Withdrawal Right. The withdrawal right described in this section will be triggered only as a result of actions taken by the Company that are inconsistent with restrictions herein on the use of funds from the Foundation Investment or related U.S. tax obligations, including without limitation the requirements set forth in Sections 5 and 8 below, or are in material breach of the Global Access Commitments (a “Material Breach”) provided that for the avoidance of doubt the parties agree that a breach of the Global Access Commitments that could reasonably result in the Foundation Investment failing to qualify as a “program related investment” under the Code will constitute a material breach of the Global Access Requirements. For the avoidance of doubt, the withdrawal right will not be triggered by the inability, for technical or scientific reasons, to successfully develop vaccines and other products for Foundation Priority Areas, so long as the Company has not materially breached its obligations under this Letter Agreement. In the event the Company fails to comply with the restrictions on the use of funds from the Foundation Investment, or the other related U.S. tax obligations set forth herein or is in Material Breach (a “Charitability Default”), the Foundation will have the rights set forth below (the “Withdrawal Right”). Each party agrees to promptly notify the other party in writing of the occurrence of such event and the Company shall thereafter provide to the Foundation a proposed strategy to remedy the Charitability Default. If the Company fails to cure the Charitability Default within [**] days of receipt of the above described notice, the Company shall have the obligation to (i) redeem all of the Series A Preferred Stock held by the Foundation or any Common Stock held by the Foundation issued upon conversion of the Series A Preferred Stock (collectively, the “Foundation Stock”), provided that such redemption shall be made only to the extent permitted by applicable law and not to the extent that it renders the Company insolvent or causes the Company to be in material breach of a third party financial covenant or contractual obligation, or (ii) locate a third party that will purchase the Foundation Stock. If the Company is unable to redeem all of the Foundation Stock, and no third party purchases the Foundation Stock, then the Company shall use its best efforts to effect the Withdrawal Right, consistent with the Code and applicable law, as soon as practicable. During the period when the Company is unable to exercise its obligation to redeem or find a purchaser of the Foundation Stock, the Company shall not pay dividends on any of its capital stock, redeem the capital stock of any other stockholder of the Company or otherwise make any other distribution to any other stockholder of the Company. Upon the transfer of any Foundation Stock to any one or more transferees that are tax-exempt organizations as described in Section 501(c)(3) of the Code, the Foundation may assign to any such transferee all of its rights attached to such Foundation Stock. For redemption or purchase by a third party, Foundation Stock shall be valued at the greater of the Original Purchase Price or the fair market value thereof as determined in good faith by the Board of Directors of the Company. If the Foundation disagrees with such Board determination, it may seek an independent appraisal, in which case the then current fair market value of the Foundation Stock shall be determined by a mutually agreed upon (such agreement not unreasonably withheld) third-party appraiser. The Foundation shall be responsible for the payment of the appraisal fees. If the Foundation’s shares are sold or redeemed due to a Charitability Default, commencing upon the date of such sale or redemption, the Foundation or a Foundation Affiliate will have a twelve (12) month look back right by which, in the event of (i) a sale of all or substantially all of the shares of the Company, or a sale of all or substantially all of its assets (“Sale Transaction”), that results in cash proceeds, or (ii) upon the closing of a firmly underwritten public offering (“Public Offering”) of shares of Common Stock of the Company pursuant to a registration statement under the Securities Act of 1933, as amended (“Securities Act”), representing a per share valuation for the Company in excess of 200% of the valuation used for the sale or redemption of the Foundation Stock from the Foundation, the Foundation will receive compensation equal to the excess of what it would have received in such transaction if it still held the Foundation Stock at the time of such Sale Transaction or Public Offering over what it actually received in the sale or redemption of the Foundation Stock had the Charitability Default not occurred.
Appears in 2 contracts
Samples: Strategic Relationship Agreement, Letter Agreement (Visterra, Inc.)
Withdrawal Right. (a) The withdrawal right Withdrawal Right described and defined in this section Section 6 will be triggered only as a result of actions taken a Charitability Default. For the avoidance of doubt, the Withdrawal Right and the Charitability Default will not be triggered by [***], so long as the Company that are inconsistent has not breached its obligations under this Letter Agreement.
(b) A “Charitability Default” will occur if the Company either (i) fails to comply, in any material respect, with the restrictions herein in Sections 2(c) and 9 of this Letter Agreement on the use of funds from the Foundation Investment or the other related U.S. tax obligationslegal obligations set forth in this Letter Agreement, including without limitation the requirements set forth in Sections 5 7, 11, and 8 12 below, or are (ii) is in material breach of the Global Access Commitments (a “Material Breach”) provided that for the avoidance of doubt the parties agree that a breach of the Global Access Commitments that could reasonably result in the Foundation Investment failing to qualify as a “program related investment” under the Code will constitute a material breach of the Global Access Requirements. For the avoidance of doubt, the withdrawal right will not be triggered by the inability, for technical or scientific reasons, to successfully develop vaccines and other products for Foundation Priority Areas, so long as the Company has not materially breached its obligations under this Letter Agreement. In the event the Company fails to comply with the restrictions on the use of funds from the Foundation Investment, or the other related U.S. tax obligations set forth herein or is in Material Breach (a “Charitability Default”), the Foundation will have the rights set forth below (the “Withdrawal Right”)Commitments. Each party agrees to promptly notify the other party in writing if it has knowledge of the occurrence of such event any Charitability Default and the Company shall thereafter provide to the Foundation a proposed strategy to remedy the Charitability Default. .
(c) If the Company fails to cure the Charitability Default within [***] days of receipt of the above described notice, notice (provided that solely for purposes of this Section 6 in the event the Company shall have disputes that a Charitability Default has occurred, such [***] period will commence upon a decision that a Charitability Default has occurred pursuant to the obligation to (i) redeem all dispute resolution process described in Section 17); and the Foundation holds any securities of the Series A Preferred Stock held by Company issued in connection with the Foundation Investment, including securities issued in respect of or any Common Stock held by the Foundation issued upon conversion or exercise of the Series A Preferred Stock such securities (collectively, the “Foundation Stock”), the Company shall have the obligation, if requested by the Foundation, to redeem or arrange for a third-party to purchase all (but not less than all) of the Foundation Stock (the “Withdrawal Right”), provided that any such redemption or repurchase shall be made only to the extent permitted by applicable law and not concerning distributions to holders of equity interests. Without limiting the extent that it renders the Company insolvent or causes the Company to be in material breach of a third party financial covenant or contractual obligationforegoing, or (ii) locate a third party that will purchase the Foundation Stock. If if the Company is unable to redeem all of the Foundation Stock, and no third third-party purchases the Foundation Stock, then the Company shall use its best commercially reasonable efforts to effect the Withdrawal Right, consistent with the Code and applicable law, as soon as practicablepracticable thereafter, provided that to the extent any redemption of the Foundation Stock pursuant to this Section 6(c) would have [***]. For the avoidance of doubt, the Foundation shall cease to be a stockholder for all purposes effective as of the date such Foundation Stock is redeemed and, thereafter, the sole right of the Foundation with respect to its ownership of Foundation Stock shall be to receive such redemption payment. During the period when the Company is unable to exercise its obligation to redeem or find a purchaser of the Foundation Stock, the Company shall not pay dividends on any of its capital stock, redeem [***] until such time as the capital stock of any other stockholder Company has fulfilled the Withdrawal Right with respect to all of the Company or otherwise make any other distribution to any other stockholder of the Company. Upon the transfer of any Foundation Stock to any one or more transferees that are tax-exempt organizations as described in Section 501(c)(3) of the Code, the Foundation may assign to any such transferee all of its rights attached to such Foundation Stock. ).
(d) For redemption or purchase by a third partythird-party pursuant to Section 6(c), Foundation Stock shall be valued at the greater of (i) the Original original purchase price attributable to such shares (the “Minimum Purchase Price or Price”) or, at the fair market value thereof as determined in good faith by the Board of Directors option of the Company. Foundation, (ii) the then current Fair Market Value.
(e) If the Foundation disagrees with such Board determination, it may seek an independent appraisal, in which case the then current fair market value of the Foundation Stock shall be determined by a mutually agreed upon (such agreement not unreasonably withheld) third-party appraiser. The Foundation shall be responsible for the payment of the appraisal fees. If the Foundation’s shares are is sold or redeemed due to in connection with a Charitability Default, commencing upon the date of such sale or redemptionWithdrawal Right, the Foundation or a Foundation Affiliate will have a twelve (12) month look back right by which, in the event of that (i) the Company consummates a sale of all or substantially all of the shares of the Company, or a sale of all or substantially all of its assets (“Sale Transaction”), that results in cash proceeds, Transaction or (ii) upon the closing Company signed a binding letter of intent or binding term sheet or entered into any definitive agreement (each, a firmly underwritten public offering (“Public OfferingBinding Agreement”) of shares of Common Stock with respect to such Sale Transaction at any time prior to the [***] anniversary of the Company pursuant to a registration statement under the Securities Act of 1933, as amended (“Securities Act”), representing a per share valuation for the Company in excess of 200% of the valuation used for the sale or redemption first date that any of the Foundation Stock from the Foundationwas redeemed or sold, then the Foundation will receive compensation equal to the excess of what it would have received in such transaction if it still held the Foundation Stock at the time of such Sale Transaction or Public Offering over what it actually received in the sale or redemption of the Foundation Stock; provided that such Sale Transaction actually closes prior to the first anniversary of the first date that any of the Foundation Stock had was redeemed or sold. For clarity, if the Charitability Default Company does not occurredenter into any Binding Agreement until after the [***] anniversary of the initial sale or redemption date of the Foundation Stock, then the Foundation’s look-back right set forth in this Section 6(e) will terminate and be of no further force and effect.
(f) If at the time that the Foundation has requested to exercise its Withdrawal Right, the Foundation Stock consists of a class of securities of the Company that (i) is registered under section 12 (or any successor provision) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) is not subject to restrictions from trading under the Securities Act or state securities laws and (iii) is listed on a U.S. national securities exchange and the Company is current in filing its financial reports and other required filings with the Securities and Exchange Commission (the “SEC”), then the Company will not be required to redeem or find a purchaser for the Foundation Stock if the Foundation elects to and is able to sell the Foundation Stock on a securities exchange for at least the Minimum Purchase Price. If the Foundation elects to sell the Foundation Stock to the public pursuant to this Section 6(f) and the Foundation receives less than the Minimum Purchase Price, then the Company will pay the Foundation as soon as practicable the difference between the amount received by the Foundation as a result of the sale of the Foundation Stock on the securities exchange and the amount of the Minimum Purchase Price.
(g) For the avoidance of doubt, notwithstanding any exercise of the Withdrawal Right, the Foundation will continue to be entitled to enforce its rights under the Global Access Commitments.
Appears in 1 contract
Samples: Strategic Relationship Agreement (Vir Biotechnology, Inc.)
Withdrawal Right. The withdrawal right described in this section will be triggered only as a result of actions taken by the Company that are inconsistent with restrictions herein on the use of funds from or with the Foundation Investment Global Access Commitments or related U.S. tax obligations, including without limitation the requirements [*] = Certain confidential information contained in this document, marked by brackets, has been omitted pursuant to Rule 406 of the Securities Act of 1933, as amended. set forth in Sections 5 paragraphs 9 and 8 12 below, or are in material breach of the Global Access Commitments (a “Material Breach”) provided that for the avoidance of doubt the parties agree that a breach of the Global Access Commitments that could reasonably result in the Foundation Investment failing to qualify as a “program related investment” under the Code will constitute a material breach of the Global Access Requirements. For the avoidance of doubt, the withdrawal right will not be triggered by the inability, for scientific and technical or scientific reasonsreasons beyond the control of the Company, to provide Services and successfully develop vaccines and other products a product for Foundation Priority Areasthe Group 1, Group 2 or Group 3 Diseases, so long as the Company has not materially breached its obligations under this Letter Agreementany of the Global Access Commitments. In the event that the Company fails to comply with the restrictions on the use of funds from funds, the Foundation Investment, Global Access Commitments or the other related U.S. tax obligations set forth herein or is in Material Breach herein, (a “Charitability Default”), the Foundation will have the rights set forth below (the “Withdrawal Right”). Each party agrees to shall promptly notify the other party in writing of the occurrence of such event event, and the Company shall thereafter promptly provide to the Foundation a proposed strategy to remedy the Charitability Default. If the Company fails to cure the Charitability Default within [**] ninety (90) days of receipt of the above above-described notice, the Company shall have the obligation option to either (i) redeem all of the Series A Atreca Preferred Stock held by the Foundation or and any Common Stock held by the Foundation issued upon conversion of the Series A Atreca Preferred Stock Stock, as applicable (collectively, the “Foundation StockFoundation’s Holdings”), provided that such redemption shall be made only to the extent permitted by applicable law and not to the extent that it renders the Company insolvent or causes the Company to be in material breach of a third party financial covenant or contractual obligationlaw, or (ii) locate a third party that will purchase the Foundation’s Holdings. In the event of a Charitability Default, the Foundation Stockand Foundation-Supported Entities will also be provided with nonexclusive access (including any necessary licenses to relevant intellectual property) to the Platform Technology sufficient to enable the Foundation and Foundation-Supported Entities to practice the Platform Technology for the pursuit of the Global Access Objectives. Such access shall include, but not be limited to, access contemplated in this Letter Agreement sufficient for the Foundation or Foundation-Supported Entities to complete the Services that the Company agreed to perform under a grant or contract previously entered into between the Company and the Foundation or Foundation Supported Entity. Such access to and permissions to practice the Platform Technology shall be accomplished without any delay or hindrance by the Company (regardless of whether or not the provision of the Services had been started). The Foundation will continue to have the other rights set forth in this Letter Agreement (e.g., use of the results of the Services in accordance with Section 3.a.ii.). If the Company is unable to redeem all of the Foundation StockFoundation’s Holdings, and no third party purchases the Foundation StockFoundation’s Holdings, then the Company shall use its best efforts to effect the Withdrawal Right, consistent with the Code and applicable lawlaw (e.g., as soon as practicable. During the period when the Company is unable to exercise its obligation to redeem or find a purchaser of the Foundation Stock, the Company shall not pay dividends on any of its capital stock, redeem the capital stock of any other stockholder of the Company or otherwise make any other distribution to any other stockholder of the Companysolvency requirements). Upon the transfer of any Foundation Stock of the Foundation’s Holdings to any one or more transferees that are tax-exempt organizations as described in Section 501(c)(3) of the Code, the Foundation may assign to any such transferee all of its rights attached to such Foundation StockFoundation’s Holdings. For redemption or purchase by a third party, Foundation Stock the Foundation’s Holdings shall be valued at the greater of the Original Purchase Price or the fair market value thereof as determined in good faith [*] or, if an appraisal is elected by the Board of Directors of the Company. If the Foundation disagrees with such Board determinationFoundation, it may seek an independent appraisal, in which case the then current fair market value of the Foundation Stock shall be Holdings as determined by a mutually agreed upon (such agreement not unreasonably withheld) independent third-party appraiser. The Foundation shall be responsible for the payment of the appraisal fees[*]. If the Foundation’s shares Holdings are sold or redeemed due to a Charitability Default, commencing upon the date of such sale or redemption, the Foundation or a Foundation Affiliate will have a twelve (12) month look back right two-year lookback rights by which, in the event of (i) a sale of all or substantially all of the shares of the Company, or a sale of all or substantially all of its assets (“Sale Transaction”), or a public offering of the Company that results in cash proceeds, or (ii) upon the closing of a firmly underwritten public offering (“Public Offering”) of shares of Common Stock of the Company pursuant to a registration statement under the Securities Act of 1933, as amended (“Securities Act”), proceeds representing a per share valuation for the Company in excess of 200[*]% of the valuation used for the sale or [*] = Certain confidential information contained in this document, marked by brackets, has been omitted pursuant to Rule 406 of the Securities Act of 1933, as amended. redemption of the Foundation Stock from the Foundation’s Holdings, the Foundation will receive compensation equal to the excess of what it would have received in such transaction if it still held the Foundation Stock at the time of such Sale Transaction or Public Offering over what it actually received commensurate with its converted equity interest in the sale or redemption of the Foundation Stock Company had the Charitability Default not occurred.
Appears in 1 contract
Samples: Investment Agreement (Atreca, Inc.)
Withdrawal Right. Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.
(a) The withdrawal right Withdrawal Right described and defined in this section Section 5 will be triggered only as a result of actions taken by a Charitability Default.
(b) A “Charitability Default” will occur if the Company that are inconsistent with restrictions herein on the use of funds from the Foundation Investment or related U.S. tax obligations, including without limitation the requirements set forth in Sections 5 and 8 below, or are (i) is in material breach of the Global Access Commitments (a “Material Breach”) provided that Commitments, including the failure to conduct the Programs as described above, other than for the avoidance reasons of doubt the parties agree that a breach of the Global Access Commitments that could reasonably result in the Foundation Investment failing to qualify as a “program related investment” under the Code will constitute a material breach of the Global Access Requirements. For the avoidance of doubt, the withdrawal right will not be triggered by the inability, for technical or scientific reasons, failure not known to successfully develop vaccines and other products for Foundation Priority Areas, so long as the Company has not materially breached its obligations under this Letter Agreement. In at or before closing of the event the Company Foundation Investment, (ii) fails to comply with the restrictions in Sections 2 and 8 of this Letter Agreement on the use of funds proceeds from the Foundation Investment, or (iii) fails to comply with the other related U.S. tax legal obligations set forth herein or is in Material Breach (a “Charitability Default”)this Letter Agreement, including, the Foundation will have the rights requirements set forth below (the “Withdrawal Right”)in Sections 6, 8, 9, 10, and 11. Each party agrees to promptly notify the other party in writing if it becomes aware of the occurrence of such event any Charitability Default and the Company shall will thereafter promptly provide to the Foundation a proposed strategy to remedy the Charitability Default. Notwithstanding the foregoing, the Foundation will not lose any rights or remedies solely as a result of a failure to notify the Company after it becomes aware of a Charitability Default.
(c) If the Company fails to cure the Charitability Default within [***] days of receipt the delivery to the Company of the above described noticeFoundation’s written notice of such Charitability Default (the “Default Notice”), and if the Foundation holds any securities of the Company shall have the obligation to (i) redeem all of the Series A Preferred Stock held by issued in connection with the Foundation Investment, including securities issued in respect of or any Common Stock held by the Foundation issued upon conversion or exercise of the Series A Preferred Stock such securities (collectively, the “Foundation Stock”), provided the Company will have the obligation, if irrevocably requested in writing by the Foundation not later than [***] days after the delivery of the Default Notice to the Company, to either (i) redeem all of the Foundation Stock at a price per share equal to the greater of the Minimum Purchase Price or the Fair Market Value; provided, that such redemption shall will be made only to the extent permitted by applicable law concerning distributions to holders of equity interests in the Company and not to the extent that it renders the Company insolvent insolvent, (ii) facilitate the purchase of the Foundation Stock to one or causes more buyers at a price per share equal to the Company to be in material breach greater of a third party financial covenant the Minimum Purchase Price or contractual obligationthe Fair Market Value, or (iiiii) locate a third party that will purchase if the Foundation StockStock is not Freely Tradeable, register the resale of the Foundation Stock on an effective registration statement and keep such registration statement continuously effective until the earlier of (x) the date all Foundation Stock has been sold and (y) the date that is [***] following the effective date of the registration statement ((i), (ii), and (iii) the “Withdrawal Right”). If the Company is unable to redeem all of the Foundation Stock, and no third party purchases the Foundation Stock, then the Company shall use its best efforts to effect the Withdrawal Rightwill [***], consistent with the Code and applicable law, as soon as practicable. During [***].
(d) Notwithstanding the period when foregoing, if the Company is unable elects to satisfy the Withdrawal Right pursuant to clauses 5(c)(ii) or (iii) above, and the Foundation receives less than the Minimum Purchase Price per share, then the Company will [***]. Notwithstanding any exercise its obligation to redeem or find a purchaser of the Foundation Stock, the Company shall not pay dividends on any of its capital stock, redeem the capital stock of any other stockholder of the Company or otherwise make any other distribution to any other stockholder of the Company. Upon the transfer of any Foundation Stock to any one or more transferees that are tax-exempt organizations as described in Section 501(c)(3) of the Code, the Foundation may assign to any such transferee all of its rights attached to such Foundation Stock. For redemption or purchase Withdrawal Right by a third party, Foundation Stock shall be valued at the greater of the Original Purchase Price or the fair market value thereof as determined in good faith by the Board of Directors of the Company. If the Foundation disagrees with such Board determination, it may seek an independent appraisal, in which case the then current fair market value of the Foundation Stock shall be determined by a mutually agreed upon (such agreement not unreasonably withheld) third-party appraiser. The Foundation shall be responsible for the payment of the appraisal fees. If the Foundation’s shares are sold or redeemed due to a Charitability Default, commencing upon the date of such sale or redemption, the Foundation or a Foundation Affiliate will have a twelve (12) month look back right by which, in the event of (i) a sale of all or substantially all of the shares of the Company, or a sale of all or substantially all of its assets (“Sale Transaction”), that results in cash proceeds, or (ii) upon the closing of a firmly underwritten public offering (“Public Offering”) of shares of Common Stock of the Company pursuant to a registration statement under the Securities Act of 1933, as amended (“Securities Act”), representing a per share valuation for the Company in excess of 200% of the valuation used for the sale or redemption of the Foundation Stock from the Foundation, the Foundation will receive compensation equal continue to be entitled to enforce its rights under the excess of what it would have received in such transaction if it still held the Foundation Stock at the time of such Sale Transaction or Public Offering over what it actually received in the sale or redemption of the Foundation Stock had the Charitability Default not occurredGlobal Access Commitments.
Appears in 1 contract
Withdrawal Right. (a) The withdrawal right Withdrawal Right described and defined in this section Section 6 will be triggered only as a result of actions taken a Charitability Default. For the avoidance of doubt, the Withdrawal Right and the Charitability Default will not be triggered by [***], so long as the Company that are inconsistent has not breached its obligations under this Letter Agreement.
(b) A “Charitability Default” will occur if the Company either (i) fails to comply, in any material respect, with the restrictions herein in Sections 2(c) and 10 of this Letter Agreement on the use of funds from the Foundation Investment or the other related U.S. tax obligationslegal obligations set forth in this Letter Agreement, including without limitation the requirements set forth in Sections 5 7, 12, and 8 13 below, or are (ii) is in material breach of the Global Access Commitments (a “Material Breach”) provided that for the avoidance of doubt the parties agree that a breach of the Global Access Commitments that could reasonably result in the Foundation Investment failing to qualify as a “program related investment” under the Code will constitute a material breach of the Global Access Requirements. For the avoidance of doubt, the withdrawal right will not be triggered by the inability, for technical or scientific reasons, to successfully develop vaccines and other products for Foundation Priority Areas, so long as the Company has not materially breached its obligations under this Letter Agreement. In the event the Company fails to comply with the restrictions on the use of funds from the Foundation Investment, or the other related U.S. tax obligations set forth herein or is in Material Breach (a “Charitability Default”), the Foundation will have the rights set forth below (the “Withdrawal Right”)Commitments. Each party agrees to promptly notify the other party in writing if it has knowledge of the occurrence of such event any Charitability Default and the Company shall thereafter provide to the Foundation a proposed strategy to remedy the Charitability Default. .
(c) If the Company fails to cure the Charitability Default within [***] days of receipt of the above described notice, notice (provided that solely for purposes of this Section 6 in the event the Company shall have disputes that a Charitability Default has occurred, such [***] period will commence upon a decision that a Charitability Default has occurred pursuant to the obligation to (i) redeem all dispute resolution process described in Section 18); and the Foundation holds any securities of the Series A Preferred Stock held by Company issued in connection with the Foundation Investment, including securities issued in respect of or any Common Stock held by the Foundation issued upon conversion or exercise of the Series A Preferred Stock such securities (collectively, the “Foundation Stock”), the Company shall have the obligation, if requested by the Foundation, to redeem or arrange for a third party to purchase all (but not less than all) of the Foundation Stock (the “Withdrawal Right”), provided that any such redemption or repurchase shall be made only to the extent permitted by applicable law and not concerning distributions to holders of equity interests. Without limiting the extent that it renders the Company insolvent or causes the Company to be in material breach of a third party financial covenant or contractual obligationforegoing, or (ii) locate a third party that will purchase the Foundation Stock. If if the Company is unable to redeem all of the Foundation Stock, and no third party purchases the Foundation Stock, then the Company shall use its best commercially reasonable efforts to effect the Withdrawal Right, consistent with the Code and applicable law, as soon as practicablepracticable thereafter, provided that to the extent any redemption of the Foundation Stock pursuant to this Section 6(c) would have [***]. For the avoidance of doubt, the Foundation shall cease to be a stockholder for all purposes effective as of the date such Foundation Stock is redeemed and, thereafter, the sole right of the Foundation with respect to its ownership of Foundation Stock shall be to receive such redemption payment. During the period when the Company is unable to exercise its obligation to redeem or find a purchaser of the Foundation Stock, the Company shall not pay dividends on any of its capital stock, redeem [***] until such time as the capital stock of any other stockholder Company has fulfilled the Withdrawal Right with respect to all of the Company or otherwise make any other distribution to any other stockholder of the Company. Upon the transfer of any Foundation Stock to any one or more transferees that are tax-exempt organizations as described in Section 501(c)(3) of the Code, the Foundation may assign to any such transferee all of its rights attached to such Foundation Stock. ).
(d) For redemption or purchase by a third partyparty pursuant to Section 6(c), Foundation Stock shall be valued at the greater of (i) the Original Purchase Price or original purchase price attributable to such shares plus a 5% compounding interest rate per annum through the fair market value thereof as determined in good faith by the Board of Directors date of the Company. If completion of the Foundation disagrees with such Board determinationredemption or third-party sale, it may seek an independent appraisalas applicable or, in which case at the option of the Foundation, (ii) the then current fair market value of the Foundation Stock shall be as determined by a mutually agreed upon (such agreement not to be unreasonably withheld) independent third-party appraiser. The Foundation shall be responsible for the payment of the appraisal fees. .
(e) If the Foundation’s shares are Foundation Stock is sold or redeemed due to a Charitability Default, commencing upon the date of such sale or redemption, the Foundation or a Foundation Affiliate will have a twelve (12) month look back right by which, in the event of that (i) the Company consummates a sale of all or substantially all of the shares of the Company, or a sale of all or substantially all of its assets (“Sale Transaction”), that results in cash proceeds, Transaction or (iiB) upon the closing of a firmly underwritten public offering (“Public Offering”) of shares of Common Stock common stock of the Company pursuant to a registration statement under the Securities Act of 1933, as amended (“Securities Act”), representing a per share valuation for the Company in excess of 200% of the valuation used for the sale or redemption of the Foundation Stock from the Foundation, and (ii) the Company signed a binding letter of intent or binding term sheet or entered into any definitive agreement (each, a “Binding Agreement”) with respect to such Sale Transaction or filed the preliminary prospectus (other than any free-writing prospectus) in connection with such Public Offering, as applicable, at any time prior to the six (6) month anniversary of the first date that any of the Foundation Stock was redeemed or sold, then the Foundation will receive compensation equal to the excess of what it would have received in such transaction if it still held the Foundation Stock at the time of such Sale Transaction or Public Offering over what it actually received in the sale or redemption of the Foundation Stock; provided that such Sale Transaction or Public Offering actually closes prior to the first anniversary of the first date that any of the Foundation Stock had was redeemed or sold. For clarity, if the Charitability Default Company does not occurredenter into any Binding Agreement or file its preliminary prospectus, as applicable, until after the six (6) month anniversary of the initial sale or redemption date of the Foundation Stock, then the Foundation’s look-back right set forth in this Section 6(e) will terminate and be of no further force and effect.
Appears in 1 contract
Samples: Strategic Relationship Agreement (Vir Biotechnology, Inc.)
