such times and under such conditions as are determined by the administrator and as set forth in the applicable award agreement.
An option is deemed exercised when we receive notice of exercise and full payment for the shares to be exercised, together with applicable tax withholdings. Until shares subject to an option are issued, the participant will have no rights to vote or
receive dividends or any other rights as a stockholder with respect to such shares. The administrator will determine the methods of payment of the exercise price of an option, which may include cash, shares or other property acceptable to the
administrator, as well as other types of consideration permitted by applicable law. After the termination of service of an employee, director or consultant, he or she may exercise his or her option for the period of time stated in his or her option
agreement. Generally, if termination is due to death or disability, the option will remain exercisable for six (6) months. In all other cases, the option will generally remain exercisable for thirty (30) days following the termination of service.
However, in no event may an option be exercised later than the expiration of its term, which in the case of an incentive stock option may not exceed ten (10) years, or five (5) years with respect to any participant who owns more than 10% of the voting
power of all classes of our outstanding stock. Subject to the provisions of our 2021 Plan, the administrator determines the other terms of options.
Stock appreciation rights may be granted under our 2021 Plan. Stock appreciation rights allow the participant to receive the appreciation in the fair market
value of our common stock between the exercise date and the date of grant. Each stock appreciation right is evidenced by an award agreement that specifies the number of shares subject to the stock appreciation right, the exercise price, the term of the
stock appreciation right, the vesting requirements, and such other terms and conditions as the administrator determines.
The exercise price of stock appreciation rights granted under our 2021 Plan will be determined by the administrator, provided that the exercise price of stock
appreciation rights granted to a U.S. taxpayer must at least be equal to the fair market value of our common stock on the date of grant.
After the termination of service of a participant, he or she may exercise his or her stock appreciation right for the period of time stated in his or her award
agreement. However, in no event may a stock appreciation right be exercised later than the expiration of its term, which may not exceed ten (10) years from the date of grant. Subject to the provisions of our 2021 Plan, the administrator determines the
other terms of stock appreciation rights, including when such rights become exercisable and whether to pay any increased appreciation in cash or with shares of our common stock, or a combination of both.
Restricted stock may be granted under our 2021 Plan. Restricted stock awards are grants of shares of our common stock that vest in accordance with terms and
conditions established by the administrator. Each award of restricted stock is evidenced by an award agreement that specifies the number of shares subject to the award of restricted stock, the purchase price, if any, the vesting requirements, and such
other terms and conditions as the administrator determines.
The administrator may impose whatever conditions for lapse of the restriction on the shares it determines to be appropriate (for example, the administrator may
set restrictions based on the achievement of specific performance goals or continued service to us); provided, however, that the administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed.
Recipients of restricted stock awards generally will have voting and dividend rights with respect to such shares upon grant without regard to the restriction, unless the administrator provides otherwise, except that if dividends or distributions are
paid in shares, the shares will be subject to the same restrictions on transferability and forfeitability as the shares of restricted stock with respect to which they were paid. Shares of restricted stock as to which the restrictions have not lapsed
are subject to our right of repurchase or forfeiture.
Restricted stock units may be granted under our 2021 Plan. Restricted stock units are bookkeeping entries representing an amount equal to the fair market value
of one share of our common stock. Each award of restricted stock units will be evidenced by an award agreement that specifies the number of restricted stock units subject to the award, vesting criteria, the form of payout, and other terms and
conditions of the award, as determined by the administrator.
Subject to the provisions of our 2021 Plan, the administrator will determine the terms and conditions of restricted stock units, including the vesting criteria
(which may be based on the achievement of Company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or any other basis determined by the
administrator in its discretion) and the form and timing of payment. Notwithstanding the foregoing, the administrator, in its sole discretion, may accelerate the time at which any restricted stock units will vest.
Performance awards may be granted under our 2021 Plan. Performance awards will result in a payment to a participant only if performance goals established by the
administrator are achieved or the awards otherwise vest. Each performance award will be evidenced by an award agreement that any time period during which any performance objectives or other vesting provisions, if
any, will be measured and such other terms and conditions as the administrator determines.
The administrator will establish organizational or individual performance goals or other vesting criteria in its discretion, which, depending on the extent to
which they are met, will determine the value of performance award paid to participants. After the grant of a performance award, the administrator, in its sole discretion, may reduce or waive any performance criteria or other vesting provisions for such
performance units or performance shares. The administrator, in its sole discretion, may pay earned performance units or performance shares in the form of cash, in shares or in some combination.
Our 2021 Plan provides that all non-employee directors are eligible to receive all types of awards (except for incentive stock options) under the 2021 Plan. Our
2021 Plan provides that in any given fiscal year, a non-employee director may not receive cash retainer fees and equity awards (including any awards issued under the 2021 Plan) with an aggregate value greater than
$600,000, increased to $900,000 in connection with his or her initial service (with the value of each equity award based on its grant date fair value determined in accordance with U.S. generally accepted accounting principles). Any cash compensation
paid or equity awards granted to an individual for his or her services as an employee, or for his or her services as a consultant (other than as a non-employee director), will not count for purposes of the foregoing limitation.
If any extraordinary dividend or other extraordinary distribution (whether in cash, shares of Company common stock, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, reclassification, repurchase, or exchange of Shares or other securities of the Company, other change in the corporate structure
of the Company affecting the shares, or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any of its successors) affecting the shares
of Company common stock occurs (including a change in control of the Company), the administrator, to prevent diminution or enlargement of the benefits or potential benefits intended to be provided under the 2021 Plan, will adjust the number and class
of shares that may be delivered under the 2021 Plan and/or the number, class, and price of shares covered by each outstanding award, and the numerical share limits in 2021 Plan’s share reserve provisions. Notwithstanding the foregoing, the conversion
of any convertible securities of the Company and ordinary course repurchases of shares of Company common stock or other securities of the Company will not be treated as an event that will require adjustment.
Dissolution or Liquidation.
In the event of a proposed dissolution or liquidation of the Company, the administrator will notify each participant as soon as practicable prior to the
effective date of such proposed transaction. To the extent it previously has not been exercised, an award will terminate immediately prior to the consummation of such proposed action.
Unless the administrator provides otherwise, our 2021 Plan generally does not allow for the transfer of awards other than by will or by the laws or descent and
distribution, and only the recipient of an award may exercise an award during his or her lifetime. If the administrator makes an award transferable, such award will contain such additional terms and conditions as the administrator deems appropriate.
Our 2021 Plan provides that in the event of a “change in control,” as defined under the 2021 Plan, each outstanding award will be treated as the administrator
determines, except that if a successor corporation or its parent or subsidiary does not assume or substitute an equivalent award for any outstanding award, then the participant will fully vest in and have the right to exercise awards of options and
stock appreciation rights, all restrictions on awards or restricted stock and restricted stock units will lapse, all performance goals or other vesting criteria applicable to the shares subject to such award will be deemed achieved at 100% of target
levels (in all cases, unless specifically provided otherwise under the applicable award agreement or another agreement authorized by the administrator between the applicable participant and the Company). A participant will be notified of the right to
exercise an award or options or stock appreciation rights, and have such right for a specified period prior to the transaction, after which time the option or stock appreciation right will terminate.
Our 2021 Plan further provides that, in the event of a change in control, as defined in our 2021 Plan, each outstanding equity award granted under our 2021 Plan
that is held by a non-employee director will fully vest, all restrictions on the shares subject to such award will lapse, and with respect to awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved
at 100% of target levels, and all of the shares subject to such award will become fully exercisable, if applicable.
Awards will be subject to any clawback policy of which we are required to adopt pursuant to the listing standards of any national securities exchange or association on which the
Company’s securities are listed or as is otherwise required by applicable laws. The administrator also may specify in an award agreement that the participant’s rights, payments and benefits with respect to an award will be subject to reduction,
cancellation, forfeiture, recoupment, reimbursement, or reacquisition upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an award.
The administrator will have the authority to amend, suspend or terminate the 2021 Plan, provided such action will not impair the existing rights of any
participant.
The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the 2021 Plan. The summary is based on existing U.S. laws and
regulations as of , 2023, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s
death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.
A participant generally recognizes no taxable income for ordinary income tax purposes as a result of the grant or exercise of an option that qualifies as an
incentive stock option under Section 422 of the Code. If a participant exercises the option and then later sells or otherwise disposes of the shares acquired through the exercise of the option after both the two-year anniversary of the date the option
was granted and the one-year anniversary of the date of exercise of the option, the participant will recognize a capital gain or loss equal to the difference between the sale price of the shares and the exercise price.
However, if the participant disposes of such shares either on or before the two-year anniversary of the date of grant or on or before the one-year anniversary
of the date of exercise of the option (a “disqualifying disposition”), any gain up to the excess of the fair market value of the shares on the date of exercise over the exercise price generally will be taxed as ordinary income, unless the shares are
disposed of in a transaction in which the participant would not recognize a gain (such as a gift). Any gain in excess of that amount will be a capital gain. If a loss is recognized with respect to the share disposition, there will be no ordinary
income, and such loss will be a capital loss.
For purposes of the alternative minimum tax, the difference between the option exercise price and the fair market value of the shares on the date of exercise of
the option is treated as an adjustment item in computing the participant’s alternative minimum taxable income in the year of exercise (unless the shares are disposed of in the same year as the option exercise). In addition, special alternative minimum
tax rules may apply to certain subsequent disqualifying dispositions of the shares or provide certain basis adjustments or tax credits.
A participant generally recognizes no taxable income as the result of the grant of such an option. However, upon exercising the option, the participant normally recognizes ordinary
income equal to the amount that the fair market value of the shares on such date exceeds the exercise price. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale of
the shares acquired by the exercise of a nonstatutory stock option, any gain or loss (based on the difference between the sale price and the fair market value on the exercise date) will be taxed as capital gain or loss.
In general, no taxable income is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant generally will recognize ordinary income in an
amount equal to the fair market value of any shares received. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.
A participant acquiring shares of restricted stock generally will recognize ordinary income equal to the fair market value of the Shares on the vesting date. If the participant is an
employee, such ordinary income generally is subject to withholding of income and employment taxes. The participant may elect, pursuant to Section 83(b) of the Internal Revenue Code to accelerate the ordinary income tax event to the date of acquisition
by filing an election with the Internal Revenue Service no later than thirty days after the date the shares are acquired. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale
price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss.
There generally are no immediate tax consequences of receiving an award of restricted stock units or a performance award. A participant who is granted
restricted stock units or performance awards generally will be required to recognize ordinary income in an amount equal to the fair market value of shares issued to such participant at the time of settlement of the award upon vesting. If the
participant is an employee, generally such ordinary income is subject to income tax withholding and certain employment tax withholdings. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or
loss.
Section 409A of the Code (“Section 409A”) provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s
deferral and distribution elections and permissible distribution events. Awards with a deferral feature granted under the 2021 Plan to a participant subject to U.S. income tax will be subject to the requirements of Section 409A. If an award is subject
to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively
received. Also, if an award that is subject to Section 409A fails to comply with the requirements of Section 409A, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such
deferred compensation.
The Company generally will be entitled to a tax deduction in connection with an award under the 2021 Plan in an amount equal to the ordinary income realized by a participant and at the
time the participant recognizes such income (for example, the exercise of a nonstatutory stock option) except to the extent such deduction is limited by applicable provisions of the Code. Special rules limit the deductibility of compensation paid to
the Company’s chief executive officer and certain “covered employees” as determined under Section 162(m) of the Code and applicable guidance. Under Section 162(m) of the Code, the annual compensation paid to any of these specified individuals will be
deductible only to the extent that it does not exceed $1,000,000.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF U.S. FEDERAL INCOME TAXATION UPON PARTICIPANTS AND MINERVA SURGICAL WITH RESPECT TO AWARDS UNDER THE 2021 PLAN. IT DOES NOT PURPORT
TO BE COMPLETE AND DOES NOT DISCUSS THE IMPACT OF EMPLOYMENT OR OTHER TAX REQUIREMENTS, THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH, OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE, OR NON-U.S. JURISDICTION IN WHICH THE
PARTICIPANT MAY RESIDE.
The number of awards that an employee, director, or consultant may receive under the 2021 Plan is in the discretion of the administrator and therefore cannot be determined in advance.
The following table sets forth: (i) the aggregate number of shares of common stock subject to options granted under the 2021 Plan during fiscal year 2022 to each of our named executive officers; executive officers, as a group; directors who are not
executive officers, as a group; and all employees who are not executive officers, as a group; (ii) the average per share exercise price of such options; (iii) the aggregate number of shares subject to RSUs granted under the 2021 Plan during fiscal year
2022 to each of our named executive officers; executive officers, as a group; directors who are not executive officers, as a group; and all employees who are not executive officers, as a group; and (iv) the grant-date value of shares subject to such
RSUs.
The approval of Proposal 9 requires the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the Special Meeting and entitled to
vote on the subject matter. Abstentions will be counted for purposes of determining the presence or absence of a quorum and will have the same effect as a vote AGAINST this proposal. Each broker non-vote will also be counted for purposes of determining
the presence or absence of a quorum but will have no effect on the outcome of the vote on this proposal. Approval of Proposal 9 is also conditioned on the closing of the Private Placement. If the closing of the Private Placement does not occur, our
Board will not implement Proposal 9, even if it is approved by the requisite vote of our stockholders.
If Proposal 9 is approved by the requisite number of our stockholders, the amendment to our 2021 Plan approved by Proposal 9 will become effective upon the closing of the Private
Placement.
The stockholders are being asked to approve an amendment (the “ESPP Amendment”) to the 2021 Employee Stock Purchase Plan (the “ESPP”) to increase the ESPP’s share reserve by 3,644,019
shares and to increase the maximum annual number of shares that may be added to the ESPP pursuant to annual automatic share reserve increases from 1,002,910 shares to 9,110,048 shares. The Board has adopted the ESPP Amendment, subject to approval from
the stockholders at the Annual Meeting. Our executive officers have an interest in this proposal as they are eligible to participate in the ESPP. Our non-employee directors are not eligible to participate in the ESPP. Unless provided otherwise, all
numerical share numbers referenced in this proposal are measured on a current, pre-split basis. See “Proposal 7: Approval of Reverse Stock Split—Effect on Equity Compensation Plans, Outstanding Options and RSUs” for additional information
regarding the effect of the Reverse Stock Split.
As of , there are 298,162 shares available for issuance under the existing version of our ESPP prior to the amendment (the “Existing ESPP”). If the stockholders
approve the ESPP Amendment, it will be effective upon the closing of the Private Placement. If the ESPP Amendment is not approved, we will need to discontinue the Existing ESPP. The Existing ESPP, however, will continue to govern awards previously
granted under it. The Board has determined that it is in the best interests of the Company and its stockholders to have an employee stock purchase plan and is asking the Company’s stockholders to approve the ESPP Amendment.
For these reasons, we request that stockholders approve the ESPP Amendment and the reservation of 3,644,019 additional shares for issuance, as well as an increase to the maximum annual
number of shares that may be added to the ESPP pursuant to annual automatic share reserve increases from 1,002,910 shares to 9,110,048 shares. We anticipate such number of shares, when added to our remaining share reserve in the Existing ESPP, will be
sufficient through the remaining term of the ESPP based on our current forecasts. This comparative summary is qualified in its entirety by reference to the ESPP itself set forth in Appendix G of this Proxy Statement.
The following is a summary of the principal features of the ESPP and its operation. The summary is qualified in its entirety by reference to the ESPP itself set forth in Appendix G of
this Proxy Statement.
The ESPP was established in October 2021 in connection with our IPO. The purpose of the ESPP is to provide eligible employees with an opportunity to purchase shares of the Company’s
common stock. The ESPP will remain in effect for a term of twenty (20) years unless sooner terminated in accordance with its terms.
Subject to the adjustment provisions contained in the ESPP, initially, a total of 401,164 shares of common stock were reserved for issuance under the ESPP plus any annual increase as
described in the following sentence. The number of shares of the Company’s common stock available for issuance under the ESPP will be increased annually on the first day of each fiscal year beginning with the Company’s fiscal year 2023 in an amount
equal to the least of (a) 1,002,910 shares of the Company’s common stock (subject to the adjustment provisions contained in the ESPP), (b) a number of shares of the Company’s common stock equal to 1% of the outstanding shares of all classes of the
Company’s common stock on the last day of the immediately preceding second fiscal year, or (c) a number of shares of the Company’s common stock determined by the administrator. On January 1, 2023, 298,162 shares were added to the share reserve pursuant
to such automatic share reserve increase feature. We are requesting stockholders approve an increase of 3,644,019 in the number of shares reserved for issuance under the ESPP, as well as an increase to the maximum annual number of shares that may be
added to the ESPP pursuant to annual automatic share reserve increases from 1,002,910 shares to 9,110,048 shares.
The Board or a committee appointed by the Board will have authority to administer the ESPP. The administrator will have full and exclusive
discretionary authority to construe, interpret and apply the terms of the ESPP, delegate ministerial duties to any of our employees, designate separate offerings under the ESPP, designate any subsidiaries of the Company as participating in the ESPP,
determine eligibility, adjudicate all disputed claims filed under the ESPP and establish procedures that it deems necessary or advisable for the administration of the ESPP, including, but not limited to, adopting such procedures, sub-plans and
appendices to the subscription agreement as are necessary or appropriate to permit participation in the ESPP by employees who are non-U.S. nationals or employed outside the United States. The administrator’s findings, decisions and determinations will
be final and binding on all participants to the maximum extent permitted by law.
Generally, any of our employees will be eligible to participate in our ESPP if they are customarily employed by the Company or any of its participating subsidiaries
for at least 20 hours per week and more than five months in any calendar year. The administrator, in its discretion, before an enrollment date for all options granted on such enrollment date in an offering, may determine (for each offering under the
423 Component, as defined below, on a uniform and nondiscriminatory basis or as otherwise permitted by applicable Treasury Regulations) that the definition of eligible employee will or will not include an individual if he or she: (a) has not completed
at least two years of service (or a lesser period of time determined by the administrator) since the employee’s last hire date, (b) customarily works not more than 20 hours per week (or a lesser period of time determined by the administrator), (c)
customarily works not more than five months per calendar year (or a lesser period of time determined by the administrator), (d) is a highly compensated employee within the meaning of Section 414(q) or (e) of the Code is a highly compensated employee
within the meaning of Section 414(q) of the Code with compensation above a certain level or who is an officer or subject to disclosure requirements under Section 16(a) of the Exchange Act. In addition, an employee may not be granted an option to
purchase stock under our ESPP if the employee (a) immediately after the grant, would own stock and/or hold outstanding options to purchase such stock possessing 5% or more of the total combined voting power or value of all classes of capital stock of
the Company or any parent or subsidiary of the Company; or (b) holds rights to purchase stock under all of the Company’s employee stock purchase plans that accrue at a rate that exceeds $25,000 worth of stock determined at the time such option is
granted, for each calendar year during which his or her right to purchase shares is outstanding at any time. As of , approximately 169 employees were eligible to participate in the ESPP.
The ESPP provides for offering periods with a duration and start and end dates as determined by the administrator, provided that no offering period will have a
duration exceeding 27 months. Unless determined otherwise by the administrator, each offering period will have one purchase period with the same duration as the offering period. The administrator is authorized to change the duration of future offering
periods and purchase periods under the ESPP, including the starting and ending dates of offering periods and purchase periods and the number of purchase periods in any offering periods. Unless determined otherwise by the administrator and to the extent
an offering period provides for more than one purchase date in such offering period, if the fair market value of a share of the Company’s common stock on a purchase date is less than the fair market value of a share of the Company’s common stock on the
first trading day of the offering period, participants in that offering period will be withdrawn from that offering period following their purchase of shares on such purchase date and automatically will be enrolled in a new offering period.
The ESPP permits participants to purchase shares of the Company’s common stock through payroll deductions of up to 15% of their eligible
compensation, which includes a participant’s base straight time gross earnings but excludes payments for overtime, shift premium, commissions, incentive compensation, equity compensation, bonuses, and other similar compensation. The administrator may
change the compensation eligible for contribution under the ESPP on a uniform and nondiscriminatory basis for future offering periods.
Amounts deducted and accumulated by a participant under the ESPP are used to purchase shares of the Company’s common stock at the end of
each purchase period. The purchase price of the shares will be 85% of the lower of (a) the fair market value of a share of the Company’s common stock on the first trading day of the offering period or (b) the fair market value of a share of the
Company’s common stock on the exercise date. A participant will be permitted to purchase up to a maximum number of shares as determined by the administrator, provided that the administrator may increase or decrease such maximum number of shares for
each purchase period. Until shares of the Company’s common stock are issued (as evidenced by the appropriate entry on our books or the books of a duly authorized transfer agent of ours) to a participant, the participant will have only rights of an
unsecured creditor with respect to such shares, and no right to vote or receive dividends or any other rights as a stockholder with respect to such shares.
Adjustments upon Changes in Capitalization, Dissolution, Liquidation, Merger or Change in Control
The administrator may amend, terminate or suspend the ESPP at any time and for any reason. Generally, no such termination can adversely affect options previously
granted and stockholder approval will be sought for certain changes as required by applicable law.
The ESPP will continue until the earlier to occur of (i) the termination of the ESPP by the administrator or (ii) twenty (20) years after the adoption of the ESPP by
the Board.
Participation in the ESPP is voluntary and is dependent on each eligible employee’s election to participate and his or her determination as to the level of payroll
deductions. Accordingly, future purchases under the ESPP are not determinable. Non-employee directors are not eligible to participate in the ESPP. For illustrative purposes, the following table sets forth (i) the number of shares of our common stock
that were purchased during fiscal year 2022 under the Existing ESPP, (ii) the average price per share paid for such shares, and (iii) the fair market value at the date of purchase.
*Mr. Clapper retired from his positions as our President and Chief Executive Officer and from our Board, effective January 2, 2023. Mr. Clapper continues to serve
the Company as a consultant.
The following brief summary of the effect of federal income taxation upon the participant and the Company with respect to the shares purchased under the ESPP does
not purport to be complete, and does not discuss the tax consequences of a participant’s death or the income tax laws of any state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may
vary based on individual circumstances. Further, tax consequences for employees participating in the Non-423 Component of the ESPP are not discussed. This summary is not intended as tax advice to participants, who should consult their own tax advisors.
The 423 Component of the ESPP is intended to qualify as an employee stock purchase plan within the meaning of Section 423 of the Code. Under
an employee stock purchase plan that so qualifies, no taxable income will be recognized by a participant, and no deductions will be allowable to the Company, upon either the grant or the exercise of the purchase rights. Taxable income will not be
recognized until there is a sale or other disposition of the shares of the Company’s common stock acquired under the ESPP or in the event of the participant’s death while still owning the purchased shares of the Company’s common stock.
If the participant sells or otherwise disposes of the purchased shares of the Company’s common stock within two years after the start date
of the offering period in which the shares of the Company’s common stock were acquired or within one year after the date of purchase of those shares of the Company’s common stock, then the participant generally will recognize ordinary income in
the year of sale or disposition equal to the amount by which the fair market value of the shares of the Company’s common stock on the purchase date exceeded the purchase price paid for those shares of the Company’s common stock, and the Company will be
entitled to an income tax deduction equal in amount to such excess, for the taxable year in which such disposition occurs. The amount of this ordinary income will be added to the participant’s basis in the shares of the Company’s common stock, and any
resulting gain or loss recognized upon the sale or disposition will be a capital gain or loss. If the shares of the Company’s common stock have been held for more than one year since the date of purchase, the gain or loss will be long-term capital gain
or loss.
If the participant sells or disposes of the purchased shares of the Company’s common stock more than two years after the start date of the
offering period in which the shares of the Company’s common stock were acquired and more than one year after the date of purchase of those shares of the Company’s common stock, then the participant generally will recognize ordinary income in the year
of sale or disposition equal to the lesser of (a) the amount by which the fair market value of the shares of the Company’s common stock on the sale or disposition date exceeded the purchase price paid for those shares of the Company’s common stock, or
(b) 15% of the fair market value of the shares of the Company’s common stock on the start date of that offering period. Any additional gain upon the disposition will be taxed as a long-term capital gain. Alternatively, if the fair market value of the
shares of the Company’s common stock on the date of the sale or disposition is less than the purchase price, there will be no ordinary income and any loss recognized will be a long-term capital loss. We will not be entitled to an income tax deduction
with respect to such disposition.
The approval of Proposal 10 requires the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the Special
Meeting and entitled to vote on the subject matter. Abstentions will be counted for purposes of determining the presence or absence of a quorum and will have the same effect as a vote AGAINST this proposal. Each broker non-vote will also be counted for
purposes of determining the presence or absence of a quorum but will have no effect on the outcome of the vote on this proposal. Approval of Proposal 10 is also conditioned on the closing of the Private Placement. If the closing of the Private
Placement does not occur, our Board will not implement Proposal 10, even if it is approved by the requisite vote of our stockholders.
If Proposal 10 is approved by the requisite number of our stockholders, the amendment to our 2021 Plan approved by Proposal 10 will become effective upon the closing
of the Private Placement.
If the Special Meeting is convened and a quorum is present, but there are not sufficient votes to approve any of Proposals 1 through 10, or if
there are insufficient votes to constitute a quorum, our proxy holders may move to adjourn the special meeting at that time in order to enable the Board to solicit additional proxies.
In this proposal (the “Adjournment Proposal”), we are asking our stockholders to authorize the holder of any proxy solicited by the Board to vote
in favor of adjourning the Special Meeting to another time and place, if necessary or appropriate (as determined in good faith by the Board), to solicit additional proxies in the event there are not sufficient votes to approve any of Proposals 1
through 10. If our stockholders approve this proposal, we could adjourn the special meeting and any adjourned or postponed session of the Special Meeting and use the additional time to solicit additional proxies, including the solicitation of proxies
from our stockholders that have previously voted. Among other things, approval of this proposal could mean that, even if we had received proxies representing a sufficient number of votes to defeat any of Proposals 1 through 10, we could adjourn the
Special Meeting without a vote on such proposal and seek to convince our stockholders to change their votes in favor of such proposals.
If it is necessary or appropriate (as determined in good faith by the Board) to adjourn the Special Meeting, no notice of the adjourned meeting is
required to be given to our stockholders, other than an announcement at the Special Meeting of the time and place to which the Special Meeting is adjourned, so long as the meeting is adjourned for 30 days or less and no new record date is fixed for the
adjourned meeting. At the adjourned meeting, we may transact any business which might have been transacted at the original meeting.
The approval of Proposal 11 requires the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the Special
Meeting and entitled to vote on the subject matter. Abstentions will be counted for purposes of determining the presence or absence of a quorum and will have the same effect as a vote AGAINST this proposal. Each broker non-vote will also be counted for
purposes of determining the presence or absence of a quorum but will have no effect on Proposal 11. Proposal 11 is considered a routine proposal, and therefore we do not expect any broker non-votes with respect to such proposal.
OTHER MATTERS
The Board knows of no other matters that will be presented for consideration at the Special Meeting. If
any other matters are properly brought before the Special Meeting, it is the intention of the person named in the accompanying proxy to vote on such matters in accordance with his or her best judgment.
|
THE BOARD OF DIRECTORS |
|
|
|
Santa Clara, California |
|
January , 2023 |
Appendix A
SHARE PURCHASE AGREEMENT
BY AND BETWEEN
MINERVA SURGICAL, INC.,
AND
EACH OF THE PURCHASERS
AS SET FORTH HEREIN
DECEMBER 27, 2022
TABLE OF CONTENTS
1. |
Definitions |
A-1 |
|
|
|
|
2. |
Purchase and Sale of Shares |
A-7 |
|
2.1 |
Purchase and Sale |
A-7 |
|
2.2 |
Closing |
A-7 |
|
|
|
|
3. |
Representations and Warranties of the Company |
A-7 |
|
3.1 |
Organization and Power |
A-8 |
|
3.2 |
Capitalization |
A-8 |
|
3.3 |
Agreements with Securityholders |
A-9 |
|
3.4 |
Authorization |
A-9 |
|
3.5 |
Valid Issuance; Reservation of Shares |
A-9 |
|
3.6 |
No Violation or Default; No Conflict; No Anti-Takeover Provision |
A-10 |
|
3.7 |
Consents |
A-10 |
|
3.8 |
SEC Filings; Financial Statements |
A-11 |
|
3.9 |
Absence of Changes |
A-11 |
|
3.10 |
Absence of Litigation |
A-11 |
|
3.11 |
Compliance with Law |
A-12 |
|
3.12 |
Compliance with Health Care Laws |
A-12 |
|
3.13 |
Product Manufacturing |
A-12 |
|
3.14 |
Licenses and Permits |
A-13 |
|
3.15 |
Intellectual Property |
A-13 |
|
3.16 |
Open Source Software |
A-14 |
|
3.17 |
Compliance with ERISA |
A-14 |
|
3.18 |
Compliance with Law |
A-15 |
|
3.19 |
Taxes |
A-15 |
|
3.20 |
Environmental Laws |
A-16 |
|
3.21 |
Title |
A-17 |
|
3.22 |
Insurance |
A-17 |
|
3.23 |
Nasdaq Stock Market |
A-17 |
|
3.24 |
Sarbanes-Oxley Act |
A-17 |
|
3.25 |
FDA and Related Matters |
A-17 |
|
3.26 |
Clinical Studies |
A-18 |
|
3.27 |
Safety Notices |
A-18 |
|
3.28 |
Accounting Controls and Disclosure Controls and Procedures |
A-18 |
|
3.29 |
Price Stabilization of Common Stock |
A-19 |
|
3.30 |
Investment Company Act |
A-19 |
|
3.31 |
General Solicitation; No Integration or Aggregation |
A-19 |
|
3.32 |
Brokers and Finders |
A-19 |
|
3.33 |
Reliance by the Purchasers |
A-20 |
|
3.34 |
No Disqualification Events |
A-20 |
|
3.35 |
Anti-Bribery and Anti-Money Laundering Laws |
A-20 |
|
3.36 |
Cybersecurity; Compliance with Data Privacy Laws |
A-20 |
|
3.37 |
Transactions with Affiliates and Employees |
A-21 |
|
3.38 |
Shell Company Status |
A-21 |
|
3.39 |
OFAC |
A-21 |
|
3.40 |
No Other Representations or Warranties |
A-22 |
|
|
|
|
4. |
Representations and Warranties of Each Purchaser |
A-22 |
|
4.1 |
Organization |
A-22 |
|
4.2 |
Authorization |
A-22 |
|
4.3 |
No Conflict |
A-22 |
|
4.4 |
Consents |
A-23 |
|
4.5 |
Residency |
A-23 |
|
4.6 |
Brokers and Finders |
A-23 |
|
4.7 |
Investment Representations and Warranties |
A-23 |
|
4.8 |
Intent |
A-23 |
|
4.9 |
Investment Experience; Ability to Protect Its Own Interests and Bear Economic Risks |
A-24 |
|
4.10 |
Tax Advisors |
A-24 |
|
4.11 |
Securities Not Registered; Legends |
A-24 |
|
4.12 |
Placement Agent |
A-25 |
|
4.13 |
Reliance by the Company |
A-26 |
|
4.14 |
No General Solicitation |
A-26 |
|
4.15 |
No Reliance |
A-26 |
|
4.16 |
Access to Information |
A-26 |
|
4.17 |
Certain Trading Activities |
A-27 |
|
4.18 |
Disqualification Event |
A-27 |
|
4.19 |
Compliance with Laws |
A-27 |
|
|
|
|
5. |
Covenants |
A-27 |
|
5.1 |
Further Assurances |
A-27 |
|
5.2 |
Listing |
A-28 |
|
5.3 |
Disclosure of Transactions |
A-28 |
|
5.4 |
Pre-Closing Covenants |
A-28 |
|
5.5 |
Stockholder Approval |
A-31 |
|
5.6 |
Integration |
A-32 |
|
5.7 |
Subsequent Equity Sales |
A-32 |
|
5.8 |
Use of Proceeds |
A-33 |
|
5.9 |
Removal of Legends |
A-33 |
|
5.10 |
Furnishing of Information |
A-33 |
|
5.11 |
Equal Treatment of Purchasers |
A-34 |
|
5.12 |
Blue Sky Laws |
A-34 |
|
5.13 |
Delivery of Shares After Closing |
A-34 |
|
5.14 |
Transfer Taxes |
A-34 |
|
|
|
|
6. |
Conditions of Closing |
A-34 |
|
6.1 |
Conditions to the Obligation of the Purchasers |
A-34 |
|
6.2 |
Conditions to the Obligation of the Company |
A-37 |
|
|
|
|
7. |
Termination |
A-37 |
8. |
Accelmed Purchaser Rights |
A-38 |
|
8.1 |
Board Rights |
A-38 |
|
8.2 |
Accelmed Information Rights |
A-40 |
|
|
|
|
9. |
Miscellaneous Provisions |
A-40 |
|
9.1 |
Public Statements or Releases; Use of Name and Logo |
A-40 |
|
9.2 |
Interpretation |
A-41 |
|
9.3 |
Notices |
A-41 |
|
9.4 |
Severability |
A-42 |
|
9.5 |
Governing Law; Submission to Jurisdiction; Venue; Waiver of Trial by Jury |
A-42 |
|
9.6 |
Waiver |
A-43 |
|
9.7 |
Expenses |
A-43 |
|
9.8 |
Assignment |
A-43 |
|
9.9 |
Confidential Information |
A-43 |
|
9.10 |
Business Opportunities |
A-44 |
|
9.11 |
Reliance by and Exculpation of Placement Agent |
A-45 |
|
9.12 |
Third Parties |
A-46 |
|
9.13 |
Independent Nature of Purchasers’ Obligations and Rights |
A-46 |
|
9.14 |
Counterparts |
A-47 |
|
9.15 |
Entire Agreement; Amendments |
A-47 |
|
9.16 |
Survival |
A-47 |
|
9.17 |
Mutual Drafting |
A-47 |
|
9.18 |
Waiver of Conflicts |
A-47 |
Exhibits
Exhibit A Purchasers
Exhibit B Form of Registration Rights Agreement
Exhibit C Form of Amended and Restated Bylaws
Exhibit D Form of Amended and Restated Certificate of Incorporation
Exhibit E Form of Lock-Up Agreement
This SHARE PURCHASE AGREEMENT (this “Agreement”) is dated
as of December 27, 2022, by and among Minerva Surgical, Inc., a Delaware corporation (the “Company”), and each of the entities listed on Exhibit A attached to this Agreement (each, a “Purchaser” and together, the “Purchasers”).
WHEREAS, the Company and each Purchaser are executing and
delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act (as defined below);
WHEREAS, the Company desires to issue and sell to the Purchasers,
and each Purchaser desires to purchase from the Company, severally and not jointly, upon the terms and subject to the conditions stated in this Agreement, Shares (as defined below) of the Company as more fully described in this Agreement; and
WHEREAS, contemporaneously with the sale of the Shares, the
parties hereto will execute and deliver a Registration Rights Agreement, substantially in the form attached hereto as Exhibit B, pursuant to which the Company will agree to provide certain registration rights in respect of the Shares under
the Securities Act and applicable state securities laws.
NOW THEREFORE, in consideration of the mutual agreements,
representations, warranties and covenants herein contained, the Company and each Purchaser, severally and not jointly, agree as follows:
1. Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
“2022 SEC Reports” shall mean the Company’s (a) Annual Report on
Form 10-K for the fiscal year ended December 31, 2021 (including, for the avoidance of doubt, the information required by Part III that is included in the Company’s definitive proxy statement filed with the SEC pursuant to Regulation 14A),
(b) Quarterly Reports on Form 10-Q, and (c) Current Reports on Form 8-K, in each case (a) – (c), (i) filed or furnished (as applicable) by the Company with the SEC after December 31, 2021, and (ii) together with any documents incorporated by
reference therein or exhibits thereto.
“5635 Approval” has the meaning set forth in Section 5.5
hereof.
“ACA” has the meaning set forth in Section 3.12 hereof.
“Accelmed Designee” has the meaning set forth in Section 8.1
hereof.
“Accelmed Director” has the meaning set forth in Section 8.1
hereof.
“Accelmed Observer” has the meaning set forth in Section 8.1
hereof.
“Accelmed Purchaser” shall mean Accelmed Partners II LP and its
permitted transferees and assigns.
“Accelmed Rights Period” has the meaning set forth in Section 8.1
hereof.
“Affiliate” shall mean, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediates, controls, is controlled by or is under common control with such Person. For the avoidance of doubt, solely for purposes of this Agreement, each Purchaser and its respective
Affiliates shall be deemed not to be an Affiliate of the Company and its Affiliates.
“Affiliate Indemnitors” has the meaning set forth in Section 8.1(g)
hereof.
“Agreement” has the meaning set forth in the recitals hereof.
“Amended and Restated Bylaws” shall mean the Bylaws of the
Company, as in effect on the date hereof.
“Amended and Restated Certificate of Incorporation” shall mean
the Certificate of Incorporation of the Company, as in effect on the date hereof.
“Authorizations” shall have the meaning set forth in Section 3.25
hereof.
“Board of Directors” shall mean the board of directors of the
Company.
“Board Indemnitee” has the meaning set forth in Section 8.1(g)
hereof.
“Change of Control” means any of the following events: (a) any
Person or group of Persons is or becomes the beneficial owner, directly or indirectly, of a majority of the total voting power represented by all then-outstanding Common Stock of the Company; or (b) the Company consolidates with or merges into
another Person, or any Person consolidates with or merges into the Company, other than (i) a merger or consolidation which would result in the Common Stock outstanding immediately prior to such merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) a majority of the combined voting power of the Common Stock of such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation (and the references to the Company in the definition of Common Stock shall be deemed to refer to such surviving entity or the parent thereof), (ii) a merger or consolidation which would result in the members of the
Board of Directors immediately prior to such merger or consolidation comprising a majority of the board of directors of the surviving entity or the parent thereof, or (iii) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person or group of Persons or such Person’s or Persons’ stockholders taken as a whole becomes the beneficial owner, directly or indirectly, of a majority of the total voting power of all then-outstanding
Common Stock.
“CIBC” means Canadian Imperial Bank of Commerce.
“CIBC Loan Agreement” means the Loan and Security Agreement by
and between the Company and CIBC, dated October 8, 2021, as amended through the date of this Agreement.
“Closing” has the meaning set forth in Section 2.2
hereof.
“Closing Conditions” has the meaning set forth in Section 2.2
hereof.
“Closing Date” shall mean such date and time as mutually agreed
by the Company and the Accelmed Purchaser, but in no event later than the third (3rd) business day following the date on which the Closing Conditions are fully
satisfied.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Common Stock” shall mean the Company’s common stock, par value
$0.001 per share.
“Common Stock Equivalents” shall mean any securities of the
Company or any subsidiary that would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock.
“Company” has the meaning set forth in the recitals hereof.
“Confidential Information” means, with respect to any Person, any
confidential information concerning such Person, its businesses or affairs, including any trade secrets or confidential business or technical information of such Person or its products, licensees, customers, suppliers or development or manufacturing
partners, clinical or preclinical results and information, manufacturing information, cost or pricing information, know-how, technology, inventions, improvements and other business information, materials and property; provided, however, that
such Confidential Information will not include information that (a) has become publicly known through no wrongful act or breach of any obligation of confidentiality by any of the parties or any of their Affiliates, (b) was approved in writing for
release by the party owning such Confidential Information, (c) is or has been independently developed or conceived by Purchaser or any of its Affiliates without the Company’s Confidential Information, or (d) is or has been made known or disclosed to
Purchaser or any of its Affiliates by a third party or was otherwise in the possession of Purchaser, provided that such source is not known (and would not reasonably be expected to be known) by the other party to be bound by a confidentiality
agreement with, or any other contractual, legal or fiduciary obligation of confidentiality to, the furnishing party or any other party with respect to such information.
“Covered Person” has the meaning set forth in Section 3.34
hereof.
“Designee Letter” means a written agreement with a member of the
Board of Directors, effective upon Closing, whereby such director (i) acknowledges and agrees that he or she serves on the Board of Directors as the designee of the Accelmed Purchaser (each, an “Initially Designated Director”) and (ii) agrees
to resign as a member of the Board of Directors upon the request of the Accelmed Purchaser.
“Disclosure Document” has the meaning set forth in Section 5.3
hereof.
“Disqualification Event” has the meaning set forth in Section 3.34
hereof.
“Environmental Laws” has the meaning set forth in Section 3.20
hereof.
“ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended, together with all of the rules and regulations promulgated thereunder.
“FDA” shall mean the U.S. Food and Drug Administration.
“Financial Statements” has the meaning set forth in Section 3.8(b)
hereof.
“GAAP” has the meaning set forth in Section 3.8(b)
hereof.
“Governmental Authority” means any foreign, federal, state,
provincial, local or other court, governmental authority, tribunal, commission or regulatory body, or any political or other subdivision, department, agency or branch of any of the foregoing.
“Health Care Laws” has the meaning set forth in Section 3.12
hereof.
“HIPAA” has the meaning set forth in Section 3.12 hereof.
“Indemnification Obligations” has the meaning set forth in Section 8.1(g)
hereof.
“Intellectual Property” has the meaning set forth in Section 3.15
hereof.
“Investment Company Act” shall mean the Investment Company Act of
1940, as amended, together with all of the rules and regulations promulgated thereunder.
“Irrevocable Transfer Agent Instructions” has the meaning set
forth in Section 6.1(k) hereof.
“IT Systems” has the meaning set forth in Section 3.36
hereof.
“Law” means any international, national, federal, state or local
law, constitution, treaty, convention, statute, ordinance, code, rule, regulation or common law or other similar requirement enacted, adopted, promulgated or applied by any Governmental Authority, each as amended and now and hereafter in effect.
“Liens” means any mortgage, pledge, lien, charge, claim,
encumbrance, security interest, adverse ownership interest or other restriction of any kind or nature, whether based on common law, statute or contract.
“Lock-Up Period” has the meaning set forth in Section 5.7
hereof.
“Material Adverse Effect” shall mean any change, event,
circumstance, development, condition, occurrence or effect that, individually or in the aggregate, (a) was, is, or would reasonably be expected to be, materially adverse to the business, properties, financial condition, prospects, assets,
liabilities, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, or (b) materially delays or materially impairs the ability of the Company to comply, or prevents the Company from complying, with its
obligations under this Agreement or with respect to the Closing or would reasonably be expected to do so.
“Material Company Code” has the meaning set forth in Section 3.16
hereof.
“National Exchange” shall mean any of the following markets or
exchanges on which the Common Stock is listed or quoted for trading on the date in question, together with any successor thereto: the NYSE American, The New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market and the Nasdaq
Capital Market. As of the date of this Agreement, references to the applicable National Exchange refer to the Nasdaq Global Market.
“Open Source Software” has the meaning set forth in Section 3.16
hereof.
“Person” shall mean an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or any other entity or organization.
“Personal Data” has the meaning set forth in Section 3.36
hereof.
“Placement Agent” shall mean Piper Sandler & Co., whom the
Company has engaged as its exclusive placement agent in connection with the placement of the Shares.
“Plan” shall mean an employee benefit plan, within the meaning of
Section 3(3) of ERISA, for which the Company or any member of its “Controlled Group” (defined as any entity, whether or not incorporated, that is under common control with the Company within the meaning of Section 4001(a)(14) of ERISA or any entity
that would be regarded as a single employer with the Company under Section 414(b),(c),(m) or (o) of the Code) would have any liability.
“Privacy Policies” has the meaning set forth in Section 3.36
hereof.
“Privacy Obligations” has the meaning set forth in Section 3.36
hereof.
“Programs” has the meaning set forth in Section 3.12
hereof
“Proxy Statement” has the meaning set forth in Section 5.5
hereof.
“Purchase Price” has the meaning set forth in Section 2.1
hereof.
“Purchaser” and “Purchasers” have the meanings set forth
in the recitals hereof.
“Purchaser Adverse Effect” has the meaning set forth in Section 4.3
hereof.
“Registration Rights Agreement” has the meaning set forth in Section 6.1(l)
hereof.
“Rule 144” shall mean Rule 144 promulgated by the SEC pursuant to
the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.
“Rule 506(d) Related Party” has the meaning set forth in Section 4.18.
“Safety Notices” has the meaning set forth in Section 3.27
hereof.
“Sanctions” has the meaning set forth in Section 3.39
hereof.
“Sarbanes-Oxley Act” shall mean Sarbanes-Oxley Act of 2002, as
amended, together with all of the rules and regulations promulgated in connection therewith.
“SEC” shall mean the United States Securities and Exchange
Commission.
“SEC Reports” has the meaning set forth in Section 3.8(a)
hereof.
“Securities Act” shall mean the Securities Act of 1933, as
amended, together with all of the rules and regulations promulgated thereunder.
“Shares” shall mean the shares of Common Stock issued to each
Purchaser pursuant to this Agreement.
“Short Sales” shall mean all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against the box (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
“Stockholder Approval” has the meaning set forth in Section 5.5
hereof.
“Stockholder Meeting” has the meaning set forth in Section 5.5
hereof.
“Stockholder Meeting Deadline” has the meaning set forth in Section 5.5
hereof.
“Studies” has the meaning set forth in Section 3.26
hereof.
“Tax Returns” shall mean returns, reports, information statements
and other documentation (including any additional or supporting material) filed or maintained, or required to be filed or maintained, in connection with the calculation, determination, assessment or collection of any Tax and shall include any amended
returns.
“Tax” or “Taxes” shall mean any and all federal, state,
local, foreign and other taxes, levies, fees, imposts, duties and charges of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto), whether or not imposed on the Company,
including, without limitation, taxes imposed on, or measured by, income, franchise, profits or gross receipts, and also ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, employment,
social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes and customs duties.
“Transaction Agreements” shall mean this Agreement and the
Registration Rights Agreement.
“Transfer Agent” shall mean, with respect to Common Stock,
American Stock Transfer & Trust Company, LLC, or such other financial institution that provides transfer agent services as proposed by the Company and consented to by the Purchasers, which consent shall not be unreasonably withheld.
“Transfer Taxes” shall mean all transfer, documentary, sales,
use, stamp, registration, value added, goods and services and similar Taxes imposed with respect to the transactions contemplated by this Agreement.
“USPTO” has the meaning set forth in Section 3.15 hereof.
“Willful Breach” has the meaning set forth in Section 7
hereof.
2. Purchase and Sale of Shares.
2.1 Purchase and Sale. On the Closing Date, upon the terms
and subject to the conditions set forth herein, the Company agrees to issue and sell, and the Purchasers, severally and not jointly, agree to purchase, an aggregate of 146,627,565 Shares (subject to appropriate adjustment in the event of any stock
dividend, stock split, combination or other similar recapitalization with respect to the Company’s Common Stock), with the number of Shares to be purchased by each Purchaser set forth opposite the name of such Purchaser under the heading “Number of
Shares” on Exhibit A attached hereto. The per Share purchase price shall be $0.2046 per Share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to
the Company’s Common Stock) (the “Purchase Price”).
2.2 Closing. Subject to the satisfaction or waiver of the
conditions set forth in Section 6 of this Agreement (the “Closing Conditions”), the closing of the purchase and sale of the Shares (the “Closing”) shall occur remotely via the exchange of documents and signatures on the Closing
Date. At the Closing, the Shares shall be issued and registered in the name of such Purchaser, or in such nominee name(s) as designated by such Purchaser, representing the number of Shares to be purchased by such Purchaser at such Closing as set
forth in Exhibit A (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Company’s Common Stock), in each case against payment to the Company of
the Purchase Price therefor in full by cancellation of indebtedness or wire transfer to the Company of immediately available funds, at or prior to the Closing, in accordance with wire instructions provided by the Company to the Purchasers at least
one business day prior to the Closing, which wire instructions will designate the Company’s bank account (which shall not be an escrow account), provided that where requested in writing by a Purchaser, such funds may follow the receipt by such
Purchaser of a copy of the records of the Company’s Transfer Agent showing the Purchaser as the owner of the number of Shares to be purchased by such Purchaser at such Closing as set forth in Exhibit A. On the Closing Date, the Company will
issue the Shares in book-entry form, free and clear of all restrictive and other legends (except as expressly provided in Section 4.11 hereof) and shall provide evidence of such issuance from the Company’s Transfer Agent as of the Closing
Date to each Purchaser.
3. Representations and Warranties of the Company. The
Company hereby represents and warrants to each of the Purchasers and the Placement Agent that the statements contained in this Section 3 are true and correct as of the date hereof and the Closing Date (except for the representations and
warranties that speak as of a specific date, which shall be made as of such date). In the event that the Company establishes one or more subsidiaries following the date of this Agreement, such representations and warranties shall apply at Closing mutatis
mutandis with respect to the Company and its subsidiaries.
3.1 Organization and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the State of Delaware, has the requisite power and authority to own, lease and operate its properties and to carry on its business as now conducted and is qualified to do
business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification, except where such failure to be in good standing or to have such power and authority or to so qualify would not
reasonably be expected to have a Material Adverse Effect. As of the date hereof, the Company has no subsidiaries and does not own or control, directly or indirectly, any corporation, association or other entity.
3.2 Capitalization. The authorized capital stock of the
Company consists of 100,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, each with a par value of $0.001 per share. As of December 19, 2022, there are no shares of preferred stock issued and outstanding, and there are
29,453,661 shares of Common Stock issued and outstanding, of which no shares are owned by the Company. There are no other shares of any other class or series of capital stock of the Company issued or outstanding. The Company has no capital stock
reserved for issuance, except that, as of December 19, 2022, there are (i) equity awards for an aggregate of 3,905,717 shares of Common Stock outstanding pursuant to the Company’s 2008 Stock Plan and 2021 Equity Incentive Plan, (ii) 347,145 shares of
Common Stock reserved for issuance pursuant to the 2021 Equity Incentive Plan, (iii) 53 shares of Common Stock reserved for issuance pursuant to the 2021 Employee Stock Purchase Plan, and (iv) an aggregate of 77,842 shares of Common Stock reserved
for issuance pursuant to outstanding warrants to purchase common stock (with an exercise price of $11.31 per share). There are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such
rights) (“Voting Debt”) of the Company issued and outstanding. Except as stated above, there are no existing options, warrants, calls, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the
issued or unissued capital stock of the Company, obligating the Company to issue, transfer, sell, redeem, purchase, repurchase or otherwise acquire or cause to be issued, transferred, sold, redeemed, purchased, repurchased or otherwise acquired any
capital stock or Voting Debt of, or other equity interest in, the Company or securities (including Common Stock Equivalents) or rights convertible into or exchangeable for such shares or equity interests or obligations of the Company to grant, extend
or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment. The Company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws have been filed as exhibits to the 2022
SEC Reports, and the Company has taken no action, and shall not, without the consent of each Purchaser, take any action prior to the Closing Date, to amend or otherwise modify the Amended and Restated Certificate of Incorporation or the Amended and
Restated Bylaws. All of the issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and non-assessable, and have been issued in compliance with all applicable federal and state securities laws.
None of the outstanding shares of capital stock of the Company were issued in violation of any preemptive or other similar rights of any securityholder of the Company which have not been validly waived.
3.3 Agreements with Securityholders. Except as set forth
in the Transaction Agreements or as disclosed in the 2022 SEC Reports, (i) there are no voting agreements, buy-sell agreements, option or right of first purchase agreements or other agreements of any kind among the Company and any of the
securityholders of the Company relating to the securities of the Company held by such securityholders, and (ii) the Company is presently not under any obligation to register, and has not granted any rights to require registration, under the
Securities Act of any of the Company’s presently outstanding securities or any of its securities that may hereafter be issued, which registration rights have not expired, and any such existing registration rights have been validly waived with respect
to, or are otherwise inapplicable to, the registration statement contemplated by the Registration Rights Agreement. The Company is not party to a stockholder rights agreement, “poison pill” or similar anti-takeover agreement or plan.
3.4 Authorization. The Company has all requisite corporate
power and authority to enter into the Transaction Agreements and to carry out and perform its obligations under the terms of the Transaction Agreements. Following the Stockholder Approval, all corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization of the Shares, the authorization, execution, delivery and performance of the Transaction Agreements, and the consummation of the transactions contemplated herein has been taken.
This Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery by each Purchaser and that this Agreement constitutes the legal, valid and binding agreement of each Purchaser,
this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Registration Rights Agreement has been duly authorized by the
Company and upon its respective execution by the Company and the other parties thereto and, assuming that it constitutes a legal, valid and binding agreement of the other parties thereto, the Registration Rights Agreement will constitute a legal,
valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3.5 Valid Issuance; Reservation of Shares. Following the
Stockholder Approval, the Shares being purchased by the Purchasers hereunder, will be been duly and validly authorized for issuance and, upon issuance pursuant to the terms hereof, against full payment of the Purchase Price therefor in accordance
with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable and will be issued free and clear of any liens or other restrictions (other than those under applicable state and federal securities laws). Subject to
the accuracy of the representations and warranties made by the Purchasers in Section 4 hereof, the offer and sale of the Shares to the Purchasers is and will be in compliance with applicable exemptions from (i) the registration and
prospectus delivery requirements of the Securities Act and (ii) the registration and qualification requirements of applicable securities laws of the states of the United States.
3.6 No Violation or Default; No Conflict; No Anti-Takeover
Provision. The Company is not (i) in violation of its Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound
or to which any property or asset of the Company is subject; or (iii) in violation of any applicable Law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over
the Company, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not reasonably be expected to have a Material Adverse Effect. The execution, delivery and performance of the Transaction Agreements by the
Company, the issuance of the Shares and the consummation of the other transactions contemplated hereby will not (a) violate any provision of the Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws of the Company,
(b) conflict with or result in a breach or violation of, or constitute a default (with or without notice or lapse of time, or both) under, result in the creation or imposition of any lien, charge or encumbrance upon any of the properties, rights or
assets of the Company under, or give rise to a right of termination, cancellation, amendment, anti-dilution or similar adjustments, or acceleration of any obligation, a change of control right or to a loss of a benefit (with or without notice or
lapse of time or both) under any agreement or instrument (including, without limitation, any arrangement with executive officers of the Company), credit facility, franchise, license, judgment, order, statute, law, ordinance, rule or regulations,
applicable to the Company or its properties or assets or to the Company’s properties and assets, or (c) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations) and the rules and regulations of any self-regulatory organization to which the Company or its
securities are subject, or by which any property or asset of the Company is bound or affected, except, in the case of clauses (b) and (c), as would not be reasonably expected to have a Material Adverse Effect. No “control share
acquisition,” “fair price,” “moratorium,” “business combination” or other anti-takeover law of jurisdiction or any similar provisions in the Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws of the Company is applicable
to, or, at the Closing will be applicable to, this Agreement or any other documents related to the transactions contemplated by this Agreement.
3.7 Consents. Assuming the accuracy of the representations
and warranties of the Purchasers in Section 4 of this Agreement, no consent, approval, authorization, order or license of, or filing, registration or qualification with, any Person or any court or governmental or regulatory agency or body is
required in connection with the transactions contemplated herein or in the other Transaction Agreements, except (a) filings under the Securities Act or the Exchange Act that have been timely made or that the Company undertakes to timely file, (b) the
filing of any requisite notices and/or application(s) to the National Exchange for the issuance and sale of the Shares and the listing of the Shares for trading or quotation, as the case may be, thereon, in each case which the Company undertakes to
file in the time and manner required thereby, (c) filings that may be required under the securities, or blue sky, laws of any state jurisdiction in connection with the offer and sale of the Shares by the Company in the manner contemplated herein,
which the Company undertakes to timely file, and (d) such as the failure of which to obtain would not have a Material Adverse Effect.
3.8 SEC Filings; Financial Statements.
(a) The Company has filed or furnished, as applicable, in a
timely manner all forms, statements, certifications, reports and documents required to be filed or furnished by it with the SEC under the Exchange Act or the Securities Act for the year preceding the date hereof (the “SEC Reports”). As of the
time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing), each of the SEC Reports complied in all material respects with the applicable requirements of the
Securities Act or the Exchange Act (as the case may be) and, as of the latest time they were filed, amended, or superseded, as applicable, none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(b) The financial statements of the Company included in the SEC
Reports (collectively, the “Financial Statements”) comply in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto. The Financial Statements fairly present in
all material respects the financial position of the Company as of the dates indicated, and the results of its operations and cash flows for the periods therein specified, all in accordance with United States generally accepted accounting principles
(“GAAP”) (except as otherwise noted therein, and in the case of unaudited financial statements, as permitted by Form 10-Q of the SEC, and except that the unaudited financial statements may not contain footnotes and are subject to normal and
recurring year-end adjustments) applied on a consistent basis unless otherwise noted therein throughout the periods therein specified. Except as set forth in the Financial Statements filed prior to the date hereof, the Company has not incurred any
liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since the date of such Financial Statements, none of which have had or would reasonably be
expected to have a Material Adverse Effect.
3.9 Absence of Changes. Except as otherwise stated or
disclosed in the 2022 SEC Reports filed at least one business day prior to the date hereof, since December 31, 2021, (a) the Company has conducted its business only in the ordinary course of business (except for the execution and performance of this
Agreement and the discussions, negotiations and transactions related thereto), (b) except for the transactions contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Company or its business,
properties, operations or financial conditions that would be required to be disclosed by the Company under applicable securities laws, and (c) there has not been any Material Adverse Effect.
3.10 Absence of Litigation. Except as otherwise stated or
disclosed in the 2022 SEC Reports filed at least one business day prior to the date hereof, there is no legal, governmental or regulatory action, suit, proceeding, arbitration, demands, claim, investigation or inquiry pending or, to the Company’s
knowledge, threatened against the Company which has had or would reasonably be expected to have a Material Adverse Effect, nor are there any orders, writs, injunctions, judgments or decrees outstanding of any court or government agency or
instrumentality and binding upon the Company that have had or would reasonably be expected to have a Material Adverse Effect. Neither the Company nor, to the knowledge of the Company, any director or officer
thereof, is, or within the last ten years has been, the subject of any action involving a claim of violation of or liability under federal or state securities laws relating to the Company or a claim of breach of fiduciary duty relating to the
Company.
3.11 Compliance with Law. The Company is not in violation of,
and has not received any notices of violations with respect to, any applicable laws, statutes, ordinances, rules or regulations of any governmental body, court or government agency or instrumentality, except for violations which have not had or would
not reasonably be expected to have a Material Adverse Effect. The Company does not (i) produce, design, test, manufacture, or develop “critical technologies”; (ii) perform certain functions related to “critical infrastructure,” (iii) maintain or
collect, directly or indirectly, sensitive personal data of U.S. citizens, or (iv) otherwise constitute a “TID U.S. Business,” in each case, within the meaning of section 721 of the Defense Production Act of 1950, as amended, including all
implementing regulations thereof administered by the Committee on Foreign Investment in the United States.
3.12 Compliance with Health Care Laws. The Company is, and
for the last three years has been, in material compliance with all applicable health care laws, including (i) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §§ 301 et seq.); (ii) applicable federal, state, local and foreign health care related
fraud and abuse laws, including, the federal health care Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), criminal false claims provisions including 42 U.S.C. § 1320a-7b(a), 18 U.S.C. §§ 286,
287, 1347 and 1349 and the health care fraud criminal provisions under the U.S. Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the exclusion laws (42 U.S.C. § 1320a-7), the civil monetary penalties law (42 U.S.C.
§ 1320a-7a) and the Patient Protection and Affordable Care Act of 2010 (Pub. Law 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. Law 111-152) (collectively, “ACA”), including without limitation the U.S.
Physician Payments Sunshine Act (42 U.S.C. § 1320a-7h); (iii) the applicable requirements of Titles XVIII (Medicare) and Title XIX (Medicaid) of the Social Security Act; (iv) HIPAA, as amended by the Health Information Technology for Economic and
Clinical Health Act (42 U.S.C. §§ 1320d et seq., 42 U.S.C. §§ 17921 et seq.); (v) the regulations promulgated pursuant to all such laws; and (vi) other similar local, state, federal, or foreign laws and regulations (collectively, the “Health Care
Laws”). The Company has not engaged in activities which are, as applicable, reasonable cause for false claims liability, civil penalties, or mandatory or permissive exclusion from Medicare, Medicaid, or any other state or federal health care
program. Neither the Company nor any of its officers, directors or employees, nor, to the knowledge of the Company, any of its agents, have been excluded, suspended or debarred from participation in any federal health care program as defined in 42
U.S.C. § 1320a-7b(f) (“Programs”) or human clinical research or, to the knowledge of the Company, is subject to a governmental inquiry, investigation, proceeding, or other similar action that could reasonably be expected to result in
debarment, suspension, or exclusion from the Programs. The Company is not a party to, and the Company does not have any ongoing reporting obligations pursuant to, any corporate integrity agreements, deferred or non-prosecution agreements, monitoring
agreements, consent decrees, settlement orders, plans of correction or similar agreements with or imposed by a governmental body or agency.
3.13 Product Manufacturing. The manufacture of the Company’s
products by or, to the knowledge of the Company, on behalf of the Company is being conducted in compliance in all material respects with all applicable Health Care Laws, including, without limitation, the FDA’s quality system regulations at 21 C.F.R.
Part 820, and, to the extent applicable, the respective counterparts thereof promulgated by governmental authorities in countries outside the United States. Except as disclosed in 2022 SEC Reports, the Company has not had any manufacturing site
(whether Company-owned or, to the knowledge of the Company, that of a third party manufacturer for the Company’s products) subject to a governmental authority (including FDA) shutdown or import or export prohibition, nor received any FDA or other
governmental authority requests to make material changes to the Company’s products, processes or operations. To the Company’s knowledge, neither the FDA nor any other governmental authority is considering such action.
3.14 Licenses and Permits. The Company possess all licenses,
sub-licenses, certificates, permits and other authorizations issued by, and has made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or
lease of its properties or the conduct of its business as described in the 2022 SEC Reports, except where the failure to possess or make the same would not have a Material Adverse Effect; and except as described in the 2022 SEC Reports, the Company
has not received notice of any revocation or modification of any such license, sub-license, certificate, permit or authorization and does not have any reason to believe that any such license, sub-license, certificate, permit or authorization will not
be renewed in the ordinary course, except where the modification or termination would not have a Material Adverse Effect. To the Company’s knowledge, no party granting any such licenses, certificates, permits or other authorizations has taken any
action to suspend or revoke the same in any material respect. The Company has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as
required by governmental or regulatory authorities and all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or
supplemented by a subsequent submission) as required for maintenance of their licenses, certificates, permits and other authorizations that are necessary for the conduct of the Company’s business.
3.15 Intellectual Property. (i) Except as would not
reasonably be expected to have a Material Adverse Effect, the Company owns or has valid and enforceable rights to use all patents, trademarks, service marks, trade names, domain names and other source indicators, copyrights and copyrightable works,
know-how, trade secrets, or other unpatented or unpatentable proprietary or confidential information, systems, or procedures, and all other similar intellectual property or proprietary rights worldwide (including all registrations and applications
for the registration of, and all goodwill associated with, the foregoing) (collectively, “Intellectual Property”) that are material to the conduct of its business now operated by it or as proposed to be operated in the 2022 SEC Reports;
(ii) to the knowledge of the Company, the Company’s conduct of its business as currently conducted or as currently proposed to be conducted in the 2022 SEC Reports does not infringe, misappropriate or otherwise violate any intellectual property
rights of any person; (iii) there is no pending or, to the knowledge of the Company, threatened in writing action, suit, proceeding or claim alleging infringement, misappropriation or other violations of any Intellectual Property of any third party
that would be reasonably expected to be material to the Company’s business as now operated by it, or challenging the validity, enforceability, scope or ownership of any Intellectual Property owned by the Company other than in the ordinary course of
patent and trademark prosecution, except as disclosed in the 2022 SEC Reports; (iv) to the knowledge of the Company, the Intellectual Property owned by or exclusively licensed to the Company is not being infringed, misappropriated or otherwise
violated by any third party, except as disclosed in the 2022 SEC Reports; (v) the Company has taken reasonable steps in accordance with customary industry practice to maintain the confidentiality of all Intellectual Property, including trade secrets,
the value of which to the Company is contingent upon maintaining the confidentiality thereof, and there has not been any unauthorized disclosure of the same; (vi) the Intellectual Property owned by or exclusively licensed to the Company is valid and
subsisting, and none of such Intellectual Property has been adjudged invalid or unenforceable, in whole or in part; (vii) there are no third parties who have rights to any Intellectual Property owned by or exclusively licensed to the Company, except
for customary reversionary rights of third-party licensors with respect to Intellectual Property that is disclosed in the 2022 SEC Reports as licensed to the Company; (viii) to the Company’s knowledge, the Company and the parties prosecuting patent
applications owned by the Company have complied with their duty of candor and disclosure to the U.S. Patent and Trademark Office (the “USPTO”) in connection with such U.S. patents and patent applications for which it has filing, prosecution
and/or maintenance responsibilities; (ix) the Company has taken reasonable steps necessary to secure the interests of the Company in the Intellectual Property purported to be owned by the Company from any employees, consultants, agents or contractors
that developed (in whole or in part) such Intellectual Property; (x) no government funding, facilities or resources of any university, college, other educational institution or research center was used in the development of any Intellectual Property
owned by or purported to be owned by the Company that would confer upon any governmental agency or body, university, college, other educational institution or research center any claim or right in or to any such Intellectual Property, except as
disclosed in the 2022 SEC Reports; (xi) to the Company’s knowledge, none of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, upon any
officers, directors or employees of the Company; and (xii) the commercial products described in the 2022 SEC Reports fall within the scope of the claims of one or more patents owned by or exclusively licensed to the Company.
3.16 Open Source Software. The Company uses and has used any
and all software and other materials distributed under a “free,” “open source,” or similar licensing model (including but not limited to the MIT License, Apache License, GNU General Public License, GNU Lesser General Public License and GNU Affero
General Public License) (“Open Source Software”) in material compliance with all license terms applicable to such Open Source Software. The Company does not distribute and has not distributed any Open Source Software in any manner that
requires or has required (i) the Company to permit reverse engineering of any software code or other technology owned by the Company, the proprietary and confidential nature of the source code to which is material to the Company’s business (“Material
Company Code”) or (ii) any Material Company Code to be (A) disclosed or distributed in source code form, (B) licensed for the purpose of making derivative works or (iii) redistributed at no charge.
3.17 Compliance with ERISA. (i) Each Plan is in compliance
with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code,
has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no Plan has
failed (whether or not waived), or is reasonably expected to fail, to satisfy the minimum funding standards (within the meaning of Section 302 of ERISA or Section 412 of the Code) applicable to such Plan; (iv) no Plan is, or is reasonably expected to
be, in “at risk status” (within the meaning of Section 303(i) of ERISA) and no Plan that is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA is in “endangered status” or “critical status” (within the meaning of Sections 304
and 305 of ERISA); (v) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan); (vi) no “reportable event” (within the meaning
of Section 4043(c) of ERISA and the regulations promulgated thereunder) has occurred or is reasonably expected to occur; (vii) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified, and to the knowledge of the
Company, nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification; (viii) neither the Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability
under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guarantee Corporation, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA); and (ix) none of the following events has occurred or is reasonably likely to occur: a material increase in the Company’s “accumulated post-retirement benefit obligations” (within the meaning of Accounting Standards
Codification Topic 715-60) compared to the amount of such obligations in the Company’s most recently completed fiscal year; except in each case with respect to the events or conditions set forth in (i) through (ix) hereof, as would not have a
Material Adverse Effect.
3.18 Compliance with Law. No labor disturbance by or dispute
with employees of the Company exists or, to the knowledge of the Company, is contemplated or threatened, and the Company is not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of its principal suppliers,
contractors or customers, except as would not have a Material Adverse Effect. The Company has not received any notice of cancellation or termination with respect to any collective bargaining agreement to which it is a party.
3.19 Taxes. The Company has filed all federal, state and
foreign income Tax Returns and other Tax Returns required to have been filed under applicable Law (or extensions have been duly obtained) and has paid all Taxes required to have been paid by it, except where failure to file such Tax Returns or pay
such Taxes would not reasonably be expected to have a Material Adverse Effect. Each Tax Return filed by or on behalf of the Company is true, correct and complete. No assessment in connection with United States federal income Tax Returns has been made
against the Company. The charges, accruals and reserves on the books of the Company in respect of any federal, state and foreign income and other Tax liability for any years not finally determined are adequate to meet any assessments or reassessments
for additional Tax for any years not finally determined, except to the extent of any inadequacy that would not reasonably be expected to have a Material Adverse Effect. The Company is not currently the beneficiary of any extension of time within
which to file any Tax Return or has requested or agreed to waive or extend any applicable statute of limitations. The Company has withheld and paid over to the applicable taxing authority all Taxes required to be so withheld and paid over, and has
complied with all rules and regulations relating to the withholding, collection, and remittance of Taxes, including all reporting and filing obligations. There are no audits, written claims, deficiencies or administrative or other proceedings
relating to Taxes or Tax Returns of the Company currently pending with or threatened by any taxing authority. There are no liens for Taxes upon the Company or any of its assets. No claim has ever been made by a taxing authority in a jurisdiction
where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction. The Company has never participated in a “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4(b). The
Company (i) has not been a member of an affiliated, consolidated combined or unitary group for Tax purposes, and (ii) has no liability for the Taxes of any Person (other than the Company) under Treasury Regulations Section 1.1502-6 (or any similar
provision of law), as a transferee or successor, by contract, or otherwise. The Company will not be required to include any amount in taxable income or exclude any item of deduction or loss from taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of (i) any change in method of accounting for a taxable period made prior to the Closing, (ii) any use of an improper method of accounting for a taxable period (or portion thereof) ending on or prior
to the Closing Date, (iii) any “closing agreement” as described in section 7121 of the Code (or any similar provision of law) executed on or prior to the Closing, (iv) any installment sale or open transaction disposition made on or prior to the
Closing or (v) any prepaid amount or deferred revenue received on or prior to the Closing. The Company has never been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code. The Company is not a party to or bound by any Tax allocation, sharing or similar agreement. The Company has never distributed stock of another Person, or had its stock distributed by another Person,
in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code (or any similar provision of any Law). The Company has not deferred the payment of any Taxes pursuant to any applicable Law.
3.20 Environmental Laws. (i) The Company (x) is in compliance
with all, and has not violated any, applicable federal, state, local and foreign laws (including common law), rules, regulations, requirements, decisions, judgments, decrees, orders and other legally enforceable requirements relating to pollution or
the protection of human health or safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (y) has received and is in compliance with all, and has not
violated any, permits, licenses, certificates or other authorizations or approvals required of it under any Environmental Laws to conduct its business; and (z) has not received notice of any actual or potential liability or obligation under or
relating to, or any actual or potential violation of, applicable Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and has no
knowledge of any event or condition that would reasonably be expected to result in any such notice; (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company, except in the case of each of (i) and (ii)
above, for any such matter as would not reasonably be expected to have a Material Adverse Effect; and (iii) except as described in the 2022 SEC Reports, (x) there is no proceeding that is pending, or that is known to be contemplated, against the
Company under any Environmental Laws in which a governmental entity is also a party, other than such proceeding regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (y) the Company is not aware of any
facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could reasonably be expected to have a
material effect on the capital expenditures, earnings or competitive position of the Company, and (z) the Company does not anticipate material capital expenditures relating to any Environmental Laws.
3.21 Title. The Company does not own any real property. The
Company has valid rights to lease or otherwise use, all items of real and personal property that are material to the business of the Company, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except
those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company or (ii) could not reasonably be expected to have a Material Adverse Effect.
3.22 Insurance. The Company carries or is entitled to the
benefits of insurance in such amounts and covering such risks that is customary for comparably situated companies and is adequate for the conduct of its business and the value of its properties and assets, and each of such insurance policies is in
full force and effect and the Company is in compliance in all material respects with the terms thereof. Other than customary end of policy notifications from insurance carriers, since January 1, 2022, the Company has not received any notice or other
communication regarding any actual or possible: (i) cancellation or invalidation of any insurance policy or (ii) refusal or denial of any coverage, reservation of rights or rejection of any material claim under any insurance policy.
3.23 Nasdaq Stock Market. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act and is listed for trading on the Nasdaq Global Market under the symbol “UTRS”. There is no suit, action, proceeding or investigation pending or, to the knowledge of the Company, threatened against the
Company by The Nasdaq Stock Market, LLC or the SEC, respectively, to prohibit or terminate the listing of the Common Stock on the Nasdaq Global Market or to deregister the Common Stock under the Exchange Act. The Company has taken no action as of the
date hereof that is designed to terminate the registration of the Common Stock under the Exchange Act. Except as disclosed in the 2022 SEC Reports, the Company has not, in the twelve months preceding the date hereof, received any notice from any
Person to the effect that the Company is not in compliance with the listing or maintenance requirements of the Nasdaq Global Market and the Company is in compliance with all such listing and maintenance requirements.
3.24 Sarbanes-Oxley Act. There is and has been no failure on
the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act, including Section 402 related to loans and Sections 302 and 906 related to certifications.
3.25 FDA and Related Matters. The Company (i) has not
received any FDA Form 483, written notice of adverse finding, warning letter, untitled letter or other written notice from the FDA or any other similar federal, state, local or foreign governmental or regulatory authority alleging or asserting
material noncompliance with any Health Care Laws (defined below) or with respect to any licenses, certificates approvals, clearances, authorizations, exemptions, permits or supplements or amendments thereto required by any Health Care Laws to conduct
the business of the Company as described in the 2022 SEC Reports (collectively, “Authorizations”); (ii) possesses all applicable Authorizations and such Authorizations are valid and in full force and effect and the Company is not in violation
of any such Authorizations except where such violation would not have a Material Adverse Effect; (iii) has not received written notice of any pending or completed claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or
other action from the FDA or any other federal, state, local or foreign governmental or regulatory authority or third party alleging that any product, operation, or activity of the Company is in material violation of any Health Care Laws or
Authorizations and the Company does not have any knowledge that the FDA or any other federal, state, local or foreign governmental or regulatory authority or third party is considering any such claim, litigation, arbitration, action, suit,
investigation or proceeding; (iv) has not received written notice that the FDA or any other federal, state, local or foreign governmental or regulatory authority has taken, is taking or intends to take action to suspend, or revoke any material
Authorizations and has no knowledge that the FDA or any other federal, state, local or foreign governmental or regulatory authority is considering such action; and (v) has filed, obtained, maintained or submitted all material reports, documents,
forms, notices, applications, records, claims, submissions, information and supplements or amendments as required by any Health Care Laws or Authorizations and all such reports, documents, forms, notices, applications, records, claims, submissions,
information and supplements or amendments were materially true, complete and correct on the date filed (or were corrected or supplemented by a subsequent submission).
3.26 Clinical Studies. The preclinical studies, tests or
clinical studies that have been or are being conducted or sponsored by or on behalf of the Company or in which the Company’s products or investigational products are participating or have participated, or that are described, or the results of which
are referred to, in the 2022 SEC Reports (collectively, “Studies”), were, and, if still pending, are being conducted in all material respects in accordance with all Health Care Laws and Authorizations, including, without limitation, 21 C.F.R.
Part 50, 54, 56, 58 and 812. Except to the extent disclosed in the 2022 SEC Reports, the Company has made all such filings and obtained all such approvals, authorizations or exemptions as may be required by the FDA or from any other U.S. or foreign
government medical device regulatory agency, notified body or health care facility institutional review board required for the conduct of such Studies. The Company has not received any written notices or correspondence from the FDA or any other
federal, state, local or foreign governmental or regulatory authority requiring the termination or suspension of any Studies conducted by or on behalf of or sponsored by the Company or in which the Company’s products participated.
3.27 Safety Notices. (a) Except as disclosed in the 2022 SEC
Reports, there have been no recalls, field notifications, field corrections, market withdrawals or mandatory replacements, warnings, “dear doctor” letters, investigator notices, safety alerts or other notice of action relating to an alleged lack of
safety, efficacy, or regulatory compliance of the Company’s products (“Safety Notices”) and (b) to the Company’s knowledge, there are no facts that would be reasonably likely to result in (i) a Safety Notice with respect to the Company’s
products, (ii) a change in labeling of any of the Company’s products or (iii) a termination or suspension of marketing or testing of any the Company’s products, except, in each of cases (i), (ii) or (iii), such as would not reasonably be expected to
be material to the Company.
3.28 Accounting Controls and Disclosure Controls and Procedures.
The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that (i) complies with the requirements of the Exchange Act applicable to the Company, (ii) has been
designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with GAAP and (iii) is sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP as applied in the United States and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management’s general or specific authorization and
(D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company’s auditors and the audit committee of the Board of Directors have
been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to
record, process, summarize and report financial information; and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. Except as
disclosed in the 2022 SEC Reports, the Company is not aware of any material weaknesses in its internal control over financial reporting (it being understood that this subsection shall not require the Company to comply with Section 404 of the
Sarbanes-Oxley Act as of an earlier date than it would otherwise be required to so comply under applicable Law). The Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) of the Exchange Act) are designed to provide reasonable
assurance that all information (both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC, and that all such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.
3.29 Price Stabilization of Common Stock. The Company has not
taken, directly or indirectly, any action designed to stabilize or manipulate the price of the Common Stock to facilitate the sale or resale of the Shares.
3.30 Investment Company Act. The Company is not, and
immediately after receipt of payment for the Shares will not be, required to register as an “investment company” within the meaning of the Investment Company Act.
3.31 General Solicitation; No Integration or Aggregation.
Neither the Company nor any other person or entity authorized by the Company to act on its behalf has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to
offers or sales of Shares pursuant to this Agreement. The Company has not, directly or indirectly, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will
be (i) integrated with the Shares sold pursuant to this Agreement for purposes of the Securities Act or (ii) aggregated with prior offerings by the Company for the purposes of the rules and regulations of the
Nasdaq Global Market.
3.32 Brokers and Finders. Other than the Placement Agent,
neither the Company nor any other Person authorized by the Company to act on its behalf has retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement.
3.33 Reliance by the Purchasers. The Company acknowledges
that each of the Purchasers will rely upon the truth and accuracy of, and the Company’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of the Company set forth herein.
3.34 No Disqualification Events. No “bad actor” disqualifying
event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company or, to the knowledge of the Company (having exercised reasonable care with respect thereto), any Covered Person (as
defined below), except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3), is applicable. “Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the Securities Act,
any person listed in the first paragraph of Rule 506(d)(1). Other than the Placement Agent, the Company is not aware of any Person (other than any Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of
purchasers in connection with the sale of the Shares pursuant to this Agreement.
3.35 Anti-Bribery and Anti-Money Laundering Laws. For the
past five years, each of the Company and its officers, directors, supervisors, managers, employees, or to the Company’s knowledge, agents has been in compliance with, and its participation in the offering will not violate, any (a) applicable
anti-bribery laws, including but not limited to the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any other applicable Law, rule, or regulation of any locality, including but not limited to any law, rule, or regulation promulgated to
implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997, including or (b) anti-money laundering laws, including, but not limited to, applicable federal, state,
international, foreign or other laws, regulations or government guidance regarding anti-money laundering, including, without limitation, Title 18 U.S. Code sections 1956 and 1957, the Patriot Act, and the Bank Secrecy Act, all as amended, and any
executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued thereunder.
3.36 Cybersecurity; Compliance with Data Privacy Laws. The
Company’s information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (including the data and information of their respective users, employees, suppliers, vendors and any third
party data maintained, processed or stored by the Company) (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company as currently
conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company has implemented and maintained commercially reasonable controls, policies, procedures, and safeguards, including
commercially reasonable disaster recovery and security plans, procedures and facilities for its business, including, without limitation, for its IT Systems and data held or used by or for the Company to maintain and protect its material confidential
information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with its
business, and there have been no breaches, violations, outages or unauthorized uses of or access to such IT Systems and data, including Personal Data. The Company is presently, and since its inception has been, in material compliance with all
applicable Laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal and external policies, industry standards and contractual obligations relating to the privacy
and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification (collectively, “Privacy Obligations”). To ensure compliance with the
Privacy Obligations, the Company has in place, complies with, and takes appropriate steps reasonably designed to ensure compliance in all material respects with its policies and procedures relating to data privacy and security and the collection,
storage, use, disclosure, handling, and analysis of Personal Data (the “Privacy Policies”). To the Company’s knowledge, it has at all times made all disclosures to users, employees or other applicable persons required by Privacy Obligations,
and no such disclosures made or contained in any external written Privacy Policies have been materially inaccurate or in violation of any Privacy Obligations. The Company (i) has not received written notice of or complaint regarding or indicating
non-compliance with, or any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Obligations, and there has not been any event or condition that would reasonably be expected to result in any such
notice; (ii) is not currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Obligations; and (iii) is not party to any governmental order, decree, or agreement that
imposes any obligation or liability under any Privacy Obligations. The Company has taken all necessary actions to prepare to comply with all other applicable Laws and regulations with respect to Personal Data that have been announced as of the date
hereof as becoming effective within 12 months after the date hereof, and for which any noncompliance with same would be reasonably likely to create a material liability, as soon they take effect.
3.37 Transactions with Affiliates and Employees. No
relationship, direct or indirect, exists between or among the Company, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company, on the other hand, that is required to be described in the SEC Reports that is
not so described.
3.38 Shell Company Status. The Company is not currently, and
has never been, an issuer identified in Rule 144 (i)(1) under the Securities Act.
3.39 OFAC. None of the Company or, to the Company’s
knowledge, any director, officer, agent, employee, Affiliate or representative of the Company is a Person currently the subject or target of any comprehensive sanctions administered or enforced by the United States Government, including, without
limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor is the
Company located, organized, or resident in a country or territory that is the subject of comprehensive Sanctions; and the Company will not directly or indirectly use the proceeds of the sale of the Shares, or lend, contribute, or otherwise make
available such proceeds to any subsidiaries, joint venture partners, or other Person to fund or facilitate any activities of or business with any Person, or in any country or territory, that, at the time of such funding or facilitating, is the
subject of Sanctions in any other manner that is reasonably expected to result in a violation or in any other manner that is reasonably expected to result in a violation by any Person (including any Person known to the Company to be participating in
the transaction, whether as underwriter, advisor, investor ) of Sanctions. For the past five years, the Company has not knowingly engaged in and is not now knowingly engaged in any dealings or transactions with any person that at the time of the
dealing or transaction is or was the subject or the target of comprehensive Sanctions or with country or territory that is the subject of comprehensive Sanction.
3.40 No Other Representations or Warranties. Except for the
representations and warranties of the Company expressly set forth in this Section 3, with respect to the transactions contemplated by this Agreement, the Company (i) expressly disclaims any representations or warranties of any kind or nature,
express or implied, including with respect to the condition, value or quality of the Company or any of the assets or properties of the Company, and (ii) specifically disclaims any representation or warranty of merchantability, usage, suitability or
fitness for any particular purpose with respect to any of the assets or properties of the Company. Notwithstanding the foregoing, in making the decision to invest in the Shares, the Purchasers will rely, and the Company agrees that the Purchasers may
rely, on the information that has been provided in writing to Purchasers by the Company or on behalf of the Company, including the SEC Reports.
4. Representations and Warranties of Each Purchaser.
Except as set forth below, each Purchaser, severally for itself and not jointly with any other Purchaser, represents and warrants to the Company and the Placement Agent that the statements contained in this Section 4 are true and correct as
of the date hereof and the Closing Date.
4.1 Organization. Such Purchaser is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite power and authority to own, lease and operate its properties and to carry on its business as now conducted.
4.2 Authorization. Such Purchaser has all requisite
corporate or similar power and authority to enter into this Agreement and the other Transaction Agreements to which it will be a party and to carry out and perform its obligations hereunder and thereunder. All corporate, member or partnership action
on the part of such Purchaser or its stockholders, members or partners necessary for the authorization, execution, delivery and performance of this Agreement and the other Transaction Agreements to which it will be a party and the consummation of the
other transactions contemplated herein has been taken. The signature of the Purchaser on this Agreement is genuine and the signatory has been duly authorized to execute the same on behalf of the Purchaser. Assuming this Agreement constitutes the
legal and binding agreement of the Company, this Agreement constitutes a legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as such enforceability may be limited or otherwise
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and/or similar laws relating to or affecting the rights of creditors generally or by general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4.3 No Conflict. The execution, delivery and performance
of the Transaction Agreements by such Purchaser in accordance with their terms, including the purchase of the Shares in accordance with the terms of this Agreement and the consummation by such Purchaser of the other transactions contemplated hereby,
will not conflict with or result in any violation of, breach or default by such Purchaser (with or without notice or lapse of time, or both) under, conflict with, or give rise to a right of termination, cancellation or acceleration of any obligation,
a change of control right or to a loss of a material benefit under (i) any provision of the organizational documents of such Purchaser, including, without limitation, its incorporation or formation papers, bylaws, indenture of trust or partnership or
operating agreement, as may be applicable or (ii) any agreement or instrument, undertaking, credit facility, franchise, license, judgment, order, ruling, statute, law, ordinance, rule or regulations, applicable to such Purchaser or its respective
properties or assets, except, in the case of clause (ii), as would not, individually or in the aggregate, be reasonably expected to materially delay or hinder the ability of such Purchaser to perform its obligations under the Transaction Agreements
(such delay or hindrance, a “Purchaser Adverse Effect”).
4.4 Consents. All consents, approvals, orders and
authorizations required on the part of such Purchaser in connection with the execution, delivery or performance of this Agreement, the issuance of the Shares and the consummation of the other transactions contemplated herein have been obtained or
made, other than such consents, approvals, orders and authorizations the failure of which to make or obtain, individually or in the aggregate, would not reasonably be expected to have a Purchaser Adverse Effect.
4.5 Residency. Such Purchaser’s offices in which its
investment decision with respect to the Shares was made are located at the address immediately below such Purchaser’s name on Exhibit A.
4.6 Brokers and Finders. Such Purchaser has not retained,
utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement whose fees the Company would be required to pay.
4.7 Investment Representations and Warranties. Such
Purchaser hereby represents and warrants that it, as of the date hereof is, and on the Closing Date will be, if an entity, an “accredited investor” as that term is defined in Rule 501(a) under Regulation D promulgated pursuant to the Securities Act.
Such Purchaser further represents and warrants that (x) it is capable of evaluating the merits and risk of such investment, and (y) that it has not been organized for the purpose of acquiring the Shares. Such Purchaser understands and agrees that the
offering and sale of the Shares has not been registered under the Securities Act or any applicable state securities laws and is being made in reliance upon federal and state exemptions for transactions not involving a public offering which depend
upon, among other things, the bona fide nature of the investment intent and the accuracy of such Purchaser’s representations as expressed herein.
4.8 Intent. Such Purchaser is purchasing the Shares solely
for investment purposes, for such Purchaser’s own account and not for the account of others, and not with a view towards, or for offer or sale in connection with, any distribution or dissemination thereof. Notwithstanding the foregoing, if such
Purchaser is purchasing the Shares as a fiduciary or agent for one or more investor accounts, such Purchaser has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements,
representations and agreements herein on behalf of each owner of each such account. Such Purchaser has no present arrangement to sell the Shares to or through any person or entity. Such Purchaser understands that the Shares must be held indefinitely
unless such Shares are resold pursuant to a registration statement under the Securities Act or an exemption from registration is available.
4.9 Investment Experience; Ability to Protect Its Own Interests
and Bear Economic Risks. Such Purchaser, or such Purchaser’s professional advisors, have such knowledge and experience in finance, securities, taxation, investments and other business matters as to be capable of evaluating the merits and risks
of investments of the kind described in this Agreement, and the Purchaser has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as such Purchaser has considered necessary to make an informed investment
decision. By reason of the business and financial experience of such Purchaser or such Purchaser’s professional advisors (who are not affiliated with or compensated in any way by the Company or any of its Affiliates or selling agents), such Purchaser
can protect such Purchaser’s own interests in connection with the transactions described in this Agreement. Such Purchaser acknowledges that such Purchaser (i) is a sophisticated investor, experienced in investing in private placements of equity
securities and capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities and (ii) has exercised independent judgment in evaluating its
participation in the purchase of the Shares. Such Purchaser acknowledges that such Purchaser is aware that there are substantial risks incident to the purchase and ownership of the Shares, including those set forth in the Company’s SEC Reports.
Alone, or together with any professional advisor(s), such Purchaser has adequately analyzed and fully considered the risks of an investment in the Shares and determined that the Shares are a suitable investment for such Purchaser. Such Purchaser is,
at this time and in the foreseeable future, able to afford the loss of such Purchaser’s entire investment in the Shares and such Purchaser acknowledges specifically that a possibility of total loss exists.
4.10 Tax Advisors. Such Purchaser has had the opportunity to
review with such Purchaser’s own tax advisors the federal, state and local tax consequences of its purchase of the Shares set forth opposite such Purchaser’s name on Exhibit A, where applicable, and the transactions contemplated by this
Agreement. Such Purchaser acknowledges that the Company and any of its agents have not provided any tax advice or any other representation or guarantee regarding the tax consequences of the transactions contemplated by the Agreement.
4.11 Securities Not Registered; Legends. Such Purchaser
acknowledges and agrees that the Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act, and such Purchaser understands that the Shares have not been registered under the Securities Act,
by reason of their issuance by the Company in a transaction exempt from the registration requirements of the Securities Act, and that the Shares must continue to be held and may not be offered, resold, transferred, pledged or otherwise disposed of by
such Purchaser unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration and in each case in accordance with any applicable securities laws of any state of the United States. Such Purchaser
understands that the exemptions from registration afforded by Rule 144 (the provisions of which are known to it) promulgated under the Securities Act depend on the satisfaction of various conditions including, but not limited to, the time and manner
of sale, the holding period and on requirements relating to the Company which are outside of such Purchaser’s control and which the Company may not be able to satisfy, and that, if applicable, Rule 144 may afford the basis for sales only in limited
amounts. Such Purchaser acknowledges and agrees that it has been advised to consult legal counsel prior to making any offer, resale, transfer, pledge or disposition of any of the Shares. Such Purchaser acknowledges that no federal or state agency has
passed upon or endorsed the merits of the offering of the Shares or made any findings or determination as to the fairness of this investment.
Each Purchaser understands that the Shares may bear one or more legends
in substantially the following form and substance:
“THE OFFER AND SALE OF THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), IN RELIANCE UPON REGULATION D PROMULGATED UNDER THE SECURITIES ACT. TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO
AVAILABLE EXEMPTION FROM REGISTRATION.”
In addition, the Shares may contain a legend regarding affiliate status
of the Purchaser, if applicable.
4.12 Placement Agent. Such Purchaser hereby acknowledges and
agrees that: (a) the Placement Agent is acting solely as placement agent in connection with the execution, delivery and performance of the Transaction Agreements and the issuance of the Shares to Purchaser and neither the Placement Agent nor any of
its Affiliates, agents or representatives have acted as an underwriter or in any other capacity and is not and shall not be construed as a fiduciary or financial advisor for such Purchaser, the Company or any other person or entity in connection with
the execution, delivery and performance of the Transaction Agreements and the issuance and purchase of the Shares; (b) the Placement Agent has not made and does not make any representation or warranty, whether express or implied, of any kind or
character, and has not provided any advice or recommendation in connection with the execution, delivery and performance of the Transaction Agreements or with respect to the Shares, nor is such information or advice necessary or desired; (c) neither
the Placement Agent nor any of its Affiliates, agents or representatives will have any responsibility with respect to (i) any representations, warranties or agreements made by any person or entity under or in connection with the execution, delivery
and performance of the Transaction Agreements, or the execution, legality, validity or enforceability (with respect to any person) thereof, or (ii) the business, affairs, financial condition, operations, properties or prospects of, or any other
matter concerning the Company; and (d) neither the Placement Agent nor any of its Affiliates, agents or representatives will have any liability or obligation (including without limitation, for or with respect to any losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements incurred by such Purchaser, the Company or any other person or entity), whether in contract, tort or otherwise, to such Purchaser, or to any person claiming
through it, in respect of the execution, delivery and performance of the Transaction Agreements, except in each case for such party’s own gross negligence, willful misconduct or bad faith. No disclosure or offering document has been prepared by the
Placement Agent or any of its Affiliates, agents, representatives or counsel in connection with the offer and sale of the Shares. Neither the Placement Agent nor any of its Affiliates, agents, representatives or counsel have made or make any
representation as to the quality or value of the Shares and the Placement Agent and any of its Affiliates, agents, representatives or counsel may have acquired non-public information with respect to the Company which Purchaser agrees need not be
provided to it. Neither of the Placement Agent nor any of its Affiliates, agents, representatives or counsel has any responsibility with respect to the completeness or accuracy of any information or materials furnished to such Purchaser in connection
with the transactions contemplated by the Transaction Agreements.
4.13 Reliance by the Company. Such Purchaser acknowledges
that the Company will rely upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of such Purchaser set forth herein.
4.14 No General Solicitation. Such Purchaser acknowledges and
agrees that such Purchaser is purchasing the Shares directly from the Company. Such Purchaser became aware of this offering of the Shares solely by means of direct contact from the Placement Agent or directly from the Company as a result of a
pre-existing, substantive relationship with the Company or the Placement Agent, and/or its advisors (including, without limitation, attorneys, accountants, bankers, consultants and financial advisors), agents, control persons, representatives,
Affiliates, directors, officers, managers, members, and/or employees, and/or the representatives of such persons. The Shares were offered to such Purchaser solely by direct contact between such Purchaser and the Company, the Placement Agent and/or
its representatives. Such Purchaser did not become aware of this offering of the Shares, nor were the Shares offered to such Purchaser, by any other means, and none of the Company, the Placement Agent and/or its representatives acted as investment
advisor, broker or dealer to such Purchaser. Such Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast
over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement, including any of the methods described in Section 502(c) of Regulation D under the Securities Act.
4.15 No Reliance. Such Purchaser further acknowledges that
there have not been and such Purchaser hereby agrees that it is not relying on and has not relied on, any statements, representations, warranties, covenants or agreements made to such Purchaser by or on behalf of the Company, any of its Affiliates or
any control persons, officers, directors, employees, partners, agents or representatives of any of the foregoing or any other person or entity (including the Placement Agent), expressly or by implication, other than the SEC Reports and those
representations, warranties and covenants of the Company expressly set forth in this Agreement.
4.16 Access to Information. In making its decision to
purchase the Shares, such Purchaser has relied solely upon independent investigation made by such Purchaser, including such Purchaser’s review of the SEC Reports, and upon the representations, warranties and covenants set forth herein. Such Purchaser
acknowledges and agrees that such Purchaser has received such information as such Purchaser deems necessary in order to make an investment decision with respect to the Shares, including, with respect to the Company. Without limiting the generality of
the foregoing, such Purchaser acknowledges that such Purchaser has had an opportunity to review the SEC Reports filed prior to the date hereof. The Purchaser acknowledges and agrees that the Purchaser and the Purchaser’s professional advisor(s), if
any, have had the opportunity to ask such questions, receive such answers and obtain such information as the Purchaser and such Purchaser’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the
Shares and that such Purchaser has independently made his, her or its own analysis and decision to invest in the Company.
4.17 Certain Trading Activities. Other than consummating the
transaction contemplated hereby, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of
the Company during the period commencing as of the time that such Purchaser was first contacted by the Company or any other Person regarding the transaction contemplated hereby and ending immediately prior to the date hereof. Notwithstanding the
foregoing, (i) in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of the assets managed by the portfolio manager that made the investment
decision to purchase the Shares covered by this Agreement and (ii) in the case of a Purchaser that is affiliated with other funds or investment vehicles or whose investment advisor or sub-advisor that routinely acts on behalf of or pursuant to an
understanding with such Purchaser is also an investment advisor or sub-advisor to other funds or investment vehicles, the representation set forth above shall only apply with respect to the personnel of such other funds or investment vehicles or such
investment advisor or sub-advisor who had knowledge of the transaction contemplated hereby and not with respect to any personnel who have been effectively walled off by appropriate information barriers. Other than to other Persons party to this
Agreement or as otherwise disclosed to the Company or to any Purchaser’s outside attorney, accountant, auditor or investment advisor (only to the extent necessary to permit evaluation of the investment), such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a
representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.
4.18 Disqualification Event. To the extent such Purchaser is
one of the covered persons identified in Rule 506(d)(1), such Purchaser represents that no Disqualification Event is applicable to such Purchaser or any of its Rule 506(d) Related Parties (as defined below), except, if applicable, for a
Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. Such Purchaser hereby agrees that it shall notify the Company promptly in writing in the event a Disqualification Event becomes applicable to such Purchaser or
any of its Rule 506(d) Related Parties, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. For purposes of this Section, “Rule 506(d) Related Party” shall mean a person or
entity that is a beneficial owner of such Purchaser’s securities for purposes of Rule 506(d) of the Securities Act.
4.19 Compliance with Laws. Such Purchaser is permitted and
entitled to acquire the Shares under the laws of all relevant jurisdictions that apply to it, has complied and will fully comply with all such laws relating to the acquisition of the Shares.
5. Covenants.
5.1 Further Assurances. At or prior to the Closing, each
party agrees to cooperate with each other and their respective officers, employees, attorneys, accountants and other agents, and, generally, do such other commercially reasonable acts and things in good faith as may be necessary to effectuate the
intents and purposes of this Agreement, subject to the terms and conditions hereof and compliance with applicable Law, including taking commercially reasonable action to facilitate the filing of any document or the taking of commercially reasonable
action to assist the other parties hereto in complying with the terms hereof. Each Purchaser agrees to promptly notify the Company if any of the acknowledgments, understandings, agreements, representations and warranties with respect to such
Purchaser set forth in Section 4 of this Agreement are no longer accurate.
5.2 Listing. The Company shall use commercially reasonable
efforts to prepare and timely file the Notification Form: Listing of Additional Shares covering all of the Shares in the manner required by the Nasdaq Global Market (or any analogous notification or approval required by the applicable National
Exchange). The Company shall use commercially reasonable efforts to maintain the listing of its Common Stock on a National Exchange and comply with the Company’s reporting, filing and other obligations under the bylaws or rules of such National
Exchange.
5.3 Disclosure of Transactions. The Company shall, by
9:00 a.m., New York City time, on the first (1st) business day immediately following the date hereof, file with the SEC a Current Report on Form 8-K (the “Disclosure
Document”) disclosing all material terms of the transactions contemplated hereby and by the other Transaction Agreements (and including as exhibits to such Current Report on Form 8-K the material Transaction Agreements (including, without
limitation, this Agreement and the Registration Rights Agreement)). In addition, effective upon the issuance of the Disclosure Document, the Company acknowledges and agrees that any and all confidentiality or similar obligations under this Agreement,
or an agreement entered into in connection with the transactions contemplated by the Transaction Agreements, whether written or oral, between the Company or any of its officers, directors, agents, employees or Affiliates, on the one hand, and any of
the Purchasers or any of their respective officers, directors, agents, employees or investment advisers, on the other hand, shall terminate unless otherwise specifically agreed in writing by such Purchaser. Prior to public issuance thereof, the
Company shall provide the Purchasers with a reasonable opportunity to review and comment upon the Disclosure Document and any press release announcing the transactions contemplated herein. Notwithstanding anything in this Agreement to the contrary,
the Company shall not publicly disclose the name of any Purchaser or any of its Affiliates or advisers, or include the name of any Purchaser or any of its Affiliates or advisers in any press release or filing with the SEC (other than any registration
statement contemplated by the Registration Rights Agreement) or any regulatory agency, without the prior written consent of such Purchaser, except (i) as required by the federal securities law in connection with (A) any registration statement
contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Agreements (including signature pages thereto) with the SEC or pursuant to other routine proceedings of regulatory authorities, or (ii) to the extent such
disclosure is required by law, at the request of the staff of the SEC or regulatory agency or under the regulations of the applicable National Exchange, in which case the Company will provide the Purchaser with prior written notice (including by
e-mail) of and an opportunity to review such disclosure under this clause (ii).
5.4 Pre-Closing Covenants. From the date hereof until the
Closing, except (x) as required or permitted by this Agreement, (y) as required by any applicable Law, judgment or order or as to comply with any notice, directive, guideline or recommendation from a Governmental Authority, or (z) as consented to in
writing by the Accelmed Purchaser (which consent shall not be unreasonably conditioned, withheld or delayed), the Company shall operate its businesses in all material respects in the ordinary course of business and the Company shall not:
(a) amend the Amended and Restated Certificate of Incorporation
or the Amended and Restated Bylaws of the Company;
(b) authorize or adopt, or publicly propose, a plan or
agreement of complete or partial liquidation or dissolution of the Company;
(c) other than the authorization and issuance of the Shares to
the Purchasers and the consummation of the other transactions contemplated by the Transaction Agreements, issue, sell or grant any shares of its capital stock or other equity or voting interests, or any securities or rights convertible into,
exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting
interests; provided, that the Company may issue or grant shares of Common Stock or other common equity securities in the ordinary course of business pursuant to equity awards or obligations outstanding on the date of this Agreement and
identified to the Accelmed Purchaser prior to the date of this Agreement;
(d) establish a record date for, declare, set aside for payment
or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity or voting interests;
(e) split, combine, subdivide or reclassify any shares of its
capital stock or other equity or voting interests;
(f) assume, guarantee, or issue new indebtedness or make
loans, advances or capital contributions in excess of $100,000 in the aggregate, other than (i) borrowings under the CIBC Loan Agreement in effect as of the date of this Agreement, (ii) indebtedness incurred by the Company, the net proceeds of which
are applied (on the date on which the indebtedness is incurred) to repurchase, redeem, repay or refinance (including by way of an exchange offer, tender offer or other liability management transaction) indebtedness of the Company existing on the date
hereof and (iii) relocation bonuses, signing bonuses and other advances to be paid pursuant to outstanding employee offer letters identified to the Accelmed Purchaser at least twenty-four (24) hours prior to the date of this Agreement;
(g) redeem, purchase or otherwise acquire any of its
outstanding shares of capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests (other than pursuant to the cashless exercise of outstanding
equity awards under Company equity compensation plans described in the 2022 SEC Reports);
(h) make any material change in the Company’s financial
accounting principles, except as required by changes in GAAP (or any interpretation thereof) or in applicable Law or by any Governmental Authority;
(i) establish any subsidiary or joint venture;
(j) enter into or consummate any transaction or series of
transactions constituting a Change of Control;
(k) create or incur any Lien not incurred in the ordinary
course of business and consistent with past practice;
(l) make any loans, advances, guarantees or capital
contributions to or investments in any Person other than relocation bonuses, signing bonuses and other advances to be paid pursuant to outstanding employee offer letters identified to the Accelmed Purchaser at least twenty-four (24) hours prior to
the date of this Agreement;
(m) other than in the ordinary course of business, consistent
with past practice, (i) enter into any contract that would be a “material contract” (within the meaning of Regulation S-K, Item 601(b)(10)) or (ii) amend, modify or terminate any material contract, as so defined, or (iii) cancel, modify or waive any
debts or claims held by the Company, or (iv) waive any material rights of the Company;
(n) make any capital expenditures or commitments therefor that
in the aggregate are in excess of $100,000 and not provided for in the preliminary 2023 budget provided to the Accelmed Purchaser prior to the date of this Agreement;
(o) transfer, sell, lease, license, mortgage, pledge,
surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company, other than pursuant to contracts in
effect before the date of this Agreement and identified to the Accelmed Purchaser prior to the date of this Agreement;
(p) grant any increase in (i) the base salary or wages,
(ii) bonus opportunities, or (iii) other compensation or benefits payable or to be provided to any employee of the Company, in each case, in excess of $50,000 in the aggregate;
(q) hire any employee who would become an employee of the
Company or engage any independent service provider to provide services to the Company with annualized compensation in excess of $125,000;
(r) grant any change in control payment, deferred
compensation, severance, termination, retention, equity or equity-based compensation, payment or benefit to any employee of the Company;
(s) other than as required by applicable Law, (i) negotiate,
modify, extend, terminate, or enter into any collective bargaining agreement or (ii) recognize or certify a labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Company with
respect to the Company;
(t) implement or announce any employee layoffs or furloughs
that would require advance notification pursuant to the WARN Act;
(u) waive or release any noncompetition, nonsolicitation,
nondisclosure, noninterference, nondisparagement or other restrictive covenant obligation of any current or former employee or independent contractor of the Company;
(v) sell, assign, license, sublicense, transfer or distribute
or subject to any Lien any Company Intellectual Property (other than non-exclusive licenses to customers granted in the ordinary course of business), disclose any Confidential Information or source code to any Person (other than the Purchasers and
the Purchaser’s representatives, agents, attorneys and accountants) or abandon or permit to lapse or expire any Company Intellectual Property, except, in each case, in the ordinary course of business or as relates to immaterial Company Intellectual
Property;
(w) settle, compromise, grant any waiver or release relating to
or otherwise adjust any action, suit, claim, charge, complaint, litigation, investigation, audit, proceeding, arbitration, inquiry, or other similar dispute, whether civil, criminal, administrative or investigative before any governmental entity.
affecting the Company or its properties; or
(x) authorize or enter into any agreement or otherwise make any
commitment to do any of the foregoing.
Other than as expressly set forth in or otherwise contemplated by this
Agreement, the Purchaser shall not have the right to directly or indirectly control or direct, or attempt to control or direct, the Company’s business and operations. Each of the Company and the Purchasers shall exercise, consistent with the other
terms and conditions of this Agreement, complete control and supervision over their respective businesses.
5.5 Stockholder Approval.
(a) As soon as practicable following the date hereof, the
Company shall provide each stockholder entitled to vote at a special meeting of stockholders of the Company (the “Stockholder Meeting”), which Stockholder Meeting shall be promptly called and held no later than ninety (90) days after the date
hereof (or 150 days, if the Proxy Statement is reviewed by the SEC) after the date hereof (the “Stockholder Meeting Deadline”), a proxy statement meeting the requirements of Section 14 of the Exchange Act (the “Proxy Statement”)
soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions approving all actions necessary to enable the purchase of the Shares by the Purchasers (collectively, the “Stockholder Approval”),
including, without limitation, (i) the transactions contemplated hereby in accordance with Nasdaq Listing Rule 5635 (including without limitation Nasdaq Listing Rule 5635(b)) (the “5635 Approval”) and (ii) the amendment and restatement of each
of the Amended and Restated Bylaws and the Second Amended and Restated Certificate of Incorporation to read in substantially the forms of Exhibit C and Exhibit D, respectively, in accordance with applicable Law, the rules and
regulations of the Nasdaq Global Market, the Company’s Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and the Delaware General Corporation Law, and the Company shall use its reasonable best efforts to solicit its
stockholders’ approval of such resolutions (which efforts shall include, without limitation, the requirement to hire a reputable proxy solicitor) and to cause the Board of Directors to recommend to the stockholders that they approve such resolutions.
(b) The Proxy Statement shall be in a form reasonably
acceptable to the Accelmed Purchaser and accordingly, the Company shall provide legal counsel to the Accelmed Purchaser with reasonable opportunity to review and comment on the Proxy Statement. The Company shall keep the Accelmed Purchaser apprised
of the status of matters relating to the Proxy Statement and the Stockholder Meeting, including promptly furnishing the Accelmed Purchaser and its counsel with copies of notices or other communications related to the Proxy Statement, the Stockholder
Meeting or the transactions contemplated hereby received by the Company from the SEC or the applicable National Exchange.
(c) If, despite the Company’s reasonable best efforts,
Stockholder Approval is not obtained for all matters on or prior to the Stockholder Meeting Deadline, the Company shall cause an additional Stockholder Meeting to be held every three months thereafter until such Stockholder Approval is obtained.
5.6 Integration. The Company has not sold, offered for
sale or solicited offers to buy and shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be required to be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares to the Purchasers, or that
would be required to be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any National Exchange such that it would require stockholder approval prior to the closing of such other transaction unless
stockholder approval is obtained before the closing of such subsequent transaction.
5.7 Subsequent Equity Sales. From the date hereof until
the close of trading on the date 90 days after the Closing Date (the “Lock-Up Period”), without the consent of Piper Sandler & Co. and the Accelmed Purchaser, the Company shall not (a) issue shares of Common Stock or Common Stock
Equivalents, or (b) file with the SEC a registration statement under the Securities Act relating to any shares of Common Stock or Common Stock Equivalents. Notwithstanding the foregoing, the provisions of this Section 5.7 shall not apply to
(i) the issuance of the Shares hereunder; (ii) the transactions contemplated by the Registration Rights Agreement; (iii) the issuance of Common Stock upon the exercise of any options or warrants outstanding on the date hereof or upon the vesting of
any restricted stock units outstanding on the date hereof, provided that each director or executive officer that is a recipient of such Common Stock pursuant to this clause (iii) shall execute a lock-up
agreement in substantially similar form as Exhibit E attached hereto (the “Lock-Up Agreement”) as of the Closing and such Common Stock shall be subject to such Lock-Up Agreement; and (iv) the issuance of Common Stock or Common
Stock Equivalents to employees, directors or consultants pursuant to (A) the vesting or exercise, as applicable, of any stock option, restricted stock unit or other equity incentive award outstanding on the date hereof and disclosed to the Accelmed
Purchaser as of the date hereof or (B) any compensation agreements described in the SEC Reports as of the date hereof, provided that each director or executive officer that is a recipient of such Common Stock or Common Stock Equivalents
pursuant to this clause (iv) shall execute a Lock-Up Agreement and such Common Stock and/or Common Stock Equivalents shall be subject to such Lock-Up Agreement.
5.8 Use of Proceeds. The Company shall use the proceeds
from the sale of the Shares, together with existing cash and cash equivalents, to expand its sales force and operations, to support research and development, and for general corporate purposes, including litigation expenses and interest payments on
its outstanding debt. The Company may also use a portion of the proceeds to expand its current business through strategic acquisitions or in-licenses of complimentary companies or technologies or pay principal payments when due on outstanding debt.
Although the Company has no specific agreements, commitments, or understandings with respect to any in-licensing activity or acquisitions, it evaluates these opportunities and engage in related discussions with other companies from time-to-time.
5.9 Removal of Legends.
(a) In connection with any sale, assignment, transfer or other
disposition of the Shares by a Purchaser pursuant to an effective registration statement or pursuant to Rule 144 or any other exemption under the Securities Act such that the purchaser acquires freely tradable shares and upon compliance by the
Purchaser with the requirements of this Agreement, if requested by the Purchaser by notice to the Company, the Company shall request the Transfer Agent to remove any restrictive legends related to the book entry account holding such shares and make a
new, unlegended entry for such book entry shares sold or disposed of without restrictive legends within two (2) business days of any such request therefor from such Purchaser, provided that the Company has timely received from the Purchaser customary
representations and other documentation reasonably acceptable to the Company in connection therewith. The Company shall be responsible for the fees of its Transfer Agent, its legal counsel and all DTC fees associated with such legend removal.
(b) Subject to receipt from the Purchaser by the Company and
the Transfer Agent of customary representations and other documentation reasonably acceptable to the Company and its counsel and the Transfer Agent in connection therewith, upon the earliest of such time as the Shares (i) have been registered under
the Securities Act pursuant to an effective registration statement, (ii) have been sold pursuant to Rule 144, or (iii) are eligible for resale under Rule 144(b)(1) or any successor provision, the Company shall, in accordance with the provisions of
this Section 5.9(b) and within three (3) business days of any request therefor from a Purchaser accompanied by such customary and reasonably acceptable documentation referred to above, (A) deliver to the Transfer Agent irrevocable
instructions that the Transfer Agent shall make a new, unlegended entry for such book entry shares, and (B) cause its counsel to deliver to the Transfer Agent one or more opinions (including blanket opinions) to the effect that the removal of such
legends in such circumstances may be effected under the Securities Act if required by the Transfer Agent to effect the removal of the legend in accordance with the provisions of this Agreement. Any shares subject to legend removal under this Section 5.9
may be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the DTC Fast Automated Securities Transfer (FAST) Program as directed by such Purchaser. The Company shall be responsible for the
fees of its Transfer Agent and all DTC fees associated with such issuance.
5.10 Furnishing of Information. Until the twelve-month
anniversary of the Closing Date, the Company covenants to use commercially reasonable best efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act.
5.11 Equal Treatment of Purchasers. No consideration
(including any modification of any Transaction Agreement) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Agreements unless the same consideration is also offered to all of
the parties to such Transaction Agreement. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Shares or otherwise.
5.12 Blue Sky Laws. The Company, on or before the Closing
Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Shares for sale to each Purchaser at the Closing pursuant to this Agreement under applicable securities or “blue
sky” laws of the states of the United States (or to obtain an exemption from such qualification). The Company shall make all filings and reports relating to the offer and sale of the Shares required under applicable securities or “blue sky” laws of
the states of the United States following the Closing Date.
5.13 Delivery of Shares After Closing. Subject to the
satisfaction of each Purchaser’s obligations under the Transaction Agreements, the Company shall deliver, or cause to be delivered to each Purchaser, a book-entry statement evidencing the Shares purchased by each such Purchaser on the Closing Date
within one trading day after the Closing.
5.14 Transfer Taxes. All Transfer Taxes shall be borne and
paid by the Company when due. The Company and the Purchasers, as applicable, shall file all necessary Tax Returns and other documentation required to be filed by each of them with respect to all such Transfer Taxes, and, if required by applicable
Law, the parties will join in the execution of any such Tax Returns and other documentation.
6. Conditions of Closing.
6.1 Conditions to the Obligation of the Purchasers. The
several obligations of each Purchaser to consummate the transactions to be consummated at the Closing, and to purchase and pay for the Shares being purchased by it at the Closing pursuant to this Agreement, are subject to the satisfaction or waiver
in writing of the following conditions precedent:
(a) Representations and Warranties. The representations
and warranties of the Company contained herein shall be true and correct on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (it being understood and agreed by each Purchaser that for purposes of
this Section 6.1(a), in the case of any representation and warranty of the Company contained herein which is made as of a specific date, such representation and warranty need be true and correct only as of such specific date) and in the case
of any representation and warranty of the Company contained herein which is not qualified by application thereto of a materiality standard, such representation and warranty need be true and correct only in all material respects and consummation of
the Closing shall constitute a reaffirmation by the Company of each of the representations and warranties of the Company contained in this Agreement as of the Closing Date.
(b) Performance. The Company shall have performed in all
material respects all obligations and conditions herein required to be performed or observed by the Company on or prior to the Closing Date.
(c) No Injunction. No statute, rule, regulation,
executive order, writ, judgment, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Agreements, and no such prohibition shall have been threatened in writing.
(d) Consents. The Company shall have obtained the
consents, permits, approvals, registrations and waivers necessary for the performance of this Agreement, including the purchase, sale, issuance and delivery of the Shares and the entry into the Registration Rights Agreement and further including, but
not limited to, having obtained the Stockholder Approval and the Board of Directors consent to the sale of the Shares to the Purchasers for purposes of Section 203 of the Delaware General Corporation Law.
(e) Designee Letters. A majority of the members of the
Board of Directors serving on the Board of Directors as of the Closing Date shall have delivered a duly executed Designee Letter to the Accelmed Purchaser.
(f) Transfer Agent. The Company shall have furnished
all required materials to the Transfer Agent to reflect the issuance of the Shares at the Closing.
(g) Adverse Changes. Since the date hereof, no Material
Adverse Effect shall have occurred.
(h) Opinion of Company Counsel. The Company shall have
delivered to the Purchasers and the Placement Agent the opinion of Wilson Sonsini Goodrich & Rosati, P.C., dated as of the Closing Date, in customary form and substance to be reasonably agreed upon with the Purchasers and the Placement Agent.
(i) Compliance Certificate. The Chief Executive Officer
of the Company shall have delivered to the Purchasers at the Closing Date a certificate certifying that the conditions specified in Sections 6.1(a) (Representations and Warranties), 6.1(b) (Performance), 6.1(c) (No Injunction),
6.1(d) (Consents), 6.1(e) (Designee Letters), 6.1(g) (Adverse Changes), and 6.1(m) (Listing Requirements) of this Agreement have been fulfilled.
(j) Secretary’s Certificate. The Secretary of the
Company shall have delivered to the Purchasers at the Closing Date a certificate certifying (i) the Amended and Restated Certificate of Incorporation, as amended and in effect at Closing; (ii) the Amended and Restated Bylaws, as amended and in effect
at Closing; and (iii) resolutions of the Board of Directors (or an authorized committee thereof) approving the Transaction Agreements and the transactions contemplated by the Transaction Agreements.
(k) Irrevocable Transfer Agent Instructions. The Company
shall issue irrevocable instructions to the Transfer Agent to issue to the Purchasers (or in such nominee’s name(s) as designated by a Purchaser) book-entry notations representing the Shares set forth on Exhibit A (subject to appropriate
adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Company’s Common Stock) (the “Irrevocable Transfer Agent Instructions”). The Company represents and warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 6.1(k) (or instructions that are consistent therewith) will be given by the Company to the Transfer Agent in connection with this Agreement (other
than those instructions contemplated in Section 5.9) and that the Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement, the other Transaction Agreements, any
registration statement filed under the Securities Act, and applicable Law. The Company acknowledges that a breach by it of its obligations under this Section 6.1(k) will cause irreparable harm to a Purchaser. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section 6.1(k) will be inadequate and agrees, in the event of a breach by the Company of the provisions of this Section 6.1(k), that a Purchaser shall be
entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being
required.
(l) Registration Rights Agreement. The Company shall
have executed and delivered the Registration Rights Agreement in the form attached hereto as Exhibit B (the “Registration Rights Agreement”) to the Purchasers.
(m) Listing Requirements. The listing and trading of the
Common Stock on the applicable National Exchange shall not have been suspended. The listing and trading of the Common Stock on the applicable National Exchange shall not have been threatened either (i) in writing by the SEC or such applicable
National Exchange or (ii) by falling below the minimum listing maintenance requirements of such National Exchange (with a reasonable prospect of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing
periods), other than the minimum stock price requirements of such National Exchange. The Company shall have filed with the applicable National Exchange a Notification Form: Listing of Additional Shares for the listing of the Shares (in the case of
the Nasdaq Global Market) or any analogous notification or approval required by the applicable National Exchange.
(n) Lock-Up Agreement. The Company shall have delivered
Lock-Up Agreements (in the form attached to Exhibit E hereto), executed by each director and executive officer (as defined under Rule 3b-7 of the Exchange Act) and the stockholders of the Company that
are Affiliates (as defined under Rule 405 of the Securities Act) of the Company or the Company’s directors and executive officers.
(o) Good Standing. The Company shall have delivered a
certificate evidencing the good standing of the Company in Delaware issued by the Secretary of State of Delaware, as of a date within five business days of the Closing Date.
(p) IRS Form W-9. The Company shall have delivered a
properly completed and executed IRS Form W-9.
(q) Board Size. The Company shall have taken all
necessary action to (i) increase the size of the Company’s Board of Directors to eight (8) directors and (ii) appoint Uri Geiger to the Board of Directors.
6.2 Conditions to the Obligation of the Company. The
obligation of the Company to consummate the transactions to be consummated at the Closing, and to issue and sell to each Purchaser the Shares to be purchased by it at the Closing pursuant to this Agreement, is subject to the satisfaction or waiver in
writing of the following conditions precedent:
(a) Representations and Warranties. The representations
and warranties contained herein of each Purchaser shall be true and correct on and as of the Closing Date, with the same force and effect as though made on and as of the Closing Date (it being understood and agreed by the Company that, in the case of
any representation and warranty of a Purchaser contained herein which is not hereinabove qualified by application thereto of a materiality standard, such representation and warranty need be true and correct only in all material respects; provided
that the representations and warranties of a Purchaser contained in Sections 4.1 and 4.2 shall be true and correct in all respects) and consummation of the Closing shall constitute a reaffirmation by the Purchaser of each of the
representations, warranties, covenants and agreements of the Purchaser contained in this Agreement as of the Closing Date.
(b) Performance. Each Purchaser shall have performed in
all material respects all obligations and conditions herein required to be performed or observed by such Purchaser on or prior to the Closing Date.
(c) Injunction. The purchase of and payment for the
Shares by each Purchaser shall not be prohibited or enjoined by any law or governmental or court order or regulation.
(d) Registration Rights Agreement. Each Purchaser shall
have executed and delivered the Registration Rights Agreement to the Company in the form attached as Exhibit B.
(e) Payment. The
Company shall have received payment, by (i) wire transfer of immediately available funds, (ii) cancellation of a promissory note issued by the Company to a Purchaser, the terms and issuance of which was approved by Accelmed at the time of issuance,
or (iii) a combination thereof, in the full amount of the Purchase Price for the number of Shares being purchased by each Purchaser at the Closing as set forth in Exhibit A, provided
that in the event that Closing does not occur on the Closing Date, the Company shall promptly return the full amount of such payment to the respective Purchaser, by wire transfer of immediately available funds, and in any event no later than the 1st business day following the scheduled Closing Date.
7. Termination. This Agreement shall terminate and be
void and of no further force and effect, and all obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of: (a) the mutual written agreement of the
Company and each of the Purchasers (solely as to itself), (b) if, on the Closing Date, any of the conditions of Closing set forth in Section 6 have not been satisfied as of the time required hereunder to be so satisfied or waived by the party
entitled to grant such waiver, or are not capable of being satisfied and, as a result thereof, the transactions contemplated by this Agreement will not be and are not consummated, or (c) if the Closing has not occurred on or before June 30, 2023,
other than as a result of a Willful Breach of a Purchaser’s obligations hereunder; provided, however, that nothing herein shall relieve any party to this Agreement of any liability for common law fraud or for any Willful Breach of any representation,
warranty, covenant, obligation or other provision contained in this Agreement and each party will be entitled to seek any remedies at law or in equity to recover losses, liabilities or damages arising from any such Willful Breach. “Willful Breach”
means a deliberate act or deliberate failure to act, taken with the actual knowledge that such act or failure to act would result in or constitute a material breach of this Agreement.
8. Accelmed Purchaser Rights.
8.1 Board Rights.
(a) As of the Closing Date, the Board of Directors shall consist
of eight (8) directors. From and after the Closing Date and for so long as the Accelmed Purchaser and its Affiliates beneficially own twenty-five percent (25%) or more of the Company’s outstanding Common Stock (the “Accelmed Rights Period”),
the Accelmed Purchaser shall be entitled to designate for appointment to the Board of Directors as a director (an “Accelmed Director”) the lesser of (i) a majority of the Board of Directors, and (ii) if the Company is listed at such time on a
National Exchange, the number of directors equal to: (A) the quotient of the number of shares issued and outstanding common stock then owned by the Accelmed Purchaser divided by the total number of shares of the Company common stock issued and
outstanding, (B) multiplied by the total number of directors on the Board of Directors, with the number of directors rounded down, except where the result would be that the Accelmed Purchaser would own greater than 50% of the outstanding common stock
of the Company and, solely as a result of such rounding down, would not be entitled to designate a majority of the total number of directors on the Board of Directors, in which case, such result would be rounded up. Initially, the Accelmed Directors
shall be Uri Geiger and the Initially Designated Directors. In addition, during the Accelmed Rights Period, the Accelmed Purchaser shall be entitled to designate one (1) individual for appointment as a non-voting Board of Directors observer (an “Accelmed
Observer” and, together with the Accelmed Directors, the “Accelmed Designees”).
(b) Pursuant to the Designee Letters, at Closing, the Initially
Designated Directors shall be deemed the Accelmed Designees. During the period that the Accelmed Purchaser is entitled to designate the Accelmed Designees for appointment to the Board of Directors pursuant to Section 8.1(a), in the event that
a vacancy is created at any time by the death, disability, retirement, resignation or removal of an Accelmed Designee, the Company agrees to take at any time and from time to time all commercially reasonable actions necessary to cause the vacancy
created thereby to be filled as promptly as practicable by a new designee of the Accelmed Purchaser designated in accordance with this Section 8.1.
(c) During the period that the Accelmed Purchaser is entitled to
designate Accelmed Directors for appointment to the Board of Directors pursuant to Section 8.1(a), the Company shall include in the slate of nominees recommended by the Board of Directors, at all of the Company’s applicable annual or special
meetings of stockholders at which directors are to be elected (or in any written consent for election of directors), the Accelmed Directors designated in accordance with this Section 8.1, and the Company shall use its reasonable best efforts
to cause the election of such Accelmed Directors to the Board of Directors, in connection therewith.
(d) In the event that the aggregate ownership of Common Stock of
the Accelmed Purchaser and its Affiliates falls below the applicable threshold set forth in Section 8.1(a), the Accelmed Designees shall immediately tender their resignation as a director and an observer, as applicable, and the Company may
take all commercially reasonable actions within its control to cause the removal of such Accelmed Designees.
(e) Notwithstanding anything to the contrary in this Section
8.1, the appointment and service of any such Accelmed Designee on the Board of Directors, whether as a director or observer, as applicable, shall be subject to and conditioned upon: (i) such Accelmed Designees providing all such information
(including information necessary to determine the nominee’s independence status under various requirements and institutional investor guidelines as well as information necessary to determine any disclosure obligations of the Company) as the Board of
Directors may reasonably request, including all information required to be disclosed for directors, candidates for directors and their respective Affiliates in a proxy statement or other filing in accordance with applicable Law or any stock exchange
rules or listing standards. For the avoidance of doubt, the Company acknowledges that the requirements of this Section 8.1(e) has been satisfied as of the date of this Agreement with respect to the Initially Designated Directors.
(f) The Company shall reimburse the Accelmed Designees (or the
employer of such Accelmed Designees, if applicable) for all reasonable travel and other reasonable and documented out-of-pocket expenses related to his or her role as such and relating to the performance of his or her duties on the Board of
Directors, as applicable, on the same terms as other members of the Board of Directors. At any time that an Accelmed Director serves as a member of the Board of Directors, the Company agrees to have in effect, at the expense of the Company, a
director and officer liability insurance policy for the benefit of the Company and such Accelmed Director to the same extent as the Company provides such insurance covering the other members of the Board of Directors.
(g) The Company hereby acknowledges that, in addition to the
rights provided to the Accelmed Designees pursuant to the Company’s Amended and Restated Certificate of Incorporation and Bylaws and any indemnification agreements that such Accelmed Designees may enter into with the Company from time to time
(collectively, the “Indemnification Obligations”) (as beneficiaries of any such rights the Accelmed Designees are herein referred to as a “Board Indemnitee”), the Board Indemnitees may have certain rights to indemnification and/or
advancement of expenses provided by, and/or insurance obtained by, the Accelmed Purchaser or its Affiliates, whether now or in the future (collectively, the “Affiliate Indemnitors”). Notwithstanding anything to the contrary in any of the
Indemnification Obligations or this Agreement, the Company hereby agrees that, with respect to its indemnification and advancement obligations to any Accelmed Designee under the Indemnification Obligations, the Company (i) is the indemnitor of first
resort (i.e., its obligations to indemnify the Board Indemnitees are primary and any obligation of the Affiliate Indemnitors or their insurers to advance expenses or to provide indemnification for the same expenses or liabilities incurred by any of
the Board Indemnitees (or any Affiliate thereof) is secondary and excess), (ii) shall be required to advance the full amount of expenses incurred by each Board Indemnitee and shall be liable for the full amount of all expenses, judgments, penalties,
fines and amounts paid in settlement by each Board Indemnitee or on such Person’s behalf, in each case, to the extent legally permitted and required by the Indemnification Obligations, without regard to any rights such Board Indemnitees may have
against the Affiliate Indemnitors or their insurers, and (iii) irrevocably waives, relinquishes and releases the Affiliate Indemnitors and such insurers from any and all claims against the Affiliate Indemnitors or such insurers for contribution, by
way of subrogation or any other recovery of any kind in respect thereof. In furtherance and not in limitation of the foregoing, the Company agrees that in the event that any Affiliate Indemnitor or its insurer should advance any expenses or make any
payment to a Board Indemnitee for matters for which the Company is required to advance expenses or indemnify a Board Indemnitee pursuant to the Indemnification Obligations, the Company shall reimburse such Affiliate Indemnitor or insurer to the
extent of its obligations under the Indemnification Obligations. The Company agrees that the Board Indemnitees are third party beneficiaries of this Section 8.1(g), able to enforce this Section 8.1(g) according to its terms as if a
party hereto. Nothing contained in the Indemnification Obligations shall limit the scope of this Section 8.1(g) or the other terms set forth in this Agreement.
8.2 Accelmed Information Rights. The Company acknowledges
that Accelmed Designees may, subject to such Accelmed Designees’ fiduciary duties and Accelmed Purchaser’s obligation to maintain the confidentiality thereof, provide Confidential Information to the Accelmed Purchaser, provided that the Company may
identify specific materials to the Accelmed Designees which Designated Director shall not provide to the Accelmed Purchaser if Company determines, in its reasonable judgment, that providing such materials to the Accelmed Purchaser would reasonably be
expected to (i) result in the disclosure of trade secrets or competitively sensitive information, (ii) violate applicable Law, an applicable judgment, order or a contract or obligation of confidentiality owing to a third party, (iii) jeopardize the
protection of an attorney-client privilege, attorney work product protection or other legal privilege, after receiving reasonable advice from counsel (including internal counsel) with respect to such matter (provided, however, that the Company shall
use reasonable efforts to provide alternative, redacted or substitute documents or information in a manner that would not result in the loss of the ability to assert attorney-client privilege, attorney work product protection or other legal
privileges), or (iv) expose the Company to risk of liability for disclosure of personal information (provided, however, that the Company shall use its commercially reasonable efforts to provide such information in a manner that would not expose the
Company to such risk). For the avoidance of doubt nothing in the foregoing sentence shall restrict the Accelmed Designees’ right to receive full access to such materials.
9. Miscellaneous Provisions.
9.1 Public Statements or Releases; Use of Name and Logo.
(a) Except as set forth in Section 5.3, neither the
Company nor any Purchaser shall make any public announcement with respect to the existence or terms of this Agreement or the transactions provided for herein without the prior approval of the other parties. Notwithstanding the foregoing, and subject
to compliance with Section 5.3, nothing in this Section 9.1 shall prevent any party from making any public announcement it considers necessary in order to satisfy its obligations under the law, including applicable securities laws, or
under the rules of any national securities exchange.
(b) The Company grants the Purchasers permission to use the
Company’s names and logos in marketing materials, limited to customary tombstone announcements, of the Purchasers and their respective Affiliates.
9.2 Interpretation. The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and subsection references are to this Agreement unless otherwise specified.
The headings in this Agreement are included for convenience of reference only and will not limit or otherwise affect the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement,
they will be deemed to be followed by the words “without limitation.” The phrases “the date of this Agreement,” “the date hereof” and terms of similar import, unless the context otherwise requires, will be deemed to refer to the date set forth in the
first paragraph of this Agreement. The meanings given to terms defined herein will be equally applicable to both the singular and plural forms of such terms. All matters to be agreed to by any party hereto must be agreed to in writing by such party
unless otherwise indicated herein. References to agreements, policies, standards, guidelines or instruments, or to statutes or regulations, are to such agreements, policies, standards, guidelines or instruments, or statutes or regulations, as amended
or supplemented from time to time (or to successors thereto).
9.3 Notices. Any notices or other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to be given (a) when delivered if personally delivered to the party for whom it is intended, (b) when delivered, if sent by electronic mail with receipt confirmed during normal
business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) three (3) days after having been sent by certified or registered mail, return-receipt requested and postage prepaid, or (d)
one (1) business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt:
(a) If to the Company, addressed as follows:
Minerva Surgical, Inc.
4255 Burton Drive
Santa Clara, CA 95054
Attention: David Clapper & Joel Jung
Email: daveclapper@minervasurgical.com; joel.jung@minervasurgical.com
with a copy (which shall not constitute notice):
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94304
Attention: Philip Oettinger
E-mail: poettinger@wsgr.com
(b) If to any Purchaser, at its address set forth on Exhibit
A or to such e-mail address or address as subsequently modified by written notice given in accordance with this Section 9.3.
Any Person may change the address or e-mail address to which notices and
communications to it are to be addressed by notification as provided for herein.
9.4 Severability. If any part or provision of this Agreement
is held unenforceable or in conflict with the applicable Laws or regulations of any jurisdiction, the invalid or unenforceable part or provisions shall be replaced with a provision which accomplishes, to the extent possible, the original business
purpose of such part or provision in a valid and enforceable manner, and the remainder of this Agreement shall remain binding upon the parties hereto.
9.5 Governing Law; Submission to Jurisdiction; Venue; Waiver of
Trial by Jury.
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without regard to choice of laws or conflicts of laws provisions thereof that would require the application of the laws of any other jurisdiction, except to the extent that mandatory principles of
Delaware law may apply.
(b) The Company and each of the Purchasers hereby irrevocably
and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating solely to this Agreement or the transactions contemplated hereby, to the general jurisdiction of the any state court or United States Federal court sitting in the State of Delaware;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the
same to the extent permitted by applicable Law;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the party, as the case may be, at its address set forth in Section 9.3 or at such other
address of which the other party shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction for recognition and enforcement of any judgment or if jurisdiction in the courts referenced in the foregoing clause (i) are not
available despite the intentions of the parties hereto;
(v) agrees that final judgment in any such suit, action or
proceeding brought in such a court may be enforced in the courts of any jurisdiction to which such party is subject by a suit upon such judgment, provided that service of process is effected upon such party in the manner specified herein or as
otherwise permitted by law;
(vi) agrees that to the extent that such party has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal process with respect to itself or its property, such party hereby irrevocably waives such immunity in respect of its obligations under this Agreement, to the extent permitted
by law; and
(vii) irrevocably and unconditionally waives trial by jury in any
legal action or proceeding in relation to this Agreement.
9.6 Waiver. No waiver of any term, provision or condition of
this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition
of this Agreement.
9.7 Expenses. Each party shall pay its own out-of-pocket
fees and expenses, including the fees and expenses of attorneys, accountants and consultants employed by such party, incurred in connection with the proposed investment in the Shares, the negotiation of the Transaction Agreements and the consummation
of the transactions contemplated thereby provided, that the Company shall reimburse the Accelmed Purchaser for reasonable out-of-pocket fees and expenses (including attorney’s fees and expenses) incurred in connection with the transactions
contemplated by this Agreement.
9.8 Assignment. None of the parties may assign its rights or
obligations under this Agreement or designate another person (i) to perform all or part of its obligations under this Agreement or (ii) to have all or part of its rights and benefits under this Agreement, in each case without the prior written
consent of (x) the Company, in the case of a Purchaser, and (y) the Purchasers, in the case of the Company, provided that a Purchaser may, without the prior consent of the Company, assign its rights to purchase the Shares hereunder to any of its
Affiliates or to any other investment funds or accounts managed or advised by the investment manager who acts on behalf of such Purchaser (provided each such assignee agrees to be bound by the terms of this Agreement and, to the extent applicable,
makes the same representations and warranties set forth in Section 4 hereof). In the event of any assignment in accordance with the terms of this Agreement, the assignee shall specifically assume and be bound by the provisions of this
Agreement by executing a writing agreeing to be bound by and subject to the provisions of this Agreement and shall deliver an executed counterpart signature page to this Agreement and, notwithstanding such assumption or agreement to be bound hereby
by an assignee, no such assignment shall relieve any party assigning any interest hereunder from its obligations or liability pursuant to this Agreement.
9.9 Confidential Information.
(a) Each Purchaser covenants that until such time as the
transactions contemplated by this Agreement and other disclosures by the Company are publicly disclosed by the Company, such Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction), other than to such Purchaser’s Affiliates, directors, officers, and employees, outside attorneys, accountants, auditors or investment advisors, in each case only to the extent necessary to permit evaluation
of the investment or the performance of the necessary or required tax, accounting, financial, legal, or administrative tasks and services and other than as may be required by law.
(b) The Company may request from the Purchasers such additional
information as the Company may deem necessary to evaluate the eligibility of the Purchaser to acquire the Shares, and the Purchaser shall promptly provide such information as may reasonably be requested to the extent readily available; provided, that
the Company agrees to keep any such information provided by the Purchaser confidential, except (i) as required by the federal securities laws, rules or regulations and (ii) to the extent such disclosure is required by other laws, rules or
regulations, at the request of the staff of the SEC or regulatory agency or under the regulations of Nasdaq Stock Market, LLC. The Purchaser acknowledges that the Company may file a copy of this Agreement and the Registration Rights Agreement with
the SEC as exhibit to a periodic report or a registration statement of the Company.
9.10 Business Opportunities. Notwithstanding anything herein
to the contrary and to the fullest extent permitted by Section 122(17) of the Delaware General Corporation Law (or any successor provision) and except as provided herein or as may be otherwise expressly agreed in writing by the Company and the
Accelmed Purchaser, the Company, on behalf of itself and its subsidiaries, if any, renounces any interest or expectancy of the Company and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities, that are
from time to time presented to the Accelmed Purchaser or any of the Accelmed Purchaser’s officers, representatives, directors, agents, stockholders, members, partners, Affiliates, subsidiaries or Accelmed Designees (other than the Initially
Designated Directors) and no such Person shall be liable to the Company or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such Person pursues or acquires such
business opportunity, directs such business opportunity to another Person or fails to present such business opportunity, or information regarding such business opportunity, to the Company or its subsidiaries unless (i) in the case of any Person who
is an Accelmed Director (other than an Initially Designated Director), such business opportunity is offered to such Person in his or her capacity as a director of the Company or such business opportunity is identified to such Person as a result of
any information obtained by such Person during the course of his or her performance of duties as a member of the Board of Directors or a s a result of Confidential Information furnished to such Person pursuant to this Agreement and (ii) in the case
of the Accelmed Purchaser or any of Accelmed Purchaser’s officers, representatives, directors, agents, stockholders, members, partners, Affiliates, subsidiaries, such business opportunity is identified by such Person as a result of any such
Confidential Information so furnished to such Person. Neither the alteration, amendment or repeal of this Section 9.10, nor the adoption of any provision of the Company’s Amended and Restated Certificate of Incorporation or Amended and
Restated Bylaws inconsistent with this Section 9.10, nor, to the fullest extent permitted by Delaware law, any modification of law, shall eliminate or reduce the effect of this Section 9.10. This Section 9.10 shall not limit
any protections or defenses available to, or indemnification or advancement rights of, any director, officer, employee or agent of the Company under its Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, any other
agreement between the Company and such director, officer, employee or agent or applicable Law. The Company shall not maintain, adopt or impose any code of conduct, by-law, organizational document or other binding rule or policy that is inconsistent
with Section 9.10.
9.11 Reliance by and Exculpation of Placement Agent.
(a) Each Purchaser hereto agrees for the express benefit of the
Placement Agent, its Affiliates, and its representatives, that (i) the Placement Agent, its Affiliates and its representatives have not made, and will not make any representations or warranties with respect to the Company or the offer and sale of the
Shares, and such Purchaser will not rely on any statements made by the Placement Agent, orally or in writing, to the contrary, (ii) such Purchaser will be responsible for conducting its own due diligence investigation with respect to the Company and
the offer and sale of the Shares, (iii) the Purchaser will be purchasing Shares based on the results of its own due diligence investigation of the Company and the Placement Agent and each of its directors, officers, employees, representatives, and
controlling persons have made no independent investigation with respect to the Company, the Shares, or the accuracy, completeness, or adequacy of any information supplied to the Purchaser by the Company, (iv) such Purchaser has negotiated the offer
and sale of the Shares directly with the Company, and such Placement Agent will not be responsible for the ultimate success of any such investment and (v) the decision to invest in the Company will involve a significant degree of risk, including a
risk of total loss of such investment. Each Purchaser further represents and warrants to the Placement Agent that it, including any fund or funds that it manages or advises that participates in the offer and sale of the Shares, is permitted under its
constitutive documents (including, without limitation, all limited partnership agreements, charters, bylaws, limited liability company agreements, all applicable side letters with investors, and similar documents) to make investments of the type
contemplated by this Agreement. This Section 9.11 shall survive any termination of this Agreement.
(b) The Company agrees and acknowledges that the Placement Agent
may rely on its representations, warranties, agreements and covenants contained in this Agreement, and each Purchaser agrees that the Placement Agent may rely on such Purchaser’s representations and warranties contained in Section 4 of this
Agreement as if such representations and warranties, as applicable, were made directly to the Placement Agent.
(c) The Company agrees and acknowledges that (1) the Placement
Agent is acting solely as placement agent in connection with the execution, delivery and performance of the Transaction Agreements and the issuance of the Shares to the Purchasers and neither the Placement Agent nor any of its Affiliates, have acted
as an underwriter or in any other capacity and is not and shall not be construed as a fiduciary or financial advisor for any Purchaser, the Company or any other person or entity in connection with the execution, delivery and performance of the
Transaction Agreements and the issuance and purchase of the Shares; and (2) the Placement Agent has not made and does not make any representation or warranty, whether express or implied, of any kind or character, and has not provided any advice or
recommendation in connection with the execution, delivery and performance of the Transaction Agreements or with respect to the Shares.
(d) Neither the Placement Agent nor any of its Affiliates,
agents or representatives (1) shall be liable for any improper payment made in accordance with the information provided by the Company; (2) makes any representation or warranty, or has any responsibilities as to the validity, accuracy, value or
genuineness of any information, certificates or documentation delivered by or on behalf of the Company pursuant to the Transaction Agreements or in connection with any of the transactions contemplated therein, including any offering or marketing
materials; or (3) shall be liable (x) for any action taken, suffered or omitted by any of them in good faith and reasonably believed to be authorized or within the discretion or rights or powers conferred upon it by the Transaction Agreements or (y)
for anything which any of them may do or refrain from doing in connection with the Transaction Agreements, except in each case for such party’s own gross negligence, willful misconduct or bad faith.
(e) The Company agrees that the Placement Agent, its Affiliates,
agents and representatives shall be entitled to (1) rely on, and shall be protected in acting upon, any certificate, instrument, opinion, notice, letter or any other document or security delivered to any of them by or on behalf of the Company,
including the representations made by the Company and the Purchasers herein, and (2) be indemnified by the Company for acting as the Placement Agent hereunder pursuant to the indemnification provisions set forth in the Engagement Letter, dated as of
September 27, 2022, between the Company and the Placement Agent.
9.12 Third Parties. Nothing in this Agreement, express or
implied, is intended to confer on any Person other than the parties to this Agreement any rights, remedies, claims, benefits, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement
(including, without limitation, any partner, member, shareholder, director, officer, employee or other beneficial owner of any party to this Agreement, in its own capacity as such or in bringing a derivative action on behalf of a party to this
Agreement) shall have any standing as a third party beneficiary with respect to this Agreement or the transactions contemplated hereby. Notwithstanding the foregoing, the Placement Agent is an intended third-party beneficiary of the representations
and warranties of the Company and of each Purchaser set forth in Section 3, Section 4, Section 6.1(h) and Section 9.11 respectively, of this Agreement.
9.13 Independent Nature of Purchasers’ Obligations and Rights.
The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance obligations of any other Purchaser under this
Agreement. Nothing contained herein, and no action taken by any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as, and the Company acknowledges that the Purchasers do not so constitute, a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group, and the Company will not assert any such claim with respect to such obligations or the transactions contemplated by this
Agreement. The Company acknowledges and each Purchaser confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Purchaser also acknowledges that
Wilson Sonsini Goodrich & Rosati, P.C. has rendered legal advice to the Company and not to such Purchaser. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of
this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. The Company has elected to provide all Purchasers with the same terms and Transaction Agreements for the
convenience of the Company and not because it was required or requested to do so by any Purchaser.
9.14 Counterparts. This Agreement may be executed in facsimile
or other electronic counterparts, each of which will be deemed to be an original and all of which together will be deemed to be one and the same document. Counterparts may be delivered via facsimile, electronic mail (including any electronic
signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable Law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered
shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
9.15 Entire Agreement; Amendments. This Agreement and the other
Transaction Agreements constitute the entire agreement between the parties hereto respecting the subject matter hereof and supersedes all prior agreements, negotiations, understandings, representations and statements respecting the subject matter
hereof, whether written or oral. No amendment, modification, alteration, waiver, or change in any of the terms of this Agreement shall be valid or binding upon the parties hereto unless made in writing and duly executed by the Company and the
Accelmed Purchaser. The Company, on the one hand, and each Purchaser, on the other hand, may by an instrument signed in writing by such parties waive the performance, compliance or satisfaction by such Purchaser or the Company, respectively, with any
term or provision hereof or any condition hereto to be performed, complied with or satisfied by such Purchaser or the Company, respectively.
9.16 Survival. The covenants, representations and warranties
made by each party hereto contained in this Agreement shall survive the Closing and the delivery of the Shares in accordance with their respective terms. Each Purchaser shall be responsible only for its own representations, warranties, agreements and
covenants hereunder. All covenants and other agreements made by a party to this Agreement herein or pursuant hereto to be performed following the Closing shall survive until all obligations set forth therein shall have been performed or satisfied or
they shall have terminated in accordance with their terms.
9.17 Mutual Drafting. This Agreement is the joint product of
each Purchaser and the Company and each provision hereof has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.
9.18 Waiver of Conflicts. Each party to this Agreement
acknowledges that Wilson Sonsini Goodrich & Rosati, P.C., counsel for the Company, has in the past performed and may continue to perform legal services for certain of the Purchasers in matters unrelated to the transactions described in this
Agreement, including the representation of such Purchasers in venture capital financings and other matters. Accordingly, (a) each party to this Agreement hereby acknowledges that they have had an opportunity to ask for information relevant to this
disclosure; and (b) the Company hereby gives its informed consent to Wilson Sonsini Goodrich & Rosati, P.C.’s representation of certain of the Purchasers in such unrelated matters and each of the Purchasers hereby gives its informed consent to
Wilson Sonsini Goodrich & Rosati, P.C.’s representation of the Company in connection with this Agreement and the transactions contemplated hereby.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
|
COMPANY: |
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MINERVA SURGICAL, INC. |
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|
|
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By: |
/s/ David M. Clapper
|
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Name: |
David M. Clapper |
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Title: |
Chief Executive Officer |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
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PURCHASER: |
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ACCELMED PARTNERS II LP |
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By: |
Accelmed Partners II (GP), L.P.,
its General Partner |
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|
|
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By: |
Accelmed Partners II LLC,
its Manager |
|
By: |
/s/ Uri Geiger
|
|
|
|
|
Name: |
Uri Geiger |
|
|
|
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Title: |
Managing Partner |
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|
|
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Address: |
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|
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848 Brickell Avenue |
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Miami, FL 33131 |
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|
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Email: Uri@accelmed.com |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
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PURCHASER: |
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NEW ENTERPRISE ASSOCIATES 13, L.P. |
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|
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By: |
/s/ Louis Citron
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Name: Louis Citron |
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Title: Chief Administrative Officer and Chief Legal Officer |
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Address: |
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1954 Greenspring Drive, Suite 600 |
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Timonium, MD 21093 |
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Email: LCitron@nea.com |
EXHIBIT A
PURCHASERS
Purchaser Name and Address |
Number of
Shares |
Aggregate
Purchase Price
for Shares |
|
|
|
Accelmed Partners II LP
848 Brickell Avenue
Miami, FL 33131
|
122,189,638 |
$24,999,999.93 |
|
|
|
New Enterprise
Associates 13, L.P.
1954 Greenspring Drive,
Suite 600, Timonium,
MD 21093
|
24,437,927 |
$4,999,999.86 |
EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
FORM OF REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made as of [ ], 2023 by and among Minerva Surgical, Inc., a corporation organized and existing under the laws of the State of Delaware
(the “Company”), and the undersigned purchasers (each, a “Purchaser” and collectively, the “Purchasers”).
RECITALS
WHEREAS, the Company and the Purchasers are parties to the Share Purchase Agreement, dated as of December 27, 2022 (the “Purchase Agreement”), pursuant to which the Purchasers are purchasing
shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”); and
WHEREAS, in connection with the consummation of the transactions contemplated by the Purchase Agreement, and pursuant to the terms of the Purchase Agreement, the parties desire to enter into this
Agreement in order to grant certain rights to the Purchasers as set forth below.
NOW, THEREFORE, in consideration of the covenants and promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
AGREEMENT
1. Certain Definitions. Unless the context otherwise requires, the following terms, for all purposes of this Agreement, shall have the meanings specified in this Section 1.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement.
“Agreement” has the meaning set forth in the recitals.
“Allowed Delay” has the meaning set forth in Section 2.1(b)(ii).
“Board” means the board of directors of the Company.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York
are authorized or required by law or other governmental action to close; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of
commercial banks in the State of New York are generally are open for use by customers on such day.
“Common Stock” has the meaning set forth in the recitals.
“Company” has the meaning set forth in the recitals.
“Effective Date” means the date that a Registration Statement filed pursuant to Section 2.1(a) is first declared effective by the SEC.
“Effectiveness Deadline” means, with respect to the Shelf Registration Statement or New Registration Statement, [ ], 2023; provided, however, that if the Company is
notified by the SEC (either orally or in writing, whichever is earlier) that the Shelf Registration Statement or the New Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as
to such Shelf Registration Statement shall be the fifth (5th) Business Day following the date on which the Company is so notified if such date precedes the dates otherwise required above; provided, further, that if the Effectiveness
Deadline falls on a Saturday, Sunday or other day that the SEC is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the SEC is open for business; provided, further, that if the SEC is
closed for operations due to a government shutdown or lapse in appropriations, the Effectiveness Deadline shall be extended by the same amount of days that the SEC remains closed for operations and provided, further, that if the Shelf
Registration Statement or the New Registration Statement is reviewed by the SEC, the fifth (5th) Business Day following the completion of such review.
“Effectiveness Period” has the meaning set forth in Section 2.1(b)(i).
“Event” has the meaning set forth in Section 2.1(d).
“Event Date” has the meaning set forth in Section 2.1(d).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Filing Deadline” has the meaning set forth in Section 2.1(a).
“FINRA” means the Financial Industry Regulatory Authority.
“Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor or similar registration form under the Securities Act subsequently adopted by the SEC that
permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.
“Free Writing Prospectus” means an issuer free writing prospectus, as defined in Rule 433 under the Securities Act, relating to an offer of Registrable Securities.
“Holder” means any Purchaser or its permitted assignee owning or having the right to acquire Registrable Securities.
“Liquidated Damages” has the meaning set forth in Section 2.1(d).
“Losses” has the meaning set forth in Section 2.5(a).
“New Registration Statement” has the meaning set forth in Section 2.1(a).
“Participating Holder” means with respect to any registration, any Holder of Registrable Securities covered by the applicable Registration Statement.
“Person” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or any other
entity or organization.
“Prospectus” means the prospectus included in any Registration Statement (including a prospectus that discloses information previously omitted from a prospectus filed as part of an effective
Shelf Registration Statement in reliance upon Rule 430A or Rule 430B promulgated under the Securities Act), all amendments and supplements to such prospectus, including pre- and post-effective amendments to such Registration Statement, and all other
material incorporated by reference in such prospectus.
“Register,” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or document.
“Registrable Securities” means (i) the Shares, and (ii) any shares of Common Stock issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, Shares,
whether by merger, charter amendment or otherwise; provided, that the Holder has completed and delivered to the Company a selling stockholder questionnaire in the form attached to this Agreement as Annex
C (a “Selling Stockholder Questionnaire”) and any other information regarding the Holder and the distribution of the Registrable Securities as the Company may, from time to time, reasonably request for inclusion in a Registration
Statement pursuant to applicable law. Notwithstanding the foregoing, Shares or any such shares of Common Stock, and only with respect to such shares, shall cease to be Registrable Securities for all purposes hereunder upon the earliest to occur of
the following: (a) the sale by any Person of such Shares or shares of Common Stock either pursuant to a registration statement under the Securities Act or under Rule 144, (b) such Shares or shares of Common Stock are transferred and new certificates
for such Shares not bearing a legend restricting further transfer have been delivered by Company and subsequent public distribution of such Shares are eligible for sale without restriction by the Purchaser holding such security without any
registration under the Securities Act or pursuant to Rule 144, including without any manner of sale or volume limitations, and without the requirement to be in compliance with Rule 144(c)(1) (or any successor thereto) promulgated under the Securities
Act, or (c) such Shares cease to be outstanding.
“Registration Statement” means any registration statement of the Company that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement filed with, or
to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, amendments and supplements to such registration statement, including pre- and post-effective amendments, and all exhibits and all material incorporated by
reference or deemed to be incorporated by reference in such registration statement.
“Remainder Registration Statement” has the meaning set forth in Section 2.1(a).
“Required Holders” means the Holders holding a majority of the Registrable Securities outstanding from time to time.
“Rule 144” means Rule 144 as promulgated by the SEC under the Securities Act, as such rule may be amended from time to time, or any similar successor rule that may be promulgated by the SEC
having substantially the same effect as such Rule.
“SEC” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.
“SEC Guidance” means any publicly-available written or oral guidance, comments, requirements or requests of the SEC staff under the Securities Act; provided, that any such oral
guidance, comments, requirements or requests are reduced to writing by the SEC.
“Securities Act” means the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time
to time.
“Shares” means the shares of Common Stock issued or issuable to the Purchasers pursuant to the Purchase Agreement.
“Shelf Registration Statement” has the meaning set forth in Section 2.1(a).
“Transaction Agreements” means this Agreement, the Purchase Agreement, the Lock-Up Agreements, all exhibits and schedules thereto and hereto and any other documents or agreement executed in
connection with the transactions contemplated hereunder or thereunder.
2. Registration Rights.
2.1 Shelf Registration.
(a) Registration Statements. On or prior to [ ]1 (the “Filing Deadline”), the Company shall
use commercially reasonable efforts to prepare and file with the SEC a Registration Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for
resale of the Registrable Securities), subject to the provisions of Section 2.1(c), for the resale of the Registrable Securities pursuant to an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (the “Shelf
Registration Statement”). Such Shelf Registration Statement shall, subject to the limitations of Form S-3, include the aggregate amount of Registrable Securities to be registered therein and shall contain (except if otherwise required pursuant
to written comments received from the SEC upon a review of such Shelf Registration Statement) the “Plan of Distribution” substantially in the form of Annex A and substantially the “Selling Stockholder” section in the form of Annex B,
in each case, which may be modified to respond to comments, if any, provided by the SEC. To the extent the staff of the SEC does not permit all of the Registrable Securities to be registered on the Shelf Registration Statement filed pursuant to this
Section 2.1(a) or for any other reason any Registrable Securities are not then included in a Registration Statement filed under this Agreement, the Company shall (i) inform each of the Participating Holders thereof and use its commercially reasonable
efforts to file amendments to the Shelf Registration Statement as required by the SEC and/or (ii) withdraw the Shelf Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the
maximum number of Registrable Securities permitted to be registered by the SEC, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering; provided, however, that prior to the filing such
amendment or New Registration Statement, the Company shall use its commercially reasonable efforts to advocate with the SEC for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation,
the Manual of Publicly Available Telephone Interpretations D.29. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities permitted to be registered on a particular
Registration Statement as a secondary offering, unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced on a pro rata
basis based on the total number of unregistered Shares held by such Holders, subject to a determination by the SEC that certain Holders must be reduced first based on the number of Shares held by such Holders. In the event the Company amends the
Shelf Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by the SEC or SEC Guidance
provided to the Company or to registrants of securities in general, one or more Registration Statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Shelf
Registration Statement, as amended, or the New Registration Statement (the “Remainder Registration Statement”). In no event shall any Participating Holder be identified as a statutory underwriter in the Registration Statement unless in
response to a comment or request from the staff of the SEC or another regulatory agency; provided, however, that if the SEC requests that a Participating Holder be identified as a statutory underwriter in the Registration Statement,
such Holder will have an opportunity to withdraw from the Registration Statement.
1 To be
30 days following the date of this Agreement.
(b) Effectiveness.
(i) The Company shall use commercially reasonable efforts to have each Registration Statement declared effective as soon as practicable but in no event later than the Effectiveness Deadline
(including filing with the SEC a request for acceleration of effectiveness in accordance with Rule 461 promulgated under the Securities Act), and shall use its commercially reasonable efforts to keep the Shelf Registration Statement or New
Registration Statement continuously effective under the Securities Act until the earlier of (A) such time as all of the Registrable Securities covered by such Registration Statement have been publicly sold by the Holders, or (B) the date that all the
Shares cease to be Registrable Securities (the “Effectiveness Period”); provided, that, the Company will not be obligated to update the Registration Statement and no sales may made under the applicable Registration Statement during any
Allowed Delay of which the Holders have received notice. The Company shall notify the Participating Holders of the effectiveness of a Registration Statement by e-mail as promptly as practicable, and shall, if requested provide the Participating
Holders with copies of the final Prospectus to be used in connection with the sale or other disposition of the securities covered thereby.
(ii) On not more than three occasions and for not more than forty-five (45) consecutive days or for a total of not more than ninety (90) days, in each case in any twelve (12) month period, the
Company may suspend the use of any Prospectus included in any Registration Statement contemplated by this Section 2 if (A) the negotiation or consummation of a transaction by the Company is pending or an event has occurred, which negotiation,
consummation or event, the Board reasonably believes, upon the advice of legal counsel, would require additional disclosure by the Company in the Registration Statement of material information that the Company has a bona fide business purpose for
keeping confidential and the non-disclosure of which in the Registration Statement would be expected, in the reasonable determination of the Board, upon the advice of legal counsel, to cause the Registration Statement to fail to comply with
applicable disclosure requirements, or (B) the Company determines in good faith, upon advice of legal counsel, that such suspension is necessary to amend or supplement the Registration Statement or the related Prospectus so that such Registration
Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances
under which they were made, not misleading (an “Allowed Delay”); provided, that the Company shall promptly (1) notify each Participating Holder in writing of the commencement of an Allowed Delay, but shall not (without the prior
written consent of a Participating Holder) disclose to such Participating Holder any material non-public information giving rise to an Allowed Delay, (2) advise the Participating Holders in writing to cease all sales under such Registration Statement
until the end of the Allowed Delay and (3) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.
(c) In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the Holders and (ii) undertake to register the Registrable Securities on Form S-3 promptly after such form is available; provided, that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.
(d) If: (i) the initial Registration Statement is not filed with the SEC on or prior to the Filing Deadline, (ii) the initial Registration Statement or the New Registration Statement, as
applicable, is not declared effective by the SEC (or otherwise does not become effective) for any reason on or prior to the Effectiveness Deadline, or (iii) an Allowed Delay applicable to a Required Registration Statement exceeds the length of the
Allowed Delay, and, for purposes of clauses (i) and (ii), the date on which such Event occurs, or for purposes of clause (iii) the date on which such Allowed Delay is exceeded, being referred to as an (“Event Date”), then in addition to any
other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured,
the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty (“Liquidated Damages”), equal to 0.5% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for any Registrable
Securities held by such Holder on the Event Date. The parties agree that notwithstanding anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be payable (i) if as of the relevant Event Date, the Registrable
Securities may be sold by the Holders without volume or manner of sale restrictions under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Holder and the
Company’s transfer agent, (ii) to a Holder causing an Event that relates to or is caused by any action or inaction taken by such Holder, (iii) to a Holder in the event it is unable to lawfully sell any of its Registrable Securities because of
possession of material non-public information or (iv) with respect to any period after the expiration of the Effectiveness Period (it being understood that this clause shall not relieve the Company of any Liquidated Damages accruing prior to the
expiration of the Effectiveness Period). If the Company fails to pay any Liquidated Damages pursuant to this Section 2.1(d) in full within ten (10) Business Days after the date payable, the Company will pay interest on the amount of Liquidated
Damages then owing to the Holder at a rate of 0.5% per month on an annualized basis (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder.
2.2 Expenses. The Company will pay all expenses associated with each Registration Statement, including filing and printing fees, the Company’s counsel and accounting fees and
expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws and listing fees, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities
industry professionals with respect to the Registrable Securities being sold.
2.3 Company Obligations. The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and
pursuant thereto the Company will:
(a) prepare the required Registration Statement including all exhibits and financial statements required under the Securities Act to be filed therewith, and provide copies to and permit each
Participating Holder to review each Registration Statement and all amendments and supplements thereto prior to their filing with the SEC and a reasonable opportunity to furnish comments thereon (it being acknowledged and agreed that if a
Participating Holder does not object to or comment on the aforementioned documents, then the Participating Holder shall be deemed to have consented to and approved the use of such documents);
(b) file with the SEC a Registration Statement relating to the Registrable Securities including all exhibits and financial statements required by the SEC to be filed therewith, and use
commercially reasonable efforts to cause such Registration Statement to become effective under the Securities Act;
(c) prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and the related Prospectus as may be necessary to keep such Registration
Statement effective for the Effectiveness Period and to comply with the provisions of the Securities Act and the Exchange Act with respect to the distribution of all of the Registrable Securities covered thereby;
(d) (i) notify the Participating Holders by facsimile or e-mail as promptly as practicable after any Registration Statement is declared effective or any post-effective amendment to a
Registration Statement is declared effective, and shall simultaneously provide the Participating Holders with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby (provided,
that the Company will not have any obligation to provide any document pursuant to this clause that is available on the EDGAR system), (ii) promptly notify the Participating Holders no later than one (1) trading day following the date (A) of the
issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or any order by the SEC preventing or suspending the use of any preliminary or final Prospectus or the
initiation of any proceedings for such purposes, (B) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction and (C) of the receipt
by the Company of any notification with respect to the initiation or threatening of any proceeding for the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction;
(e) promptly notify the Participating Holders, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the
Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing (provided that
such notice shall not, without the prior written consent of a Participating Holder, disclose to such Participating Holder any material nonpublic information regarding the Company), and promptly prepare, file with the SEC and furnish to such Holder a
supplement to or an amendment of such Prospectus as may be necessary so that such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
(f) promptly incorporate in a Prospectus supplement, Free Writing Prospectus or post-effective amendment to the applicable Registration Statement such information as the Participating
Holders reasonably request to be included therein relating to the plan of distribution with respect to such Registrable Securities, and make all required filings of such Prospectus supplement, Free Writing Prospectus or post-effective amendment as
soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement, Free Writing Prospectus or post-effective amendment;
(g) furnish to each Participating Holder whose Registrable Securities are included in any Registration Statement (i) promptly after the same is prepared and filed with the SEC, if requested
by the Participating Holder, one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC
or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion thereof which contains information for which the Company has sought
confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as such Participating Holder may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Participating Holder that are covered by such Registration Statement;
(h) on or prior to the date on which the Registration Statement is declared effective, use its commercially reasonable efforts to register or qualify, or cooperate with the Participating
Holders and their respective counsel, in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for offer and sale under the applicable state securities or “Blue Sky”
laws of those jurisdictions within the United States as any Participating Holder or their respective counsel reasonably request in writing and do any and all other acts or things reasonably necessary or advisable to keep such registration or
qualification (or exemption therefrom) in effect during the Effectiveness Period, provided that the Company shall not be required to qualify generally to do business or as a dealer in securities in any jurisdiction where it is not then so
qualified or to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject;
(i) within two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver to the transfer agent for such
Registrable Securities (with copies to each Participating Holder whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC;
(j) cooperate with each Participating Holder participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made
with FINRA or any other securities regulatory authority;
(k) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the Securities Act and the Exchange Act, including, without limitation,
Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the Securities Act, promptly inform the Participating Holders in writing if, at any time during the
Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Participating Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take
such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder; and make available to its security holders, as soon as reasonably practicable, an earnings statement covering satisfying the
provisions of Section 11(a) of the Securities Act;
(l) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the
effective date of such Registration Statement;
(m) use commercially reasonable efforts to maintain the listing of all Registrable Securities on each securities exchange on which the Common Stock is then listed or quoted and on each
inter-dealer quotation system on which any of the Common Stock is then quoted;
(n) if requested by a Holder, the Company shall (i) as soon as practicable, incorporate in a prospectus supplement or post-effective amendment such information as a Holder reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable, make all required filings of such prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by a Holder holding any Registrable
Securities; and
(o) with a view to making available to the Purchasers the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit the Purchasers to sell shares of Common
Stock to the public without registration, the Company covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) the date as all of the Registrable
Securities shall have been otherwise transferred, new certificates for such Registrable Securities not bearing a legend restricting further transfer shall have been delivered by Company and subsequent public distribution of such Shares shall not
require registration under the Securities Act or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and
(iii) furnish to each Purchaser upon request, as long as such Purchaser owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the Exchange Act, (B) a copy of the Company’s most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail such Purchaser of any rule or regulation of the SEC that permits the selling of any such Registrable
Securities without registration.
2.4 Obligations of the Purchasers.
(a) Notwithstanding any other provision of the Agreement, no Holder of Registrable Securities may include any of its Registrable Securities in the Registration Statement pursuant to this
Agreement unless the Holder furnishes to the Company a completed and signed Selling Stockholder Questionnaire at least five (5) Business Days prior to the first anticipated filing date of any Registration Statement if such Purchaser elects to have
any of its Registrable Securities included in the Registration Statement; provided, however, the Company must notify the Holder of an anticipated filing of a Registration Statement at least fifteen (15) Business Days prior to the first anticipated
filing date of any Registration Statement. Each Holder who intends to include any of its Registrable Securities in the Registration Statement shall promptly furnish the Company in writing such other information as the Company may reasonably request
in writing. Each Holder acknowledges and agrees that the information in the Selling Stockholder Questionnaire or provided in response to a request for further information as described in this Section 2.4(a) will be used by the Company in the
preparation of the Registration Statement and hereby consents to the inclusion of such information in the Registration Statement. The Company shall not be obligated to file more than one post-effective amendment or supplement in any sixty (60) day
period following the date such Registration Statement is declared effective for the purposes of naming Holders as selling security holders who are not named in such Registration Statement at the time of effectiveness.
(b) Each Purchaser, by its acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing
of a Registration Statement hereunder, unless such Purchaser has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement. The Company may require each selling Holder to furnish to
the Company a certified statement as to (i) the number of shares of Common Stock beneficially owned by such Holder and any affiliate thereof, (ii) any FINRA affiliations, (iii) any natural persons who have the power to vote or dispose of the shares
of Common Stock and (iv) any other information as may be requested by the SEC, FINRA or any state securities commission. Each Holder agrees by its acquisition of such Registrable Securities that, it will not commence a disposition of Registrable
Securities under the Registration Statement until such Holder has received written confirmation from the Company of the availability of the Registration Statement.
(c) Each Purchaser agrees that, upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2.1(b) or (ii) the happening of any event
of the kind described in Section 2.3(d) and Section 2.3(e) hereof, such Purchaser will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until the Purchaser is
advised by the Company that such dispositions may again be made and/or the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed and, if so directed by the Company, each Holder will deliver to the Company or
destroy (at the Company’s expense) all copies, other than permanent file copies then in its possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice.
2.5 Indemnification.
(a) Indemnification by the Company. The Company will indemnify and hold harmless each Participating Holder and its officers, directors, members, employees, investment advisers and
agents, successors and assigns, and each other person, if any, who controls such Participating Holder within the meaning of the Securities Act, against any losses, claims, damages, liabilities and expense (including reasonable attorney fees)
(collectively, “Losses”), actually incurred, joint or several, to which they may become subject under the Securities Act or otherwise, insofar as such Losses (or actions in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of any material fact contained in any Registration Statement, any preliminary Prospectus or final Prospectus, or any amendment or supplement thereof or arising out of or relating to any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made)
not misleading; or (ii) any violation by the Company or its agents of any rule or regulation promulgated under the Securities Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with
such registration; and will reimburse such Participating Holder who sells Registrable Securities covered by such Registration Statement, and each such officer, director, employee, agent or member and each such controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or defending against any such Loss or action; provided, however, that the Company will not be liable in any such case to the extent that any such Losses arise
out of or are based upon (x) an untrue statement or alleged untrue statement or omission or alleged omission so made in reliance upon or in conformity with information furnished by such Purchaser or any such controlling person in writing specifically
for use in such Registration Statement or Prospectus (preliminary, final or summary) or any amendment or supplement thereto or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that each Holder has
approved Annex A hereto for this purpose), (y) the use by a Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that such Prospectus is outdated or defective or (z) a Purchaser’s (or any other
indemnified Person’s) failure to send or give a copy of the Prospectus or supplement (as then amended or supplemented), if required, pursuant to Rule 172 under the Securities Act (or any successor rule) to the Persons asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such Prospectus or supplement.
(b) Indemnification by the Participating Holders. Each Purchaser agrees, severally but not jointly with any other Purchaser, to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers, employees, stockholders, agents, and each person who controls the Company (within the meaning of the Securities Act and the Exchange Act) against any Losses (i) arising out of, based on, or
resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in any Registration Statement or Prospectus (preliminary, final or summary) or any amendment or supplement thereto or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, to the extent, but only to the extent that such untrue statement or omission
is contained in any information furnished by such Purchaser to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto, or a document incorporated by reference into any of the foregoing;
or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved in writing by such Holder expressly for use in a Registration Statement (it being
understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (ii) related to the use by such Holder of an outdated or defective Prospectus
after the Company has notified such Holder in writing that the Prospectus is outdated or defective. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the proceeds (net of all expenses paid
by such Holder in connection with any claim relating to this Section 2.5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the
Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party (provided, however, that such indemnified party shall, at the
expense of the indemnified party, be entitled to counsel of its own choosing to monitor such defense); provided that, subject to the preceding sentence, any Person entitled to indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (A) the indemnifying party has agreed to pay such fees or expenses, or (B) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (C) in the reasonable judgment of any such Person, based upon written advice of its counsel, a conflict of interest exists between such
person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such claim on behalf of such Person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its
obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or
litigation. The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party, or any officer, director, employee, agent, affiliate, or
controlling person of such indemnified party and shall survive the transfer of the Shares.
(d) Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it
harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No Person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall
be entitled to contribution from any Person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such
Holder in connection with any claim relating to this Section 2.5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by it upon the sale of the Registrable Securities
giving rise to such contribution obligation.
3. Miscellaneous.
3.1 Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law
principles thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the state and federal courts located in the State of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out
of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of
notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each of the parties hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
3.2 Assignments and Transfers by Purchasers. The provisions of this Agreement shall be binding upon and inure to the benefit of the Purchasers and their respective successors and
assigns. A Holder may transfer or assign, in whole or from time to time in part, to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Holder to such person, provided that such Holder
complies with all laws applicable thereto, and the provisions of the Purchase Agreement, and provides written notice of assignment to the Company promptly after such assignment is effected, and such person agrees in writing to be bound by all of the
provisions contained herein.
3.3 Assignments and Transfers by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise), provided, however, that in
the event that the Company is a party to a merger, consolidation, share exchange or similar business combination transaction in which the Common Stock is converted into the equity securities of another Person, from and after the effective time of
such transaction, such Person shall, by virtue of such transaction, be deemed to have assumed the obligations of the Company hereunder, the term “Company” shall be deemed to refer to such Person and the term “Registrable Securities” shall be deemed
to include the securities received by the Holders in connection with such transaction unless such securities are otherwise freely tradable by the Holders after giving effect to such transaction.
3.4 Entire Agreement; Amendment. This Agreement and the other Transaction Agreements constitute the full and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof. Any previous agreements among the parties relative to the specific subject matter hereof are superseded by this Agreement. This Agreement may be amended only by a writing signed by the Company and the Required Holders,
provided that (i) this Agreement may not be amended with respect to any Purchaser without the written consent of such Purchaser unless such amendment applies to all Purchasers in the same fashion and (ii) the consent of each Purchaser is required for
any amendment to Section 2.1(d), Section 2.5 or the definition of “Registrable Securities.” The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission to act of the Required Holders.
3.5 Notices. All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 8.3 of the Purchase Agreement.
3.6 Third Parties. This Agreement does not create any rights, claims or benefits inuring to any person that is not a party hereto nor create or establish any third party beneficiary
hereto; provided, that the indemnified parties are intended third party beneficiaries of Section 2.5.
3.7 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to
find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
3.8 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
3.9 Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were
an original thereof.
3.10 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party upon any breach or default of any other party under this
Agreement shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of 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. It is further agreed that any waiver, permit, consent or approval of any kind or character of any breach or default under this Agreement, or any
waiver of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in writing, and that all remedies, either under this Agreement, by law or otherwise, shall be cumulative and
not alternative.
3.11 Consents. Any permission, consent, or approval of any kind or character under this Agreement shall be in writing and shall be effective only to the extent specifically set forth
in such writing.
3.12 SPECIFIC PERFORMANCE. THE PARTIES HERETO AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH
ITS SPECIFIC INTENT OR WERE OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS, WITHOUT BOND, TO PREVENT OR CURE BREACHES OF THE PROVISIONS OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE
TERMS AND PROVISIONS HEREOF, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY MAY BE ENTITLED BY LAW OR EQUITY, AND ANY PARTY SUED FOR BREACH OF THIS AGREEMENT EXPRESSLY WAIVES ANY DEFENSE THAT A REMEDY IN DAMAGES WOULD BE ADEQUATE.
3.13 Construction of Agreement. No provision of this Agreement shall be construed against either party as the drafter thereof.
3.14 Section References. Unless otherwise stated, any reference contained herein to a Section or subsection refers to the provisions of this Agreement.
3.15 Variations of Pronouns. All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the context in which they
are used may require.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the day and year first
written above.
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COMPANY:
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MINERVA SURGICAL, INC.
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By:
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Name:
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Title:
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[Company Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the day and year first
written above.
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PURCHASER:
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By:
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Name:
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Title:
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[Purchaser Signature Page to Registration Rights Agreement]
PLAN OF DISTRIBUTION
We are registering the shares of common stock (the “Common Stock”), par value $0.001 per share, of the Company (the “Securities”); to permit the resale of these Securities by the
holders from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the Securities. We will bear all fees and expenses incident to our obligation to register the
Securities.
The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling the Securities or interests in the Securities received after the date of
this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their Securities or interests in shares of the Securities on any
stock exchange, market or trading facility on which the Securities are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at
varying prices determined at the time of sale, or at negotiated prices.
Sales of the Securities by the selling stockholders named in this prospectus may be made from time to time in one or more transactions in the over-the-counter market, on any exchange or quotation
system on which shares of our Common Stock may be listed or quoted, in negotiated transactions or in a combination of any such methods of sale, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Securities may be offered directly, to or through agents designated from time to time or to or through brokers or dealers, or through any combination of these methods of sale. The methods by
which the Securities may be sold include:
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block trades (which may involve crosses) in which the broker or dealer will attempt to sell the Securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker or dealer as principal and resales by the broker or dealer for its own account pursuant to this prospectus;
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exchange distributions or secondary distributions in accordance with the rules of the applicable exchange;
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ordinary brokerage transactions and transactions in which the broker or dealer solicits purchasers;
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privately negotiated transactions;
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the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
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the settlement of short sales;
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a combination of any of the foregoing methods of sale; and
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any other method permitted by applicable law.
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An agent, broker or dealer may receive compensation in the form of discounts, concessions or commissions from the selling stockholders or the purchasers of the Securities for whom such brokers or dealers may act as
agents or to whom they sell as principals, or both (which compensation as to a particular broker or dealer might be in excess of customary commissions). A member firm of an exchange on which our shares of Common Stock are traded may be engaged to act
as the selling stockholders’ agent in the sale of Securities by the selling stockholders.
In connection with distributions of the Securities offered by this prospectus or otherwise, the selling stockholders may enter into hedging transactions with brokers or dealers or other financial institutions with
respect to our Common Stock. In connection with these transactions, the brokers or dealers or other financial institutions may engage in short sales of our Common Stock in the course of hedging the positions they assume with the selling stockholders.
The selling stockholders may also sell our Common Stock short to effect its hedging transactions and deliver the Securities covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The
selling stockholders may also loan or pledge the Securities to broker-dealers that in turn may sell such Securities.
In addition, any of the Securities covered by this prospectus that qualify for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus.
The aggregate proceeds to the selling stockholders from the sale of the Securities offered by it pursuant to this prospectus will be the purchase price of the shares less discounts or commissions, if any. The selling
stockholders reserve the right to accept and, together with its agents from time to time, to reject, in whole or in part, any proposed purchase of the Securities to be made directly or through agents.
To the extent required, the Securities to be sold, the name of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealers or underwriters, any applicable
commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus.
Each broker-dealer that receives the Securities for its own account pursuant to this prospectus must acknowledge that it will deliver the prospectus in connection with any sale of the Securities. If required, this
prospectus may be amended or supplemented on a continual basis to describe a specific plan of distribution. We will make copies of this prospectus available to the selling stockholders, brokers and dealers for purposes of satisfying the prospectus
delivery requirements of the Securities Act, if applicable.
In order to comply with the securities laws of some states, if applicable, the Securities offered by this prospectus may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition,
in some states the shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with as part of such sale.
The selling stockholders and any other person participating in such distribution will be subject to certain provisions of the Exchange Act. The Exchange Act rules include Regulation M, which may limit the timing of
purchases and sales of any of our Common Stock by the selling stockholders and any other such person. In addition, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of our Common Stock to engage in
market-making activities with respect to the Securities. In addition, the anti-manipulation rules under the Exchange Act may apply to sales of the securities in the market. All of the foregoing may affect the marketability of the Securities and the
ability of any person to engage in market-making activities with respect to the securities.
The selling stockholders and any brokers, dealers, agents or others that participate with the selling stockholders in the distribution of the Securities offered by this prospectus may be deemed to be
“underwriters” within the meaning of the Securities Act, and any underwriting discounts, commissions or fees received by such persons and any profit on the resale of the Securities purchased by such persons may be deemed to be underwriting
commissions or discounts under the Securities Act. If any of the selling stockholders is deemed to be an “underwriter” within the meaning of the Securities Act, it will be subject to the prospectus delivery requirements of the Securities Act. We will
make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders, brokers and dealers for the purpose of satisfying the prospectus delivery requirements of the Securities Act, if
applicable.
There can be no assurance that the selling stockholders will sell any or all of the Securities offered hereby.
We will bear all fees and expenses in connection with the preparation and filing of the registration statement of which this prospectus is a part. The fees and expenses of registration to be borne by
us referred to in the foregoing sentence shall include registration, filing and qualification fees, word processing, duplicating, printers’ and accounting fees, listing fees, messenger and delivery expenses, all fees and expenses of complying with
state securities or blue sky laws, fees and disbursements of our counsel. We estimate that the total expenses payable by us in connection with the preparation and filing of the registration statement of which this prospectus is a part will be $[___].
We will indemnify the selling stockholders against liabilities, including certain liabilities under the Securities Act. We may be indemnified by the selling stockholders against liabilities, including certain liabilities under the Securities Act,
that may arise from any written information furnished to us by the selling stockholders specifically for use in this prospectus.
Any underwriter, dealers and agents engaged by the selling stockholders may engage in transactions with us or the selling stockholders, or perform services for us or the selling stockholders, in the
ordinary course of business.
SELLING STOCKHOLDERS
The Securities being offered by the selling stockholders are those issued to the selling stockholders pursuant to that certain Share Purchase Agreement, dated as of December 27, 2022 by and among us
and the selling stockholders. We are registering these Securities in order to permit the selling stockholders to offer the shares for resale from time to time.
The table below lists the selling stockholders and other information regarding the beneficial ownership of the Securities by each of the selling stockholders. The second column lists the number of
the Securities beneficially owned by each selling stockholder, based on its ownership of the Securities.
The amounts listed in the third and fourth columns reflect the number of shares being offered by each selling stockholder and the number of shares remaining following the sale of such shares,
respectively. The amounts listed do not assume sales by any other selling stockholder and are subject to the maximum number of shares that may be resold under this prospectus.
The selling shareholders may sell all, some or none of their Securities in this offering. See “Plan of Distribution.”
[Selling Stockholder Table to be Included]
Selling Stockholder Notice and Questionnaire
The undersigned beneficial owner of Registrable Securities understands that the Company has filed or intends to file with the SEC a Registration Statement for the registration and resale under Rule
415 of the Securities Act of 1933, as amended, of Registrable Securities in accordance with the terms of a Registration Rights Agreement, dated [●], 2023 (the “Registration Rights Agreement”), among the Company and the Holders named therein. A
copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms used but not otherwise defined herein shall have the meaning ascribed thereto in the Registration Rights
Agreement.
In order to sell or otherwise dispose of any Registrable Securities pursuant to the Registration Statement, a beneficial owner of Registrable Securities generally will be required to be named as a
selling stockholder in the related prospectus or a supplement thereto (as so supplemented, the “Prospectus”), deliver the Prospectus to purchasers of Registrable Securities (including pursuant to Rule 172 under the Securities Act) and be bound by the
provisions of the Registration Rights Agreement (including certain indemnification provisions, as described below). Any beneficial owner of Registrable Securities wishing to include its Registrable Securities in the Registration Statement must
deliver to the Company a properly completed and signed Notice and Questionnaire.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, beneficial owners of Registrable Securities are
advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby gives notice to the Company of its intention to have its Registrable Securities owned by it and
listed below in Item (3), unless otherwise specified in Item (3), included for resale in the Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire, understands and agrees that it will be bound by the terms
and conditions of this Notice and Questionnaire and the Registration Rights Agreement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1.
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Name.
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(a)
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Full Legal Name of Selling Stockholder:
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(b)
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Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below Item 3 below:
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(c)
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Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):
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2.
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Address for Notices to Selling Stockholder.
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Email address of Contact Person:
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3.
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Beneficial Ownership of Registrable Securities.
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(a)
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Type and Number of Registrable Securities beneficially owned:
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(b)
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Number of shares of Common Stock to be registered pursuant to this Notice for resale:
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4.
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Broker-Dealer Status.
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(a)
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Are you a broker-dealer?
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(b)
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If “yes” to Section 4(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
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Note: If no, the SEC’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
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(c)
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Are you an affiliate of a broker-dealer?
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Note: If yes, provide a narrative explanation below:
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(d)
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If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the Registrable Securities?
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Note: If no, the SEC’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
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5.
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Beneficial Ownership of Other Securities of the Company Owned by the Selling Stockholder.
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Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in
Item 3.
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Type and amount of other securities beneficially owned:
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6.
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Relationships with the Company. Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
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State any exceptions here:
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7.
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Plan of Distribution. The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the Registration Rights Agreement, and hereby
confirms that, except as set forth below, the information contained therein regarding the undersigned and its plan of distribution is correct and complete.
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State any exceptions here:
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The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof and prior to the effective date of
any applicable Registration Statement. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing, by hand delivery, confirmed or facsimile transmission, first-class mail or air courier guaranteeing overnight
delivery at the address set forth below. In the absence of any such notification, the Company shall be entitled to continue to rely on the accuracy of the information in this Notice and Questionnaire.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items (1) through (7) above and the inclusion of such information in the Registration Statement and the
Prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of any such Registration Statement and the Prospectus.
By signing below, the undersigned acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations
thereunder, particularly Regulation M in connection with any offering of Registrable Securities pursuant to the Registration Statement. The undersigned also acknowledges that it understands that the answers to this Questionnaire are furnished for use
in connection with Registration Statements filed pursuant to the Registration Rights Agreement and any amendments or supplements thereto filed with the SEC pursuant to the Securities Act.
The undersigned hereby acknowledges and is advised of the following Interpretation A.65 of the July 1997 SEC Manual of Publicly Available Telephone Interpretations regarding short selling:
“An Issuer filed a Form S-3 registration statement for a secondary offering of common stock which is not yet effective. One of the selling stockholders wanted to
do a short sale of common stock “against the box” and cover the short sale with registered shares after the effective date. The issuer was advised that the short sale could not be made before the registration statement become effective, because the
shares underlying the short sale are deemed to be sold at the time such sale is made. There would, therefore, be a violation of Section 5 if the shares were effectively sold prior to the effective date.”
By returning this Questionnaire, the undersigned will be deemed to be aware of the foregoing interpretation.
I confirm that, to the best of my knowledge and belief, the foregoing statements (including the answers to this Questionnaire) are correct.
[Signature page follows.]
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.
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[____________________]
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By:
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Name:
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Title:
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Dated:
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[____________________]
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PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO: [ ]
EXHIBIT E
Form of LOCK-UP AGREEMENT
FORM OF LOCK-UP AGREEMENT
PIPER SANDLER & CO.
As Placement Agent
Accelmed Partners II LP
848 Brickell Avenue
Miami, FL 33131
New Enterprise Associates 13 L.P.
1954 Greenspring Drive, Suite 600,
Timonium MD 21093
As Purchasers
c/o Piper Sandler & Co.
U.S. Bancorp Center
800 Nicollet Mall
Minneapolis, Minnesota 55402
Re: |
Minerva Surgical, Inc. — Private Placement
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Ladies and Gentlemen:
The undersigned understands that you have agreed to act as placement agent (the “Placement Agent”) in connection with a private placement (the “Placement”) of shares (the “Securities”) of common
stock, par value $0.001 per share (the “Common Stock”), of Minerva Surgical, Inc. (the “Company”) to Accelmed Partners II LP (“Accelmed”) and certain other purchasers.
In consideration of the Placement Agent’s agreement to act as Placement Agent and Accelmed’s purchase of a portion of the Securities in the Placement, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of each of the Placement Agent and Accelmed, the undersigned will not, and will not cause any direct or indirect affiliate to, during
the period beginning on the date of this letter agreement (this “Letter Agreement”) and ending at the close of business 60 days after the date of the closing of the Placement (such period, the “Restricted Period”), (1) 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, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for shares of Common Stock (including without limitation, shares of Common Stock or such other securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission (the “SEC”) and securities which may be issued upon exercise of a stock option or warrant) (collectively with the Common Stock, the “Lock-Up Securities”), (2) enter into any hedging, swap or other
agreement or transaction that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up
Securities, in cash or otherwise, (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities, or (4) publicly disclose the intention to do any of the foregoing. The undersigned acknowledges and agrees
that the foregoing precludes the undersigned from engaging in any hedging or other transactions or arrangements (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof,
forward, swap or any other derivative transaction or instrument, however described or defined) designed or intended, or which could reasonably be expected to lead to or result in, a sale or disposition or transfer of any economic consequences of
ownership, in whole or in part, of any Lock-Up Securities, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Lock-Up Securities, in cash or otherwise. The
undersigned further confirms that it has furnished each of the Placement Agent and Accelmed with the details of any transaction the undersigned, or any of its affiliates, is a party to as of the date hereof, which transaction would have been
restricted by this Letter Agreement if it had been entered into by the undersigned during the Restricted Period.
Notwithstanding the foregoing, the undersigned may:
(a) transfer the undersigned’s Lock-Up Securities:
(i) as a bona fide gift or gifts, or for bona fide estate planning purposes,
(ii) by will or intestacy,
(iii) to any member of the undersigned’s immediate family or any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, or if the undersigned is a
trust, to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust (for purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, current or former marriage, domestic partnership or
adoption, not more remote than first cousin),
(iv) to a partnership, limited liability company or other entity of which the undersigned and the immediate family of the undersigned are the legal and beneficial owner of all of the outstanding
equity securities or similar interests,
(v) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (i) through (iv) above,
(vi) if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, (A) to another corporation, partnership, limited liability company, trust or other
business entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned, or to any investment fund or other entity controlling, controlled by, managing or managed by or under common
control with the undersigned or affiliates of the undersigned (including, for the avoidance of doubt, where the undersigned is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership),
or (B) as part of a transfer or distribution to members, partners, stockholders or other equity holders of the undersigned,
(vii) by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree or separation agreement or similar court order,
(viii) if from a service provider, to the Company upon death, disability or termination of service, in each case, of such service provider,
(ix) as part of a sale of the undersigned’s Lock-Up Securities acquired in the Placement or in open market transactions after the closing date of the Placement,
(x) to the Company in connection with the vesting, settlement, or exercise of restricted stock units, options, warrants or other rights to purchase shares of Common Stock (including, in each case, by
way of “net” or “cashless” exercise), including for the payment of exercise price and tax withholdings and remittance payments due as a result of the vesting, settlement, or exercise of such restricted stock units, options, warrants or rights,
provided that any such shares of Common Stock received upon such exercise, vesting or settlement shall be subject to the terms of this Letter Agreement, and provided further that any such restricted stock units, options, warrants or rights are held
by the undersigned pursuant to an agreement or equity awards granted under a stock incentive plan or other equity award plan, each such agreement or plan which is described in the Company’s filings with the SEC, or
(xi) pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the Board of Directors of the Company and made to all holders of the
Company’s capital stock involving a Change of Control (as defined below) of the Company (for purposes hereof, “Change of Control” shall mean the transfer (whether by tender offer, merger, consolidation or other similar transaction), in one
transaction or a series of related transactions, to a person or group of affiliated persons, of shares of capital stock if, after such transfer, such person or group of affiliated persons would hold at least a majority of the outstanding voting
securities of the Company (or the surviving entity)); provided that in the event that such tender offer, merger, consolidation or other similar transaction is not completed, the undersigned’s Lock-Up Securities shall remain subject to the
provisions of this Letter Agreement;
provided that (A) in the case of any transfer or distribution pursuant to clause (a)(i), (ii), (iii), (iv), (v), (vi) and (vii), such transfer shall not involve a disposition for value and each donee, devisee,
transferee or distributee shall execute and deliver to each of the Placement Agent and Accelmed a lock-up letter in the form of this Letter Agreement, (B) in the case of any transfer or distribution pursuant to clause (a)(i), (iii), (iv), (v), (vi)
and (ix), no filing by any party (donor, donee, devisee, transferor, transferee, distributer or distributee) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other public announcement shall be required or shall be made
voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the Restricted Period referred to above) and (C) in the case of any transfer or distribution pursuant to clause (a)(vii),
(viii) and (x) it shall be a condition to such transfer that no public filing, report or announcement shall be voluntarily made and if any filing under Section 16(a) of the Exchange Act, or other public filing, report or announcement reporting a
reduction in beneficial ownership of shares of Common Stock in connection with such transfer or distribution shall be legally required during the Restricted Period, such filing, report or announcement shall clearly indicate in the footnotes thereto
the nature and conditions of such transfer;
(b) exercise outstanding options, settle restricted stock units or other equity awards or exercise warrants pursuant to plans described in the Company’s filings with the SEC; provided that any
Lock-up Securities received upon such exercise, vesting or settlement shall be subject to the terms of this Letter Agreement;
(c) convert outstanding preferred stock, warrants to acquire preferred stock or convertible securities into shares of Common Stock or warrants to acquire shares of Common Stock; provided that any
such shares of Common Stock or warrants received upon such conversion shall be subject to the terms of this Letter Agreement; and
(d) establish trading or distribution plans pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Lock-Up Securities; provided that (1) such plans do not provide for
the transfer of Lock-Up Securities during the Restricted Period and (2) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the
establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer, sale or other disposition of Lock-Up Securities may be made under such plan during the Restricted Period.
If the undersigned is not a natural person, the undersigned represents and warrants that no single natural person, entity or “group” (within the meaning of Section 13(d)(3) of the Exchange Act)
beneficially owns, directly or indirectly, 50% or more of the common equity interests, or 50% or more of the voting power, in the undersigned.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any
transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any
obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned. This Letter Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S.
federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and
validly delivered and be valid and effective for all purposes.
The undersigned acknowledges and agrees that each of the Placement Agent and Accelmed has not provided any recommendation or investment advice nor has either the Placement Agent or Accelmed solicited
any action from the undersigned with respect to the Placement of the Securities and the undersigned has consulted their own legal, accounting, financial, regulatory and tax advisors to the extent deemed appropriate. The undersigned further
acknowledges and agrees that, although the Placement Agent may be required or choose to provide certain Regulation Best Interest and Form CRS disclosures to you in connection with the Placement, the Placement Agent is not making a recommendation to
you to enter into this Letter Agreement, and nothing set forth in such disclosures is intended to suggest that the Placement Agent is making such a recommendation.
The undersigned shall be automatically be released from all obligations under this Letter Agreement if (A) prior to the execution of definitive securities purchase agreement in connection with the
Placement, either the Company, on the one hand, or each of the Placement Agent and Accelmed, on the other hand, notifies the other in writing prior to the execution of definitive securities purchase agreement in connection with the Placement that it
does not intend to proceed with the Placement or (B) January 31, 2023, in the event the definitive securities purchase agreement in connection with the Placement has not been executed by such date.
This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York.
[Signature page follows]
Very truly yours,
IF A NATURAL PERSON:
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[Signature Page to Lock-up Agreement]
Appendix B
Minerva Surgical, Inc.
4255 Burton Drive
Santa Clara, CA 95054
Attention: David Clapper & Joel Jung
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Re: |
Side Letter and Voting Agreement |
To Whom it May Concern:
This letter agreement (this “Agreement”) is entered into as of December 27, 2022, by and among Minerva Surgical, Inc., a Delaware
corporation (the “Company”), and the undersigned stockholders of the Company, (each a “Stockholder” and collectively, the “Stockholders”).
Each Stockholder agrees to vote, or cause to be voted, all shares of capital stock of the Company owned by such Stockholder or over which such
Stockholder has voting control (the “Shares”), from time to time and at all times, in whatever manner as shall be necessary to ensure that at any special meeting of stockholders held or pursuant to any written consent of the stockholders
of the Company solely to (each a “Matter” and collectively, the “Matters”):
(a) Approve the private placement of securities sold to Accelmed Partners II LP (“Accelmed”) pursuant to the Share Purchase
Agreement (the “Purchase Agreement”), dated on even date herewith, by and among the Company and each of the purchasers set forth therein, in accordance with Nasdaq Listing Rule 5635(b) (the “Transaction”), including any
matter necessary for the consummation of the Transaction and the other transactions contemplated by the Purchase Agreement;
(b) Amend and restate the Company’s Amended and Restated Certificate of Incorporation, dated October 26, 2021, as may be amended from
time to time (the “Charter”), and its Amended and Restated Bylaws, dated October 26, 2021 (the “Bylaws”), as may be amended from time to time, to read in substantially the form of Exhibit A (the “Charter
Amendment”) and Exhibit B (the “Bylaws Amendment”) attached hereto (and together with the Matters set forth in (a), the “Accelmed Transaction Matters”);
(c) Approve an amendment to the Charter to effect a reverse stock split of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), at a reverse stock split ratio ranging from 5:1 to 25:1;
(d) Approve an amendment to the Charter to effect an increase in the Company’s authorized capitalization to 300,000,000 shares of Common
Stock and 15,000,000 shares of Preferred Stock;
(e) Approve an amendment to the Company’s 2021 Equity Incentive Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by an amount of shares not to exceed 20% of the Company’s fully-diluted capitalization at the time of such increase;
(f) Approve an amendment to the Company’s 2021 Employee Stock Purchase Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by an amount of shares not to exceed 2% of the Company’s fully-diluted capitalization at the time of such increase; and
(g) Approve one or more adjournments of any special meeting of stockholders in connection with the matters set forth herein, if necessary
or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, one or more of the other proposals to be voted on at any special meeting of stockholders in
connection with the matters set forth herein.
Each Stockholder hereby represents and warrants follows:
(a) such Stockholder has the full power and authority to execute and deliver this Agreement and to perform such Stockholder’s obligations
hereunder;
(b) this Agreement has been duly executed and delivered by or on behalf of such Stockholder and constitutes a valid and binding agreement
with respect to such Stockholder, enforceable against such Stockholder in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors’ rights and remedies generally;
(c) such Stockholder beneficially owns the number of Shares indicated opposite such Stockholder’s name on Schedule 1 free and clear of
any liens, claims, charges or other encumbrances or restrictions of any kind whatsoever (“Liens”), and has sole or shared, and otherwise unrestricted, voting power with respect to such Shares and none of the Shares are subject to any
voting trust or other agreement, arrangement, or restriction with respect to the voting of the Shares, except as contemplated by this Agreement;
(d) the execution and delivery of this Agreement by such Stockholder does not, and the performance by such Stockholder of his obligations
hereunder and the compliance by such Stockholder with any provisions hereof will not, violate or conflict with, result in a material breach of or constitute a default (or an event that with notice or lapse of time or both would become a material
default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any Shares pursuant to, any agreement, instrument, note, bond, mortgage, contract, lease, license, permit or
other obligation or any order, arbitration award, judgment or decree to which such Stockholder is a party or by which such Stockholder is bound, or any law, statute, rule or regulation to which such Stockholder is subject or, in the event that such
Stockholder is a corporation, partnership, trust or other entity, any bylaw or other organizational document of such Stockholder; and
(e) the execution and delivery of this Agreement by such Stockholder does not, and the performance of this Agreement by such Stockholder
does not and will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority by such Stockholder except for applicable requirements, if any, of the Securities and Exchange
Act of 1934, as amended (the “Exchange Act”), and except where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or delay the performance by such
Stockholder of his obligations under this Agreement in any material respect.
Each Stockholder hereby constitutes and appoints as the proxies of such Stockholder and hereby grants a power of attorney to Ross A. Jaffe, M.D.
and David M. Clapper, with full power of substitution, with respect to the matters set forth herein, and hereby authorizes each of them to represent and vote, if and only if the Stockholder (i) fails to vote, or (ii) attempts to vote (whether by proxy,
in person or by written consent), in a manner which is inconsistent with the terms of this Agreement, all of such Stockholder’s Shares in favor of the Matters or to take any action reasonably necessary to effect intent of this Agreement. Each of the
proxy and power of attorney granted pursuant to this Agreement is given in consideration of the agreements and covenants of the parties to this Agreement in connection with the transactions contemplated by this Agreement and, as such, each is coupled
with an interest and shall be irrevocable unless and until this Agreement terminates or expires pursuant to the provisions below. Each Stockholder hereby revokes any and all previous proxies or powers of attorney with respect to the Shares and shall
not hereafter, unless and until this Agreement terminates or expires pursuant to the provisions below, purport to grant any other proxy or power of attorney with respect to any of the Shares, deposit any of the Shares into a voting trust or enter into
any agreement (other than this Agreement), arrangement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of the Shares, in each case, with respect to any of the
matters set forth herein.
From and after the date hereof until the Expiration Date, and except as set out herein, each Stockholder shall not, directly or indirectly, (a)
sell, assign, transfer, tender, or otherwise dispose of including, without limitation, by the creation of any Liens any Shares, (b) deposit any Shares into a voting trust or enter into a voting agreement or similar arrangement with respect to such
Shares or grant any proxy or power of attorney with respect thereto, (c) take any action that would make any representation or warranty of the Stockholder contained herein untrue or incorrect, or (d) take any action that would have the effect of
preventing or disabling the Stockholder from performing the Stockholder’s obligations under this Agreement.
This Agreement shall terminate on the Expiration Date. As used in this Agreement, the term “Expiration Date” shall mean the earlier to occur of
(a) the date of the approval of each of the Accelmed Transaction Matters at the Company stockholders’ meeting and effecting of each of the Accelmed Transaction Matters and the events and transactions contemplated thereby (including, but not limited to,
the closing of the Transaction, the filing of the Charter Amendment and the Company’s Board of Directors’ adoption of the Bylaws Amendment), (b) such date and time as the Purchase Agreement shall be terminated pursuant to its terms, (c) upon mutual
written agreement of the parties and Accelmed; and (d) the consummation of a merger or consolidation of the Company that is effected (A) for independent business reasons unrelated to extinguishing such rights and (B) for purposes other than (1) the
reincorporation of the Company in a different state or (2) the formation of a holding company that will be owned exclusively by the Company’s stockholders and will hold all of the outstanding shares of capital stock of the Company’s successor.
The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the
terms hereof or was otherwise breached. It is accordingly agreed that the parties shall be entitled to specific relief hereunder, including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof, in any state or federal court in any competent jurisdiction, in addition to any other remedy to which they may be entitled at law or in equity. Any requirements for the securing or
posting of any bond with respect to any such remedy are hereby waived.
The parties hereto agree that Accelmed shall be a third party beneficiary of the rights set forth in the immediately preceding paragraph (the “Specific
Enforcement Rights”), and Accelmed shall have the right to enforce the Specific Enforcement Rights directly to the extent it deems such enforcement necessary or advisable in its sole and absolute discretion. The parties hereto agree that
nothing in this Agreement shall be construed to create a “group” as defined under Section 13(d)(3) of the Exchange Act between Accelmed and any of the parties to this Agreement with respect to the securities of the Company.
All of the covenants and agreements contained in this Agreement shall be binding upon, and inure to the benefit of, the respective parties and
their permitted successors, assigns, heirs, executors, administrators and other legal representatives, as the case may be. This Agreement may not be assigned by any Stockholder without the prior written consent of the Company.
This Agreement shall be governed in all respects by the internal laws of the State of Delaware as applied to agreements entered into among
Delaware residents to be performed entirely within Delaware, without regard to principles of conflicts of law. This Agreement may not be modified or amended or the rights of any party hereunder waived unless such modification, amendment or waiver is
effected by a written instrument expressly modifying, amending or waiving this Agreement or the rights of a party hereunder that is signed by (i) the Company, (ii) each of the Stockholders and (iii) Accelmed. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile copies of signed signature pages will be deemed binding originals. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
(Remainder of Page Intentionally Left Blank)
Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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MINERVA SURGICAL, INC.: |
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By: |
/s/ David M. Clapper
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David M. Clapper |
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Chief Executive Officer |
Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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New Enterprise Associates 13, L.P. |
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By: |
/s/ Louis Citron
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Name: Louis Citron |
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Title: Chief Administrative Officer and Chief Legal Officer |
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NEA Partners 13, L.P. |
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By: |
/s/ Louis Citron
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Name: Louis Citron |
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Title: Chief Administrative Officer and Chief Legal Officer |
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NEA 13 GP, LTD. |
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By: |
/s/ Louis Citron
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Name: Louis Citron |
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Title: Chief Administrative Officer and Chief Legal Officer |
Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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CVF, LLC |
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By: |
/s/ Rick Robb
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Name: Rick Robb |
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Title: |
Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Versant Venture Capital IV, L.P.
By: Versant Ventures IV, LLC
Its: General Partner
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By: |
/s/ Ross A. Jaffe
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Name: Ross A. Jaffe |
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Title: |
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Versant Side Fund IV, L.P.
By: Versant Ventures IV, LLC
Its: General Partner
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By: |
/s/ Ross A. Jaffe
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Name: Ross A. Jaffe |
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Title: |
Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Vivo Ventures Fund VII, L.P.
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By: |
/s/ Frank Kung
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Name: Frank Kung |
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Title: |
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Vivo Ventures VII Affiliates Fund, L.P.
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By: |
/s/ Frank Kung
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Name: Frank Kung |
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Title: |
Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Boston Scientific Corporation |
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By: |
/s/ Michael Ryan
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Name: Michael Ryan |
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Title: |
Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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The Jaffe Family Trust dated 7/9/91 |
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By: |
/s/ Ross A. Jaffe
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Name: Ross A. Jaffe |
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Title: Trustee |
Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Jill D. Anderson |
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By: |
/s/ Jill D. Anderson
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Ali Behbahani, M.D. |
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By: |
/s/ Ali Behbahani, M.D.
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Catherine Coste |
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By: |
/s/ Catherine Coste
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Ross A. Jaffe, M.D. |
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By: |
/s/ Ross A. Jaffe, M.D.
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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David M. Renzi |
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By: |
/s/ David M. Renzi
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Niquette Hunt |
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By: |
/s/ Niquette Hunt
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Derrick Sung |
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By: |
/s/ Derrick Sung
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Thomas Pendlebury |
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By: |
/s/ Thomas Pendlebury
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Eugene V. Skalnyi, M.D. |
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By: |
/s/ Eugene V. Skalnyi, M.D.
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Dominique J. Filloux |
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By: |
/s/ Dominique J. Filloux
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Joel R. Jung |
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By: |
/s/ Joel R. Jung
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Wendy Bowman |
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By: |
/s/ Wendy Bowman
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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Joanne Long |
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By: |
/s/ Joanne Long
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Please acknowledge your agreement with the terms and conditions contained in this Agreement by countersigning below.
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STOCKHOLDER: |
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David M. Clapper |
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By: |
/s/ David M. Clapper
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Appendix C
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
MINERVA SURGICAL, INC.
a Delaware corporation
Minerva Surgical, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”), does hereby certify
as follows:
A. The original Certificate of Incorporation of the Company was filed
with the Secretary of State of the State of Delaware on November 3, 2008.
B. This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”) by the Board of Directors of the Company (the “Board of Directors”) and has been duly approved by the written consent of the stockholders of the Company in accordance with Section 228211 of the DGCL.
C. The text of the Amended and Restated Certificate of Incorporation is
hereby amended and restated in its entirety to read as follows:
ARTICLE I
The name of the Company is Minerva Surgical, Inc.
ARTICLE II
The address of the Company’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle,
Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity for which
corporations may be organized under the DGCL.
ARTICLE IV
Section 1. This Company is authorized to
issue two classes of stock, to be designated, respectively, Common Stock and Preferred Stock. The total number of shares of stock that the Company shall have authority to issue is 105,000,000315,000,000 shares, of which 100,000,000300,000,000 shares are Common Stock, $0.001 par value per share, and 5,000,00015,000,000 shares are Preferred Stock, $0.001 par value per share.
Section 2. Each share of Common Stock outstanding as of the applicable
record date shall entitle the holder thereof to one (1) vote on any matter submitted to a vote at a meeting of stockholders.
Section 3. The Preferred Stock may be issued from time to time in one or
more series pursuant to a resolution or resolutions providing for such issue duly adopted by the Board of Directors (authority to do so being hereby expressly vested in the Board of Directors). The
Board of Directors is further authorized, subject to and
approved by the affirmative vote of the holders of a majority of the voting power of all the then-outstanding shares
of capital stock. Subject to the foregoing and limitations prescribed by law, the Board of Directors is further
authorized to fix by resolution or resolutions the designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof, of any series of Preferred Stock, including, without limitation, authority to
fix by resolution or resolutions the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), redemption price or prices, and liquidation preferences of any such series, and
the number of shares constituting any such series and the designation thereof, or any of the foregoing. The Board of Directors is further authorized to increase (but not above the total number of authorized shares of the class) or decrease (but not
below the number of shares of any such series then outstanding) the number of shares of any series, subject to the powers, preferences and rights, and the qualifications, limitations and restrictions thereof stated in this Amended and Restated
Certificate of Incorporation or the resolution of the Board of Directors originally fixing the number of shares of such series (as approved by the requisite stockholders).
Except as may be otherwise specified by the terms of any series of Preferred Stock, if the number of shares of any series of Preferred Stock is so decreased, then the Company shall take all such steps as are necessary to cause the shares constituting
such decrease to resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.
Section 4. Except as otherwise required by law or provided in this Amended
and Restated Certificate of Incorporation, holders of Common Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of
Preferred Stock) 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 as a class with the holders of one or more other such series, to
vote thereon by law or pursuant to this Amended and Restated Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock).
Section 5. The number of authorized shares of Preferred Stock or Common
Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then-outstanding shares of capital stock of the Company entitled to
vote thereon, without a separate vote of the holders of the class or classes the number of authorized shares of which are being increased or decreased, unless a vote of any holders of one or more series of Preferred Stock is required pursuant to the
terms of any certificate of designation relating to any series of Preferred Stock, irrespective of the provisions of Section 242(b)(2) of the DGCL.
ARTICLE V
Section 1. Subject to the rights of holders of Preferred Stock, the number of
directors that constitutes the entire Board of Directors of the Company shall be fixed only by resolution of the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board. For the purposes of this Amended and Restated
Certificate of Incorporation, the term “Whole Board” shall mean the total number of authorized directorships whether or not there exist any vacancies or other unfilled seats in previously authorized
directorships. At each annual meeting of stockholders, directors of the Company shall be elected to hold office until the expiration of the term for which they are elected next annual meeting of stockholders and until their successors have been duly elected and qualified or until their earlier
resignation or removal; except that if any such meeting shall not be so held, such election shall take place at a stockholders’ meeting called and held in accordance with the Bylaws
and DGCL.
Section 2. From and after the effectiveness of this Amended and Restated Certificate of
Incorporation, the directors of the Company (other than any who may be elected by holders of Preferred Stock under specified circumstances) shall be divided into three classes as nearly equal in size as is practicable, hereby designated Class I,
Class II and Class III. Directors already in office shall be assigned to each class at the time such classification becomes effective in accordance with a resolution or resolutions adopted by the Board of Directors. At the first annual meeting of stockholders following the date hereof, the term of office of the Class I directors shall expire and Class I directors shall be elected
for a full term of three years. At the second annual meeting of stockholders following the date hereof, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third
annual meeting of stockholders following the date hereof, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders,
directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting. If the number of directors is changed, any newly created directorships or decrease in directorships shall be
so apportioned hereafter among the classes as to make all classes as nearly equal in number as is practicable, provided that no decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent
director.
ARTICLE VI
Section 1. From and after the
effectiveness of this Amended and Restated Certificate of Incorporation, only for so long as the Board of Directors is classified and subjectSubject
to the rights of holders of Preferred Stock, any director or the entire Board of Directors may be removed from office at any time, but only for cause, and only by the affirmative vote of
the holders of at least a majority of the voting power of the issued and outstanding capital stock of the Company entitled to vote in the election of directors.
Section 2. Except as otherwise provided for or fixed by or pursuant to the
provisions of ARTICLE IV hereof in relation to the rights of the holders of Preferred Stock to elect directors under specified circumstances or except as otherwise provided by resolution of a majority of the Whole Board, newly created directorships
resulting from any increase in the number of directors, created in accordance with the Bylaws of the Company, and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled only
by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director, and not by the stockholders. A person so elected by the Board of Directors to
fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have been chosenannual meeting of stockholders and until his or her successor shall have been duly elected and
qualified, or until such director’s earlier death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
ARTICLE VII
Section 1. The Company is to have perpetual existence.
Section 2. The business and affairs of the Company shall be managed by or
under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by this Amended and Restated Certificate of Incorporation or the Bylaws of the Company, the directors are hereby
empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Company.
Section 3. In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to adopt, alter, amend or repeal the Bylaws of the Company. The affirmative vote of at least a majority of the Whole Board shall be required in order for the Board of Directors to adopt, amend,
alter or repeal the Company’s Bylaws. The Company’s Bylaws may also be adopted, amended, altered or repealed by the stockholders of the Company. Notwithstanding the above or any other provision of this Amended and Restated Certificate of Incorporation,
the Bylaws of the Company may not be amended, altered or repealed except in accordance with the provisions of the Bylaws relating to amendments to the Bylaws. No Bylaw hereafter legally adopted, amended, altered or repealed shall invalidate any prior
act of the directors or officers of the Company that would have been valid if such Bylaw had not been adopted, amended, altered or repealed.
Section 4. The election of directors need not be by written ballot
unless the Bylaws of the Company shall so provide.
Section 5. No stockholder will be permitted to cumulate votes at any
election of directors.
ARTICLE VIII
Section 1. From
and after the closing of a firm commitment underwritten initial public offering of securities of the Company pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, and subject to the rights of holders of Preferred Stock, any actionAny action, including any vote
required or permitted to be taken by the stockholders of the Company must be effected at a duly called
annual or special meeting of stockholders of the Company and may not be effected by any consent in writing by such stockholders., may be taken without a meeting, without prior notice and without a vote, if a written consent setting forth the action so taken is signed by the holders of outstanding shares of capital
stock entitled to be voted with respect to the subject matter thereof 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.
Section 2. Subject to the terms of any series of
Preferred Stock, special meetings of stockholders of the Company may be called only by the Chairperson of the Board of Directors, the Chief Executive Officer, the President or, the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, but a special meeting may not be called by any other
person or persons and any power of stockholders to call a special meeting of stockholders is specifically denied or by written notice to the Company signed by the
holders of a majority of all the votes entitled to be cast on such issue proposed therein. Only such business
shall be considered at a special meeting of stockholders as shall have been stated in the notice for such meeting.
Section 3. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of the stockholders of the Company shall be given in the manner and to the extent provided in the Bylaws of the Company.
ARTICLE IX
Section 1. To the fullest extent permitted by the DGCL as the same exists
or as may hereafter be amended from time to time, a director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL is amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then the liability of a director of the Company shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Section 2. Subject to any provisions in the Bylaws of the Company related
to indemnification of directors of the Company, the Company shall indemnify, to the fullest extent permitted by applicable law, any director of the Company who was or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she is or was a director of the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding. The Company shall be required to indemnify a person in connection with a Proceeding (or part thereof) initiated by such person only if the
Proceeding (or part thereof) was authorized by the Board of Directors.
Section 3. The Company shall have the power to indemnify, to the extent
permitted by applicable law, any officer, employee or agent of the Company who was or is a party or is threatened to be made a party to any Proceeding by reason of the fact that he or she is or was a director, officer, employee or agent of the Company
or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding.
Section 4. Neither any amendment nor repeal of any Section of this ARTICLE
IX, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation or the Bylaws of the Company inconsistent with this ARTICLE IX, shall eliminate or reduce the effect of this ARTICLE IX in respect of any matter occurring,
or any Proceeding accruing or arising or that, but for this ARTICLE IX, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.
ARTICLE X
Meetings of stockholders may be held within or outside of the State of Delaware, as the Bylaws may provide. The books of the Company may be kept
(subject to any provision of applicable law) outside of the State of Delaware at such place or places or in such manner or manners as may be designated from time to time by the Board of Directors or in the Bylaws of the Company.
ARTICLE XI
The Company reserves the right to amend or repeal any provision contained in this Amended and Restated Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon stockholders are granted subject to this reservation; provided, however, that notwithstanding any other provision of this Amended
and Restated Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote, the Board of Directors acting pursuant to a resolution adopted by a majority
of the Whole Board and the affirmative vote of 66 2/3% of the voting power of the then outstanding voting securities of the Company, voting together as a single class, shall be required for the amendment, repeal or modification of the provisions of Section 3 of ARTICLE IV, Section 2 of ARTICLE V, Section 1 of
ARTICLE VI, Section 2 of ARTICLE VI, Section 5 of ARTICLE VII, Section 1 of ARTICLE VIII, Section 2 of ARTICLE VIII, Section 3 of ARTICLE VIII, or this ARTICLE XI of this Amended and Restated Certificate of Incorporation.
IN WITNESS WHEREOF, Minerva Surgical, Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by the President and
Chief Executive Officer of the Company on this 26th[_____] day of October 2021[________] 2023.
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By: |
/s/ David Clapper
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David Clapper[___________] |
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President and Chief Executive Officer |
Appendix D
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MINERVA SURGICAL, INC.
Minerva Surgical, Inc., a Delaware corporation (the “Corporation”), hereby certifies
as follows:
1. The name of the Corporation is Minerva Surgical, Inc. The
Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on November 3, 2008.
2. The terms and provisions of this Certificate of Amendment of
Amended and Restated Certificate of Incorporation have been duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware (the “DGCL”) by the Board of Directors of the Company (the “Board of Directors”)
and have been duly approved by the consent of the stockholders of the Company in accordance with Section 211 of the DGCL.
3. The following amendment to the Amended and Restated Certificate of
Incorporation shall be effective on [________], 2023, and the effective time shall be 12:01 a.m., Eastern Time.
4. Section 1 of Article IV of the Amended and Restated Certificate of
Incorporation of the Corporation is hereby amended and restated in its entirety to read as follows:
“Section 1. Effectively immediately on [_________], 2023, at 12:01
a.m., Eastern Time, each [____] ([__]) outstanding shares of Common Stock are hereby exchanged and combined, automatically and without further action, into one (1) share of Common Stock, respectively (the “Reverse Stock Split”). The Reverse
Stock Split shall also apply to any outstanding securities or rights convertible into, or exchangeable or exercisable for, Common Stock of the Corporation. The Reverse Stock Split shall be effected on a certificate-by-certificate basis and no
fractional shares shall be issued upon the exchange and combination. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay an amount of cash equal to the product of (i) the fractional share to
which the holder would otherwise be entitled and (ii) the closing price per share on the trading day immediately preceding the effective time of the Reverse Stock Split (as adjusted to give effect to the Reverse Stock Split), without interest. All
other rights, preferences and privileges of the Company’s Common Stock shall be adjusted to reflect the Reverse Stock Split pursuant to the terms of the Amended and Restated Certificate of Incorporation in existence as of immediately prior to the
filing of the Certificate of Amendment.
After giving effect to the Reverse Stock Split, the total number of
shares of all classes of capital stock that the Corporation is authorized to issue is 315,000,000 shares, consisting of 300,000,000 shares of Common Stock, having a par value of $0.001 (the “Common Stock”), and 15,000,000 shares of Preferred
Stock, having a par value of $0.001 (the “Preferred Stock”).”
[signature page follows]
IN WITNESS WHEREOF, this Certificate of Amendment of Amended and
Restated Certificate of Incorporation has been duly executed by an authorized officer of the Corporation’s on [_______], 2023.
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MINERVA SURGICAL, INC. |
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[_________] |
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President and Chief Executive Officer |
[Certificate of Amendment to Amended and Restated Certificate of Incorporation]
Appendix E
AMENDED AND RESTATED BYLAWS OF
MINERVA SURGICAL, INC.
(effective as of the
closing of the Company’s initial public offering, on October 26, 2021[__________], 2023)
TABLE OF CONTENTS
Page
ARTICLE I - CORPORATE OFFICES |
E-1 |
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1.1 |
REGISTERED OFFICE |
E-1 |
1.2 |
OTHER OFFICES |
E-1 |
|
|
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ARTICLE II - MEETINGS OF STOCKHOLDERS |
E-1 |
|
|
2.1 |
PLACE OF MEETINGS |
E-1 |
2.2 |
ANNUAL MEETING |
E-1 |
2.3 |
SPECIAL MEETING |
E-1 |
2.4 |
ADVANCE NOTICE PROCEDURES |
E-2 |
2.5 |
NOTICE OF STOCKHOLDERS’ MEETINGS |
E-8 |
2.6 |
QUORUM |
E-8 |
2.7 |
ADJOURNED MEETING; NOTICE |
E-8 |
2.8 |
CONDUCT OF BUSINESS |
E-9 |
2.9 |
VOTING |
E-9 |
2.10 |
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING |
E-9 |
2.11 |
RECORD DATES |
E-10 |
2.12 |
PROXIES |
E-11 |
2.13 |
LIST OF STOCKHOLDERS ENTITLED TO VOTE |
E-11 |
2.14 |
INSPECTORS OF ELECTION |
E-11 |
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ARTICLE III - DIRECTORS |
E-12 |
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3.1 |
POWERS |
E-12 |
3.2 |
NUMBER OF DIRECTORS |
E-12 |
3.3 |
ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS |
E-12 |
3.4 |
RESIGNATION AND VACANCIES |
E-12 |
3.5 |
PLACE OF MEETINGS; MEETINGS BY TELEPHONE |
E-13 |
3.6 |
REGULAR MEETINGS |
E-13 |
3.7 |
SPECIAL MEETINGS; NOTICE |
E-13 |
3.8 |
QUORUM; VOTING |
E-14 |
3.9 |
BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING |
E-14 |
3.10 |
FEES AND COMPENSATION OF DIRECTORS |
E-14 |
3.11 |
REMOVAL OF DIRECTORS |
E-15 |
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ARTICLE IV - COMMITTEES |
E-15 |
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4.1 |
COMMITTEES OF DIRECTORS |
E-15 |
4.2 |
COMMITTEE MINUTES |
E-15 |
4.3 |
MEETINGS AND ACTION OF COMMITTEES |
E-15 |
4.4 |
SUBCOMMITTEES |
E-16 |
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ARTICLE V - OFFICERS |
E-16 |
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5.1 |
OFFICERS |
E-16 |
5.2 |
APPOINTMENT OF OFFICERS |
E-16 |
5.3 |
SUBORDINATE OFFICERS |
E-16 |
TABLE OF CONTENTS
(continued)
Page
5.4 |
REMOVAL AND RESIGNATION OF OFFICERS |
E-17 |
5.5 |
VACANCIES IN OFFICES |
E-17 |
5.6 |
REPRESENTATION OF SECURITIES OF OTHER ENTITIES |
E-17 |
5.7 |
AUTHORITY AND DUTIES OF OFFICERS |
E-17 |
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ARTICLE VI - STOCK |
E-17 |
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6.1 |
STOCK CERTIFICATES; PARTLY PAID SHARES |
E-17 |
6.2 |
SPECIAL DESIGNATION ON CERTIFICATES |
E-18 |
6.3 |
LOST CERTIFICATES |
E-18 |
6.4 |
DIVIDENDS |
E-19 |
6.5 |
TRANSFER OF STOCK |
E-19 |
6.6 |
STOCK TRANSFER AGREEMENTS |
E-19 |
6.7 |
REGISTERED STOCKHOLDERS |
E-19 |
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ARTICLE VII - MANNER OF GIVING NOTICE AND WAIVER |
E-19 |
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7.1 |
NOTICE OF STOCKHOLDERS’ MEETINGS |
E-19 |
7.2 |
NOTICE TO STOCKHOLDERS SHARING AN ADDRESS |
E-19 |
7.3 |
NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL |
E-20 |
7.4 |
WAIVER OF NOTICE |
E-20 |
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ARTICLE VIII - INDEMNIFICATION |
E-20 |
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8.1 |
Indemnification of Directors and Officers in Third Party Proceedings |
E-20 |
8.2 |
Indemnification of Directors and Officers in Actions by or in the Right of the COMPANY |
E-21 |
8.3 |
Successful Defense |
E-21 |
8.4 |
Indemnification of Others |
E-21 |
8.5 |
Advanced Payment of Expenses |
E-21 |
8.6 |
Limitation on Indemnification |
E-22 |
8.7 |
Determination; Claim |
E-23 |
8.8 |
Non-Exclusivity of Rights |
E-23 |
8.9 |
Insurance |
E-23 |
8.10 |
Survival |
E-23 |
8.11 |
Effect of Repeal or Modification |
E-23 |
8.12 |
Certain Definitions |
E-24 |
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ARTICLE IX - GENERAL MATTERS |
E-24 |
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9.1 |
EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS |
E-24 |
9.2 |
FISCAL YEAR |
E-24 |
9.3 |
SEAL |
E-24 |
9.4 |
CONSTRUCTION; DEFINITIONS |
E-25 |
9.5 |
FORUM SELECTION |
E-25 |
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ARTICLE X - AMENDMENTS |
E-25 |
BYLAWS OF MINERVA SURGICAL, INC.
ARTICLE I - CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of Minerva Surgical, Inc. (the “Company”)
shall be fixed in the Company’s certificate of incorporation, as the same may be amended from time to time.
1.2 OTHER OFFICES
The Company may at any time establish other offices.
ARTICLE II - MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at a place, if any, within or
outside the State of Delaware, determined by the board of directors of the Company (the “Board of Directors”). The Board of Directors may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may
instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the “DGCL”). In the absence of any such designation or determination, stockholders’ meetings shall be held at
the Company’s principal executive office.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year. The Board of
Directors shall designate the date and time of the annual meeting. At the annual meeting, directors shall be elected and any other proper business, brought in accordance with Section 2.4 of these bylaws, may be transacted. The Board of Directors
acting pursuant to a resolution adopted by a majority of the Whole Board may cancel, postpone or reschedule any previously scheduled annual meeting at any time, before or after the notice for such meeting has been sent to the stockholders. For the
purposes of these bylaws, the term “Whole Board” shall mean the total number of authorized directorships whether or not there exist any vacancies or other unfilled seats in previously authorized directorships.
2.3 SPECIAL MEETING
(a) A special meeting of the stockholders, other
than as required by statute, may be called at any time by (i) the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, (ii) the chairperson of the Board of Directors, (iii) the chief executive officer or, (iv) the president, but a special meeting may not be called by any other person
or persons and any power of stockholders to call a special meeting of stockholders is specifically denied or (v) written notice to the Company signed by the holders of a majority of all the votes entitled to be cast on such issue proposed therein. The Board of Directors acting
pursuant to a resolution adopted by a majority of the Whole Board may cancel, postpone or reschedule any previously scheduled special meeting at any time, before or after the notice for such meeting has been sent to the stockholders.
(b) The notice of a special meeting shall include the purpose
for which the meeting is called. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting by or at the direction of a majority of the Whole Board, the chairperson of the Board of
Directors, the chief executive officer or, the president or the stockholders having called such meeting pursuant to Section 2.3(a). Nothing contained in this Section 2.3(b) shall be construed as limiting, fixing or affecting the time when a meeting of
stockholders called by action of the Board of Directors may be held.
2.4 ADVANCE NOTICE PROCEDURES
(a) Annual Meetings of Stockholders.
(i) Nominations of persons for election to the Board of
Directors or the proposal of other business to be transacted by the stockholders at an annual meeting of stockholders may be made only (1) pursuant to the Company’s notice of meeting (or any supplement thereto); (2) by or at the direction of the
Board of Directors; (3) as may be provided in the certificate of designations for any class or series of preferred stock; or (4) by any stockholder of the Company who (A) is a stockholder of record at the time of giving of the notice contemplated by
Section 2.4(a)(ii); (B) is a stockholder of record on the record date for the determination of stockholders entitled to notice of the annual meeting; (C) is a stockholder of record on the record date for the determination of stockholders entitled to
vote at the annual meeting; (D) is a stockholder of record at the time of the annual meeting; and (E) complies with the procedures set forth in this Section 2.4(a).
(ii) For nominations or other business to be properly brought
before an annual meeting of stockholders by a stockholder pursuant to clause (4) of Section 2.4(a)(i), the stockholder must have given timely notice in writing to the secretary and any such nomination or proposed business must constitute a proper
matter for stockholder action. To be timely, a stockholder’s notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day and no later than 5:00 p.m., local time,
on the 90th day prior to the day of the first anniversary of the preceding year’s annual meeting of stockholders. However, if no annual meeting of stockholders was held in the preceding year, or if the date of the applicable annual meeting has been
changed by more than 25 days from the first anniversary of the preceding year’s annual meeting, then to be timely such notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time,
on the 120th day prior to the day of the annual meeting and no later than 5:00 p.m., local time, on the 10th day following the day on which public announcement of the date of the annual meeting was first made by the Company. In no event will the
adjournment, rescheduling or postponement of any annual meeting, or any announcement thereof, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. If the number of directors to be elected
to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors at least 10 days before the last day that a stockholder may deliver a notice
of nomination pursuant to the foregoing provisions, then a stockholder’s notice required by this Section 2.4(a)(ii) will also be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by
the secretary at the principal executive offices of the Company no later than 5:00 p.m., local time, on the 10th day following the day on which such public announcement is first made. “Public announcement” means disclosure in a press release
reported by a national news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (as amended and inclusive of rules and
regulations thereunder, the “1934 Act”).
(iii) A stockholder’s notice to the secretary must set forth:
(1) as to each person whom the stockholder proposes to nominate
for election as a director:
(A) such person’s name, age, business address, residence address
and principal occupation or employment; the class and number of shares of the Company that are held of record or are beneficially owned by such person and a description of any Derivative Instruments (defined below) held or beneficially owned thereby
or of any other agreement, arrangement or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss to, or to manage the risk or benefit of share price changes for, or to
increase or decrease the voting power of such person; and all information relating to such person that is required to be disclosed in solicitations of proxies for the contested election of directors, or is otherwise required, in each case pursuant to
the Section 14 of the 1934 Act;
(B) such person’s written consent to being named in such
stockholder’s proxy statement as a nominee of such stockholder and to serving as a director of the Company if elected;
(C) a reasonably detailed description of any direct or indirect
compensatory, payment, indemnification or other financial agreement, arrangement or understanding that such person has, or has had within the past three years, with any person or entity other than the Company (including the amount of any payment or
payments received or receivable thereunder), in each case in connection with candidacy or service as a director of the Company (a “Third-Party Compensation Arrangement”); and
(D) a description of any other material relationships between
such person and such person’s respective affiliates and associates, or others acting in concert with them, on the one hand, and such stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made, and their
respective affiliates and associates, or others acting in concert with them, on the other hand;
(2) as to any other business that the stockholder proposes to
bring before the annual meeting:
(A) a brief description of the business desired to be brought
before the annual meeting;
(B) the text of the proposal or business (including the text of
any resolutions proposed for consideration and, if applicable, the text of any proposed amendment to these bylaws or the Company’s certificate of incorporation);
(C) the reasons for conducting such business at the annual
meeting;
(D) any material interest in such business of such stockholder
giving the notice and the beneficial owner, if any, on whose behalf the proposal is made, and their respective affiliates and associates, or others acting in concert with them; and
(E) a description of all agreements, arrangements and
understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made, and their respective affiliates or associates or others acting in concert with them, and any other person or persons (including their
names) in connection with the proposal of such business by such stockholder; and
(3) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made:
(A) the name and address of such stockholder (as they appear on
the Company’s books), of such beneficial owner and of their respective affiliates or associates or others acting in concert with them;
(B) for each class or series, the number of shares of stock of
the Company that are, directly or indirectly, held of record or are beneficially owned by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them;
(C) a description of any agreement, arrangement or
understanding between such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, and any other person or persons (including, in each case, their names) in connection with the proposal
of such nomination or other business;
(D) a description of any agreement, arrangement or
understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions
and borrowed or loaned shares) that has been entered into by or on behalf of such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, with respect to the Company’s securities (any of
the foregoing, a “Derivative Instrument”), or any other agreement, arrangement or understanding that has been made the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for or increase or
decrease the voting power of such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, with respect to the Company’s securities;
(E) any rights to dividends on the Company’s securities owned
beneficially by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, that are separated or separable from the underlying security;
(F) any proportionate interest in the Company’s securities or
Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them, is a general partner or,
directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership;
(G) any performance-related fees (other than an asset-based fee)
that such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with, them is entitled to based on any increase or decrease in the value of the Company’s securities or Derivative Instruments,
including, without limitation, any such interests held by members of the immediate family of such persons sharing the same household;
(H) any significant equity interests or any Derivative
Instruments in any principal competitor of the Company that are held by such stockholder, such beneficial owner or their respective affiliates or associates or others acting in concert with them;
(I) any direct or indirect interest of such stockholder, such
beneficial owner or their respective affiliates or associates or others acting in concert with them, in any contract with the Company, any affiliate of the Company or any principal competitor of the Company (in each case, including any employment
agreement, collective bargaining agreement or consulting agreement);
(J) a representation and undertaking that the stockholder is a
holder of record of stock of the Company as of the date of submission of the stockholder’s notice and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting;
(K) a representation and undertaking that such stockholder or
any such beneficial owner intends, or is part of a group that intends, to (x) deliver a proxy statement or form of proxy to holders of at least the percentage of the voting power of the Company’s then-outstanding stock required to approve or adopt
the proposal or to elect each such nominee; or (y) otherwise solicit proxies from stockholders in support of such proposal or nomination;
(L) any other information relating to such stockholder, such
beneficial owner, or their respective affiliates or associates or others acting in concert with them, or director nominee or proposed business that, in each case, would be required to be disclosed in a proxy statement or other filing required to be
made in connection with the solicitation of proxies in support of such nominee (in a contested election of directors) or proposal pursuant to Section 14 of the 1934 Act; and
(M) such other information relating to any proposed item of
business as the Company may reasonably require to determine whether such proposed item of business is a proper matter for stockholder action.
(iv) In addition to the requirements of this Section 2.4, to be
timely, a stockholder’s notice (and any additional information submitted to the Company in connection therewith) must further be updated and supplemented (1) if necessary, so that the information provided or required to be provided in such notice is
true and correct as of the record date(s) for determining the stockholders entitled to notice of, and to vote at, the meeting and as of the date that is 10 business days prior to the meeting or any adjournment, rescheduling or postponement thereof
and (2) to provide any additional information that the Company may reasonably request. Such update and supplement or additional information, if applicable, must be received by the secretary at the principal executive offices of the Company, in the
case of a request for additional information, promptly following a request therefor, which response must be delivered not later than such reasonable time as is specified in any such request from the Company or, in the case of any other update or
supplement of any information, not later than five business days after the record date(s) for the meeting (in the case of any update and supplement required to be made as of the record date(s)), and not later than eight business days prior to the
date for the meeting or any adjournment, rescheduling or postponement thereof (in the case of the update and supplement required to be made as of 10 business days prior to the meeting or any adjournment, rescheduling or postponement thereof). The
failure to timely provide such update, supplement or additional information shall result in the nomination or proposal no longer being eligible for consideration at the meeting.
(b) Special Meetings of Stockholders. Except to the
extent required by the DGCL, and subject to Section 2.3(a), special meetings of stockholders may be called only in accordance with the Company’s certificate of incorporation and these bylaws. Only such business will be conducted at a special meeting
of stockholders as has been brought before the special meeting pursuant to the Company’s notice of meeting. If the election of directors is included as business to be brought before a special meeting in the Company’s notice of meeting, then
nominations of persons for election to the Board of Directors at such special meeting may be made by any stockholder who (i) is a stockholder of record at the time of giving of the notice contemplated by this Section 2.4(b); (ii) is a stockholder of
record on the record date for the determination of stockholders entitled to notice of the special meeting; (iii) is a stockholder of record on the record date for the determination of stockholders entitled to vote at the special meeting; (iv) is a
stockholder of record at the time of the special meeting; and (v) complies with the procedures set forth in this Section 2.4(b). For nominations to be properly brought by a stockholder before a special meeting pursuant to this Section 2.4(b), the
stockholder’s notice must be received by the secretary at the principal executive offices of the Company no earlier than 8:00 a.m., local time, on the 120th day prior to the day of the special meeting and no later than 5:00 p.m., local time, on the
10th day following the day on which public announcement of the date of the special meeting was first made. In no event will any adjournment, rescheduling or postponement of a special meeting or the announcement thereof commence a new time period (or
extend any time period) for the giving of a stockholder’s notice. A stockholder’s notice to the Secretary must comply with the applicable notice requirements of Section 2.4(a)(iii).
(c) Other Requirements.
(i) To be eligible to be a nominee by any stockholder for
election as a director of the Company, the proposed nominee must provide to the secretary, in accordance with the applicable time periods prescribed for delivery of notice under Section 2.4(a)(ii) or Section 2.4(b):
(1) a signed and completed written questionnaire (in the form
provided by the secretary at the written request of the nominating stockholder, which form will be provided by the secretary within 10 days of receiving such request) containing information regarding such nominee’s background and qualifications and
such other information as may reasonably be required by the Company to determine the eligibility of such nominee to serve as a director of the Company or to serve as an independent director of the Company;
(2) a written representation and undertaking that, unless
previously disclosed to the Company, such nominee is not, and will not become, a party to any voting agreement, arrangement, commitment, assurance or understanding with any person or entity as to how such nominee, if elected as a director, will vote
on any issue;
(3) a written representation and undertaking that, unless
previously disclosed to the Company, such nominee is not, and will not become, a party to any Third-Party Compensation Arrangement;
(4) a written representation and undertaking that, if elected as
a director, such nominee would be in compliance, and will continue to comply, with the Company’s corporate governance guidelines as disclosed on the Company’s website, as amended from time to time; and
(5) a written representation and undertaking that such nominee,
if elected, intends to serve a full term on the Board of Directors.
(ii) At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director must furnish to the secretary the information that is required to be set forth in a stockholder’s notice of nomination that pertains to such nominee.
(iii) No person will be eligible to be nominated by a
stockholder for election as a director of the Company unless nominated in accordance with the procedures set forth in this Section 2.4. No business proposed by a stockholder will be conducted at a stockholder meeting except in accordance with this
Section 2.4.
(iv) The chairperson of the applicable meeting of stockholders
will, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these bylaws or that business was not properly brought before the meeting. If the chairperson of the
meeting should so determine, then the chairperson of the meeting will so declare to the meeting and the defective nomination will be disregarded or such business will not be transacted, as the case may be.
(v) Notwithstanding anything to the contrary in this
Section 2.4, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear in person at the meeting to present a nomination or other proposed business, such nomination will be disregarded or
such proposed business will not be transacted, as the case may be, notwithstanding that proxies in respect of such nomination or business may have been received by the Company and counted for purposes of determining a quorum. For purposes of this
Section 2.4, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic
transmission delivered by such stockholder to act for such stockholder as proxy at the meeting, and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the
meeting.
(vi) Without limiting this Section 2.4, a stockholder must also
comply with all applicable requirements of the 1934 Act with respect to the matters set forth in this Section 2.4, it being understood that (1) any references in these bylaws to the 1934 Act are not intended to, and will not, limit any requirements
applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.4; and (2) compliance with clause (4) of Section 2.4(a)(i) and with Section 2.4(b) are the exclusive means for a stockholder to make
nominations or submit other business (other than as provided in Section 2.4(c)(vii)).
(vii) Notwithstanding anything to the contrary in this
Section 2.4, the notice requirements set forth in these bylaws with respect to the proposal of any business pursuant to this Section 2.4 will be deemed to be satisfied by a stockholder if (1) such stockholder has submitted a proposal to the Company
in compliance with Rule 14a-8 under the 1934 Act; and (2) such stockholder’s proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for the meeting of stockholders. Subject to Rule 14a-8 and other
applicable rules and regulations under the 1934 Act, nothing in these bylaws will be construed to permit any stockholder, or give any stockholder the right, to include or have disseminated or described in the Company’s proxy statement any nomination
of a director or any other business proposal.
2.5 NOTICE OF STOCKHOLDERS’ MEETINGS
Whenever stockholders are required or permitted to take any action at a
meeting, a notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at
such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called. Except as otherwise provided in the DGCL, the certificate of incorporation or these bylaws, the notice of any meeting of stockholders shall be given not less than 10 nor more than 60 days before
the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting.
2.6 QUORUM
The holders of a majority of the voting power of the capital stock of
the Company issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. Where a separate vote by a class or series or classes
or series is required, a majority of the voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on
that matter, except as otherwise provided by law, the certificate of incorporation or these bylaws.
If, however, such quorum is not present or represented at any meeting of
the stockholders, then either (a) the chairperson of the meeting, or (b) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the original meeting.
2.7 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these
bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at
such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30
days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of
Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 213(a) of the DGCL and Section 2.11 of these bylaws, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote
at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
2.8 CONDUCT OF BUSINESS
The chairperson of any meeting of stockholders shall determine the order
of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business and discussion as seem to the chairperson in order. The chairperson of any meeting of stockholders shall be designated by the
Board of Directors; in the absence of such designation, the chairperson of the Board of Directors, if any, or the chief executive officer (in the absence of the chairperson of the Board of Directors) or the president (in the absence of the
chairperson of the Board of Directors and the chief executive officer), or in their absence any other executive officer of the Company, shall serve as chairperson of the stockholder meeting. The chairperson of any meeting of stockholders shall have
the power to adjourn the meeting to another place, if any, date or time, whether or not a quorum is present.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.11 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting
agreements) of the DGCL.
Except as may be otherwise provided in the certificate of incorporation
or these bylaws, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder.
Except as otherwise provided by law, the certificate of incorporation,
these bylaws or the rules of the stock exchange on which the Company’s securities are listed, in all matters other than the election of directors, the affirmative vote of a majority of the voting power of the shares present in person or represented
by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders and broker non-votes and abstentions will be considered for purposes of establishing a quorum, but
will not be considered as votes cast for or against a proposal. Except as otherwise required by law, the certificate of incorporation or these bylaws, directors shall be elected by a plurality of the voting power of the shares
present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Where a separate vote by a class or series or classes or series is required, in all matters other than the election of directors, the
affirmative vote of the majority of the voting power of the outstanding shares of such class or series or classes or series present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of such
class or series or classes or series (and broker non-votes and abstentions will not be considered as votes cast for or against a proposal), except as otherwise provided by law, the
certificate of incorporation, these bylaws or the rules of the stock exchange on which the securities of the Company are listed.
2.10 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Subject to the rights of holders of preferred stock of
the Company, any action required or permitted to be taken by the stockholders of the Company must be effected at a duly called annual or special meeting of stockholders of the Company and may not be effected by any consent in writing by such
stockholders.
Any action, including any vote required or permitted to be taken by the stockholders of the Company, may be taken without a meeting, without prior notice and without a vote, if a written consent setting forth the
action so taken is signed by the holders of outstanding shares of capital stock entitled to be voted with respect to the subject matter thereof 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 (as determined in accordance with Section 2.11 hereof).
Any action taken by written consent shall be delivered to the Company by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Company having custody of the records of proceedings of meetings of stockholders. Delivery made to the Company’s registered office shall
be by hand, by nationally recognized overnight courier or electronic transmission. 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 written consents signed by the requisite number of stockholders entitled to vote with
respect to the subject matter thereof are delivered to the Company, in the manner required by this Article 2, within 60 days of the first date on which a consent is so delivered to the Company in the manner required by this Article 2.
Prompt notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given by the Company to those stockholders who have not consented in writing. Any such consent shall be inserted in the minute book as if it were the minutes of a meeting of the stockholders.
2.11 RECORD DATES
In order that the Company may determine the stockholders entitled to
notice of 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 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting
unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination.
If no record date is fixed by the Board of Directors, the record date
for determining stockholders entitled to notice of and 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.
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 Chapter 1 of the DGCL, 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
Company in accordance with Section 2.10.
If no record date has been fixed by the Board of Directors and prior
action by the Board of Directors is required by Chapter 1 of the DGCL, 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.
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, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such
case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the provisions of Section 213 of the
DGCL and this Section 2.11 at the adjourned meeting.
In order that the Company 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 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.
2.12 PROXIES
Each stockholder entitled to vote at a meeting of stockholders, or such
stockholder’s authorized officer, director, employee or agent, may authorize another person or persons to act for such stockholder by proxy authorized by a document or by a transmission permitted by law filed in accordance with the procedure
established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed
by the provisions of Section 212 of the DGCL.
2.13 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The Company shall prepare, at least 10 days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect
the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Company shall not be
required 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 10 days prior to the
meeting: (a) 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 (b) during ordinary business hours, at the Company’s principal place
of business. In the event that the Company determines to make the list available on an electronic network, the Company may take reasonable steps to ensure that such information is available only to stockholders of the Company. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time
thereof, and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then such 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.
2.14 INSPECTORS OF ELECTION
Before any meeting of stockholders, the Company shall appoint an
inspector or inspectors of election to act at the meeting or its adjournment. The Company may designate one or more persons as alternate inspectors to replace any inspector who fails to act.
Such inspectors shall:
(a) ascertain the number of shares outstanding and the voting
power of each;
(b) determine the shares represented at the meeting and the
validity of proxies and ballots;
(c) count all votes and ballots;
(d) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors; and
(e) certify their determination of the number of shares
represented at the meeting, and their count of all votes and ballots.
The inspectors of election shall perform their duties impartially, in
good faith, to the best of their ability and as expeditiously as is practical. If there are multiple inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any
report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.
ARTICLE III - DIRECTORS
3.1 POWERS
The business and affairs of the Company shall be managed by or under the
direction of the Board of Directors, except as may be otherwise provided in the DGCL or the certificate of incorporation.
3.2 NUMBER OF DIRECTORS
The Board of Directors shall consist of one or more members, each of
whom shall be a natural person. Unless the certificate of incorporation fixes the number of directors, the number of directors shall be determined from time to time by resolution of a majority of the Whole Board. No reduction of the authorized number
of directors shall have the effect of removing any director before that director’s term of office expires.
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
Whether elected at an annual election
of directors or to fill an interim vacancy,
each director shall hold office until the next succeeding annual election or until
his or her successor is elected and qualified or
until his or her earlier resignation or removal. The certificate of incorporation or these bylaws may prescribe other qualifications for directors.
Except as provided in Section 3.4 of
these bylaws, each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until such director’s successor is elected and qualified or until such director’s earlier death,
resignation or removal. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these bylaws may prescribe other qualifications for directors.
If so provided in the certificate of incorporation, the directors of the Company shall be divided into three
classes.
3.4 RESIGNATION AND VACANCIES
Any director may resign at any time upon notice given in writing or by
electronic transmission to the Company. A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation which
is conditioned upon the director failing to receive a specified vote for reelection as a director may provide that it is irrevocable. Unless otherwise provided in the certificate of incorporation or these bylaws, when one or more directors resign
from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective.
Unless otherwise provided in the certificate of incorporation or these
bylaws or permitted in the specific case by resolution of the Board of Directors, and subject to the rights of holders of Preferred Stock, vacancies and newly created directorships resulting from any increase in the authorized number of directors
elected by all of 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, and not by stockholders. If the directors are divided into classes, a person so chosen to fill a vacancy or newly created directorship shall hold office until the next election of the
class for which such director shall have been chosen and until his or her successor shall have been duly elected and qualified.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The Board of Directors may hold meetings, both regular and special,
either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or these
bylaws, members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and
such participation in a meeting shall constitute presence in person at the meeting.
3.6 REGULAR MEETINGS
Regular meetings of the Board of Directors may be held without notice at
such time and at such place as shall from time to time be determined by the Board of Directors.
3.7 SPECIAL MEETINGS; NOTICE
Special meetings of the Board of Directors for any purpose or purposes
may be called at any time by the chairperson of the Board of Directors, the chief executive officer, the president, the secretary or a majority of the Whole Board.
Notice of the time and place of special meetings shall be:
(a) delivered personally by hand, by courier or by telephone;
(b) sent by United States first-class mail, postage prepaid;
(c) sent by facsimile;
(d) sent by electronic mail; or
(e) otherwise given by electronic transmission (as defined in
Section 232 of the DGCL),
directed to each director at that director’s address, telephone number, facsimile number,
electronic mail address or other contact for notice by electronic transmission, as the case may be, as shown on the Company’s records.
If the notice is (i) delivered personally by hand, by courier or by
telephone, (ii) sent by facsimile, (iii) sent by electronic mail or (iv) otherwise given by electronic transmission, it shall be delivered, sent or otherwise directed to each director, as applicable, at least 24 hours before the time of the holding
of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not
specify the place of the meeting (if the meeting is to be held at the Company’s principal executive office) nor the purpose of the meeting, unless required by statute.
3.8 QUORUM; VOTING
At all meetings of the Board of Directors, a majority of the Whole Board
shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum is present.
The affirmative vote of a majority of the directors present at any
meeting at which a quorum is present shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws.
If the certificate of incorporation provides that one or more directors
shall have more or less than one vote per director on any matter, except as may otherwise be expressly provided herein or therein and denoted with the phrase “notwithstanding the final paragraph of Section 3.8 of the bylaws” or language to similar
effect, every reference in these bylaws to a majority or other proportion of the directors shall refer to a majority or other proportion of the votes of the directors.
3.9 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
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 of Directors or committee, as the case may be, consent thereto in
writing or by electronic transmission. Any person (whether or not then a director) may provide, whether through instruction to an agent or otherwise, that a consent to action will be effective at a future time (including a time determined upon the
happening of an event), no later than 60 days after such instruction is given or such provision is made and such consent shall be deemed to have been given for purposes of this Section 3.9 at such effective time so long as such person is then a
director and did not revoke the consent prior to such time. Any such consent shall be revocable prior to its becoming effective.
3.10 FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the certificate of incorporation or these
bylaws, the Board of Directors shall have the authority to fix the compensation of directors.
3.11 REMOVAL OF DIRECTORS
Any director or the entire Board of Directors
may be removed from office by stockholders of the Company in the manner specified in the certificate of incorporation and applicable law. No reduction of the authorized
number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.
ARTICLE IV - COMMITTEES
4.1 COMMITTEES OF DIRECTORS
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 Company. 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 thereof 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
or in these bylaws, 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 Company, and may authorize the seal of the Company to be affixed to all papers that may
require it; but no such committee shall have the power or authority to (a) approve or adopt, or recommend to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to
stockholders for approval, or (b) adopt, amend or repeal any bylaw of the Company.
4.2 COMMITTEE MINUTES
Each committee and subcommittee shall keep regular minutes of its
meetings.
4.3 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees and subcommittees shall be governed
by, and held and taken in accordance with, the provisions of:
(a) Section 3.5 (place of meetings and meetings by telephone);
(b) Section 3.6 (regular meetings);
(c) Section 3.7 (special meetings and notice);
(d) Section 3.8 (quorum; voting);
(e) Section 3.9 (action without a meeting); and
(f) Section 7.4 (waiver of notice)
with such changes in the context of those bylaws as are necessary to
substitute the committee or subcommittee and its members for the Board of Directors and its members. However, (i) the time and place of regular meetings of committees or subcommittees may be determined either by resolution of the Board of
Directors or by resolution of the committee or subcommittee; (ii) special meetings of committees or subcommittees may also be called by resolution of the Board of Directors or the committee or the subcommittee; and (iii) notice of special meetings of
committees and subcommittees shall also be given to all alternate members who shall have the right to attend all meetings of the committee or subcommittee. The Board of Directors may adopt rules for the government of any committee not inconsistent
with the provisions of these bylaws.
Any provision in the certificate of incorporation providing that one or
more directors shall have more or less than one vote per director on any matter shall apply to voting in any committee or subcommittee, unless otherwise provided in the certificate of incorporation or these bylaws.
4.4 SUBCOMMITTEES
Unless otherwise provided in the certificate of incorporation, these
bylaws or the resolutions of the Board of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the
powers and authority of the committee.
ARTICLE V - OFFICERS
5.1 OFFICERS
The officers of the Company shall be a president and a secretary. The
Company may also have, at the discretion of the Board of Directors, a chairperson of the Board of Directors, a vice chairperson of the Board of Directors, a chief executive officer, a chief financial officer or treasurer, one or more vice presidents,
one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the
same person.
5.2 APPOINTMENT OF OFFICERS
The Board of Directors shall appoint the officers of the Company, except
such officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
The Board of Directors may appoint, or empower the chief executive
officer or, in the absence of a chief executive officer, the president, to appoint, such other officers as the business of the Company may require. Each of such officers shall hold office for such period, have such authority, and perform such duties
as are provided in these bylaws or as the Board of Directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by the Board of Directors or, for the avoidance of doubt, any duly authorized committee or subcommittee thereof or by any officer who has been conferred such power of removal.
Any officer may resign at any time by giving notice, in writing or by
electronic transmission, to the Company. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the
resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.
5.5 VACANCIES IN OFFICES
Any vacancy occurring in any office of the Company shall be filled by
the Board of Directors or as provided in Section 5.3.
5.6 REPRESENTATION OF SECURITIES OF OTHER ENTITIES
The chairperson of the Board of Directors, the chief executive officer,
the president, any vice president, the treasurer, the secretary or assistant secretary of this Company or any other person authorized by the Board of Directors or the chief executive officer, the president or a vice president, is authorized to vote,
represent and exercise on behalf of this Company all rights incident to any and all shares or other securities of any other entity or entities, and all rights incident to any management authority conferred on the Company in accordance with the
governing documents of any entity or entities, standing in the name of this Company, including the right to act by written consent. The authority granted herein may be exercised either by such person directly or by any other person authorized to do
so by proxy or power of attorney duly executed by such person having the authority.
5.7 AUTHORITY AND DUTIES OF OFFICERS
All officers of the Company shall respectively have such authority and
perform such duties in the management of the business of the Company as may be designated from time to time by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the
Board of Directors.
ARTICLE VI - STOCK
6.1 STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of the Company shall be represented by certificates, provided
that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Company. Unless otherwise provided by resolution of the Board of Directors, every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of, the Company by any
two officers of the Company representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if such person were such officer, transfer agent or
registrar at the date of issue. The Company shall not have power to issue a certificate in bearer form.
The Company may issue the whole or any part of its shares as partly paid
and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly-paid shares, or upon the books and records of the Company in the case of
uncertificated partly-paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully-paid shares, the Company shall declare a dividend upon partly-paid
shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
6.2 SPECIAL DESIGNATION ON CERTIFICATES
If the Company is authorized to issue more than one class of stock or
more than one series of any class, then the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Company shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in
Section 202 of the DGCL, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the Company shall issue to represent such class or series of stock, a statement that the Company will furnish without
charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the registered owner thereof shall be given a notice, in writing or by electronic transmission, containing the information required to be set
forth or stated on certificates pursuant to this Section 6.2 or Sections 156, 202(a), 218(a) or 364 of the DGCL or with respect to this Section 6.2 a statement that the Company will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Except as otherwise
expressly provided by law, the rights and obligations of the holders of uncertificated stock and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.
6.3 LOST CERTIFICATES
Except as provided in this Section 6.3, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is surrendered to the Company and cancelled at the same time. The Company may issue a new certificate of stock or uncertificated shares in the place of any certificate
theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Company may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Company a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
6.4 DIVIDENDS
The Board of Directors, subject to any restrictions contained in the
certificate of incorporation or applicable law, may declare and pay dividends upon the shares of the Company’s capital stock. Dividends may be paid in cash, in property, or in shares of the Company’s capital stock, subject to the provisions of the
certificate of incorporation. The Board of Directors may set apart out of any of the funds of the Company available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
6.5 TRANSFER OF STOCK
Transfers of record of shares of stock of the Company shall be made only
upon its books by the holders thereof, in person or by an attorney duly authorized, and, if such stock is certificated, upon the surrender of a certificate or certificates for a like number of shares, properly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer.
6.6 STOCK TRANSFER AGREEMENTS
The Company shall have power to enter into and perform any agreement
with any number of stockholders of any one or more classes of stock of the Company to restrict the transfer of shares of stock of the Company of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
6.7 REGISTERED STOCKHOLDERS
The Company:
(a) shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and notices and to vote as such owner; and
(b) shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VII - MANNER OF GIVING NOTICE AND WAIVER
7.1 NOTICE OF STOCKHOLDERS’ MEETINGS
Notice of any meeting of stockholders shall be given in the manner set
forth in the DGCL.
7.2 NOTICE TO STOCKHOLDERS SHARING AN ADDRESS
Except as otherwise prohibited under the DGCL, without limiting the
manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Company under the provisions of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a single
written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent shall be revocable by the stockholder by written notice to the Company. Any stockholder who fails
to object in writing to the Company, within 60 days of having been given written notice by the Company of its intention to send the single notice, shall be deemed to have consented to receiving such single written notice. This Section 7.2 shall not
apply to Sections 164, 296, 311, 312 or 324 of the DGCL.
7.3 NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL
Whenever notice is required to be given, under the DGCL, the certificate
of incorporation or these bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to
give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that
the action taken by the Company is such as to require the filing of a certificate under the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such
persons with whom communication is unlawful.
7.4 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the DGCL,
the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to
be given, shall be deemed equivalent to notice. Attendance of a person at a meeting 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. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice
or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.
ARTICLE VIII - INDEMNIFICATION
8.1 Indemnification of Directors and
Officers in Third Party Proceedings
Subject to the other provisions of this Article VIII, the Company shall
indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”) (other than an action by or in the right of the Company) by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company
serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.
8.2 Indemnification of Directors and
Officers in Actions by or in the Right of the COMPANY
Subject to the other provisions of this Article VIII, the Company shall
indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed Proceeding by or in the right of the Company to
procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such Proceeding if such person
acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
8.3 Successful Defense
To the extent that a present or former director or officer (for purposes
of this Section 8.3 only, as such term is defined in Section 145(c)(1) of the DGCL) of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in Section 8.1 or Section 8.2, or in defense of
any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. The Company may indemnify any other person who is not a present
or former director or officer of the Company against expenses (including attorneys’ fees) actually and reasonably incurred by such person to the extent he or she has been successful on the merits or otherwise in defense of any suit or proceeding
described in Section 8.1 or Section 8.2, or in defense of any claim, issue or matter therein.
8.4 Indemnification of Others
Subject to the other provisions of this Article VIII, the Company shall
have power to indemnify its employees and agents, or any other persons, to the extent not prohibited by the DGCL or other applicable law. The Board of Directors shall have the power to delegate to any person or persons identified in subsections (1)
through (4) of Section 145(d) of the DGCL the determination of whether employees or agents shall be indemnified.
8.5 Advanced Payment of Expenses
Expenses (including attorneys’ fees) actually and reasonably incurred by
an officer or director of the Company in defending any Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding upon receipt of a written request therefor (together with documentation reasonably evidencing such
expenses) and an undertaking by or on behalf of the person to repay such amounts if it shall ultimately be determined that the person is not entitled to be indemnified under this Article VIII or the DGCL. Such expenses (including attorneys’ fees)
actually and reasonably incurred by former directors and officers or other employees and agents of the Company or by persons serving at the request of the Company as directors, officers, employees or agents of another corporation, partnership, joint
venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the Company deems appropriate. The right to advancement of expenses shall not apply to any Proceeding (or any part of any Proceeding) for which indemnity is
excluded pursuant to these bylaws, but shall apply to any Proceeding (or any part of any Proceeding) referenced in Section 8.6(b) or 8.6(c) prior to a determination that the person is not entitled to be indemnified by the Company.
Notwithstanding the foregoing, unless otherwise determined pursuant to
Section 8.8, no advance shall be made by the Company to an officer of the Company (except by reason of the fact that such officer is or was a director of the Company, in which event this paragraph shall not apply) in any Proceeding if a determination
is reasonably and promptly made (a) by a vote of the directors who are not parties to such Proceeding, even though less than a quorum, or (b) by a committee of such directors designated by the vote of the majority of such directors, even though less
than a quorum, or (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, that facts known to the decision-making party at the time such determination is made demonstrate clearly and
convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Company.
8.6 Limitation on Indemnification
Subject to the requirements in Section 8.3 and the DGCL, the Company
shall not be obligated to indemnify any person pursuant to this Article VIII in connection with any Proceeding (or any part of any Proceeding):
(a) for which payment has actually been made to or on behalf of
such person under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;
(b) for an accounting or disgorgement of profits pursuant to
Section 16(b) of the 1934 Act, or similar provisions of federal, state or local statutory law or common law, if such person is held liable therefor (including pursuant to any settlement arrangements);
(c) for any reimbursement of the Company by such person of any
bonus or other incentive-based or equity-based compensation or of any profits realized by such person from the sale of securities of the Company, as required in each case under the 1934 Act (including any such reimbursements that arise from an
accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by such person of securities in violation
of Section 306 of the Sarbanes-Oxley Act), if such person is held liable therefor (including pursuant to any settlement arrangements);
(d) initiated by such person, including any Proceeding (or any
part of any Proceeding) initiated by such person against the Company or its directors, officers, employees, agents or other indemnitees, unless (i) the Board of Directors authorized the Proceeding (or the relevant part of the Proceeding) prior to its
initiation, (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, (iii) otherwise required to be made under Section 8.7 or (iv) otherwise required by applicable law;
or
(e) if prohibited by applicable law.
8.7 Determination; Claim
If a claim for indemnification or advancement of expenses under this
Article VIII is not paid in full within 90 days after receipt by the Company of the written request therefor, the claimant shall be entitled to an adjudication by a court of competent jurisdiction of his or her entitlement to such indemnification or
advancement of expenses. The Company shall indemnify such person against any and all expenses that are actually and reasonably incurred by such person in connection with any action for indemnification or advancement of expenses from the Company under
this Article VIII, to the extent such person is successful in such action, and to the extent not prohibited by law. In any such suit, the Company shall, to the fullest extent not prohibited by law, have the burden of proving that the claimant is not
entitled to the requested indemnification or advancement of expenses.
8.8 Non-Exclusivity of Rights
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the certificate of incorporation or any statute, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. The Company is specifically authorized to enter into individual contracts with
any or all of its directors, officers, employees or agents respecting indemnification and advancement of expenses, to the fullest extent not prohibited by the DGCL or other applicable law.
8.9 Insurance
The Company may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Company would have the power to indemnify such person against such liability under the
provisions of the DGCL.
8.10 Survival
The rights to indemnification and advancement of expenses conferred by
this Article VIII shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
8.11 Effect of Repeal or Modification
A right to indemnification or to advancement of expenses arising under a
provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to or repeal or elimination of the certificate of incorporation or these bylaws after the occurrence of the act or omission that is the
subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such
elimination or impairment after such action or omission has occurred.
8.12 Certain Definitions
For purposes of this Article VIII, references to the “Company”
shall include, in addition to the resulting company, any constituent company (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent company, or is or was serving at the request of such constituent company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving company as such person would have
with respect to such constituent company if its separate existence had continued. For purposes of this Article VIII, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Article VIII.
ARTICLE IX - GENERAL MATTERS
9.1 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
Except as otherwise provided by law, the certificate of incorporation or
these bylaws, the Board of Directors may authorize any officer or officers, or agent or agents, to enter into any contract or execute any document or instrument in the name of and on behalf of the Company; such authority may be general or confined to
specific instances. Unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Company by any contract or engagement or to pledge
its credit or to render it liable for any purpose or for any amount.
9.2 FISCAL YEAR
The fiscal year of the Company shall be fixed by resolution of the Board
of Directors and may be changed by the Board of Directors.
9.3 SEAL
The Company may adopt a corporate seal, which shall be adopted and which
may be altered by the Board of Directors. The Company may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
9.4 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person”
includes a corporation, partnership, limited liability company, joint venture, trust or other enterprise, and a natural person. Any reference in these bylaws to a section of the DGCL shall be deemed to refer to such section as amended from time to
time and any successor provisions thereto.
9.5 FORUM SELECTION
Unless the Company consents in writing to the selection of an
alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware) shall, to the fullest extent
permitted by law, be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, stockholder, officer or other
employee of the Company to the Company or the Company’s stockholders, (c) any action arising pursuant to any provision of the DGCL or the certificate of incorporation or these bylaws (as either may be amended from time to time) or (d) any action
asserting a claim governed by the internal affairs doctrine, except for, as to each of (a) through (d) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the
indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not
have subject matter jurisdiction.
Unless the Company consents in writing to the selection of an
alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
Any person or entity purchasing or otherwise acquiring any interest in
any security of the Company shall be deemed to have notice of and consented to the provisions of this Section 9.5. For the avoidance of doubt, nothing contained in this Section 9.5 shall apply to any action brought to enforce a duty or liability
created by the 1934 Act or any successor thereto.
ARTICLE X - AMENDMENTS
These bylaws may be adopted, amended or repealed by the stockholders entitled to vote; provided,
however, that the affirmative vote of the holders of at least 66 2/3% of the total voting power of outstanding voting securities, voting
together as a single class, shall be required for the stockholders of the Company to alter, amend or repeal, or adopt any bylaw
inconsistent with, the following provisions of these bylaws: Article II, Sections 3.1, 3.2, 3.4 and
3.11 of Article III, Article VIII, Section 9.5 of Article IX or this Article X (including, without limitation, any such Article or Section as renumbered as a
result of any amendment, alteration, change, repeal, or adoption of any other Bylaw). The Board of Directors shall also have the power to
adopt, amend or repeal bylaws; provided, however, that a bylaw amendment adopted by stockholders which specifies the votes that shall be necessary for the election of directors shall not be further amended or repealed or by the Board of Directors.
Appendix F
MINERVA SURGICAL, INC.
2021 EQUITY INCENTIVE PLAN
(Adopted on October 13, 2021; amended on [__], 2023)
1. Purposes of the Plan; Award Types.
(a) Purposes of
the Plan. The purposes of this Plan are to attract and retain personnel for positions with the Company Group, to provide additional incentive to Employees, Directors, and Consultants
(collectively, “Service Providers”), and to promote the success of the Company’s business.
(b) Award Types. The Plan permits the grant of
Incentive Stock Options to any ISO Employee and the grant of Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Performance Awards to any Service Provider.
2. Definitions. The following definitions are
used in this Plan:
(a) “Administrator” means Administrator as
defined in Section 4(a).
(b) “Applicable Laws” means the legal and
regulatory requirements relating to the administration of equity-based awards, including but not limited to the related issuance of Shares under U.S. federal and state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange
or quotation system on which the Common Stock is listed or quoted and, only to the extent applicable with respect to an Award or Awards, the tax, securities, exchange control, and other laws of any jurisdictions other than the United States where
Awards are, or will be, granted under the Plan. Reference to a section of an Applicable Law or regulation related to that section shall include such section or regulation, any valid regulation issued under such section, and any comparable provision of
any future legislation or regulation amending, supplementing or superseding such section or regulation.
(c) “Award” means, individually or collectively,
a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, or Performance Awards.
(d) “Award Agreement” means the written or
electronic agreement setting forth the terms applicable to an Award granted under the Plan. The Award Agreement is subject to the terms of the Plan.
(e) “Board” means the Board of Directors of the
Company.
(f) “Change in Control” means the occurrence of
any of the following events:
(i) A change in the ownership of the Company which
occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, with the stock held by such Person, constitutes more than 50% of the total voting power of the
stock of the Company; provided, that for this subsection, the acquisition of additional stock by any one Person, who prior to such acquisition is considered to own more than 50% of the total voting power of the stock of the Company will not be
considered a Change in Control and provided, further, that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board also will not be considered a Change in Control. Further,
if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately
prior to the change in ownership, direct or indirect beneficial ownership of 50% or more of the total voting power of the stock of the Company or of the ultimate parent entity of the Company, such event shall not be considered a Change in Control under
this Section 2(f)(i). For this purpose, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company, as the
case may be, either directly or through one or more subsidiary corporations or other business entities; or
(ii) A change in the effective control of the Company
which occurs on the date a majority of members of the Board is replaced during any 12-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the appointment or election. For purposes
of this Section 2(f)(ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(iii) A change in the ownership of a substantial
portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the
total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, that for this Section 2(f)(iii), the following will not constitute a change
in the ownership of a substantial portion of the Company’s assets:
(1) a transfer to an entity controlled by the Company’s
stockholders immediately after the transfer, or
(2) a transfer of assets by the Company to:
(A) a stockholder of the Company (immediately before
the asset transfer) in exchange for or with respect to the Company’s stock,
(B) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company,
(C) a Person, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company, or
(D) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a Person described in Section 2(f)(iii)(2)(A) to Section 2(f)(iii)(2)(C).
For this definition, gross fair market value means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to any liabilities associated with such assets. For this definition, persons will be acting as a group if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock, or similar business transaction with the Company. For the avoidance of doubt, wholly-owned subsidiaries of the Company shall not be considered “Persons” for purposes of this Section 2(f).
For purposes of this Section 2(f), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction with the Company. For the avoidance of doubt, wholly-owned subsidiaries of the Company shall not be considered “Persons” for purposes of this Section 2(f).
(iv) A transaction
will not be a Change in Control:
(1) unless the transaction qualifies as a change in
control event within the meaning of Code Section 409A; or
(2) if its primary purpose is to (1) change the jurisdiction of the Company’s incorporation, or (2) create a holding company owned in substantially the same proportions by the persons who held the
Company’s securities immediately before such transaction.
(g) “Code” means the U.S. Internal Revenue Code
of 1986, as amended. Reference to a section of the Code or regulation related to that section shall include such section or regulation, any valid regulation issued or other official applicable guidance of general or direct applicability promulgated
under such section or regulation, and any comparable provision of any future legislation, regulation or official guidance of general or direct applicability amending, supplementing or superseding such section or regulation.
(h) “Committee” means a committee of Directors or
of other individuals satisfying Applicable Laws appointed by the Board.
(i) “Common Stock” means the common stock of the
Company.
(j) “Company” means Minerva Surgical, Inc., a
Delaware corporation, or any of its successors.
(k) “Company Group” means the Company, any
Parent or Subsidiary, and any entity that, from time to time and at the time of any determination, directly or indirectly, is in control of, is controlled by or is under common control with the Company.
(l) “Consultant” means any natural person
engaged by a member of the Company Group to render bona fide services to such entity, provided the services (i) are not in connection with the offer or sale of securities in a capital raising transaction, and (ii) do not directly promote or maintain a
market for the Company’s securities. A Consultant must be a person to whom the issuance of Shares registered on Form S-8 under the Securities Act is permitted.
(m) “Director” means a member of the Board.
(n) “Disability” means total and permanent
disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform
and non-discriminatory standards adopted by the Administrator from time to time.
(o) “Employee” means any person, including
Officers and Directors, providing services as an employee to the Company or any member of the Company Group. However, with respect to Incentive Stock Options, an Employee must be employed by the Company or any Parent or Subsidiary of the Company (such
an Employee, an “ISO Employee”). Notwithstanding, Options awarded to individuals not providing services to the Company or a Subsidiary of the Company should be carefully structured to comply with the payment timing rule of Code Section 409A.
Neither service as a Director nor payment of a director’s fee by the Company will constitute “employment” by the Company.
(p) “Exchange Act” means the U.S. Securities
Exchange Act of 1934.
(q) “Exchange Program” means a program under
which (i) outstanding Awards are surrendered or cancelled in exchange for awards of the same type (which may have higher or lower Exercise Prices and different terms), awards of a different type, and/or cash, (ii) Participants would have the
opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the Exercise Price of an outstanding Award is increased or reduced. The Administrator will determine the
terms and conditions of any Exchange Program in its sole discretion.
(r) “Exercise Price” means the price payable per
share to exercise an Award.
(s) “Expiration Date” means the last possible day
on which an Option or Stock Appreciation Right may be exercised. Any exercise must be completed before midnight U.S. Pacific Time between the Expiration Date and the following date; provided, however, that any broker-assisted cashless exercise of an
Option granted hereunder must be completed by the close of market trading on the Expiration Date.
(t) “Fair Market Value” means, as of any date,
the value of a Share, determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market, the Fair Market Value will be the
closing sales price for a Share (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported by such source as the Administrator determines to be reliable. If the determination date for
the Fair Market Value occurs on a non-Trading Day (i.e., a weekend or holiday), the Fair Market Value will be such price on the immediately preceding Trading Day, unless otherwise determined by the Administrator;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on
that date on the last Trading Day such bids and asks were reported), as reported by such source as the Administrator determines to be reliable;
(iii) For any Awards granted on the Registration Date,
the Fair Market Value will be the initial price to the public set forth in the final prospectus included within the registration statement on Form S-1 filed with the United States Securities and Exchange Commission for the initial public offering of
the Common Stock; or
(iv) Absent an established market for the Common Stock,
the Fair Market Value will be determined in good faith by the Administrator.
Notwithstanding the foregoing, if the determination date for the Fair Market Value occurs on a weekend, holiday or other day other than a Trading
Day, the Fair Market Value will be the price as determined under subsections (t)(i) or (t)(ii) above on the immediately preceding Trading Day, unless otherwise determined by the Administrator. In addition, for purposes of determining the fair market
value of shares for any reason other than the determination of the Exercise Price of Options or Stock Appreciation Rights, fair market value will be determined by the Administrator in a manner compliant with Applicable Laws and applied consistently for
such purpose. Note that the determination of fair market value for purposes of tax withholding may be made in the Administrator’s sole discretion subject to Applicable Laws and is not required to be consistent with the determination of Fair Market
Value for other purposes.
(u) “Fiscal Year” means a fiscal year of the
Company.
(v) “Grant Date” means Grant Date as defined in
Section 4(c).
(w) “Incentive Stock Option” means an Option that
is intended to qualify and does qualify as an incentive stock option within the meaning of Code Section 422.
(x) “Nonstatutory Stock Option” means an Option
that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
(y) “Officer” means a person who is an officer of
the Company within the meaning of Section 16 of the Exchange Act.
(z) “Option” means a stock option to acquire
Shares granted under Section 6.
(aa) “Outside Director” means a Director who is not
an Employee.
(bb) “Parent” means a “parent corporation,” whether
now or hereafter existing, as defined in Code Section 424(e).
(cc) “Participant” means the holder of an
outstanding Award.
(dd) “Performance
Awards” means an Award which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be cash- or
stock-denominated and may be settled for cash, Shares or other securities or a combination of the foregoing under Section 10.
(ee) “Performance Period” means Performance Period
as defined in Section 10(a)
(ff) “Period of Restriction” means the period
during which the transfer of Shares of Restricted Stock is subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of
performance, or the occurrence of other events as determined by the Administrator.
(gg) “Plan” means this 2021 Equity Incentive Plan.
(hh) “Registration Date” means the effective date of
the first Registration Statement.
(ii) “Registration Statement” means a
registration statement filed by the Company and declared effective under Section 12(b) of the Exchange Act, with respect to any class of the Company’s securities.
(jj) “Restricted Stock” means Shares issued under
an Award granted under Section 8 or issued as a result of the early exercise of an Option.
(kk) “Restricted Stock Unit” means a bookkeeping
entry representing an amount equal to the Fair Market Value, granted under Section 9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(ll) “Securities Act” means U.S. Securities Act
of 1933.
(mm) “Service Provider” means an Employee, Director
or Consultant.
(nn) “Share” means a share of the Common Stock as
adjusted in accordance with Section 13 of the Plan.
(oo) “Stock Appreciation Right” means an Award
granted under Section 7.
(pp) “Subsidiary” means a “subsidiary corporation”
as defined in Code Section 424(f), in relation to the Company.
(qq) “Tax
Withholdings” means tax, social insurance and social security liability or premium obligations in connection with the Awards, including, without limitation, (i) all federal, state, and local income, employment and any other taxes (including the Participant’s U.S. Federal Insurance Contributions Act (FICA) obligation) that are required to be withheld by the Company or a member of the Company Group,
(ii) the Participant’s and, to the extent required by the Company, the fringe benefit tax liability of the Company or a member of the Company Group, if any, associated with the grant, vesting, or exercise of an Award or sale of Shares issued under
the Award, and (iii) any other taxes or social insurance or social security liabilities or premium the responsibility for which the Participant has, or has agreed to bear, with respect to such Award, the Shares subject to, or other amounts or
property payable under, an Award, or otherwise associated with or related to participation in the Plan and with respect to which the Company or the applicable member of the Company Group has either agreed to withhold or has an obligation to withhold.
(rr) “Ten Percent Owner” means Ten Percent Owner
as defined in Section 6(b)(i).
(ss) “Trading Day” means a day on which the
primary stock exchange or national market system (or other trading platform, as applicable) on which the Common Stock trades is open for trading.
(tt) “Transaction” means Transaction as defined
in Section 14(a).
3. Shares Subject to the Plan.
(a) Allocation of Shares to Plan. The maximum
aggregate number of Shares that may be issued under the Plan is:
(i) 39,595,159 Shares,
plus
(ii) any Shares subject to awards granted under the
Company’s 2008 Stock Plan (the “Existing Plan”) that, on or after the Registration Date, expire or otherwise terminate without having been exercised in full, are tendered to or withheld by the Company for payment of an exercise price or for tax
withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest, with the maximum number of Shares to be added to the Plan under this clause (ii) equal to 2,154,771 Shares, plus
(iii) any
additional Shares that become available for issuance under the Plan under Sections 3(b) and 3(c).
The Shares may be authorized but unissued Common Stock or Common Stock issued and then reacquired by the Company.
(b) Automatic Share Reserve Increase. The number
of Shares available for issuance under the Plan will be increased on the first day of each Fiscal Year beginning with the 2023 Fiscal Year, in an amount equal to the least of:
(i) 91,100,480
Shares,
(ii) five percent (5%) of the total number of shares
of all classes of common stock of the Company outstanding on the last day of the immediately preceding Fiscal Year, and
(iii) a lesser number of Shares determined by the
Administrator.
(c) Share
Reserve Return.
(i) Options and Stock Appreciation
Rights. If an Option or Stock Appreciation Right expires or becomes unexercisable without having been exercised in full or is surrendered under an Exchange Program, the unissued Shares subject to the Option or Stock Appreciation Right will become
available for future issuance under the Plan.
(ii) Stock Appreciation Rights. Only Shares
actually issued pursuant to a Stock Appreciation Right (i.e., the net Shares issued) will cease to be available under the Plan; all remaining Shares originally subject to the Stock Appreciation Right will remain available for future issuance under the
Plan.
(iii) Full-Value Awards. Shares issued
pursuant to Awards of Restricted Stock, Restricted Stock Units, or stock-settled Performance Awards that are reacquired by the Company due to failure to vest or are forfeited to the Company will become available for future issuance under the Plan.
(iv) Withheld Shares. Shares used to pay
the Exercise Price of an Award or to satisfy Tax Withholdings related to an Award will become available for future issuance under the Plan.
(v) Cash-Settled Awards. If any portion
of an Award under the Plan is paid to a Participant in cash rather than Shares, that cash payment will not reduce the number of Shares available for issuance under the Plan.
(d) Incentive
Stock Options. The maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a) plus, to the extent allowable under Code Section 422, any Shares that become available for issuance under the Plan under Sections 3(b) and 3(c).
(e) Adjustment.
The numbers provided in Sections 3(a), 3(b), and 3(d) will be adjusted as a result of changes in capitalization and any other adjustments under Section 13.
(f) Substitute
Awards. If the Committee grants Awards in substitution for equity compensation awards outstanding under a plan maintained by an entity acquired by or becomes a part of any member of the Company group, the grant of those substitute Awards will not decrease the number of Shares available for issuance under the Plan.
(g) Share Reserve. The Company, during the term
of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) The Plan will be administered by the Board or a
Committee (the “Administrator”). Different Administrators may administer the Plan with respect to different groups of Service Providers. The Board may retain the authority to concurrently
administer the Plan with a Committee and may revoke the delegation of some or all authority previously delegated.
(ii) To the
extent permitted by Applicable Laws, the Board or a Committee may delegate to one or more subcommittees of the Board or a Committee or officers the authority to grant Awards to Employees of the Company or any of its Subsidiaries, provided that the
delegation must comply with any limitations on the authority required by Applicable Laws, including the total number of Shares that may be subject to the Awards granted by such officer(s). This delegation may be revoked at any time by the Board or
Committee.
(b) Powers of the Administrator. Subject to the
terms of the Plan, any limitations on delegations specified by the Board, and any requirements imposed by Applicable Laws, the Administrator will have the authority, in its sole discretion, to make any determinations and perform any actions deemed
necessary or advisable to administer the Plan including:
(i) to determine the Fair Market Value;
(ii) to approve
forms of Award Agreements for use under the Plan;
(iii) to select the Service Providers to whom Awards
may be granted and grant Awards to such Service Providers;
(iv) to determine the number of Shares to be covered by
each Award granted;
(v) to determine the terms and conditions, consistent
with the Plan, of any Award granted. Such terms and conditions may include, but are not limited to, the Exercise Price, the time(s) when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating to an Award;
(vi) to institute and determine the terms and
conditions of an Exchange Program;
(vii) to construe interpret the Plan and make any decisions necessary to administer the Plan, including but not limited to determining whether and when a Change in Control has occurred;
(viii) to establish, amend and rescind rules and
regulations and adopt sub-plans relating to the Plan, including rules, regulations and sub-plans for the purposes of facilitating compliance with applicable non-U.S. laws, easing the administration of the Plan and/or obtaining tax-favorable treatment
for Awards granted to Service Providers located outside the U.S., in each case as the Administrator may deem necessary or advisable;
(ix) to interpret, modify or amend each Award (subject
to Section 19), including extending the Expiration Date and the post-termination exercisability period of such modified or amended Awards;
(x) to allow Participants to satisfy tax withholding
obligations in any manner permitted by Section 16;
(xi) to delegate
ministerial duties to any of the Company’s employees;
(xii) to authorize any person to take any steps and
execute, on behalf of the Company, any documents required for an Award previously granted by the Administrator to be effective;
(xiii) to temporarily suspend the exercisability of an
Award if the Administrator deems such suspension to be necessary or appropriate for administrative purposes, provided that, unless prohibited by Applicable Laws, such suspension shall be lifted in all cases
not less than 10 Trading Days before the last date that the Award may be exercised;
(xiv) to allow Participants
to defer the receipt of the payment of cash or the delivery of Shares otherwise due to any such Participants under an Award; and
(xv) to make any determinations necessary or appropriate
under Section 13
(c) Grant Date. The grant date of an Award (“Grant
Date”) will be the date that the Administrator makes the determination granting such Award or may be a later date if such later date is designated by the Administrator on the date of the determination or under an automatic grant policy. Notice of
the determination will be provided to each Participant within a reasonable time after the Grant Date.
(d) Waiver. The Administrator may waive any
terms, conditions or restrictions.
(e) Fractional Shares. Except as otherwise
provided by the Administrator, any fractional Shares that result from the adjustment of Awards will be canceled. Any fractional Shares that result from vesting percentages will be accumulated and vested on the date that an accumulated full Share is
vested.
(f) Electronic Delivery. The Company may deliver
by e-mail or other electronic means (including posting on a website maintained by the Company or by a third party under contract with the Company or another member of the Company Group) all documents relating to the Plan or any Award and all other
documents that the Company is required to deliver to its security holders (including prospectuses, annual reports and proxy statements).
(g) Choice of Law; Choice of Forum. The Plan, all
Awards and all determinations made and actions taken under the Plan, to the extent not otherwise governed by the laws of the United States, will be governed by the laws of the State of Delaware without giving effect to principles of conflicts of law.
For purposes of litigating any dispute that arises under this Plan, a Participant’s acceptance of an Award is his or her consent to the jurisdiction of the State of Delaware, and agreement that any such litigation will be conducted in Delaware Court of
Chancery, or the federal courts for the United States for the District of Delaware, and no other courts, regardless of where a Participant’s services are performed.
(h) Effect of Administrator’s Decision. The
Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
5. Eligibility. Nonstatutory Stock Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units and Performance Awards may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6. Stock Options.
(a) Stock Option Award Agreement. Each Option
will be evidenced by an Award Agreement that will specify the number of Shares subject to the Option, per share Exercise Price, its Expiration Date, and such other terms and conditions as the Administrator determines. Each Option will be designated in
the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. An Option not designated as an Incentive Stock Option is a Nonstatutory Stock Option.
(b) Exercise Price. The Exercise Price for the
Shares to be issued upon exercise of an Option will be determined by the Administrator and stated in the Award Agreement, subject to the following:
(i) In the case of an Incentive Stock Option:
(1) granted to an ISO Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Parent or Subsidiary (a “Ten Percent Owner”), the Exercise Price for the Shares to be issued will be no
less than 110% of the Fair Market Value per Share on the date of grant; and
(2) granted to any ISO Employee other than a Ten Percent Owner, the Exercise
Price for the Shares to be issued will be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the
Exercise Price for the Shares to be issued will be no less than 100% of the Fair Market Value per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be
granted with an Exercise Price of less than 100% of the Fair Market Value per Share on the date of grant (i) pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code or (ii) to a Service Provider that is not a
U.S. taxpayer.
(c) Form of Consideration. The Administrator will
determine the acceptable form(s) of consideration for exercising an Option. Unless the Administrator determines otherwise, the consideration may consist of any one or more or combination of the following, to the extent permitted by Applicable Laws:
(i) cash;
(ii) check or wire transfer;
(iii) promissory note, if and to the extent approved by
the Company;
(iv) other Shares that have a fair market value on the
date of surrender equal to the aggregate Exercise Price of the Shares as to which such Option will be exercised. To the extent not prohibited by the Administrator, this shall include the ability to tender Shares to exercise the Option and then use the
Shares received on exercise to exercise the Option with respect to additional Shares;
(v) consideration received by the Company under a
cashless exercise arrangement (whether through a broker or otherwise) implemented by the Company for the exercise of Options that has been approved by the Administrator, if and to the extent permitted by the Company with respect to a particular Award;
(vi) consideration received by the Company under a net exercise program under which Shares are withheld from otherwise deliverable Shares that has been approved by the Administrator, if and to the extent permitted by the Company with
respect to a particular Award; and
(vii) any other consideration or method of payment to
issue Shares (provided that other forms of considerations may only be approved by the Administrator).
The Administrator has the power to remove or limit any of the above forms of consideration for exercising an Option except for the payment of cash
at any time in its sole discretion.
(d) Term of Option. The term of each Option will
be determined by the Administrator and stated in the Award Agreement, provided that, in the case of an Incentive Stock Option: (a) granted to a Ten Percent Owner, the Option may not be exercisable after the expiration of 5 years from the date such
Option is granted, or such shorter term as may be provided in the Award Agreement; and (b) granted to an ISO Employee other than a Ten Percent Owner, the Option may not be exercisable after the expiration of 10 years from the date such Option is
granted term, or such shorter term as may be provided in the Award Agreement.
(e) Incentive Stock Option Limitations.
(i) To the
extent that the aggregate fair market value of the shares with respect to which incentive stock options under Code Section 422(b) are exercisable for the first time by a Participant during any calendar year (under all plans and agreements of the
Company Group) exceeds $100,000, the incentive stock options whose value exceeds $100,000 will be treated as nonstatutory stock options. Incentive stock options will be considered in the order in which they were granted. For this purpose, the fair
market value of the shares subject to an option will be determined as of the grant date of each option.
(ii) If an Option is designated in the Administrator
action that granted it as an Incentive Stock Option but the terms of the Option do not comply with Sections 6(b) and 6(d), then the Option will not qualify as an Incentive Stock Option.
(f) Exercise of Option. An Option is exercised
when the Company receives: (i) a notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable tax withholdings). Shares issued upon exercise of an Option will be issued in the name of the Participant. Until the Shares are issued (as evidenced by the entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, despite the exercise of the Option. The Company will issue (or cause to be issued) such Shares
promptly after the Option is exercised. An Option may not be exercised for a fraction of a Share. Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan (except as provided in Section
3(c) and for purchase under the Option, by the number of Shares as to which the Option is exercised.
(i) Termination of Relationship as a Service
Provider. If a Participant ceases to be a Service Provider, other than upon such cessation as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within thirty (30) days of such cessation, or such
longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement or Section 6(d), as applicable) to the extent that the Option is vested on the date
of cessation. Unless otherwise provided by the Administrator or set forth in the Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable, if
on the date of such cessation the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan immediately. If after such cessation the Participant does not exercise his or
her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(ii) Disability of Participant. If a
Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within six (6) months of cessation, or such longer period of time as is specified in the Award Agreement (but in no
event later than the expiration of the term of such Option as set forth in the Award Agreement or Section 6(d), as applicable) to the extent the Option is vested on the date of cessation. Unless otherwise provided by the Administrator or set forth in
the Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable, if on the date of cessation the Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan immediately. If after such cessation the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.
(iii) Death of Participant. If a Participant
dies while a Service Provider, the Option may be exercised within six (6) months following the Participant’s death, or within such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of
such Option as set forth in the Award Agreement or Section 6(d), as applicable) to the extent that the Option is vested on the date of death, by the Participant’s designated beneficiary, provided the Administrator has permitted the designation of a
beneficiary and provided such beneficiary has been designated prior to the Participant’s death in a form (if any) acceptable to the Administrator. If the Administrator has not permitted the designation of the beneficiary or if no such beneficiary has
been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of
descent and distribution. If the Option is exercised pursuant to this Section 6(f)(iii), Participant’s designated beneficiary or personal representative shall be subject to the terms of this Plan and the Award Agreement, including but not limited to
the restrictions on transferability and forfeitability applicable to the Service Provider. Unless otherwise provided by the Administrator or set forth in the Award Agreement or other written agreement authorized by the Administrator between the
Participant and the Company or any of its Subsidiaries or Parents, as applicable, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan
immediately. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(g) Expiration of Options. Subject to Section
6(d), an Option’s Expiration Date will be set forth in the Award Agreement. An Option may expire before its expiration date under the Plan (including pursuant to Sections 6(f), 13, 14, or 17(c) or under the Award Agreement.
(h) Tolling of Expiration. If exercising an
Option prior to its expiration is not permitted because of Applicable Laws, other than the rules of any stock exchange or quotation system on which the Common Stock is listed or quoted, the Option will remain exercisable until 30 days after the first
date on which exercise no longer would be prevented by such provisions; provided, however, that this tolling of expiration shall not apply if and to the extent the holder of such Option is a United States taxpayer and the tolling would result in a
violation of Section 409A such that the Option would be subject to additional taxation or interest under Section 409A. If this would result in the Option remaining exercisable past its Expiration Date, then unless earlier terminated pursuant to Section
14, the Option will remain exercisable only until the end of the later of (x) the first day on which its exercise would not be prevented by Section 20(a) and (y) its Expiration Date.
7. Stock Appreciation Rights.
(a) Stock Appreciation Right Award Agreement.
Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the number of Shares subject to the Stock Appreciation Right, its per share Exercise Price, its Expiration Date, and such other terms and conditions as the
Administrator determines.
(b) Exercise Price. The Exercise Price of a Stock
Appreciation Right will be determined by the Administrator, provided that in the case of a Stock Appreciation Right granted to a U.S. taxpayer, the Exercise Price will be no less than 100% of the Fair Market Value of a Share on the date of grant.
(c) Payment of Stock Appreciation Right Amount.
Payment upon Stock Appreciation Right exercise may be made in cash, in Shares (which, on the date of exercise, have an aggregate Fair Market Value equal to the amount of payment to be made under the Award), or any combination of cash and Shares, with
the determination of form of payment made by the Administrator. When a Participant exercises a Stock Appreciation Right, he or she will be entitled to receive a payment from the Company equal to:
(i) the excess, if any, between the fair market value
on the date of exercise over the Exercise Price multiplied by
(ii) the number of Shares with respect to which the
Stock Appreciation Right is exercised.
(d) Exercise of Stock Appreciation Right. A Stock
Appreciation Right is exercised when the Company receives a notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Stock Appreciation Right. Shares issued upon exercise of a Stock
Appreciation Right will be issued in the name of the Participant. Until the Shares are issued (as evidenced by the entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder will exist with respect to the Shares subject to a Stock Appreciation Right, despite the exercise of the Stock Appreciation Right. The Company will issue (or cause to be issued) such Shares promptly after the Stock
Appreciation Right is exercised. A Stock Appreciation Right may not be exercised for a fraction of a Share. Exercising a Stock Appreciation Right in any manner will decrease (x) the number of Shares thereafter available under the Stock Appreciation
Right by the number of Shares as to which the Stock Appreciation Right is exercised and (y) the number of Shares thereafter available under the Plan by the number of Shares issued upon such exercise.
(e) Expiration of Stock Appreciation Rights. A
Stock Appreciation Right’s Expiration Date will be set forth in the Award Agreement. A Stock Appreciation Right may expire before its expiration date under the Plan (including pursuant to Sections 13, 14, or 17(c)) or under the Award Agreement.
Notwithstanding the foregoing, the rules of Section 6(d) relating to the maximum term and Section 6(f) relating to exercise also will apply to Stock Appreciation Rights.
(f) Tolling of Expiration. If exercising a Stock
Appreciation Right prior to its expiration is not permitted because of Applicable Laws, other than the rules of any stock exchange or quotation system on which the Common Stock is listed or quoted, the Stock Appreciation Right will remain exercisable
until 30 days after the first date on which exercise no longer would be prevented by such provisions; provided, however, that this tolling of expiration shall not apply if and to the extent the holder of such Stock Appreciation Right is a United States
taxpayer and the tolling would result in a violation of Section 409A such that the Stock Appreciation Right would be subject to additional taxation or interest under Section 409A. If this would result in the Stock Appreciation Right remaining
exercisable past its Expiration Date, then unless earlier terminated pursuant to Section 14, the Stock Appreciation Right will remain exercisable only until the end of the later of (x) the first day on which its exercise would not be prevented by
Section 20(a) and (y) its Expiration Date.
8. Restricted Stock.
(a) Restricted Stock Award Agreement. Each Award
of Restricted Stock will be evidenced by an Award Agreement that will specify the number of Shares subject to the Award of Restricted Stock and such other terms and conditions as the Administrator determines. For the avoidance of doubt, Restricted
Stock may be granted without any Period of Restriction (e.g., vested stock bonuses). Unless the Administrator determines otherwise, Shares of Restricted Stock will be held in escrow while unvested.
(b) Restrictions.
(i) Except as provided in this Section 8(b) or the
Award Agreement, while unvested, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated.
(ii) While unvested, Service Providers holding Shares of Restricted Stock may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(iii) Service Providers holding a Share covered by an
Award of Restricted Stock will not be entitled to receive dividends and other distributions paid with respect to such Shares while such Shares are unvested, unless the Administrator provides otherwise. If the Administrator provides that dividends and
distributions will be received and any such dividends or distributions are paid in cash they will be subject to the same provisions regarding forfeitability as the Shares with respect to which they were paid and if such dividend or distributions are
paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares with respect to which they were paid and, unless the Administrator determines otherwise, the Company will hold such dividends until
the restrictions on the Shares with respect to which they were paid have lapsed.
(iv) Except as otherwise provided in this Section 8(b)
or an Award Agreement, a Share covered by each Award of Restricted Stock made under the Plan will be released from escrow when practicable after the last day of the applicable Period of Restriction.
(v) The Administrator may impose, prior to grant, or
remove any restrictions on Shares covered by an Award of Restricted Stock.
9. Restricted Stock Units.
(a) Restricted Stock Unit Award Agreement. Each
Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the number of Restricted Stock Units subject to the Award of Restricted Stock Units and such other terms and conditions as the Administrator determines.
(b) Vesting Criteria and Other Terms. The
Administrator will set vesting criteria, if any, that, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units paid out to the Participant. The Administrator may set vesting criteria based upon the
achievement of Company-wide, divisional, business unit, or individual goals (that may include continued employment or service) or any other basis determined by the Administrator in its sole discretion.
(c) Earning Restricted Stock Units. Upon meeting
any applicable vesting criteria, the Participant will have earned the Restricted Stock Units and will be paid as determined in Section 9(d). The Administrator may reduce or waive any criteria that must be met to earn the Restricted Stock Units.
(d) Form and Timing of Payment. Payment of earned
Restricted Stock Units will be made at the time(s) set forth in the Award Agreement and determined by the Administrator. Unless otherwise provided in the Award Agreement, the Administrator may settle earned Restricted Stock Units in cash, Shares, or a
combination of both.
10. Performance Awards.
(a) Award Agreement. Each Performance Award will
be evidenced by an Award Agreement that will specify the specify any time period during which any performance objectives or other vesting provisions, if any, will be measured (“Performance Period”), and such other terms and conditions as the
Administrator determines.
(b) Objectives or Vesting Provisions and Other Terms.
The Administrator will set objectives or vesting provisions that, depending on the extent to which the objectives or vesting provisions are met, will determine the value of the payout for the Performance
Awards. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit, or individual goals (that may include continued employment or service) or any other basis determined by the
Administrator in its sole discretion.
(c) Form and Timing of Payment. Payment of earned
Performance Awards will be made at the time(s) specified in the Award Agreement. Payment with respect to earned Performance Awards will be made in cash, in Shares of equivalent value, or any combination of cash and Shares, with the determination of
form of payment made by the Administrator at the time of payment or, in the discretion of the Administrator, at the time of grant.
(d) Value of Performance Awards. Each Performance
Award’s threshold, target, and maximum payout values will be established by the Administrator on or before the Grant Date.
(e) Earning Performance Awards. After an
applicable Performance Period has ended, the holder of a Performance Award will be entitled to receive a payout for the Performance Award earned by the Participant over the Performance Period. The Administrator may reduce or waive any performance
objectives or other vesting provisions for such Performance Award.
11. Leaves of Absence/ Reduced or Part-time Work
Schedule/Transfer Between Locations/Change of Status.
(a) Leaves of Absence/ Reduced or Part-time Work
Schedule/Transfer Between Locations. Unless the Administrator provides otherwise or as otherwise required by Applicable Laws, vesting of Awards granted hereunder will be adjusted or suspended during any unpaid leave of absence in accordance with
the Company’s leave of absence policy in effect at the time of such leave. A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or within the
Company Group. In addition, unless the Administrator provides otherwise or as otherwise required by Applicable Laws, if, after the date of grant of a Participant’s Award, the Participant commences working on a part-time or reduced work schedule basis,
the vesting of such Award will be adjusted in accordance with the Company’s reduced work schedule/ part-time policy then in effect. Adjustments or suspensions of vesting pursuant to this Section shall be accomplished in a manner that is exempt from or
complies with the requirements of Code Section 409A and the regulations and guidance thereunder.
(b) Employment Status. A Participant will not
cease to be a Service Provider in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company (or member of the Company Group) or between the Company or any member of the Company Group.
(c) Incentive Stock Options. With respect to
Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so
guaranteed, then six (6) months following the first (1st) day of such leave any Incentive Stock Option held by a Participant will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option.
12. Transferability of Awards. Unless determined
otherwise by the Administrator, or otherwise required by Applicable Laws, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, the Award will be limited by any additional terms and conditions imposed by the Administrator. Any unauthorized transfer of an
Award will be void.
13. Adjustments; Dissolution or Liquidation.
(a) Adjustments. If any extraordinary dividend or
other extraordinary distribution (whether in cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, reclassification, repurchase,
or exchange of Shares or other securities of the Company, other change in the corporate structure of the Company affecting the Shares, or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards
Board Accounting Standards Codification Topic 718 (or any of its successors) affecting the Shares occurs (including a Change in Control), the Administrator, to
prevent diminution or enlargement of the benefits or potential benefits intended to be provided under the Plan, will adjust the number and class of shares that may be delivered under the Plan and/or the
number, class, and price of shares covered by each outstanding Award, and the numerical Share limits in Section 3. Notwithstanding the foregoing, the conversion of any convertible securities of the Company and
ordinary course repurchases of Shares or other securities of the Company will not be treated as an event that will require adjustment.
(b) Dissolution or Liquidation. In the event of
the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant, at such time prior to the effective date of such proposed transaction as the Administrator determines. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.
14. Change in Control or Merger.
(a) Administrator Discretion. If a Change in
Control or a merger of the Company with or into another corporation or other entity occurs (each, a “Transaction”), each outstanding Award will be treated as the Administrator determines (subject to the provisions of this Section), without a
Participant’s consent, including that such Award be continued by the successor corporation or a Parent or Subsidiary of the successor corporation (or an affiliate thereof) or that the vesting of any such Awards may accelerate automatically upon
consummation of a Transaction.
(b) Identical Treatment Not Required. The
Administrator need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants. The Administrator may take different actions with respect to the vested and unvested portions of an Award. The
Administrator will not be required to treat all Awards similarly in the Transaction.
(c) Continuation. An Award will be considered
continued if, following the Change in Control or merger:
(i) the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior to the Transaction, the consideration (whether stock, cash, or other securities or property) received in the Transaction by holders of Shares for each Share held on the effective date of the Transaction (and if holders were offered a choice of
consideration, the type of consideration received by the holders of a majority of the outstanding Shares) and the Award otherwise is continued in accordance with its
terms (including vesting criteria, subject to Section 14(c)(iii) below and Section 13(a); provided that if the consideration received in the Transaction
is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon exercising an
Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, or Performance Award, for each Share subject to such Award, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Transaction; or
(ii) the Award is terminated in exchange for an amount
of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the Transaction. Any such cash or property may be
subjected to any escrow applicable to holders of Common Stock in the Change in Control. If as of the date of the occurrence of the Transaction the Administrator determines that no amount would have been attained upon the exercise of such Award or
realization of the Participant’s rights, then such Award may be terminated by the Company without payment. The amount of cash or property can be subjected to vesting and paid to the Participant over the original vesting schedule of the Award.
(iii) Notwithstanding anything in this Section 14(c) to
the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent, in
all cases, unless specifically provided otherwise under the applicable Award Agreement or other written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable; provided,
however, a modification to such performance goals only to reflect the successor corporation’s post-Transaction corporate structure will not invalidate an otherwise valid Award assumption.
(d) Modification. The Administrator will have
authority to modify Awards in connection with a Change in Control or merger:
(i) in a manner
that causes the Awards to lose their tax-preferred status,
(ii) to
terminate any right a Participant has to exercise an Option prior to vesting in the Shares subject to the Option (i.e., “early exercise”), so that following the closing of the Transaction the Option may
only be exercised only to the extent it is vested;
(iii) to reduce
the Exercise Price subject to the Award in a manner that is disproportionate to the increase in the number of Shares subject to the Award, as long as the amount that would be received upon exercise of
the Award immediately before and immediately following the closing of the Transaction is equivalent and the adjustment complies with U.S. Treasury Regulation Section 1.409A-1(b)(v)(D); and
(iv) to suspend a
Participant’s right to exercise an Option during a limited period of time preceding and or following the closing of the Transaction without Participant consent if such suspension is administratively necessary or advisable to permit the closing of the
Transaction.
(e) Non-Continuation. If the successor
corporation does not continue an Award (or some portion such Award), the Participant will fully vest in (and have the right to exercise) 100% of the then-unvested Shares subject to his or her outstanding Options and Stock Appreciation Rights, all
restrictions on 100% of the Participant’s outstanding Restricted Stock and Restricted Stock Units will lapse, and, regarding 100% of Participant’s outstanding Awards with performance-based vesting, all performance goals or other vesting criteria will
be treated as achieved at 100% of target levels and all other terms and conditions met, in all cases, unless specifically provided otherwise under the applicable Award Agreement or other written agreement authorized by the Administrator between the
Participant and the Company or any of its Subsidiaries or Parents, as applicable. In no event will vesting of an Award accelerate as to more than 100% of the Award. Unless specifically provided otherwise under the applicable Award Agreement or other
written agreement authorized by the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable, if Options or Stock Appreciation Rights are not continued when a Change in Control or a merger of the
Company with or into another corporation or other entity occurs, the Administrator will notify the Participant in writing or electronically that the Participant’s vested Options or Stock Appreciation Rights (after considering the foregoing vesting
acceleration, if any) will be exercisable for a period of time determined by the Administrator in its sole discretion and all of the Participant’s Options or Stock Appreciation Rights will terminate upon the expiration of such period (whether vested or
unvested).
15. Outside Director Awards.
(a) Outside Director Limits. No Outside Director
may be paid, issued or granted, in any Fiscal Year, cash retainer fees and equity awards (including any Awards issued under this Plan) with an aggregate value greater than $600,000, increased to $900,000 in connection with his or her initial service
(with the value of each equity award based on its grant date fair value (determined in accordance with U.S. generally accepted accounting principles)). Any cash compensation paid or Awards granted to an individual for his or her services as an
Employee, or for his or her services as a Consultant (other than as an Outside Director), will not count for purposes of the limitation under this Section 15(a).
(b) Outside Director Acceleration. With respect
to Awards granted to an Outside Director, in the event of a Change in Control, the Participant will fully vest in and have the right to exercise outstanding Options and/or Stock Appreciation Rights as to all of the Shares underlying such Award,
including those Shares which otherwise would not be vested or exercisable, all restrictions on other outstanding Awards will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be
deemed achieved at 100% of target levels and all other terms and conditions met, unless specifically provided otherwise under the applicable Award Agreement, a Company policy related to Director compensation, or other written agreement authorized by
the Administrator between the Participant and the Company or any of its Subsidiaries or Parents, as applicable, that specifically references this default rule.
16. Tax Matters.
(a) Withholding Requirements. Prior to the
delivery of any Shares or cash under an Award (or exercise thereof) or such earlier time as any Tax Withholding are due, the Company may deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy any Tax
Withholding with respect to such Award or Shares subject to an Award (including upon exercise of an Award).
(b) Withholding Arrangements. The Administrator,
in its sole discretion and under such procedures as it may specify from time to time, may elect to satisfy such Tax Withholding, in whole or in part (including in combination) by (without limitation) (i) requiring the Participant to pay cash, check or
other cash equivalents, (ii) withholding otherwise deliverable cash (including cash from the sale of Shares issued to the Participant) or Shares having a fair market value equal to the amount required to be withheld or such greater amount (including up
to a maximum statutory amount) as the Administrator may determine or permit if such amount does not result in unfavorable financial accounting treatment, as the Administrator determines in its sole discretion, (iii) forcing the sale of Shares issued
pursuant to an Award (or exercise thereof) having a fair market value equal to the minimum statutory amount applicable in a Participant’s jurisdiction or a greater amount as the Administrator may determine or permit if such greater amount would not
result in unfavorable financial accounting treatment, as the Administrator determines in its sole discretion, (iv) requiring the Participant to deliver to the Company already-owned Shares having a fair market value equal to the minimum statutory amount
required to be withheld or a greater amount as the Administrator may determine or permit if such greater amount would not result in unfavorable financial accounting treatment, as the Administrator determines in its sole discretion, (v) requiring the
Participant to engage in a cashless exercise transaction (whether through a broker or otherwise) implemented by the Company in connection with the Plan, (vi) having the Company or a Parent or Subsidiary withhold from wages or any other cash amount due
or to become due to the Participant and payable by the Company or any Parent or Subsidiary, or (vii) such other consideration and method of payment for the meeting of Tax Withholding as the Administrator may determine to the extent permitted by
Applicable Laws, provided that, in all instances, the satisfaction of the Tax Withholding will not result in any adverse accounting consequence to the Company, as the Administrator may determine in its sole discretion. The fair market value of the
Shares to be withheld or delivered will be determined as of the date the amount of tax to be withheld is calculated or such other date as Administrator determines is applicable or appropriate with respect to the Tax Withholding calculation.
(c) Compliance With Code Section 409A. Unless the
Administrator determines that compliance with Code Section 409A is not necessary, it is intended that Awards will be designed and operated so that they are either exempt or excepted from the application of Code Section 409A or comply with any
requirements necessary to avoid the imposition of additional tax under Code Section 409A(a)(1)(B) so that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A and the Plan
and each Award Agreement will be interpreted consistent with this intent. This Section 16(c) is not a guarantee to any Participant of the consequences of his or her Awards. In no event will the Company have any responsibility, liability or obligation
to reimburse, indemnify or hold harmless Participant for any taxes that may be imposed or other costs that may be incurred, as a result of Section 409A.
17. Other Terms.
(a) No Effect on Employment or Service. Neither
the Plan nor any Award will confer upon a Participant any right regarding continuing the Participant’s relationship as a Service Provider with the Company or member of the Company Group, nor will they interfere with the Participant’s right, or the
Participant’s employer’s right, to terminate such relationship at any time free from any liability or claim under the Plan.
(b) Interpretation and Rules of Construction. The
words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.”
(c) Plan
Governs. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of any Grant Agreement, the terms and conditions of the Plan will prevail.
(d) Forfeiture Events.
(i) All Awards granted under the Plan will be subject
to recoupment under any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the
Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Laws. In addition, the Administrator may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Administrator determines necessary or
appropriate, including without limitation to any reacquisition right regarding previously acquired Shares or other cash or property. Unless this Section 17(d)(i) is specifically mentioned and waived in an
Award Agreement or other document, no recovery of compensation under a clawback policy or otherwise will be an event that triggers or contributes to any right of a Participant to resign for “good reason” or “constructive termination” (or similar
term) under any agreement with the Company or a member of the Company Group.
(ii) The Administrator may specify in an Award
Agreement that the Participant’s rights, payments, and benefits with respect to an Award will be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of specified events, in addition to any otherwise applicable vesting or
performance conditions of an Award. Such events may include, but will not be limited to, termination of such Participant’s status as Service Provider for cause or any specified action or inaction by a Participant that would constitute cause for
termination of such Participant’s status as a Service Provider.
18. Term of Plan. Subject to Section 21, the
Plan will become effective upon the business day immediately prior to the Registration Date. It will continue in effect until terminated under Section 19, but no Incentive Stock Options may be granted after ten (10) years from the date the Plan is
adopted by the Board and Section 3(b) will operate only until the tenth (10th) anniversary of the date the Plan is adopted by the Board.
19. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Administrator,
in its sole discretion, may amend, alter, suspend or terminate the Plan or any part thereof, at any time and for any reason.
(b) Stockholder Approval. The Company will obtain
stockholder approval of any Plan amendment to the extent necessary or desirable to comply with Applicable Laws.
(c) Consent of Participants Generally Required.
Subject to Section 19(d) below, no amendment, alteration, suspension or termination of the Plan or an Award under it will materially impair the rights of any Participant without a signed, written agreement authorized by the Administrator between the
Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it regarding Awards granted under the Plan prior to such termination.
(d) Exceptions to Consent Requirement.
(i) A
Participant’s rights will not be deemed to have been impaired by any amendment, alteration, suspension or termination if the Administrator, in its sole discretion, determines that the amendment, alteration, suspension or termination taken as a whole,
does not materially impair the Participant’s rights; and
(ii) Subject to
any limitations of Applicable Laws, the Administrator may amend the terms of any one or more Awards without the affected Participant’s consent even if it does materially impair the Participant’s right if such amendment is done
(ii) in a manner specified by the Plan,
(iii) to maintain the qualified status
of the Award as an Incentive Stock Option under Code Section 422,
(iv) to change the terms of an Incentive
Stock Option, if such change results in impairment of the Award only because it impairs the qualified status of the Award as an Incentive Stock Option under Code Section 422,
(v) to clarify the manner of exemption
from Code Section 409A or compliance with any requirements necessary to avoid the imposition of additional tax or interest under Code Section 409A(a)(1)(B), or
(vi) to comply with other Applicable
Laws.
20. Conditions Upon Issuance of Shares.
(a) Legal Compliance. The Company will make good
faith efforts to comply with all Applicable Laws related to the issuance of Shares. Shares will not be issued pursuant to an Award, including without limitation upon exercise or vesting thereof, as applicable, unless the issuance and delivery of such
Shares and exercise or vesting of the Award, as applicable, will comply with Applicable Laws. If required by the Administrator, issuance will be further subject to the approval of counsel for the Company with respect to such compliance. If the Company
determines it to be impossible or impractical to obtain authority from any regulatory body having jurisdiction or to complete or comply with the requirements of any Applicable Laws, registration or other qualification of the Shares under any state,
federal or foreign law or under the rules and regulations of the U.S. Securities and Exchange Commission, the stock exchange on which Shares of the same class are then listed, or any other governmental or regulatory body, which authority, registration,
qualification or rule compliance is deemed by the Company’s counsel to be necessary or advisable for the issuance and sale of any Shares hereunder, the Company will be relieved of any liability regarding the failure to issue or sell such Shares as to
which such authority, registration, qualification or rule compliance was not obtained and the Administrator reserves the authority, without the consent of a Participant, to terminate or cancel Awards with or without consideration in such a situation.
(b) Investment Representations. As a condition to
the exercise or vesting of an Award, the Company may require the person exercising such Award to represent and warrant during any such exercise or vesting that the Shares are being purchased only for investment and with no present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
(c) Failure to Accept Award. If a Participant has
not accepted an Award to the extent such acceptance has been requested or required by the Company or has not taken all administrative and other steps (e.g., setting up an account with a broker designated by the Company) necessary for the Company to
issue Shares upon the vesting, exercise, or settlement of the Award prior to the first date the Shares subject to such Award are scheduled to vest, then the portion of the Award scheduled to vest on such date will be cancelled on such date and such
Shares subject to the Award immediately will revert to the Plan for no additional consideration unless otherwise provided by the Administrator.
21. Stockholder Approval. The Plan will be
subject to approval by the stockholders of the Company within 12 months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
Appendix G
MINERVA SURGICAL, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
The purpose of the Plan is to provide employees of the Company and its Designated Companies with an opportunity to purchase Common Stock through accumulated Contributions. The Company intends for the Plan to have two components: a component that is
intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “423 Component”) and a component that is not intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “Non-423 Component”).
The provisions of the 423 Component, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code. An option to purchase shares of
Common Stock under the Non-423 Component will be granted pursuant to rules, procedures, or sub-plans adopted by the Administrator designed to achieve tax, securities laws, or other objectives for Eligible Employees and the Company. Except as otherwise
provided herein, the Non-423 Component will operate and be administered in the same manner as the 423 Component.
2. Definitions.
(a) “Administrator”
means the Board or any Committee designated by the Board to administer the Plan pursuant to Section 14.
(b) “Affiliate”
means any entity, other than a Subsidiary, in which the Company has an equity or other ownership interest.
(c) “Applicable
Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any foreign country or jurisdiction where options are, or will be, granted under the Plan.
(d) “Board”
means the Board of Directors of the Company.
(e) “Change in
Control” means the occurrence of any of the following events:
(i) A change in
the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more
than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of
the total voting power of the stock of the Company will not be considered a Change in Control. Further, if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in
substantially the same proportions as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, direct or indirect beneficial ownership of fifty percent (50%) or more of the total voting power of the stock of
the Company or of the ultimate parent entity of the Company, such event shall not be considered a Change in Control under this subsection (i). For this purpose, indirect beneficial ownership shall include, without limitation, an interest resulting from
ownership of the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities; or
(ii) A change
in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12)-month period by Directors whose appointment or election is not endorsed by a majority of the members of the
Board prior to the date of the appointment or election. For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be
considered a Change in Control; or
(iii) A change
in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) assets
from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that
for purposes of this subsection, the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer,
or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least
fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection, gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this definition, persons will be considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase, or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction
qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final U.S. Treasury Regulations and Internal Revenue Service guidance that has been promulgated or
may be promulgated thereunder from time to time.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole
purpose is to change the jurisdiction of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before
such transaction.
(f) “Code”
means the U.S. Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code will include such section or regulation, any valid regulation or other official applicable guidance promulgated under such section, and any comparable
provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
(g) “Committee”
means a committee of the Board appointed in accordance with Section 14 hereof.
(h) “Common
Stock” means the common stock of the Company.
(i) “Company”
means Minerva Surgical, Inc., a Delaware corporation, or any successor thereto.
(j) “Compensation”
includes an Eligible Employee’s base straight time gross earnings but excludes payments for incentive compensation, bonuses, payments for overtime and shift premium, equity compensation income and other similar compensation. The Administrator, in its
discretion, may, on a uniform and nondiscriminatory basis, establish a different definition of Compensation for a subsequent Offering Period.
(k) “Contributions”
means the payroll deductions and other additional payments that the Company may permit to be made by a Participant to fund the exercise of options granted pursuant to the Plan.
(l) “Designated
Company” means any Subsidiary or Affiliate of the Company that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan. For purposes of the 423 Component, only the Company and its
Subsidiaries may be Designated Companies, provided, however that at any given time, a Subsidiary that is a Designated Company under the 423 Component will not be a Designated Company under the Non-423 Component.
(m) “Director”
means a member of the Board.
(n) “Eligible
Employee” means any individual who is a common law employee providing services to the Company or a Designated Company and is customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year by the
Employer, or any lesser number of hours per week and/or number of months in any calendar year established by the Administrator (if required under applicable local law) for purposes of any separate Offering or the Non-423 Component. For purposes of the
Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the Employer approves or is legally protected under Applicable Laws. Where the period of leave exceeds three (3)
months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three (3) months and one (1) day following the commencement of such leave. The
Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date in an Offering, determine (for each Offering under the 423 Component, on a uniform and nondiscriminatory basis or
as otherwise permitted by Treasury Regulation Section 1.423-2) that the definition of Eligible Employee will or will not include an individual if he or she: (i) has not completed at least two (2) years of service since his or her last hire date (or
such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii)
customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (iv) is a highly compensated employee within the meaning of Section 414(q) of the Code, or
(v) is a highly compensated employee within the meaning of Section 414(q) of the Code with compensation above a certain level or is an officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided the exclusion is
applied with respect to each Offering under the 423 Component in an identical manner to all highly compensated individuals of the Employer whose Eligible Employees are participating in that Offering under the 423 Component. Each exclusion will be
applied with respect to an Offering in a manner complying with U.S. Treasury Regulation Section 1.423-2(e)(2)(ii). Such exclusions may be applied with respect to an Offering under the Non- 423 Component without regard to the limitations of Treasury
Regulation Section 1.423-2.
(o) “Employer”
means the employer of the applicable Eligible Employee(s).
(p) “Enrollment
Date” means the first Trading Day of an Offering Period.
(q) “Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
(r) “Exercise
Date” means the last Trading Day of the Purchase Period. Notwithstanding the foregoing, in the event that an Offering Period is terminated prior to its expiration pursuant to Section 20(a), the Administrator, in its sole discretion, may determine
that any Purchase Period also terminating under such Offering Period will terminate without options being exercised on the Exercise Date that otherwise would have occurred on the last Trading Day of such Purchase Period.
(s) “Fair
Market Value” means, as of any date, closing sales price for Common Stock as quoted on any established stock exchange or national market system (including without limitation the New York Stock Exchange, NASDAQ Global Select Market, the NASDAQ
Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market) on which the Common Stock is listed on the date of determination (or the closing bid, if no sales were reported), as reported in The Wall Street Journal or such other source
as the Administrator deems reliable. If the determination date for the Fair Market Value occurs on a non-trading day (i.e., a weekend or holiday), the Fair Market Value will be such price on the immediately preceding trading day, unless otherwise
determined by the Administrator. In the absence of an established market for the Common Stock, the Fair Market Value thereof will be determined in good faith by the Administrator. The determination of fair market value for purposes of tax withholding
may be made in the Administrator’s discretion subject to Applicable Laws and is not required to be consistent with the determination of Fair Market Value for other purposes.
(t) “Fiscal
Year” means a fiscal year of the Company.
(u) “New
Exercise Date” means a new Exercise Date if the Administrator shortens any Offering Period then in progress.
(v) “Offering”
means an offer under the Plan of an option that may be exercised during an Offering Period as further described in Section 4. For purposes of the Plan, the Administrator may designate separate Offerings under the Plan (the terms of which need not be
identical) in which Eligible Employees of one or more Employers will participate, even if the dates of the applicable Offering Periods of each such Offering are identical and the provisions of the Plan will separately apply to each Offering. To the
extent permitted by U.S. Treasury Regulation Section 1.423-2(a)(1), the terms of each Offering need not be identical provided that the terms of the Plan and an Offering together satisfy U.S. Treasury Regulation Section 1.423-2(a)(2) and (a)(3).
(w) “Offering
Periods” means a period beginning on such date as may be determined by the Administrator in its discretion and ending on such Exercise Date as may be determined by the Administrator in its discretion, in each case on a uniform and
nondiscriminatory basis. The duration and timing of Offering Periods may be changed pursuant to Sections 4, 20 and 30.
(x) “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(y) “Participant”
means an Eligible Employee that participates in the Plan.
(z) “Plan”
means this Minerva Surgical, Inc. 2021 Employee Stock Purchase Plan.
(aa) “Purchase
Period” means the period during an Offering Period during which shares of Common Stock may be purchased on a Participant’s behalf in accordance with the terms of the Plan. Unless otherwise determined by the Administrator, Purchase Periods will
coincide with Offering Periods.
(bb) “Purchase
Price” means an amount equal to eighty-five percent (85%) of the Fair Market Value on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be determined for subsequent Offering Periods by
the Administrator subject to compliance with Section 423 of the Code (or any successor rule or provision or any other Applicable Law, regulation or stock exchange rule) or pursuant to Section 20.
(cc) “Registration
Date” means the effective date of the Registration Statement.
(dd) “Registration
Statement” means the registration statement on Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Common Stock.
(ee) “Subsidiary”
means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
(ff) “Trading
Day” means a day on which the national stock exchange upon which the Common Stock is listed is open for trading.
(gg) “U.S.
Treasury Regulations” means the Treasury regulations of the Code. Reference to a specific Treasury Regulation will include such Treasury Regulation, the section of the Code under which such regulation was promulgated, and any comparable provision
of any future legislation or regulation amending, supplementing, or superseding such Section or regulation.
3. Eligibility.
(a) Offering
Periods. Any Eligible Employee on a given Enrollment Date will be eligible to participate in the Plan, subject to the requirements of Section 5.
(b) Non-U.S.
Employees. Eligible Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the
Code)) may be excluded from participation in the Plan or an Offering if the participation of such Eligible Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause
the Plan or an Offering to violate Section 423 of the Code. In the case of the Non-423 Component, Eligible Employees may be excluded from participation in the Plan or an Offering if the Administrator determines that participation of such Eligible
Employees is not advisable or practicable.
(c) Limitations.
Any provisions of the Plan to the contrary notwithstanding, no Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other person whose stock would be attributed
to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in
Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate, which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is
granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.
4. Offering
Periods. The Plan will be implemented by consecutive Offering Periods commencing and ending on such dates as determined by the Administrator. The Administrator will have the power to change the duration of Offering Periods (including the
commencement dates thereof) with respect to future Offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter; provided, however, that no Offering Period
may last more than twenty-seven (27) months.
5. Participation.
An Eligible Employee may participate in the Plan pursuant to Section 3(a) by (i) submitting to the Company’s stock administration office (or its designee) a properly completed subscription agreement authorizing Contributions in the form provided by the
Administrator for such purpose or (ii) following an electronic or other enrollment procedure determined by the Administrator, in either case on or before a date determined by the Administrator prior to an applicable Enrollment Date.
6. Contributions.
(a) At the time a
Participant enrolls in the Plan pursuant to Section 5, he or she will elect to have Contributions (in the form of payroll deductions or otherwise, to the extent permitted by the Administrator) made on each pay day during the Offering Period in an
amount not exceeding fifteen percent (15%) of the Compensation that he or she receives on the pay day. The Administrator, in its sole discretion, may permit all Participants in a specified Offering to contribute amounts to the Plan through payment by
cash, check or other means set forth in the subscription agreement prior to each Exercise Date of each Purchase Period. A Participant’s subscription agreement will remain in effect for successive Offering Periods unless terminated as provided in
Section 10 hereof.
(b) In the event
Contributions are made in the form of payroll deductions, such payroll deductions for a Participant will commence on the first pay day following the Enrollment Date and will end on the last pay day on or prior to the last Exercise Date of such Offering
Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Section 10 hereof; provided, however, that for the first Offering Period, payroll deductions will commence on the first pay day on or following
the end of the Enrollment Window.
(c) All
Contributions made for a Participant will be credited to his or her account under the Plan and Contributions will be made in whole percentages of his or her Compensation only. A Participant may not make any additional payments into such account.
(d) A Participant
may discontinue his or her participation in the Plan as provided under Section 10. Unless otherwise determined by the Administrator, during a Purchase Period, a Participant may not increase the rate of his or her Contributions and may only decrease the
rate of his or her Contributions one (1) time and such decrease must be to a Contribution rate of zero percent (0%). Any such decrease during a Purchase Period requires the Participant (i) properly completing and submitting to the Company’s stock
administration office (or its designee) a new subscription agreement authorizing the change in Contribution rate in the form provided by the Administrator for such purpose or (ii) following an electronic or other procedure prescribed by the
Administrator, in either case on or before a date determined by the Administrator prior to an applicable Exercise Date. If a Participant has not followed such procedures to change the rate of Contributions, the rate of his or her Contributions will
continue at the originally elected rate throughout the Purchase Period and future Offering Periods and Purchase Periods (unless the Participant’s participation is terminated as provided in Sections 10 or 11). The Administrator may, in its sole
discretion, amend the nature and/or number of Contribution rate changes that may be made by Participants during any Offering Period or Purchase Period and may establish other conditions or limitations as it deems appropriate for Plan administration.
Any change in the rate of Contributions made pursuant to this Section 6(d) will be effective as of the first (1st) full payroll period following five (5) business days
after the date on which the change is made by the Participant (unless the Administrator, in its sole discretion, elects to process a given change in payroll deduction rate more quickly).
(e) Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(c), a Participant’s Contributions may be decreased to zero percent (0%) at any time during a Purchase Period. Subject to Section 423(b)(8) of the Code and
Section 3(c) hereof, Contributions will recommence at the rate originally elected by the Participant effective as of the beginning of the first Purchase Period scheduled to end in the following calendar year, unless terminated by the Participant as
provided in Section 10.
(f) Notwithstanding
any provisions to the contrary in the Plan, the Administrator may allow Participants to participate in the Plan via cash contributions instead of payroll deductions if (i) payroll deductions are not permitted under applicable local law, (ii) the
Administrator determines that cash contributions are permissible under Section 423 of the Code; or (iii) the Participants are participating in the Non-423 Component.
(g) At the time
the option is exercised, in whole or in part, or at the time some or all of the Common Stock issued under the Plan is disposed of (or any other time that a taxable event related to the Plan occurs), the Participant must make adequate provision for the
Company’s or Employer’s federal, state, local or any other tax liability payable to any authority including taxes imposed by jurisdictions outside of the U.S., national insurance, social security or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock (or any other time that a taxable event related to the Plan occurs). At any time, the Company or the Employer may, but will not be obligated to, withhold from the
Participant’s compensation the amount necessary for the Company or the Employer to meet applicable withholding obligations, including any withholding required to make available to the Company or the Employer any tax deductions or benefits attributable
to sale or early disposition of Common Stock by the Eligible Employee. In addition, the Company or the Employer may, but will not be obligated to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the Company or
the Employer deems appropriate to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
7. Grant of
Option. On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to
a number of shares of Common Stock determined by dividing such Eligible Employee’s Contributions accumulated prior to such Exercise Date and retained in the Eligible Employee’s account as of the Exercise Date by the applicable Purchase Price; provided
that in no event will an Eligible Employee be permitted to purchase during each Purchase Period more than a fixed number of shares of Common Stock (subject to any adjustment pursuant to Section 19) in an amount that the Administrator may establish from
time to time, in its discretion and on a uniform and nondiscriminatory basis, for all options to be granted on any Enrollment Date, and provided further that such purchase will be subject to the limitations set forth in Sections 3(c) and 13. The
Eligible Employee may accept the grant of such option (i) with respect to the first Offering Period by submitting a properly completed subscription agreement in accordance with the requirements of Section 5 on or before the last day of the Enrollment
Window, and (ii) with respect to any subsequent Offering Period under the Plan, by electing to participate in the Plan in accordance with the requirements of Section 5. The Administrator may, for future Offering Periods, increase or decrease, in its
absolute discretion, the maximum number of shares of Common Stock that an Eligible Employee may purchase during each Purchase Period. Exercise of the option will occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section
10. The option will expire on the last day of the Offering Period.
8. Exercise
of Option.
(a) Unless a
Participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock will be exercised automatically on each Exercise Date, and the maximum number of full shares subject to the option will be
purchased for such Participant at the applicable Purchase Price with the accumulated Contributions from his or her account. No fractional shares of Common Stock will be purchased; any Contributions accumulated in a Participant’s account, which are not
sufficient to purchase a full share will be retained in the Participant’s account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the Participant as provided in Section 10. Any other funds left over in a
Participant’s account after the Exercise Date will be returned to the Participant. During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by him or her.
(b) If the
Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the
Enrollment Date of the applicable Offering Period, or (ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata
allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all
Participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect or (y) provide that the Company will make a pro rata allocation of the shares of Common Stock available for purchase on
such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise
Date, and terminate any or all Offering Periods then in effect pursuant to Section 20. The Company may make a pro rata allocation of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence,
notwithstanding any authorization of additional shares for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date.
9. Delivery.
As soon as reasonably practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company will arrange the delivery to each Participant of the shares purchased upon exercise of his or her option in a form determined
by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The Company may permit or require that shares be deposited directly with a broker designated by the Company or to a designated agent of the Company,
and the Company may utilize electronic or automated methods of share transfer. The Company may require that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of
disqualifying dispositions of such shares. No Participant will have any voting, dividend, or other stockholder rights with respect to shares of Common Stock subject to any option granted under the Plan until such shares have been purchased and
delivered to the Participant as provided in this Section 9.
10. Withdrawal.
(a) A Participant
may withdraw all but not less than all the Contributions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by (i) submitting to the Company’s stock administration office (or its designee) a written
notice of withdrawal in the form determined by the Administrator for such purpose (which may be similar to the form attached hereto as Exhibit B), or (ii) following an electronic or other withdrawal procedure determined by the Administrator.
The Administrator may set forth a deadline of when a withdrawal must occur to be effective prior to a given Exercise Date in accordance with policies it may approve from time to time. All of the Participant’s Contributions credited to his or her
account will be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s option for the Offering Period will be automatically terminated, and no further Contributions for the purchase of shares will be made for
such Offering Period. If a Participant withdraws from an Offering Period, Contributions will not resume at the beginning of the succeeding Offering Period, unless the Participant re-enrolls in the Plan in accordance with the provisions of Section 5.
(b) A Participant’s
withdrawal from an Offering Period will not have any effect on his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or in succeeding Offering Periods that commence after the termination of the Offering
Period from which the Participant withdraws.
11. Termination
of Employment. Upon a Participant’s ceasing to be an Eligible Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to such Participant’s account during the Offering Period but
not yet used to purchase shares of Common Stock under the Plan will be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such Participant’s option will be automatically
terminated. Unless otherwise provided by the Administrator, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Company will not be treated
as terminated under the Plan; however, if a Participant transfers from an Offering under the 423 Component to the Non-423 Component, the exercise of the option will be qualified under the 423 Component only to the extent it complies with Section 423 of
the Code, unless otherwise provided by the Administrator.
12. Interest.
No interest will accrue on the Contributions of a participant in the Plan, except as may be required by Applicable Law, as determined by the Company, and if so required by the laws of a particular jurisdiction, will apply to all Participants in the
relevant Offering under the 423 Component, except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).
13. Stock.
(a) Subject to
adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of Common Stock that will be made available for sale under the Plan will be 4,045,183 shares of Common Stock. The number of shares
of Common Stock available for issuance under the Plan will be increased on the first day of each Fiscal Year beginning with the 2023 Fiscal Year equal to the least of (i) 9,110,048 shares of Common Stock, (ii) one percent (1%) of the outstanding shares
of Common Stock on the last day of the immediately preceding Fiscal Year, or (iii) an amount determined by the Administrator.
(b) Until the
shares of Common Stock are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a Participant will have only the rights of an unsecured creditor with respect to such shares,
and no right to vote or receive dividends or any other rights as a stockholder will exist with respect to such shares.
(c) Shares of
Common Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse.
14. Administration.
The Plan will be administered by the Board or a Committee appointed by the Board, which Committee will be constituted to comply with Applicable Laws. The Administrator will have full and exclusive discretionary authority to construe, interpret and
apply the terms of the Plan, to delegate ministerial duties to any of the Company’s employees, to designate separate Offerings under the Plan, to designate Subsidiaries and Affiliates of the Company as participating in the 423 Component or Non-423
Component, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary for the administration of the Plan (including, without limitation, to adopt such procedures and
sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the U.S., the terms of which sub-plans may take precedence over other provisions of this Plan, with the
exception of Section 13(a) hereof, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan will govern the operation of such sub-plan). Unless otherwise determined by the Administrator, the Eligible Employees eligible
to participate in each sub-plan will participate in a separate Offering or in the Non-423 Component. Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to
participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions, payment
of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements. The Administrator
also is authorized to determine that, to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f), the terms of an option granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less favorable than
the terms of options granted under the Plan or the same Offering to employees resident solely in the U.S. Every finding, decision, and determination made by the Administrator will, to the full extent permitted by law, be final and binding upon all
parties.
15. Designation
of Beneficiary.
(a) If permitted
by the Administrator, a Participant may file a designation of a beneficiary who is to receive any shares of Common Stock and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to an Exercise
Date on which the option is exercised but prior to delivery to such Participant of such shares and cash. In addition, if permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any cash from the
Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the option. If a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be
effective.
(b) Such
designation of beneficiary may be changed by the Participant at any time by notice in a form determined by the Administrator. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living
at the time of such Participant’s death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company
may designate.
(c) All
beneficiary designations will be in such form and manner as the Administrator may designate from time to time. Notwithstanding Sections 15(a) and (b) above, the Company and/or the Administrator may decide not to permit such designations by Participants
in non-U.S. jurisdictions to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
16. Transferability.
Neither Contributions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than
by will, the laws of descent and distribution or as provided in Section 15 hereof) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an
election to withdraw funds from an Offering Period in accordance with Section 10 hereof.
17. Use of
Funds. The Company may use all Contributions received or held by it under the Plan for any corporate purpose, and the Company will not be obligated to segregate such Contributions except under Offerings or for Participants in the Non-423
Component for which Applicable Laws require that Contributions to the Plan by Participants be segregated from the Company’s general corporate funds and/or deposited with an independent third party. Until shares of Common Stock are issued, Participants
will have only the rights of an unsecured creditor with respect to such shares.
18. Reports.
Individual accounts will be maintained for each Participant in the Plan. Statements of account will be given to participating Eligible Employees at least annually, which statements will set forth the amounts of Contributions, the Purchase Price, the
number of shares of Common Stock purchased and the remaining cash balance, if any.
19. Adjustments,
Dissolution, Liquidation, Merger, or Change in Control.
(a) Adjustments.
In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan, will, in such manner as it may deem equitable, adjust the number and class of Common Stock that may be delivered under the Plan, the Purchase Price per share and the number of
shares of Common Stock covered by each option under the Plan that has not yet been exercised, and the numerical limits of Sections 7 and 13.
(b) Dissolution
or Liquidation. In the event of the proposed dissolution or liquidation of the Company, any Offering Period then in progress will be shortened by setting a New Exercise Date, and will terminate immediately prior to the consummation of such
proposed dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date will be before the date of the Company’s proposed dissolution or liquidation. The Administrator will notify each Participant in writing or
electronically, prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to
such date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.
(c) Merger or
Change in Control. In the event of a merger or Change in Control, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that
the successor corporation refuses to assume or substitute for the option, the Offering Period with respect to which such option relates will be shortened by setting a New Exercise Date on which such Offering Period will end. The New Exercise Date will
occur before the date of the Company’s proposed merger or Change in Control. The Administrator will notify each Participant in writing or electronically prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been
changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.
20. Amendment
or Termination.
(a) The
Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason. If the Plan is terminated, the Administrator, in its discretion, may elect to terminate all outstanding Offering
Periods either immediately or upon completion of the purchase of shares of Common Stock on the next Exercise Date (which may be sooner than originally scheduled, if determined by the Administrator in its discretion), or may elect to permit Offering
Periods to expire in accordance with their terms (and subject to any adjustment pursuant to Section 19). If the Offering Periods are terminated prior to expiration, all amounts then credited to Participants’ accounts that have not been used to purchase
shares of Common Stock will be returned to the Participants (without interest thereon, except as otherwise required under Applicable Laws, as further set forth in Section 12 hereof) as soon as administratively practicable.
(b) Without
stockholder consent and without limiting Section 20(a), the Administrator will be entitled to change the Offering Periods or Purchase Periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit Contributions in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s
processing of properly completed Contribution elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly
correspond with Contribution amounts, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable that are consistent with the Plan.
(c) In the event
the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to
reduce or eliminate such accounting consequence including, but not limited to:
(i) amending
the Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), including with respect to an Offering Period underway at the time;
(ii) altering
the Purchase Price for any Offering Period or Purchase Period including an Offering Period or Purchase Period underway at the time of the change in Purchase Price;
(iii) shortening
any Offering Period or Purchase Period by setting a New Exercise Date, including an Offering Period or Purchase Period underway at the time of the Administrator action;
(iv) reducing the
maximum percentage of Compensation a Participant may elect to set aside as Contributions; and
(v) reducing the
maximum number of shares of Common Stock a Participant may purchase during any Offering Period or Purchase Period.
Such modifications or amendments will not require stockholder approval or the consent of any Participants.
21. Notices.
All notices or other communications by a Participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated
by the Company for the receipt thereof.
22. Conditions
Upon Issuance of Shares. Shares of Common Stock will not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto will comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the U.S. Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed,
and will be further subject to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the person exercising such option to
represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned applicable provisions of law.
23. Code
Section 409A. The 423 Component of the Plan is exempt from the application of Code Section 409A and any ambiguities herein will be interpreted to so be exempt from Code Section 409A. In furtherance of the foregoing and notwithstanding any
provision in the Plan to the contrary, if the Administrator determines that an option granted under the Plan may be subject to Code Section 409A or that any provision in the Plan would cause an option under the Plan to be subject to Code Section 409A,
the Administrator may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Administrator determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any
outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Code Section 409A, but only to the extent any such amendments or action by the Administrator would not violate Code Section 409A.
Notwithstanding the foregoing, the Company and any Parent, Subsidiary or Affiliate will have no liability to a Participant or any other party if the option to purchase Common Stock under the Plan that is intended to be exempt from or compliant with
Code Section 409A is not so exempt or compliant or for any action taken by the Administrator with respect thereto. The Company makes no representation that the option to purchase Common Stock under the Plan is compliant with Code Section 409A.
24. Term of
Plan. The Plan will become effective upon the later to occur of (i) its adoption by the Board or (ii) the business day immediately prior to the Registration Date. It will continue in effect for a term of twenty (20) years, unless sooner
terminated under Section 20.
25. Stockholder
Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under
Applicable Laws.
26. Governing
Law. The Plan will be governed by, and construed in accordance with, the laws of the State of Delaware (except its choice-of-law provisions).
27. No Right
to Employment. Participation in the Plan by a Participant will not be construed as giving a Participant the right to be retained as an employee of the Company or a Subsidiary or Affiliate of the Company, as applicable. Further, the Company or a
Subsidiary or Affiliate of the Company may dismiss a Participant from employment at any time, free from any liability or any claim under the Plan.
28. Severability.
If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability will not affect the remaining parts of the
Plan, and the Plan will be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.
29. Compliance with Applicable Laws. The terms of this Plan are intended to comply with all Applicable Laws and
will be construed accordingly.
30. Automatic Transfer to Low Price Offering Period. To the extent permitted by Applicable Laws, if the Fair
Market Value on any Exercise Date in an Offering Period is lower than the Fair Market Value on the Enrollment Date of such Offering Period, then all Participants in such Offering Period automatically will be withdrawn from such Offering Period
immediately after the exercise of their option on such Exercise Date and automatically re-enrolled in the immediately following Offering Period as of the first day thereof.
EXHIBIT A
MINERVA SURGICAL, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application |
Offering Date: _______________ |
_____ Change in Payroll Deduction Rate
1. ____________________
(“Employee”) hereby elects to participate in the Minerva Surgical, Inc. 2021 Employee Stock Purchase Plan (the “Plan”) and subscribes to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan. Unless
otherwise defined herein, the terms defined in the 2021 Employee Stock Purchase Plan (the “Plan”) shall have the same defined meanings in this Subscription Agreement.
2. Employee
hereby authorizes payroll deductions from each paycheck in the amount of ____% (from 0 to fifteen percent (15%)) of his or her Compensation on each payday during the Offering Period in accordance with the Plan. (Please note that no fractional
percentages are permitted.)
3. Employee
understands that said payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Plan. Employee understands that if he or she does not withdraw from an Offering
Period, any accumulated payroll deductions will be used to automatically exercise his or her option and purchase Common Stock under the Plan.
4. Employee
has received a copy of the complete Plan and its accompanying prospectus. Employee understands that his or her participation in the Plan is in all respects subject to the terms of the Plan.
5. Shares of
Common Stock purchased by Employee under the Plan should be issued in the name(s) of _____________ (Employee or Employee and Spouse only).
6. Employee
understands that if he or she disposes of any shares that he or she purchased under the Plan within two (2) years after the Enrollment Date (the first day of the Offering Period during which he or she purchased such shares) or one (1) year after the
applicable Exercise Date, he or she will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were
purchased over the price paid for the shares. Employee hereby agrees to notify the Company in writing within thirty (30) days after the date of any disposition of such shares and to make adequate provision for federal, state or other tax
withholding obligations, if any, that arise upon the disposition of such shares. The Company may, but will not be obligated to, withhold from Employee’s compensation the amount necessary to meet any applicable withholding obligation including any
withholding necessary to make available to the Company any tax deductions or benefits attributable to Employee’s sale or early disposition of such shares. Employee understands that if he or she disposes of such shares at any time after the expiration
of the two (2)-year and one-(1) year holding periods, he or she will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of
an amount equal to the lesser of (i) the excess of the fair market value of the shares at the time of such disposition over the purchase price paid for the shares, or (ii) fifteen percent (15%) of the fair market value of the shares on the first day of
the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.
7. Employee
hereby agrees to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon Employee’s eligibility to participate in the Plan.
Employee’s Social Security Number: |
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Employee’s Address: |
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EMPLOYEE UNDERSTANDS THAT THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY EMPLOYEE.
Dated: |
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Signature of Employee |
EXHIBIT B
MINERVA SURGICAL, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
Unless otherwise defined herein, the terms defined in the 2021 Employee Stock Purchase Plan (the “Plan”) shall have the same
defined meanings in this Notice of Withdrawal.
The undersigned Participant in the Offering Period of the Minerva Surgical, Inc. 2021 Employee Stock Purchase Plan that began on
____________, ______ (the “Offering Date”) hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be terminated automatically. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering Period and the undersigned will be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.
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Name and Address of Participant: |
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Signature: |
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Date: |
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