AMENDMENT NO. 2 TO PREFERRED STOCK RIGHTS AGREEMENT
Exhibit 4.2
AMENDMENT NO. 2 TO
PREFERRED STOCK RIGHTS AGREEMENT
This AMENDMENT NO. 2 TO PREFERRED STOCK RIGHTS AGREEMENT (this “Amendment”) is dated as of July 28, 2023 (the “Effective Date”), and amends that certain Preferred Stock Rights Agreement, dated as of July 12, 2022, as amended by that certain Amendment No. 1 dated as of June 26, 2023 (the “Rights Agreement”), by and between Forte Biosciences, Inc., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A., a federally chartered trust company, as rights agent (the “Rights Agent”). Capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings given to them in the Rights Agreement.
RECITALS
WHEREAS, the board of directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its stockholders to raise additional capital for the Company through the sale and issuance by the Company to certain institutional and accredited investors and certain members of the Board and Company’s management (the “Purchasers”) of shares of the Common Stock and pre-funded warrants (“Pre-Funded Warrants”) to purchase shares of Common Stock (the “Warrant Shares”), pursuant to that certain securities purchase agreement (the “Securities Purchase Agreement”) to be entered into as of the Effective Date by and among the Company and each Purchaser and the Pre-Funded Warrants to be issued to the Purchasers, as applicable, pursuant to the terms and subject to the conditions set forth in the Securities Purchase Agreement;
WHEREAS, in accordance with Section 27 of the Rights Agreement, for so long as the Rights are redeemable, the Company may in its sole discretion supplement or amend the Rights Agreement in any respect without the approval of any holders of Rights Certificates, Preferred Stock or Common Stock, and the Rights Agent must, if the Company so directs, execute such supplement or amendment;
WHEREAS, the Rights are currently redeemable;
WHEREAS, the board of directors of the Company has determined that this Amendment is advisable, fair to and in the best interests of the Company and its stockholders;
WHEREAS, the Company has delivered to the Rights Agent a certificate stating that this Amendment complies with Section 27 of the Rights Agreement; and
WHEREAS, the Rights Agent is directed to join in this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein, the parties hereto hereby agree as follows:
1. Amendment of the Rights Agreement.
| A. | Section 1 of the Rights Agreement is hereby amended by adding the following additional definitions: |
| (hhh) | “Purchaser” has the meaning ascribed to such term in the Securities Purchase Agreement. |
| (iii) | “Pre-Funded Warrants” has the meaning ascribed to such term in the Securities Purchase Agreement. |
(jjj) “Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of July 28, 2023, by and among the Company and each Purchaser.
B. The following is added as a new Section 38 of the Rights Agreement:
“Section 38. Exception for Securities Purchase Agreement. Notwithstanding anything to the contrary in this Agreement, none of the approval, execution, delivery or performance of the Securities Purchase Agreement or the Pre-Funded Warrants, or the consummation of any of the transactions contemplated by the Securities Purchase Agreement or the Pre-Funded Warrants, including any issuance or acquisition of shares of Common Stock pursuant to the terms of the Securities Purchase Agreement or the Pre-Funded Warrants, shall (a) result in a Stock Acquisition Date, a Distribution Date or in any way permit any Rights to be exercised pursuant to Section 7, or otherwise, for consideration or exchanged pursuant to Section 24; (b) constitute a Section 11(a)(ii) Event or a Section 13 Event; (c) cause any of Purchaser or any of their respective Affiliates or Associates (each, a “Purchaser Person”) to be deemed to be an “Acquiring Person” for any purpose in this Agreement (it being understood that other future actions by any Purchaser Person could still result in such Purchaser Person being an Acquiring Person for purposes of the Agreement); or (d) cause any officer, director or employee of any Purchaser Person to be deemed to be, solely by reason of such Person’s status or authority as such, the “Beneficial Owner” of or to “Beneficially Own” any securities that are “Beneficially Owned” by a Purchaser Person, including in a fiduciary capacity. Nothing in this Agreement shall be construed to give any holder of Rights or any other Person any legal or equitable rights, remedy or claim under this Agreement in connection with the execution, delivery or performance of the Securities Purchase Agreement or the Pre-Funded Warrants, or the consummation of any of the transactions contemplated by the Securities Purchase Agreement or the Pre-Funded Warrants.”
2. No Other Amendment; Effect of Amendment. Except as and to the extent expressly modified by this Amendment, the Rights Agreement and the exhibits thereto remain in full force and effect in all respects without any modification. This Amendment will be deemed an amendment to the Rights Agreement and will become effective on the Effective Date. All references to the Rights Agreement shall, from and after the Effective Date, be deemed to be references to the Rights Agreement as amended hereby. In the event of a conflict or an inconsistency between this Amendment and the Rights Agreement and the exhibits thereto, the provisions of this Amendment will govern.
3. Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts will for all purposes be deemed to be an original, and all such counterparts will together constitute one and the same instrument, it being understood that all parties hereto need not sign the same counterpart. A signature to this Amendment executed and/or transmitted electronically (including by fax and .pdf) will have the same authority, effect, and enforceability as an original signature. No party hereto may raise the use of such electronic transmission to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through such electronic transmission, as a defense to the formation of a contract, and each party hereto forever waives any such defense, except to the extent that such defense relates to lack of authenticity.
4. Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment will remain in full force and effect and will in no way be affected, impaired or invalidated; provided, however, that if any such excluded term, provision, covenant or restriction adversely affects the rights, immunities, duties or obligations of the Rights Agent, then the Rights Agent shall be entitled to resign immediately.
5. Descriptive Headings. The descriptive headings of the several sections of this Amendment are inserted for convenience only and will not control or affect the meaning or construction of any of the provisions hereof.
6. Further Assurances. Each of the parties to this Amendment will reasonably cooperate and take such action as may be reasonably requested by the other party in order to carry out the provisions and purposes of this Amendment, the Rights Agreement and the transactions contemplated hereunder and thereunder.
7. Governing Law. This Amendment, and all claims or causes of action (whether in contract or in tort or otherwise, or whether at law (including at common law or by statute) or in equity) that may be based on, arise out of or relate to this
-2-
Amendment, or the negotiation, execution, performance or subject matter of this Amendment, will be governed by and construed in accordance with the laws of the State of Delaware.
[Signature page follows.]
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and year first written above.
| By: | /s/ Xxxx X. Xxxxxx | |
| Name: | Xxxx X. Xxxxxx, Ph.D. | |
| Title: | Chief Executive Officer | |
| COMPUTERSHARE TRUST COMPANY, N.A. | ||
| By: | /s/ Xxxxx Xxxxxxxx | |
| Name: | Xxxxx Xxxxxxxx | |
| Title: | Manager, Client Management | |
[Signature Page to Amendment No. 2 to Preferred Stock Rights Agreement]
