EX-10.47 4 a2231655zex-10_47.htm EX-10.47 AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
Exhibit 10.47
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
THIS AMENDED AND RESTATED NOTE PURCHASE AGREEMENT (this “Agreement”) is made as of March 31, 2017 (the “Effective Date”), by and among Napo Pharmaceuticals, Inc., a Delaware Corporation (“Napo” or the “Company”), Kingdon Associates (“Kingdon Associates”), X. Xxxxxxx Offshore Master Fund L.P. (“Kingdon Offshore Master Fund”), Kingdon Family Partnership, L.P. (“Kingdon Family Partnership”), and Kingdon Credit Master Fund L.P. (“Kingdon Credit Master Fund” and, together with Kingdon Associates, Kingdon Offshore Master Fund, Kingdon Family Partnership and any other party purchasing Notes (as defined below) pursuant to this Agreement, collectively, the “Purchasers” and each, a “Purchaser”). This Agreement shall amend and restate that certain Note Purchase Agreement, dated December 30, 2016 (the “Original Effective Date”), by and among the Company and the Purchasers (the “Original Agreement”).
The Original Agreement is hereby amended and restated in its entirety to read as follows:
“Affiliate” means, with respect to any specified Person, any other Person who or which, directly or indirectly, controls, is controlled by, or is under common control with such specified Person, including, without limitation, any general partner, officer, director or manager of such person and any pooled investment vehicle now or hereafter existing that is controlled by one or more general partners or managing members of, or is under common investment management with, such Person.
“Amended and Restated Security Agreement” shall mean the Amended and Restated Security Agreement in the form attached hereto as Exhibit D.
“Board of Directors” means the Board of Directors of Napo.
“Certificate” means Napo’s Certificate of Incorporation, as may be amended, restated or modified from time to time.
“Collateral” has the meaning ascribed thereto in the Security Agreement.
“Excluded Stock” shall mean (a) shares of Common Stock and options, warrants or other rights to purchase Common Stock or other rights to purchase Common Stock issued to employees, officers or directors of, or consultants or advisors to Napo pursuant to stock grants, restricted stock purchase agreements, option plans, Napo’s Equity Incentive Plan, purchase plans, incentive programs or any other similar arrangement; (b) securities issued in connection with research and development partnerships, licensing, corporate partnering, collaborative arrangements or similar transactions; provided, however, such transaction is primarily for non-equity purposes; (c) securities issued to financial institutions or lessors in connection with
commercial credit arrangements, equipment financings, commercial property lease transactions, or similar transactions; (d) shares of Common Stock issuable upon the exercise or conversion or vesting of any rights to acquire Common Stock outstanding as of the Closing Date; and (e) shares of Common Stock or rights to acquire Common Stock issued or issuable in connection with the settlement of existing debt of Napo.
“GAAP” means United States generally accepted accounting principles, consistently applied.
“Governmental Authority” means any Federal, state, local, foreign, political subdivision, court, administrative agency, commission or department or other governmental authority, regulatory body or instrumentality.
“Including (or includes)” and words to the same or similar effect shall be interpreted and construed to mean including without limitation (or includes without limitation).
“Intercreditor Agreement” means that certain Limited Inventory Subordination Agreement, dated as of the Original Effective Date by and among Napo, the Purchasers, Nantucket Investments Limited, the lenders under the Nantucket Financing Agreement (as defined therein), Dorsar Investment Company, Alco Investment Company and Two Daughters LLC.
“Jaguar” means Jaguar Animal Health, Inc., a Delaware corporation.
“Jaguar Average Closing Price” means, as of a particular date (the “Valuation Date”), (a) the volume weighted average of the closing prices of Jaguar Common Stock as reported on Nasdaq for the thirty (30) consecutive Trading Days up to and including the Trading Day on the third Trading Day prior to the Valuation Date; or (b) if the Jaguar Common Stock is then quoted on the National Association of Securities Dealers, Inc. OTC Bulletin Board (the “Bulletin Board”) or such similar quotation system or association, the volume weighted average of the closing prices of Jaguar Common Stock as reported on the Bulletin Board or such other quotation system or association for the thirty (30) consecutive Trading Days up to and including the Trading Day on the third Trading Day prior to the Valuation Date.
“Jaguar Common Stock” means shares of Jaguar’s common stock, no par value, together with any securities into which such shares may be reclassified, whether by merger, charter amendment or otherwise.
“Kingdon Pro Rata Portion” means with respect to each Kingdon Purchaser in a Subsequent Closing, the percentage set forth next to such Kingdon Purchaser’s name in Exhibit B.
“Kingdon Purchasers” means Kingdon Associated, Kingdon Offshore Master Fund, Kingdon Family Partnership and Kingdon Credit Master Fund.
“Law” as to any Person, means any law (including common law), statute, ordinance, treaty, rule, regulation, policy or requirement of any Governmental Authority and authoritative interpretations thereon, whether now or hereafter in effect, in each case, applicable
to or binding on such Person or any of its properties or to which such Person or any of its properties is subject.
“Lien” means any security interest, mortgage, pledge, lien, claim, charge, encumbrance, conditional sale or title retention agreement, or lessor’s interest under a capitalized lease or analogous instrument, in, of or on any of a Person’s property (whether held on the date hereof or hereafter acquired).
“Material Adverse Effect” means any change, effect, circumstance, development, event, occurrence or state of facts that is or could reasonably be expected to be materially adverse to or have a material adverse effect on the business, assets, liabilities, properties, results of operations or business relationships of Napo.
“Merger” means the merger of Napo into Merger Sub pursuant to the terms of the Merger Agreement.
“Merger Agreement” means the Agreement and Plan of Merger, dated March , 2017, by and among Napo, Jaguar and Merger Sub, an executed copy of which is attached hereto as Exhibit C.
“Merger Effective Date” means the date on which the Merger is consummated.
“Nantucket” means Nantucket Investments Limited.
“Napo Merger Representations and Warranties” means all of the representations and warranties provided by Napo to Jaguar and Merger Sub in the Merger Agreement (as modified by the disclosure schedules attached thereto).
“Nasdaq” means The Nasdaq Capital Market.
“NDA” means that certain Nondisclosure Agreement, dated as of September 9, 2016, by and between Jaguar and Kingdon Capital Management, L.L.C., as amended, modified or supplemented from time to time.
“Order” as to any Person, means any order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court or other Governmental Authority, in each case, applicable to or binding on such Person or any of its properties or to which such Person or any of its properties is subject.
“Person” means and includes any natural person, individual, partnership, joint venture, corporation, trust, limited liability company, limited company, joint stock company, unincorporated organization, government entity or any political subdivision or agency thereof, or any other entity.
“Permitted Liens” means:
(a) Liens granted pursuant to the Security Agreement;
(b) Liens for taxes, assessments and governmental charges;
(c) Liens imposed by Law, such as carriers’, warehousemen’s, mechanics’, materialmen’s and other similar Liens arising in the ordinary course of business;
(d) Liens described on Schedule 1.1(a);
(e) deposits and pledges of cash securing (i) obligations incurred in respect of workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits, (ii) the performance of bids, tenders, leases, contracts and statutory obligations or (iii) obligations on surety or appeal bonds;
(f) easements, zoning restrictions and similar encumbrances on real property and minor irregularities in the title thereto;
(g) Liens of landlords and mortgagees of landlords (i) arising by statute or under any lease or related contractual obligation entered into in the ordinary course of business, (ii) on fixtures and movable tangible property located on the real property leased or subleased from such landlord, (iii) for amounts not yet due or that are being contested in good faith by appropriate proceedings diligently conducted and (iv) for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP;
(h) the title and interest of a lessor or sublessor in and to personal property leased or subleased;
(i) licenses of intellectual property;
(j) judgment Liens securing judgments which do not constitute an Event of Default hereunder;
(k) rights of set-off or bankers’ Liens upon deposits of cash in favor of banks or other depository institutions; and
(l) Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums.
“Required Purchasers” means the Purchasers holding a majority of the outstanding principal amount of all of the then-outstanding Notes.
“Riverside” means MEF I, LP, a Delaware limited partnership, Riverside Merchant Partners LLC, a New York limited liability company, and their respective Affiliates.
“Riverside Debt” has the meaning assigned thereto in Section 5.3.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended from time to time, and any rules or regulations promulgated thereunder.
“Security Agreement” means that certain Security Agreement, dated as of the Original Effective Date, by Napo in favor of Kingdon Capital Management L.L.C. as amended, modified or supplemented from time to time.
“Settlement Agreement” means that certain Settlement and Discounted Payoff Agreement dated as of March , 2017 by and among (i) the lenders party to that certain Financing Agreement dated as of October 10, 2014 by and among such lenders, Nantucket, as Collateral Agent and Administrative Agent for such lenders and Napo, (ii) Nantucket, as Administrative Agent and Collateral Agent and (iii) Napo, in the form attached hereto as Exhibit E, as amended, modified or supplemented from time to time (in each case, only to the extent that such amendment, modification or supplement to the Settlement Agreement is first approved by the Requisite Purchasers).
“Surviving Entity” means Napo, as the surviving entity of the Merger and a wholly-owned subsidiary of Jaguar.
“Tax” or “Taxes” means any United States or foreign, state or local income, gross receipts, sales, business license, payroll, employment, excise, withholding, social security (or similar), unemployment, disability, real property, personal property, use, transfer, value-added, alternative or add-on minimum, estimated or other tax.
“Taxing Authority” means, with respect to any Tax or Tax Return, the Governmental Authority that imposes such Tax or requires a person to file such Tax Return and the agency (if any) charged with the collection of such Tax or the administration of such Tax Return, in each case, for such Governmental Authority.
“Tax Return” means any return, declaration, form, report, claim for refund or information return or statement required to be filed with any Taxing Authority with respect to Taxes.
“Trading Day” means any day on which Nasdaq is open for business.
“Transaction Documents” means this Agreement, the Notes issued pursuant hereto, Intercreditor Agreement, Deposit Account Control Agreement, Security Agreement, Settlement Agreement, and any other agreement directly relating hereto including without limitation any documents delivered by the Company or Jaguar in connection with the signing or closing of this transaction.
2.1. Authorization of the Notes. Napo has authorized the issuance and sale to each Purchaser of Convertible Promissory Notes containing the terms and conditions and in the forms set forth in Exhibit A attached hereto (as amended, supplemented, replaced or otherwise modified from time to time, collectively, the “Notes” and individually, a “Note”); provided that, for all purposes under this Agreement, as of and following the Subsequent Closing, all references to (a) the Notes shall mean the Notes of the Surviving Entity, and (b) all references to Napo shall mean the Surviving Entity. Notwithstanding the foregoing, in no event may the aggregate
outstanding original principal amount of the Notes outstanding exceed Twelve Million Five Hundred Thousand Dollars ($12,500,000) at any one time (the “Maximum Principal Amount”).
(a) Upon written request of Napo specifying the wire transfer instructions pursuant to which such purchase price shall be funded, (i) simultaneously with the closing of the Merger, and with effect as of immediately prior to the closing of the Merger, and subject to the satisfaction of each of the conditions set forth in Section 2.3(b), each Kingdon Purchaser shall (severally, and not jointly) purchase its Kingdon Pro Rata Portion of additional Notes with an aggregate original principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000) for an aggregate purchase price of Six Million Dollars ($6,000,000) and (ii) [Reserved]; provided that in no event shall, after giving effect to any such sale, the aggregate outstanding original principal amount of all Notes exceed the Maximum Principal Amount (each such purchase, a “Subsequent Closing”), and provided further that each Purchaser shall be offered terms in respect of its participation in Subsequent Closing(s) which are at least as favorable as the terms applicable to any other purchaser of the Notes (a “Subsequent Purchaser”) in a Subsequent Closing. Following each such Subsequent Closing, Exhibit B hereto shall be amended to include the Notes purchased by the applicable Purchasers at such Subsequent Closing.
(b) Without limitation of the foregoing, the obligations to the Purchasers to purchase Notes at the Subsequent Closing shall be conditioned upon the satisfaction of the following:
(i) The satisfaction of each of the conditions set forth in Article 8 of the Merger Agreement (and any condition therein satisfied by a waiver of the applicable party thereto shall only be deemed to satisfy this Section 2.3(b)(i) to the extent that such waiver has been explicitly agreed to by the Required Purchasers);
(ii) (A) The satisfaction of each of the conditions set forth in the Settlement Agreement other than (1) payment of the Cash Payment Amount (as defined in the Settlement Agreement), (2) consummation of the Merger and (3)
those conditions set forth therein which are subject to the consummation of the Merger (and any condition therein satisfied by a waiver of the applicable party thereto shall only be deemed to satisfy this Section 2.3(b)(ii) to the extent that such waiver has been explicitly agreed to by the Required Purchasers), and (B) the delivery by Nantucket, in its capacity as Administrative Agent and Collateral Agent under the Settlement Agreement, to the Kingdon Purchasers of a confirmation letter in the form attached hereto as Exhibit F;
(iii) The entry into the Amended and Restated Security Agreement in the form attached hereto as Exhibit D;
(iv) All of the representations and warranties of Napo under this Agreement and each Transaction Document shall be true and correct in all material respects as of the date of the Subsequent Closing;
(v) Napo shall have performed in all material respects all of the covenants to be performed by it under this Agreement and any other Transaction Document
(vi) All parties to the Transaction Documents (other than the Purchasers) shall have provided their counterpart signatures thereto;
(vii) The receipt of any waivers reasonably requested by the Purchasers in respect of the transactions contemplated by this Agreement;
(viii) All of the representations and warranties of Jaguar under any Transaction Document to which it is a party shall be true and correct in all material respects as of the date of the Subsequent Closing; and
(ix) Jaguar shall have performed in all material respects all of the covenants to be performed by it under any Transaction Document to which it is a party.
2.4. Deposit Account Control Agreement.
(a) Napo shall cause an additional bank account (the “New Account”) to be opened with Bridge Bank or another bank reasonably acceptable to Napo, the Collateral Agent (as defined in the Intercreditor Agreement) and the Required Purchasers (the “Deposit Bank”), and in respect of which New Account the parties thereto (including, without limitation, the Purchasers, Napo, the Collateral Agent and the Deposit Bank) shall enter into a deposit account control agreement, on customary terms and conditions (and based upon a form of such agreement provided by the Deposit Bank) (the “Deposit Account Control Agreement”). Napo and the Purchasers shall use their respective commercially reasonable efforts to establish such New Account at the Deposit Bank and enter into such Deposit Account Control Agreement no later than March 31, 2017.
(b) Following the Merger, Napo shall use commercially reasonable efforts to enter into a Deposit Account Control Agreement within 60 days following the closing of the Merger
Agreement, on customary terms and conditions (and based upon a form of such agreement provided by the applicable bank), in respect of each existing bank account of Napo (other than Excluded Accounts (as defined on Exhibit B to the Security Agreement)), in each case to the extent necessary or advisable to perfect the Purchaser’ security interest in such bank accounts.
2.5. OID Legend. The face page of each Note shall bear a legend in substantially the following form:
“THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. PURSUANT TO TREASURY REGULATION SECTION 1.1275-3, A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, AND YIELD TO MATURITY FOR THIS NOTE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUERS AT THE FOLLOWING ADDRESS: 000 XXXXXXX XXXXXX, XXXXX 0000, XXX XXXXXXXXX, XX 00000, ATTENTION: CHIEF EXECUTIVE OFFICER.”
3.1. Organization. Napo is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Napo has all licenses, permits and authorizations necessary to own its respective properties and to carry on its businesses as now being conducted, except as would not reasonably be expected to have a Material Adverse Effect.
the execution and delivery by Napo of the other Transaction Documents and all other instruments, documents and agreements contemplated or required by the provisions hereof or thereof and to be executed and delivered by Napo, (c) the execution, issuance and delivery by Napo of the Notes, or (d) the consummation by Napo of the transactions herein and therein contemplated to be consummated by Napo, in each case other than as has been made or obtained as of the date hereof.
prepared in accordance with GAAP, consistently applied throughout the periods indicated, and present fairly in all material respects the consolidated financial condition and results of operations of Napo as of the times and for the periods referred to therein.
3.12. Brokers. No brokers were used by Napo in connection with the transactions contemplated hereby.
conducted; (b) maintain all approvals necessary for the Transaction Documents and all other instruments, documents and agreements contemplated or required by the provisions of any of the Transaction Documents; and (c) operate its business with due diligence, efficiency and in conformity with sound business practices, provided that nothing in this Section 4.2 shall prohibit the consummation of the Merger in accordance with the Merger Agreement.
documents and agreements contemplated or required by the provisions of any of the Merger Agreement and the Transaction Documents, respectively.
entity form, or (d) sale, transfer, lease or exchange or other action with respect to the disposal of, or disposition of rights to, any assets or business lines of Napo (other than the sale of inventory where the proceeds are applied in accordance with the Security Agreement and entering into licenses in the ordinary course of business), in a single transaction or series of transactions. Except for and in connection with the Merger, Napo shall not liquidate or dissolve or enter into any consolidation, merger, spin-off, or reorganization, or acquire the assets or stock of any other business or company or enter into any partnership, joint venture, syndicate, pool, profit-sharing or royalty agreement or other combination, or enter into any management contract or similar arrangement whereby its business or operations are managed by another Person other than Jaguar. Notwithstanding anything to the contrary set forth herein, in the event the Merger has not been consummated and Napo has received shares of common stock of Jaguar as payment of the Break-Up Fee (as defined in the Merger Agreement), Napo may transfer such shares to the holders of the Riverside Debt in accordance with the terms thereof and in satisfaction of such Riverside Debt.
6.2. Account. Such Purchaser is acquiring its Note(s) for investment for such Purchaser’s own account, and not with a view to, or for resale in connection with, any distribution thereof, and such Purchaser has no present intention of selling or distributing any of the Notes. Such Purchaser understands that the Notes have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment as expressed herein.
representations or warranties, oral or written, have been made by Napo or any agent thereof except as set forth in this Agreement.
6.8. Residence. Such Purchaser’s principal place of business is in the state identified in the address set forth on the signature page.
THE SECURITIES OF THE COMPANY OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN RELIANCE UPON REGULATION D PROMULGATED UNDER THE ACT, AND THE SECURITIES OFFERED
HEREBY HAVE NOT BEEN QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS IN THE STATES WHERE THIS OFFERING IS MADE. THEREFORE, THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT OR QUALIFICATION UNDER SUCH STATE SECURITIES LAWS OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED. THESE SECURITIES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS PURSUANT TO EXEMPTIONS IN THE VARIOUS STATES WHERE THEY ARE BEING SOLD.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE PURCHASE AGREEMENT (AS DEFINED HEREIN) BY AND BETWEEN THE ORIGINAL HOLDER HEREOF AND THE COMPANY WHICH MAY BE OBTAINED UPON REQUEST.
Notwithstanding anything to the contrary set forth herein, subject to compliance with applicable securities Laws, a Purchaser shall be permitted to transfer its Note and its rights and obligations hereunder, thereunder and under any other Transaction Document to any Affiliate but not to any other third party without the prior written consent of Napo (which consent shall not be unreasonably withheld or delayed).
6.10. Bad Actor Disqualification. Neither such Purchaser, nor any person or entity with whom such Purchaser shares beneficial ownership of the Notes, is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act, attached hereto as Annex I.
next business day following deposit with such carrier, (d) sent by telecopy or telegram, upon receipt thereof, or (e) by email at the address set forth below, to the parties as set forth below:
If to the Purchasers, to the addresses set forth on the signature pages to this Agreement.
If to Napo:
Napo Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to:
Xxxx Xxxxx LLP.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Telecopier: (000) 000-0000
Either party may change the name and address of the designee to whom notice shall be sent by giving written notice of such change to the other party.
7.3. Choice of Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, applicable to agreements made and to be performed entirely within such State.
part of the Purchasers of any breach or default under this Agreement or any such waiver of any provision or condition of this Agreement must be in writing by the Required Purchasers, Napo and, prior to the consummation of the Merger, Nantucket and shall be effective only to the extent in such writing specifically set forth. Prior to the Subsequent Closing, this Agreement and any provision herein may only be amended either in the manner contemplated in Section 2.3 in connection with a Subsequent Closing or with the written consent of Napo, Nantucket and the Required Purchasers. Prior to the Merger, neither the Notes nor any provision therein may be amended without the written consent of Napo, Nantucket and the Required Purchasers. Notwithstanding the foregoing, no such amendment, change, addition, omission or waiver shall be effective to change the principal amount of a Note without the consent of such Purchaser.
(a) EXCLUSIVE JURISDICTION. THE PURCHASERS AND NAPO AGREE THAT ALL ACTIONS TO ENFORCE THIS AGREEMENT AND ALL DISPUTES AMONG OR BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG OR BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY A COURT LOCATED IN NEW CASTLE COUNTY, DELAWARE, AND NAPO AND THE PURCHASERS HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF SUCH COURT.
(b) WAIVERS OF NAPO AND THE PURCHASERS. NAPO AND THE PURCHASERS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS UPON THEM AND CONSENT THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO NAPO AT THEIR ADDRESS SET FORTH IN SECTION 7.2 OF THIS AGREEMENT, AND TO THE PURCHASERS AT THEIR RESPECTIVE ADDRESSES SET FORTH IN SECTION 7.2 OF THIS AGREEMENT, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. NAPO AND THE PURCHASERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL, ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE IN NEW CASTLE COUNTY, DELAWARE IN CONNECTION WITH (A) ANY CLAIM OR CAUSE OF ACTION TO ENFORCE THIS AGREEMENT OR, (B) BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. NAPO, AGENT AND THE PURCHASERS AGREE THAT NEW CASTLE COUNTY, DELAWARE IS A REASONABLY CONVENIENT FORUM TO RESOLVE ANY DISPUTE BETWEEN NAPO AND THE PURCHASERS. NAPO AND THE PURCHASERS EACH REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. NOTHING IN THIS SECTION 7.6 SHALL
AFFECT THE RIGHT OF NAPO OR THE PURCHASERS TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
7.7. Herein, etc. Words such as “herein,” “hereunder,” “hereof” and the like shall be deemed to refer to this Agreement as a whole and not to any particular document or Article, Section or other portion of a document.
7.10. Survival. Each representation and warranty contained in the Transaction Documents shall survive indefinitely.
7.14. Costs and Expenses. Napo will reimburse Kingdon Capital Management L.L.C. (or its designee(s)), on behalf of the lead Purchasers, all reasonable and documented out of pocket costs and expenses of the Purchasers incurred in connection with the Initial Closing and the Subsequent Closing, which reimbursement shall be made in the form of Napo common stock (which will be exchanged in the Merger for shares of common stock of Jaguar in the same manner as all other shares of Napo common stock).
last date on which shares of Jaguar’s common stock are issuable under the Notes (for the avoidance of doubt, other than pursuant to the Merger Agreement) and (y) a Change of Control (as defined in the Notes), subject to customary delays and suspensions.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Note Purchase Agreement as of the Effective Date.
NAPO: |
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NAPO PHARMACEUTICALS, INC. |
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By: |
/s/ Xxxx X. Xxxxx |
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Xxxx X. Xxxxx |
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Title: |
Chief Executive Officer |
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NANTUCKET: |
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Acknowledged, agreed and consented to as of the date first set forth above: |
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NANTUCKET INVESTMENTS LIMITED |
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By: |
/s/ Xxxx Xxxxxxxx |
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Name: |
Xxxx Xxxxxxxx |
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Director |
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Note Purchase Agreement as of the Effective Date.
PURCHASERS: |
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KINGDON ASSOCIATES |
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KINGDON OFFSHORE MASTER FUND, L.P. | ||
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By: Kingdon Capital Management, L.L.C., in its capacity as agent and investment adviser |
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By: Kingdon Capital Management, L.L.C., in its capacity as agent and investment adviser | ||
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By: |
/s/ Xxxxxxx Xxxxx |
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By: |
/s/ Xxxxxxx Xxxxx |
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CFO |
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CFO |
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Address: |
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x/x Xxxxxxx Xxxxxxx Xxxxxxxxxx |
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x/x Xxxxxxx Xxxxxxx Management | ||
000 Xxxx 00xx Xxxxxx, 00xx floor |
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000 Xxxx 00xx Xxxxxx, 00xx xxxxx | ||
Xxx Xxxx, XX 00000 |
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Xxx Xxxx, XX 00000 | ||
Attn: Xxxxxxx Xxxxxxxxx |
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Attn: Xxxxxxx Xxxxxxxxx | ||
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KINGDON FAMILY PARTNERSHIP, X.X. |
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XXXXXXX CREDIT MASTER FUND L.P. | ||
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By: Kingdon Capital Management, L.L.C., in its capacity as agent and investment adviser |
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By: Kingdon Capital Management, L.L.C., in its capacity as agent and investment adviser | ||
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By: |
/s/ Xxxxxxx Xxxxx |
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CFO |
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x/x Xxxxxxx Xxxxxxx Xxxxxxxxxx |
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x/x Xxxxxxx Xxxxxxx Management | ||
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000 Xxxx 00xx Xxxxxx, 00xx xxxxx | ||
Xxx Xxxx, XX 00000 |
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Attn: Xxxxxxx Xxxxxxxxx |
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EXHIBIT A
FORM OF CONVERTIBLE PROMISSORY NOTE
THE SECURITIES OF THE COMPANY OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN RELIANCE UPON REGULATION D PROMULGATED UNDER THE ACT, AND THE SECURITIES OFFERED HEREBY HAVE NOT BEEN QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS IN THE STATES WHERE THIS OFFERING IS MADE. THEREFORE, THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE ACT OR QUALIFICATION UNDER SUCH STATE SECURITIES LAWS OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED. THESE SECURITIES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS PURSUANT TO EXEMPTIONS IN THE VARIOUS STATES WHERE THEY ARE BEING SOLD.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE PURCHASE AGREEMENT (AS DEFINED HEREIN) BY AND BETWEEN THE ORIGINAL HOLDER HEREOF AND THE COMPANY WHICH MAY BE OBTAINED UPON REQUEST.
THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. PURSUANT TO TREASURY REGULATION SECTION 1.1275-3, A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, AND YIELD TO MATURITY FOR THIS NOTE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE ISSUERS AT THE FOLLOWING ADDRESS: 000 XXXXXXX XXXXXX, XXXXX 0000, XXX XXXXXXXXX, XX 00000, ATTENTION: CHIEF EXECUTIVE OFFICER.
CONVERTIBLE PROMISSORY NOTE
$[ ] |
[ , 20 ] |
Napo Pharmaceuticals, Inc., a Delaware corporation (the “Company”), for value received, hereby promises to pay to [ ] (the “Holder”), the principal sum of [ ] Dollars ($[ ]) with interest as provided below. This Convertible Promissory Note (this “Note”) is being issued as of [ , 20 ] (the “Effective Date”) pursuant to that certain Amended and Restated Note Purchase Agreement, dated March , 2017, by and among the Company and the parties identified therein (as
amended, the “Purchase Agreement”). Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Purchase Agreement.
(a) The occurrence of any one or more of the following shall constitute an “Event of Default” hereunder:
(i) The Company fails to repay the principal or interest on this Note within five (5) business days following the due date thereof.
(ii) The Merger Effective Date has not occurred on or prior to July 31, 2017.
(iii) The Company makes an assignment for the benefit of creditors, or applies for or consents to the appointment of a receiver of or for the major part of its properties.
(iv) A trustee or receiver is appointed for the Company or for a material part of its properties and the order of such appointment is not discharged, vacated or stayed within ninety (90) days after such appointment.
(v) Bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings for relief under any bankruptcy or similar Laws or Laws for the relief of debtors, are instituted by or against the Company and, if so instituted, are consented to by the Company, or, if contested, are not dismissed by the adverse parties or by an Order within ninety (90) days after such institution.
(vi) Any of the representations and warranties made by Napo set forth in the Purchase Agreement were not true when made.
(vii) Any of the representations and warranties made by Jaguar set forth in any Transaction Document to which it is a party were not true when made.
(viii) Napo defaults in the observance or performance of any covenant, condition, obligation or agreement contained in the Transaction Documents, and to the extent that such default is curable, such default continues for a period of fifteen (15) consecutive days.
(ix) Jaguar defaults in the observance or performance of any covenant, condition, obligation or agreement contained in the Merger Agreement or any Transaction Document to which it is a party, and to the extent that such default is curable, such default continues for a period of fifteen (15) consecutive days.
(x) Jaguar Common Stock ceases to trade on either Nasdaq or the Bulletin Board.
(xi) The occurrence of a default under the Nantucket Loan Documents (as defined in the Intercreditor Agreement) or the Subordinated Loan Documents (as defined in the Intercreditor Agreement) other than any default as to which the Forbearance (as defined in the Intercreditor Agreement) applies.
(xii) The termination or expiration of the Forbearance Period (as defined in the Intercreditor Agreement).
(b) If any Event of Default occurs under Sections 2(a)(i), 2(a)(ii), or 2(a)(vi) — (xii), the Required Purchasers may declare the entire outstanding principal amount of the Notes and all accrued but unpaid interest thereon and all other payments payable on the Notes to be forthwith due and payable in cash immediately, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Company, to the fullest extent permitted by applicable Law. If an Event of Default specified in Sections 2(a)(iii), 2(a)(iv) or 2(a)(v) occurs and is continuing, then the outstanding principal balance, accrued interest thereon and all other payments payable hereunder shall become and be immediately due and payable in cash without any declaration or other act on the part of the Holder or the Required Purchaser. The Required Purchasers by notice to the Company may rescind an acceleration and its consequences. No such rescission shall affect any subsequent default or impair any right thereto. Notwithstanding anything to the contrary set forth herein, other than in connection with a breach of the Security Agreement or Section 4.1 of the Purchase Agreement, in no event will any right or remedy conferred to the Holder under this Section 2(b) be exercised prior to the earlier of (i) July 1, 2017, (ii) the consummation of the Merger, or (iii) the delivery of the written notice by the Collateral Agent (as defined in the Intercreditor Agreement) to Kingdon set forth in Section 1.10 of the Intercreditor Agreement.
(c) No right, power or remedy conferred hereby or now or hereafter available at law, in equity, by statute or otherwise shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise, but all rights, powers and remedies of the Holder shall be cumulative and not alternative.
notice to the Company thereof, at a price equal to the applicable Conversion Price (defined below), subject to customary adjustments in connection with stock splits, combinations and reclassifications of the Jaguar Common Stock on or following the Initial Closing. Within five (5) business days following receipt of notice of such exercise, Jaguar will issue to the Holder the Conversion Stock and, if necessary, a new Note with all necessary adjustments, including the principal amount. This Section 3 shall be null and void if the Merger Effective Date has not then occurred. The “Conversion Price” means $0.925.
4. Security Agreement and Intercreditor Agreement
The obligations of the Company under this Note are secured pursuant to the terms of the Security Agreement and Intercreditor Agreement.
This Note may not be amended or modified, nor may any of its terms be waived, except by written instruments signed by the Company, the Required Purchasers and, prior to the consummation of the Merger, Nantucket, and then only to the extent set forth therein.
If any provision of this Note is determined to be invalid, illegal or unenforceable, in whole or in part, the validity, legality and enforceability of any of the remaining provisions of this Note shall not in any way be affected or impaired thereby and this Note shall nevertheless be binding between the Company and the Holder.
This Note shall be binding upon, and shall inure to the benefit of, the Company and the Holder thereof and their respective permitted successors and assigns. The Company may not assign any of its rights or obligations hereunder or under any Transaction Document without the prior written consent of the Required Purchasers. Holder (or its transferees and/or assigns) may assign any rights and/or delegate any obligations hereunder or under any Transaction Document to an Affiliate but not to any other third party without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed), provided that any such assignee agrees in writing to be subject to the terms of the NDA.
Except as expressly forth herein, the Company hereby waives notice of default, presentment or demand for prepayment, protest or notice of nonpayment of dishonor and all other notices or demands relative to this instrument.
The failure in any one or more instances of a party to insist upon performance of any of the terms, covenants or conditions of this Note or to exercise any right or privilege conferred hereby, or the waiver by said party of any breach of any of the terms, covenants or conditions of this Note shall not be construed as a subsequent waiver of any such terms, covenants, conditions, rights or privileges, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
10. Time of the Essence
Time is of the essence with respect to all obligations hereunder.
If any provision of this Note would require the Company to pay interest hereunder at a rate exceeding the maximum rate permitted by applicable Law, the Company shall instead pay interest on the outstanding principal balance of this Note at the maximum rate permitted by applicable Law.
If payment hereunder becomes due and payable on a Saturday, Sunday or legal holiday under the laws of the United States or the State of Illinois, the due date thereof shall be extended to the next succeeding business day.
This Note shall be governed and controlled by the internal Laws of the State of Delaware as to interpretation, enforcement, validity, construction and effect and in all other respects, including, without limitation, the legality of the interest rate and other charges.
All notices required or permitted to be given hereunder shall be in writing and may be delivered in accordance with Section 7.2 of the Purchase Agreement.
The Company shall pay on demand all expenses of the Holder (including reasonable attorney’s fees) incurred in connection with the Holder’s enforcement of its rights and remedies arising under the Transaction Documents.
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NAPO PHARMACEUTICALS, INC. | |
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By: |
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Name: |
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Its: |
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EXHIBIT B
ALLOCATION OF NOTES IN INITIAL CLOSING
Purchaser |
|
Notes |
|
Aggregate Purchase Price |
| ||
Kingdon Associates |
|
$ |
1,112,500 |
|
$ |
890,000 |
|
Kingdon Family Partnership, L.P. |
|
$ |
225,000 |
|
$ |
180,000 |
|
X. Xxxxxxx Offshore Master Fund, L.P. |
|
$ |
1,162,500 |
|
$ |
930,000 |
|
TOTAL |
|
$ |
2,500,000 |
|
$ |
2,000,000 |
|
ALLOCATION OF NOTES TO KINGDON PURCHASERS IN SUBSEQUENT CLOSING
Purchaser |
|
Notes |
|
Aggregate Purchase Price |
|
Kingdon Pro Rata Portion |
| ||
Kingdon Associates |
|
$ |
2,800,000 |
|
$ |
2,240,000 |
|
37.33 |
% |
Kingdon Family Partnership, L.P. |
|
$ |
600,000 |
|
$ |
480,000 |
|
8.00 |
% |
X. Xxxxxxx Offshore Master Fund, L.P. |
|
$ |
3,100,000 |
|
$ |
2,480,000 |
|
41.34 |
% |
Kingdon Credit Master Fund L.P. |
|
$ |
1,000,000 |
|
$ |
800,000 |
|
13.33 |
% |
TOTAL |
|
$ |
7,500,000 |
|
$ |
6,000,000 |
|
100 |
% |
ANNEX I
BAD ACTOR
Rule 506(d)(1)(i) to (viii) under the Securities Act of 1933, as amended
(i) Has been convicted, within ten years before such sale (or five years, in the case of issuers, their predecessors and affiliated issuers), of any felony or misdemeanor:
(A) In connection with the purchase or sale of any security;
(B) Involving the making of any false filing with the SEC; or
(C) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;
(ii) Is subject to any order, judgment or decree of any court of competent jurisdiction, entered within five years before such sale, that, at the time of such sale, restrains or enjoins such person from engaging or continuing to engage in any conduct or practice:
(A) In connection with the purchase or sale of any security;
(B) Involving the making of any false filing with the SEC; or
(C) Arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;
(iii) Is subject to a final order of a state securities commission (or an agency or officer of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the U.S. Commodity Futures Trading Commission; or the National Credit Union Administration that:
(A) At the time of such sale, bars the person from:
(1) Association with an entity regulated by such commission, authority, agency, or officer;
(2) Engaging in the business of securities, insurance or banking; or
(3) Engaging in savings association or credit union activities; or
(B) Constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct entered within ten years before such sale;
(iv) Is subject to an order of the SEC entered pursuant to section 15(b) or 15B(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b) or 78o-4(c)) or section 203(e) or (f) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(e) or (f)) that, at the time of such sale:
(A) Suspends or revokes such person’s registration as a broker, dealer, municipal securities dealer or investment adviser;
(B) Places limitations on the activities, functions or operations of such person; or
(C)Bars such person from being associated with any entity or from participating in the offering of any xxxxx stock;
(v) Is subject to any order of the SEC entered within five years before such sale that, at the time of such sale, orders the person to cease and desist from committing or causing a violation or future violation of:
(A) Any scienter-based anti-fraud provision of the federal securities laws, including
without limitation section 17(a)(1) of the Securities Act of 1933 (15 U.S.C. 77q(a)(1)), section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78j(b)) and 17 CFR 240.10b-5, section 15(c)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(1)) and section 206(1) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-6(1)), or any other rule or regulation thereunder; or
(B) Section 5 of the Securities Act of 1933 (15 U.S.C. 77e).
(vi) Is suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade;
(vii) Has filed (as a registrant or issuer), or was or was named as an underwriter in, any registration statement or Regulation A offering statement filed with the SEC that, within five years before such sale, was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, at the time of such sale, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued; or
(viii) Is subject to a United States Postal Service false representation order entered within five years before such sale, or is, at the time of such sale, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations.