8-K
false 0001631650 --12-31 0001631650 2020-02-04 2020-02-04

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 4, 2020

 

AIMMUNE THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-37519

 

45-2748244

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

8000 Marina Blvd, Suite 300

Brisbane, CA 94005

(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (650) 614-5220

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.0001 per share

 

AIMT

 

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

 

 


Item 1.01 Entry into a Material Definitive Agreement.

I. Equity Investment by Nestle Health Science S.A.

On February 4, 2020, Aimmune Therapeutics, Inc., a Delaware corporation (“Aimmune” or the “Company”), announced a $200.0 million equity investment into the Company by Nestle Health Science S.A. and the extension of their existing strategic collaboration designed to enable the development and commercialization of innovative food allergy therapies.

In connection with the equity investment, Aimmune entered into a Securities Purchase Agreement (the “Purchase Agreement”), dated as of February 4, 2020 (the “Effective Date”), by and between the Company and Nestle Health Science US Holdings, Inc., a Delaware corporation (“NHSc US”). In connection with the extension of the existing strategic collaboration, Aimmune entered into an Amended and Restated Strategic Collaboration Agreement (the “Strategic Collaboration Agreement”), dated as of the Effective Date, with Société des Produits Nestlé S.A., a company organized and existing under the laws of Switzerland and the successor to Nestec Ltd. (“Nestlé”), which is a research and development subsidiary of Swiss food, nutrition and wellness company, Nestlé Pursuant to the Purchase Agreement, the Company and NHSc US also entered into an Amended and Restated Standstill Agreement (the “Standstill Agreement”) and an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”), each dated as of the Effective Date.

The following are summaries of the material terms and conditions of the Strategic Collaboration Agreement, the Purchase Agreement, the Standstill Agreement and the Registration Rights Agreement (collectively, the “Agreements”). The following summaries of the material terms and conditions of the Agreement are qualified in their entirety by the actual Agreements, copies of which are filed as Exhibits 10.1, 10.2, 4.1 and 4.2, respectively, to this Current Report and are incorporated herein by reference.

Strategic Collaboration Agreement

Pursuant to the Strategic Collaboration Agreement, the Company and Nestlé (through itself and one or more affiliated entities) agreed to continue to collaborate with one another in connection with the development of the Company’s products, including by (i) sharing information relating to the Company’s activities directed towards the development of the Company’s products for the treatment of allergies to one or more particular types of food (the “Development Programs”) and commercialization plans for PALFORZIATM (AR101), the Company’s investigational product for the treatment of peanut allergy, and (ii) providing the Company access to Nestlé’s scientific, clinical, regulatory and commercial expertise relevant to such Development Programs. In connection with the foregoing, the Company and Nestlé will maintain their existing Strategic Collaboration Committee, which will continue to be comprised of up to five (5) representatives of each party. The input that the Company receives from Nestlé in the Strategic Collaboration Agreement is advisory only; the Company retains full decision-making control for all Development Programs and for the commercialization of PALFORZIA. In addition, for so long as Nestle holds not less than fourteen percent (14%) of the Company’s outstanding common stock, Nestlé will continue to be entitled to designate one (1) nominee to serve as a director on Aimmune’s Board of Directors, which shall continue to be Greg Behar, Chief Executive Officer of Nestlé HealthScience S.A.

The term of the Strategic Collaboration Agreement (the “Term”) commenced on November 3, 2016, was subsequently extended on November 11, 2018 (the “Extension Date”) and will terminate three (3) years from the Extension Date, unless earlier terminated in accordance with the terms thereof. The Strategic Collaboration Agreement may be terminated by either party (i) upon 60 days’ written notice of an uncured material breach or (ii) upon a change of control of the other party. In addition, Aimmune may terminate the Strategic Collaboration Agreement upon 60 days’ written notice in the event Nestlé (or an affiliated entity) acquires or combines with a company engaged in the research, development or commercialization of certain oral immunotherapies intended to desensitize a patient to a food allergen. Further, Nestlé may terminate the Strategic Collaboration Agreement upon 60 days’ written notice in the event that Aimmune sells, conveys, transfers or licenses to a third party commercial rights to one or more of its products or Development Programs.

During the Term, the Company may conduct licensing or partnering discussions with other potential partners, with respect to the Development Programs. During the Term, if Nestlé decides to pursue development of a drug or biologic product that can be combined with an oral immunotherapy product and that is intended to improve the efficacy or safety of such oral immunotherapy product for the treatment of one or more food allergies, then NHSc shall provide Aimmune with the opportunity to enter into an exclusive negotiating period with respect to such opportunity for a period of three (3) months and the parties will negotiate in good faith during such period. If the parties have not entered into a definitive agreement governing the opportunity as of the end of any such negotiating period, NHSc would be free to partner or pursue a transaction with third parties with respect to such opportunity.

The Strategic Collaboration Agreement contains a non-competition covenant pursuant to which Nestlé has agreed not to engage in certain activities relating to oral immunotherapies for the treatment of food allergies, including, with respect to the treatment of peanut allergy, the research, development or commercialization of any drug or biologic for use as an oral immunotherapy, other than, any product for the prevention of food allergies for egg or milk that are currently part of a development program of Nestlé. The Strategic Collaboration Agreement also contains mutual non-solicitation and confidentiality provisions.


Purchase Agreement

Pursuant to the Purchase Agreement, the Company agreed to issue and sell to NHSc US (i) 1,000,000 shares of its common stock, par value $0.0001 (“Common Stock”), for an aggregate cash purchase price of $31,970,000.00, representing approximately 1.5% of Aimmune’s outstanding Common Stock and (ii) 525,634 shares of its Series A Preferred Stock, par value $0.0001 (“Series A Preferred Stock”), for an aggregate cash purchase price of $168,032,048.95, (collectively, the “NHSc Shares”). The NHSc Shares are to be issued and sold to NHSc US at a price per share of Common Stock of $31.97 and a price per share of Series A Preferred Stock of $319.675. The closing of the sale and issuance of the NHSc Shares (the “Closing”) is subject to certain closing conditions, including the delivery of the aggregate purchase price. Following the Closing, NHSc US will hold shares representing 19.9% of Aimmune’s outstanding Common Stock.

The sale and issuance of the NHSc Shares is intended to be exempt from registration pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D under the Securities Act.

The Purchase Agreement also contains customary representations, warranties and covenants by, among and for the benefit of the parties, as well as mutual indemnification obligations.

Standstill Agreement

Pursuant to the Standstill Agreement, the Company and NHSc US agreed to the Standstill Restrictions (as defined below) and, subject to certain limited exceptions, that neither NHSc US nor its affiliates shall sell or transfer any Common Stock or securities convertible into, exchangeable for, exercisable for, or repayable with Common Stock (including without limitation, the Series A Preferred Stock) for the period commencing on the Effective Date and lasting through November 11, 2020 (the “Market Standstill Termination Date”).

Pursuant to the Standstill Agreement, NHSc US agreed that until the Market Standstill Termination Date, neither NHSc US nor any of its affiliates shall (without the prior written consent of a majority of the members of Aimmune’s Board of Directors who are not affiliated with NHSc US):

  a. effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or in any way advise, assist, knowingly facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause:

  i. any acquisition, or obtaining any economic interest in, any right to direct the voting or disposition of, or any other right with respect to, any securities of the Company or any of its subsidiaries (or any rights, options or other securities convertible into or exercisable or exchangeable for such securities or any obligations measured by the price or value of any securities of the Company or any of its subsidiaries, including without limitation any swaps or other derivative arrangements), in each case, whether or not any of the foregoing may be acquired or obtained immediately or only after the passage of time or upon the satisfaction of one or more conditions pursuant to any agreement, arrangement or understanding, without the prior consent of the Company’s Board of Directors;

  ii. any tender or exchange offer, merger, consolidation, business combination or acquisition or disposition of assets of the Company or any of its subsidiaries;

  iii. any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries; or

  iv. any “solicitation” of “proxies” (as such terms are used in Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or consents to vote any voting securities of the Company, or become a “participant” in any “election contest” (as such terms are defined in Rule 14a-11 of the Exchange Act) or propose, or solicit stockholders of the Company for the approval of, any stockholder proposals with respect to the Company or seek to advise or influence any person with respect to the voting of any voting securities of the Company;

  b. form, join or in any way participate in a “group” (as defined under the securities laws) with respect to any securities of the Company or any securities convertible into Common Stock or any other voting securities of the Company or otherwise act in concert with any person in respect of any such securities;


  c. otherwise act, alone or in concert with others, to seek to control or influence the management, Board of Directors or policies of the Company;

  d. take any action which would reasonably be expected to result in the Company or its representatives being obligated to make a public announcement regarding any of the types of matters set forth in the Standstill Agreement;

  e. enter into any discussions or arrangements with any third party with respect to any of the foregoing; or

  f. publicly disclose any intention, plan or arrangement regarding any of the matters referred to above.

(collectively (a) through (f), the “Standstill Restrictions”).

The Standstill Restrictions shall not apply after (A) a public announcement by the Company of the initiation of any merger, consolidation, acquisition, scheme, business combination or other extraordinary transaction in which the Company or any of its subsidiaries is a constituent corporation or party and following consummation of such transaction, either (i) substantially all of the persons or entities who, immediately prior to such transaction, had beneficial ownership of 50% or more of the voting power of the Company would not continue to beneficially own at least 50% of the voting power of the combined entity and would not have the ability to elect a majority of the directors of the combined entity or (ii) all or a substantial part of the assets of the Company and its subsidiaries would be transferred to a third party or (B) the submission of any bona fide offer by any third party to acquire all or a substantial portion of the securities or assets of the Company or its subsidiaries (which for the avoidance of doubt shall exclude any offer with respect to which the Company elects not to engage in substantive negotiations), prompt notice of which shall be provided to NHSc US.

The Standstill Agreement also provides for a market standoff provision that restricts NHSc US from engaging in certain transfers of the Company’s securities prior to November 11, 2021 (the “Market Standoff Termination Date”). In addition, the Standstill Agreement provides that, in connection with any transaction constituting a change of control of the Company approved by the Board during the period beginning on the Effective Date and ending on the Market Standoff Termination Date, NHSc US shall not seek an appraisal remedy under Section 262 of the Delaware General Corporation Law with respect to any shares of common stock of the Company held by NHSc US as of the date of the consummation of such change of control transaction.

Registration Rights Agreement

Pursuant to the Registration Rights Agreement, the Company has agreed to register the resale of all shares of Common Stock issued to NHSc US and the shares of Common Stock issuable upon conversion of the shares of the Company’s Series A Preferred Stock issued to NHSc US on a registration statement to be filed with the Securities and Exchange Commission upon the request of NHSc US, which request cannot be made prior to the 45th day preceding February 4, 2021 (the “Termination Date”). The Registration Rights Agreement contains customary indemnification provisions and terminates if NHSc US fails to request that the NHSc Shares be registered within the two (2) year anniversary of the Termination Date or, if earlier, such date that NHSc US and its affiliates own in the aggregate less than 30% of the number of shares of Common Stock that NHSc US and its Affiliates owned in the aggregate as of the date of the Registration Rights Agreement.

II. License Agreement with Xencor, Inc.

On February 4, 2020 (the “License Agreement Effective Date”), the Company and Xencor, Inc., a Delaware corporation (“Xencor”), entered into a license agreement (the “License Agreement”) for the development, manufacture, and commercialization of biopharmaceutical products containing or comprising the humanized monoclonal antibody XmAb®7195 (“Antibody”) or certain variants of the Antibody (“Product”). Under the License Agreement, Xencor granted to the Company an exclusive, worldwide, royalty-bearing sublicensable license under certain patent rights and a non-exclusive, royalty-bearing sublicensable license under certain know-how rights to develop, manufacture, and commercialize the Product for the diagnosis, treatment, or prevention of human diseases and conditions.

Under the License Agreement, the Company is obligated to pay Xencor an upfront payment of $5,000,000 and to issue a number of shares of Common Stock having an aggregate value of $5,000,000. Additionally, the Company is obligated to pay Xencor an aggregate of up to $380,000,000 in milestone payments and to issue an additional number of shares of Common Stock having an aggregate value of $5,000,000 in connection with the achievement of the first development milestone with respect to a Product (the “Xencor Milestone Shares”). The Company will pay a royalty to Xencor equal to a percentage of net sales of Products in the high single-digit to mid-teen range.

The term of the License Agreement begins on the License Agreement Effective Date and continues on a country-by-country and Product-by-Product basis until the expiration of the Company’s obligation to pay royalties with respect such Product and country. The Company


may terminate the License Agreement in its entirety without cause on sixty days’ prior written notice. Xencor may terminate the License Agreement in its entirety if the Company or its affiliates or sublicensees challenge the licensed patents. Either party may terminate the License Agreement for the other party’s material breach that is not cured within a specified time period or for the other party’s bankruptcy or insolvency-related events.

In connection with the entry into the License Agreement, Aimmune issued to Xencor 156,238 shares of Common Stock, pursuant to a Securities Issuance Agreement with Xencor, dated February 4, 2020 (the “Xencor Initial Shares” and, together with the Xencor Milestone Shares, the “Xencor Shares”). The number of Xencor Milestone Shares to be issued shall be equal to the quotient obtained by dividing (x) $5.0 million by (y) the volume-weighted average price of the Common Stock as reported by the Nasdaq Global Select Market during the seven-day period immediately preceding the date of achievement of the applicable milestone.

The foregoing description of the material terms of the License Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, reference to the License Agreement, a copy of which is filed as Exhibit 10.1 and incorporated herein by reference. Portions of the Commercial Services Agreement may be subject to a FOIA Confidential Treatment Request to the SEC pursuant to Rule 24b-2 under the Exchange Act.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On February 4, 2020, the Company delivered notice to draw down the $85,000,000 available under the second tranche of its term loan available pursuant to that certain Credit Agreement, dated January 3, 2019, by and among the Company, KKR Peanut Aggregator L.P. and Cortland Capital Markets Services LLC.

Item 3.02 Unregistered Sales of Equity Securities.

Reference is made to the disclosures set forth in Item 1.01 with regard to the issuance of the NHSc Shares and the Xencor Initial Shares, which disclosures are incorporated by reference into this Item 3.02.

The sale and issuance of the NHSc Shares and the Xencor Initial Shares is being made in reliance upon exemptions from registration pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder. NHSc US and Xencor each represented to the Company that it is an “accredited investor” within the meaning of Rule 501 under the Securities Act. Accordingly, neither the NHSc Shares nor the Xencor Initial Shares have been registered under the Securities Act, and until so registered, these securities may not be offered or sold in the United States absent registration or availability of an applicable exemption from registration. No underwriting discounts or commissions or similar fees are payable in connection with the issuance.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On or prior to the Closing date, the Company will designate 525,634 shares of its authorized and unissued preferred stock as Series A Convertible Preferred Stock and will file a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate of Designation”) with the Delaware Secretary of State.

Each share of Series A Preferred Stock is convertible into ten shares of Common Stock (subject to adjustment as provided in the Certificate of Designation) at any time at the option of the holder, provided that the holder will be prohibited from converting the Series A Preferred Stock into shares of Common Stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 19.99% of the total number of shares of Common Stock then issued and outstanding, subject to certain exceptions. In the event of the Company’s liquidation, dissolution, or winding up, holders of Series A Preferred Stock will be entitled to receive, before any proceeds are distributed to the holders of Common Stock or junior securities and pari passu with any distributions to the holders of the Series A Preferred Stock, (i) an amount equal to $0.0001 per share of Series A Preferred Stock, plus any dividends declared but unpaid on such shares, plus (ii) such amount per share as would have been payable to such holder if all shares of Series A Preferred Stock held by such holder had been converted to Common Stock immediately prior to such liquidation, dissolution or winding up of the Company; provided, however, that, in the event that the assets to be distributed pursuant to this clause (ii) constitute equity securities or convertible securities of the Company (or any successor thereof) and, following any such distribution, any holder would hold or have a right to acquire greater than 19.99% of the number of shares of Common Stock or voting power of the Company (or any successor thereof) outstanding immediately after giving effect to all such distributions (such amount of securities being referred to as the “Surplus Amount”), then (x) the Company shall use commercially reasonable efforts to promptly obtain the approval of stockholders of the Company for such distribution of such Surplus Amount and (y) unless such approval of the stockholders of the Company is obtained, such holder shall not be entitled to receive such Surplus Amount. Shares of Series A Preferred Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the then outstanding Series A Preferred Stock will be required to amend the terms of the Series A Preferred Stock. Shares of Series A Preferred Stock will be entitled to receive any dividends payable to holders of Common Stock, and will rank:

  senior to all of the Common Stock;


  senior to any class or series of capital stock of the Company created after the designation of the Series A Preferred Stock specifically ranking by its terms junior to the Series A Preferred Stock;

  on parity with all shares of Series A Preferred Stock and any class or series of capital stock of the Company created after the designation of the Series A Preferred Stock specifically ranking by its terms on parity with the Series A Preferred Stock; and

  junior to any class or series of capital stock of the Company created after the designation of the Series A Preferred Stock specifically ranking by its terms senior to the Series A Preferred Stock;

in each case, as to distributions of assets upon the Company’s liquidation, dissolution or winding up whether voluntarily or involuntarily and/or the right to receive dividends.

The shares of Series A Preferred Stock issued pursuant to the Securities Purchase Agreement were issued in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. This Current Report does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The foregoing description of the Series A Preferred Stock does not purport to be complete and is qualified by reference to the Certificate of Designation, a copy of which is filed as Exhibit 3.1 to this Current Report and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibit 

No.

   

Description

         
 

  3.1

   

Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock

         
 

  4.1

   

Amended and Restated Registration Rights Agreement, dated February 4, 2020, by and between the Company and Nestle Health Science US Holdings, Inc.

         
 

  4.2

   

Amended and Restated Standstill Agreement, dated February 4, 2020, by and between the Company and Nestle Health Science US Holdings, Inc.

         
 

10.1†

   

Amended and Restated Strategic Collaboration Agreement, dated February 4, 2020, by and between the Company and Société des Produits Nestlé S.A.

         
 

10.2

   

Securities Purchase Agreement, dated February 4, 2020, by and between the Company and Nestle Health Science US Holdings, Inc.

         
 

10.3†

   

License Agreement, dated February 4, 2020, by and among, Aimmune Therapeutics, Inc. and Xencor, Inc.

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

AIMMUNE THERAPEUTICS, INC.

             

Date: February 4, 2020

 

 

By:

 

/s/ Douglas T. Sheehy

 

 

 

Douglas T. Sheehy

 

 

 

General Counsel and Secretary

EX-3.1

Exhibit 3.1

AIMMUNE THERAPEUTICS, INC.

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES A CONVERTIBLE PREFERRED STOCK

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

The undersigned, Jayson Dallas, does hereby certify that:

 

  1.

He is the President and Chief Executive Officer of Aimmune Therapeutics, Inc., a Delaware corporation (the “Corporation”).

 

  2.

The Corporation is authorized to issue 10,000,000 shares of preferred stock, 525,634 of which have been designated.

 

  3.

In accordance with the provisions of Sections 103 and 151 of the Delaware General Corporation Law (the “DGCL”) the Board of Directors of the Corporation (the “Board of Directors”) does hereby certify that the following resolutions were duly adopted by the Board of Directors or by a duly authorized committee thereof, on January 28, 2020:

WHEREAS, the Amended and Restated Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), provides for a class of its authorized stock known as preferred stock, consisting of 10,000,000 shares, $0.0001 par value per share, issuable from time to time in one or more series;

WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a new series of the preferred stock, which shall consist of, up to 525,634 shares of the preferred stock which the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:

RESOLVED, pursuant to authority expressly set forth in the Certificate of Incorporation, the issuance of a series of Preferred Stock designated as the Series A Convertible Preferred Stock, par value $0.0001 per share, of the Corporation is hereby authorized and the designation, number of shares, powers, preferences, rights, qualifications, limitations and restrictions thereof (in addition to any provisions set forth in the Certificate of Incorporation that are applicable to the Preferred Stock of all classes and series) are hereby fixed, and the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock is hereby approved as follows:


SERIES A CONVERTIBLE PREFERRED STOCK

Section 1. Definitions. For the purposes hereof, the following terms shall have the following meanings:

Affiliate” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Holder will be deemed to be an Affiliate of such Holder.

Alternate Consideration” shall have the meaning set forth in Section 7(b).

Beneficial Ownership Limitation” shall have the meaning set forth in Section 6(c).

Business Day” means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

Buy-In” shall have the meaning set forth in Section 6(d)(iii).

Closing Sale Price” means, for any security as of any date, the last closing trade price for such security prior to 4:00 p.m., New York City time, on the principal securities exchange or trading market where such security is listed or traded, as reported by Bloomberg, L.P. (or an equivalent, reliable reporting service mutually acceptable to and hereafter designated by Holders of a majority of the then-outstanding Series A Preferred Stock and the Corporation), or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, L.P., or, if no last trade price is reported for such security by Bloomberg, L.P., the average of the bid prices of any market makers for such security as reported on the OTC Pink Market by OTC Markets Group, Inc. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as determined in good faith by the Board of Directors of the Corporation.

Commission” means the Securities and Exchange Commission.

Common Stock” means the Corporation’s common stock, par value $0.0001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed into.

Conversion Date” shall have the meaning set forth in Section 6(a).

Conversion Ratio” shall have the meaning set forth in Section 6(b).

Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series A Preferred Stock in accordance with the terms hereof.

Daily Failure Amount” means the product of (x) 0.005 multiplied by (y) the Closing Sale Price of the Common Stock on the applicable Share Delivery Date.

DGCL” shall mean the Delaware General Corporation Law.

Distributions” shall have the meaning set forth in Section 5(a).

DTC” shall have the meaning set forth in Section 6(a).

DWAC Delivery” shall have the meaning set forth in Section 6(a).

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


Fundamental Transaction” shall have the meaning set forth in Section 7(b).

Holder” means any holder of Series A Preferred Stock.

Issuance Date” means on or after February 7, 2020.

Junior Securities” shall have the meaning set forth in Section 5(a).

Notice of Conversion” shall have the meaning set forth in Section 6(a).

Parity Securities” shall have the meaning set forth in Section 5(a).

Person” means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

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

Senior Securities” shall have the meaning set forth in Section 5(a).

Series A Preferred Stock” shall have the meaning set forth in Section 2(a).

Series A Preferred Stock Register” shall have the meaning set forth in Section 2(b).

Share Delivery Date” shall have the meaning set forth in Section 6(d)(i).

Trading Day” means a day on which the Common Stock is traded for any period on the principal securities exchange or if the Common Stock is not traded on a principal securities exchange, on a day that the Common Stock is traded on another securities market on which the Common Stock is then being traded.

Section 2. Designation, Amount and Par Value; Assignment.

 

  (a)

The series of preferred stock designated by this Certificate of Designation shall be designated as the Corporation’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and the number of shares so designated shall be 525,634. Each share of Series A Preferred Stock shall have a par value of $0.0001 per share. The Series A Preferred Stock may be issued in certificated form or in book-entry form at the election of the Holder. To the extent that any shares of Series A Preferred Stock are issued in book-entry form, references herein to “certificates” shall instead refer to the book-entry notation relating to such shares.

 

  (b)

The Corporation shall register shares of the Series A Preferred Stock, upon records to be maintained by the Corporation for that purpose (the “Series A Preferred Stock Register”), in the name of the Holders thereof from time to time. The Corporation may deem and treat the registered Holder as the absolute owner thereof for the purpose of any conversion thereof and for all other purposes. The Corporation shall register the transfer of any shares of Series A Preferred Stock in the Series A Preferred Stock Register, upon surrender of the certificates evidencing such shares to be transferred, duly endorsed by the Holder thereof, to the Corporation at its address specified herein. Upon any such registration or transfer, a new certificate evidencing the shares of Series A Preferred Stock so transferred shall be issued to the transferee and a new certificate evidencing the remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder, in each case, within three (3) Business Days. The provisions of this Certificate of Designation are intended to be for the benefit of all Holders from time to time and shall be enforceable by any such Holder.


Section 3. Dividends. Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of the Series A Preferred Stock at a rate equal (on an as-if-converted-to-Common-Stock basis, without regard to the Beneficial Ownership Limitation) to and in the same form, and in the same manner, as dividends (other than dividends in the form of the issuance of Common Stock) actually paid on shares of the Common Stock when, as and if such dividends (other than dividends in the form of the issuance of Common Stock) are paid on shares of the Common Stock, whenever funds are legally available and when and as declared by the Board. Other than as set forth in the previous sentence, no other dividends shall be paid on shares of the Series A Preferred Stock, and the Corporation shall pay no dividends (other than dividends in the form of the issuance of Common Stock) on shares of the Common Stock unless it simultaneously complies with the previous sentence.

Section 4. Voting Rights; Amendments.

 

  (a)

Except as otherwise provided herein or as otherwise required by the DGCL, the Holders shall have no voting rights.

 

  (b)

So long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval of the Holders of not less than a majority of the then-outstanding shares of Series A Preferred Stock, or their designees, voting separately as a single class:

 

  (i)

alter, repeal or change the powers, preferences or rights of the Series A Preferred Stock or alter or amend this Certificate of Designation so as to adversely affect the Series A Preferred Stock;

 

  (ii)

supplement, amend, restate, repeal, or waive any provision of the Certificate of Incorporation or Corporation’s bylaws, or file any articles of amendment, certificate of designation, preferences, limitations and relative rights of any series of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock, regardless of whether any of the foregoing actions shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise (it being understood that the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock shall not be considered to be adversely altered or changed solely because of the issuance of shares of another series of preferred stock of the Corporation, including a series of preferred stock that ranks senior to the Series A Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, occurrence of a Fundamental Transaction, and/or the payment of dividends);

 

  (iii)

increase or decrease (other than by conversion) the number of authorized shares of Series A Preferred Stock; or

 

  (iv)

enter into any agreement with respect to any of the foregoing.

Section 5. Rank; Liquidation.

 

  (a)

The Series A Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms junior to any Series A Preferred Stock (“Junior Securities”); (iii) on parity with any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms on parity with


  the Series A Preferred Stock (the “Parity Securities”); and (iv) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms senior to any Series A Preferred Stock (“Senior Securities”), in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntarily or involuntarily (all such distributions being referred to collectively as “Distributions”) and/or the right to receive dividends.

 

  (b)

Subject to the prior and superior rights of the holders of any Senior Securities of the Corporation, upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, each Holder shall be entitled to receive, in preference to any distributions of any of the assets or surplus funds of the Corporation to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, (i) an amount equal to $0.0001 per share of Series A Preferred Stock, plus any dividends declared but unpaid on such shares, plus (ii) such amount per share as would have been payable to such Holder if all shares of Series A Preferred Stock held by such Holder had been converted to Common Stock pursuant to Section 6 hereof (without giving effect to any limitation on conversion pursuant to Section 6(c) thereof) immediately prior to such liquidation, dissolution or winding up of the Corporation, before any payments shall be made or any assets distributed to holders of any class of Common Stock or Junior Securities; provided, however, that, in the event that the assets to be distributed pursuant to this clause (ii) constitute equity securities or convertible securities of the Corporation (or any successor thereof) and, following any such distribution, any Holder (together with its Attribution Parties) would hold or have a right to acquire greater than 19.99% of the number of shares of Common Stock or voting power of the Corporation (or any successor thereof) outstanding immediately after giving effect to all such distributions (such amount of securities being referred to as the “Surplus Amount”), then, unless the distribution thereof is approved by the stockholders of the Corporation, such Holder or any of its Attribution Parties shall be entitled to receive in lieu of such securities and in the sole discretion of the Corporation, either (x) the Surplus Amount of securities of the Corporation (or any successor thereof) with substantially similar preferences, rights, privileges, powers of, and restrictions provided for the benefit of the Series A Preferred Stock or (y) the equivalent monetary value in cash of such Surplus Amount from the Corporation (or any successor thereof), as determined by the Board of Directors. If, upon any such liquidation, dissolution or winding up of the Corporation, the assets of the Corporation shall be insufficient to pay the Holders the amount required under the preceding sentence, then all remaining assets of the Corporation shall be distributed pro rata to holders of the shares of the Series A Preferred Stock and Parity Securities.

Section 6. Conversion.

 

  (a)

Conversions at Option of Holder. Each share of Series A Preferred Stock shall be convertible, at any time and from time to time from and after the Issuance Date, at the option of the Holder thereof, into a number of shares of Common Stock equal to the Conversion Ratio (as defined below). Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”), duly completed and executed. Other than a conversion following a Fundamental Transaction or following a notice provided for under Section 7(d)(ii) hereof, the Notice of Conversion must specify at least a number of shares of Series A Preferred Stock to be converted equal to the lesser of (x) 1,000 shares (such number subject to appropriate adjustment following the occurrence of an event specified in Section 7(a) hereof) and (y) the number of shares of Series A Preferred Stock then held by the Holder. Provided the Corporation’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, the Notice of Conversion may specify, at the Holder’s election, whether the applicable Conversion Shares shall be credited to the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission system (a “DWAC Delivery”). The “Conversion Date,” or the date on which a conversion shall be deemed effective,


  shall be defined as the Trading Day that the Notice of Conversion, completed and executed, is sent by facsimile to, and received during regular business hours by, the Corporation; provided that the original certificate(s) (if applicable) representing such shares of Series A Preferred Stock being converted, duly endorsed, and the accompanying Notice of Conversion, are received by the Corporation within two (2) Trading Days thereafter. In all other cases, the Conversion Date shall be defined as the Trading Day on which the original share certificate(s) (if applicable) of Series A Preferred Stock being converted, duly endorsed, and the accompanying Notice of Conversion, are received by the Corporation. The calculations set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error.

 

  (b)

Conversion Ratio. Each share of Series A Preferred Stock is convertible at a rate of ten (10) shares of Common Stock for each share of Series A Preferred Stock, subject to adjustment as set forth in Section 7 below (this rate, as adjusted from time to time, the “Conversion Ratio”).

 

  (c)

Beneficial Ownership Limitation. Notwithstanding anything herein to the contrary, the Corporation shall not effect any conversion of the Series A Preferred Stock, and a Holder shall not have the right to convert any portion of the Series A Preferred Stock, to the extent that, after giving effect to an attempted conversion set forth on an applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any other Person whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act and the applicable regulations of the Commission, including any “group” of which the Holder is a member (the foregoing, “Attribution Parties”)) would beneficially own a number of shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock subject to the Notice of Conversion with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted Series A Preferred Stock beneficially owned by such Holder or any of its Attribution Parties, and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation (including any warrants) beneficially owned by such Holder or any of its Attribution Parties that are subject to a limitation on conversion or exercise similar to the limitation contained herein. For purposes of this Section 6(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable regulations of the Commission. For purposes of this Section 6(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (A) the Corporation’s most recent periodic or annual filing with the Commission, as the case may be, (B) a more recent public announcement by the Corporation that is filed with the Commission, or (C) a more recent notice by the Corporation or the Corporation’s transfer agent to the Holder setting forth the number of shares of Common Stock then outstanding. Upon the written request of a Holder (which may be by email), the Corporation shall, within three (3) Trading Days thereof, confirm in writing to such Holder (which may be via email) the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to any actual conversion or exercise of securities of the Corporation, including shares of Series A Preferred Stock, by such Holder or its Attribution Parties since the date as of which such number of outstanding shares of Common Stock was last publicly reported or confirmed to the Holder. The “Beneficial Ownership Limitation” means 19.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock pursuant to such Notice of Conversion (to the extent permitted pursuant to this Section 6(c)). The Corporation shall be entitled to rely on representations made to it by the Holder in any Notice of Conversion regarding its Beneficial Ownership Limitation.


  (d)

Mechanics of Conversion

 

  (i)

Delivery of Certificate or Electronic Issuance Upon Conversion. Not later than three (3) Trading Days after the applicable Conversion Date, or if the Holder requests the issuance of physical certificate(s), two (2) Trading Days after receipt by the Corporation of the original certificate(s) representing such shares of Series A Preferred Stock being converted, duly endorsed, and the accompanying Notice of Conversion (the “Share Delivery Date”), the Corporation shall (a) deliver, or cause to be delivered, to the converting Holder a physical certificate or certificates representing the number of Conversion Shares being acquired upon the conversion of shares of Series A Preferred Stock or (b) in the case of a DWAC Delivery, electronically transfer such Conversion Shares by crediting the account of the Holder’s prime broker with DTC through its DWAC system. If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by or, in the case of a DWAC Delivery, such shares are not electronically delivered to or as directed by, the applicable Holder by the Share Delivery Date, the applicable Holder shall be entitled to elect to rescind such Notice of Conversion by written notice to the Corporation at any time on or before its receipt of such certificate or certificates for Conversion Shares or electronic receipt of such shares, as applicable, in which event the Corporation shall promptly return to such Holder any original Series A Preferred Stock certificate delivered to the Corporation and such Holder shall promptly return to the Corporation any Common Stock certificates or otherwise direct the return of any shares of Common Stock delivered to the Holder through the DWAC system, representing the shares of Series A Preferred Stock unsuccessfully tendered for conversion to the Corporation.

 

  (ii)

Obligation Absolute. Subject to Section 6(c) hereof and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6(d)(i) above, the Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of Series A Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares. Subject to Section 6(c) hereof and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6(d)(i) above, in the event a Holder shall elect to convert any or all of its Series A Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Series A Preferred Stock of such Holder shall have been sought and obtained by the Corporation, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the value of the Conversion Shares into which would be converted the Series A Preferred Stock which is subject to such injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Corporation shall, subject to Section 6(c) hereof and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6(d)(i) above, issue Conversion Shares upon a properly noticed conversion. If the Corporation fails to deliver to a Holder such certificate or certificates, or electronically deliver (or cause its transfer agent to electronically deliver) such shares in the case of a DWAC Delivery, pursuant to Section 6(d)(i) on or prior to the fifth (5th) Trading Day after the Share Delivery Date


  applicable to such conversion (other than a failure caused by incorrect or incomplete information provided by Holder to the Corporation), then, unless the Holder has rescinded the applicable Notice of Conversion pursuant to Section 6(d)(i) above, the Corporation shall pay (as liquidated damages and not as a penalty) to such Holder an amount payable, at the Corporation’s option, either (a) in cash or (b) to the extent that it would not cause the Holder or its Attribution Parties to exceed the Beneficial Ownership Limitation, in shares of Common Stock that are valued for these purposes at the Closing Sale Price on the date of such calculation, in each case equal to the product of (x) the number of Conversion Shares required to have been issued by the Corporation on such Share Delivery Date, (y) an amount equal to the Daily Failure Amount and (z) the number of Trading Days actually lapsed after such fifth (5th) Trading Day after the Share Delivery Date during which such certificates have not been delivered, or, in the case of a DWAC Delivery, such shares have not been electronically delivered; provided, however, the Holder shall only receive up to such amount of shares of Common Stock such that Holder and its Attribution Parties and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which the Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) shall not collectively beneficially own greater than the Beneficial Ownership Limitation. Nothing herein shall limit a Holder’s right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief; provided, that Holder shall not receive duplicate damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

  (iii)

Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. If the Corporation fails to deliver to a Holder the applicable certificate or certificates or to effect a DWAC Delivery, as applicable, by the Share Delivery Date pursuant to Section 6(d)(i) (other than a failure caused by incorrect or incomplete information provided by Holder to the Corporation), and if after such Share Delivery Date such Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount by which (x) such Holder’s total purchase price (including any brokerage commissions) for the shares of Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Series A Preferred Stock equal to the number of shares of Series A Preferred Stock submitted for conversion or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(d)(i). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Series A Preferred Stock with respect to which the actual sale price (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder


  $1,000. The Holder shall provide the Corporation written notice, within three (3) Trading Days after the occurrence of a Buy-In, indicating the amounts payable to such Holder in respect of such Buy-In together with applicable confirmations and other evidence reasonably requested by the Corporation. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to timely deliver certificates representing shares of Common Stock upon conversion of the shares of Series A Preferred Stock as required pursuant to the terms hereof; provided, however, that the Holder shall not be entitled to both (i) require the reissuance of the shares of Series A Preferred Stock submitted for conversion for which such conversion was not timely honored and (ii) receive the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(d)(i).

(iv) Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of the Series A Preferred Stock, not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments of Section 7) upon the conversion of all outstanding shares of Series A Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and non-assessable.

(v) Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the conversion of the Series A Preferred Stock. As to any fraction of a share which a Holder would otherwise be entitled to receive upon such conversion, such fraction shall be rounded down to the next whole share.

 

  (vi)

Transfer Taxes. The issuance of certificates for shares of the Common Stock upon conversion of the Series A Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the registered Holder(s) of such shares of Series A Preferred Stock and the Corporation shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

 

  (e)

Status as Stockholder. Upon each Conversion Date, (i) the shares of Series A Preferred Stock being converted shall be deemed converted into shares of Common Stock; (ii) the Holders of such converted shares shall assume the rights, privileges, and obligations of a holder of Common Stock of the Corporation; and (iii) the Holder’s rights as a holder of such converted shares of Series A Preferred Stock shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Corporation to comply with the terms of this Certificate of Designation. In all cases, the Holder shall retain all of its rights and remedies for the Corporation’s failure to convert Series A Preferred Stock.


Section 7. Certain Adjustments.

 

  (a)

Stock Dividends and Stock Splits. If the Corporation, at any time while this Series A Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of this Series A Preferred Stock) with respect to the then-outstanding shares of Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the Conversion Ratio shall be divided by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event (excluding any treasury shares of the Corporation). Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination.

 

  (b)

Fundamental Transaction. If, at any time while this Series A Preferred Stock is outstanding, (i) the Corporation effects any merger or consolidation of the Corporation with or into another Person or any stock sale to, or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, share exchange or scheme of arrangement) with or into another Person (other than such a transaction in which the Corporation is the surviving or continuing entity and its Common Stock is not exchanged for or converted into other securities, cash or property), (ii) the Corporation effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which more than 50% of the Common Stock not held by the Corporation or such Person is exchanged for or converted into other securities, cash or property, or (iv) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant (other than as a result of a dividend, subdivision or combination covered by Section 7(a) above) to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent conversion of this Series A Preferred Stock the Holders shall, notwithstanding anything to the contrary in Section 6(c), have the right to receive, in lieu of the right to receive Conversion Shares, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”); provided, however, that, in the event that the assets to be distributed pursuant to this Section 7(b) constitute equity securities or convertible securities of the Corporation (or any successor thereof) and, following any such distribution, any Holder (together with its Attribution Parties) would hold or have a right to acquire a Surplus Amount, then, unless the distribution thereof is approved by the stockholders of the Corporation, such Holder or any of its Attribution Parties shall be entitled to receive in lieu of such securities and in the sole discretion of the Corporation, either (x) the Surplus Amount of securities of the Corporation (or any successor thereof) with substantially similar preferences, rights, privileges, powers of, and restrictions provided for the benefit of the Series A Preferred Stock or (y) the equivalent monetary value in cash of such Surplus Amount from the Corporation (or any successor thereof), as determined by the Board of Directors. For purposes of any such subsequent conversion, the determination of the Conversion Ratio shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall adjust the Conversion Ratio in a reasonable manner reflecting the relative value of any different components


  of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holders shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Series A Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The terms of any agreement to which the Corporation is a party and pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 7(b) and insuring that this Series A Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. The Corporation shall cause to be delivered to each Holder, at its last address as it shall appear upon the stock books of the Corporation, written notice of any Fundamental Transaction at least 20 calendar days prior to the date on which such Fundamental Transaction is expected to become effective or close.

 

  (c)

Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

 

  (d)

Notice to the Holders.

 

  (i)

Adjustment to Conversion Ratio. Whenever the Conversion Ratio is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Ratio after such adjustment and setting forth a brief statement of the facts requiring such adjustment; provided, that no certificate or other notice of adjustment in the Conversion Rate will be required unless the adjustment would result in an increase or decrease of at least one percent (1.0%) in the Conversion Rate.

 

  (ii)

Other Notices. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Series A Preferred Stock, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is


  expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.

Section 8. Miscellaneous.

 

  (a)

Redemption. The Series A Preferred Stock is not redeemable.

 

  (b)

Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at 8000 Marina Blvd Suite #300, Brisbane, California 94005, or such other facsimile number or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by email, facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the email address, facsimile number or mailing address of such Holder appearing on the books of the Corporation, or if no such email address, facsimile number or mailing address appears on the books of the Corporation, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the date immediately following the date of transmission, if such notice or communication is delivered via email at the email address or facsimile at the facsimile number specified between 5:30 p.m. and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

  (b)

Lost or Mutilated Series A Preferred Stock Certificate. If a Holder’s Series A Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series A Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership thereof, reasonably satisfactory to the Corporation and, in each case, customary and reasonable indemnity, if requested. Applicants for a new certificate under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Corporation may prescribe.

 

  (c)

Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation. Any waiver by the Corporation or a Holder must be in writing. Notwithstanding any provision in this Certificate of Designation to the contrary, any provision contained herein and any right of the Holders of Series A Preferred Stock granted hereunder may be waived as to all shares of Series A Preferred Stock (and the Holders thereof) upon the written consent of the Holders of not less than a majority of the shares of Series A Preferred Stock then outstanding, unless a higher percentage is required by the DGCL, in which case the written consent of the Holders of not less than such higher percentage shall be required.


  (d)

Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

 

  (e)

Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

 

  (f)

Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

 

  (g)

Status of Converted Series A Preferred Stock. If any shares of Series A Preferred Stock shall be converted or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series A Preferred Stock.

 

  (h)

No Impairment. The Corporation will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Certificate of Designations and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders against impairment.


IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation this 4th day of February 2020.

 

/s/ Jayson Dallas
Jayson Dallas
President and Chief Executive Officer

SIGNATURE PAGE TO CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND

LIMITATIONS OF SERIES A CONVERTIBLE PREFERRED STOCK


ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES A PREFERRED STOCK)

The undersigned Holder hereby irrevocably elects to convert the number of shares of Series A Preferred Stock indicated below, represented by stock certificate No(s).(the “Preferred Stock Certificates”), into shares of common stock, par value $0.0001 per share (the “Common Stock”), of Aimmune Therapeutics, Inc., a Delaware corporation (the “Corporation”), as of the date written below. If securities are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate”) filed by the Corporation with the Secretary of State of the State of Delaware on February 4, 2020.

As of the date hereof, the number of shares of Common Stock beneficially owned by the undersigned Holder (together with such Holder’s Affiliates, and any other Person whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act and the applicable regulations of the Commission, including any “group” of which the Holder is a member (the foregoing, “Attribution Parties”)), including the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock subject to this Notice of Conversion, but excluding the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted Series A Preferred Stock beneficially owned by such Holder or any of its Attribution Parties, and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation (including any warrants) beneficially owned by such Holder or any of its Attribution Parties that are subject to a limitation on conversion or exercise similar to the limitation contained in Section 6(c) of the Certificate of Designation, is _______%. For purposes hereof, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable regulations of the Commission.

Conversion calculations:

 

Date to Effect

Conversion:

Number of shares of Series

A Preferred Stock owned prior to Conversion:

Number of shares of Series

A Preferred Stock to be Converted:

Number of shares of Common Stock to be Issued:

Address for delivery of physical certificates:

or

for DWAC Delivery:

DWAC Instructions:

Broker no:

Account no:

EX-4.1

Exhibit 4.1

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

This Amended and Restated Registration Rights Agreement (this “Agreement”) is made and entered into as of February 4, 2020, between Aimmune Therapeutics, Inc., a Delaware corporation (the “Company”), and Nestle Health Science US Holdings, Inc., a Delaware corporation (the “Purchaser”).

WHEREAS, the Purchaser is purchasing shares of the Company’s Series A Preferred Stock and Common Stock pursuant to that certain Securities Purchase Agreement, dated as of February 4, 2020, between the Company and the Purchaser (the “Purchase Agreement”);

WHEREAS, the obligations in the Purchase Agreement are conditioned upon the execution and delivery of this Agreement; and

WHEREAS, the Company and the Purchaser are parties to that certain Amended and Restated Registration Rights Agreement, dated as of November 11, 2018 (the “Prior Agreement”) and desire to amend and restate the Prior Agreement to accept the rights and covenants hereof in lieu of their rights and covenants under the Prior Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the respective meanings set forth in this Section 1:

Advice” shall have the meaning set forth in Section 7(c).

Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act.

Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

Commission” means the United States Securities and Exchange Commission, or any successor entity or entities, including, if applicable, the staff of the Commission.

Common Stock” means the common stock, par value $0.0001 per share, of the Company.

 

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Effectiveness Date” means: (a) with respect to the Initial Registration Statement required to be filed hereunder, the date that is forty (45) days following the Permitted Request Date, but no earlier than the Termination Date (or the 60th day following the Permitted Request Date in the event the Initial Registration Statement is reviewed by the Commission) and (b) with respect to any additional Registration Statements which may be required pursuant to Section 2, the 60th day following the date on which the Permitted Request Date applicable to such additional Registration Statement as is required under such Section (or the 90th day following such date in the event such additional Registration Statement is reviewed by the Commission). If the Effectiveness Date falls on a Saturday, Sunday or other date that the Commission is closed for business, the Effectiveness Date shall be extended to the next day on which the Commission is open for business.

Effectiveness Period” shall have the meaning set forth in Section 2(a).

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

Indemnified Party” shall have the meaning set forth in Section 6(c).

Indemnifying Party” shall have the meaning set forth in Section 6(c).

Initial Registration Statement” shall mean the initial Registration Statement required to be filed to cover the resale by the Holders of the Registrable Securities pursuant to Section 2(a).

Losses” shall have the meaning set forth in Section 6(a).

Permitted Request Date” means the date on which the Purchaser requests that the Company register the Registrable Securities under Section 2, (a) which date with respect to the Initial Registration Statement, may not be a date that precedes the date that is 45th calendar days prior to the Termination Date, and (b) which date with respect to any additional Registration Statements that may be required pursuant to Section 2 hereof, may be any day following the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement is required under such Section, prompt notice of which shall be provided to the Purchaser.

Person means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

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Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A or Rule 430B promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

Reduction Securities” shall have the meaning set forth in Section 2(b).

Registrable Securities” means (i) the shares of Common Stock issued pursuant to the Purchase Agreement and the shares of Common Stock issuable upon conversion of the shares of the Company’s Series A Preferred Stock issued pursuant to the Purchase Agreement, (ii) the shares of Common Stock issued pursuant to that certain Securities Purchase Agreement, dated November 11, 2018, (iii) the shares of Common Stock issued pursuant to that certain Securities Purchase Agreement, dated November 3, 2016, by and among the Company and the Purchaser, and (iv) any other shares of Common Stock issued as (or issuable upon conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, in exchange for or in replacement of the shares referenced in clauses (i) through (iii); provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold or transferred in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Company’s transfer agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the Company.

Registration Statement” means each of the following: (i) an initial registration statement which is required to register the resale of the Registrable Securities, and (ii) each additional registration statement, if any, contemplated by Section 2, and including, in each case, the Prospectus, amendments and supplements to each such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

3


Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

Securities Act” means the Securities Act of 1933, as amended.

Termination Date” shall mean February 4, 2021.

Trading Day” means any day on which the Common Stock is traded on The Nasdaq Global Select Market, or, if The Nasdaq Global Select Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded.

Transaction Documents” shall have the meaning set forth in the Purchase Agreement.

Underwritten Offering” means a registration in which Registrable Securities are sold to an underwriter for reoffering to the public.

2. Registration.

(a) At the written request of the Purchaser, at any time after the Permitted Request Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” in substantially the form attached hereto as Annex A (which may be modified to respond to comments, if any, provided by the Commission or at the written request of the Purchaser to address any modifications to the Plan of Distribution at the time that Purchaser issues a request for registration of the Registrable Securities in accordance with Section 2 hereof). The Company shall use its commercially reasonable efforts to cause a Registration Statement filed under this Agreement to be declared effective under the Securities Act promptly but, in any event, no later than the Effectiveness Date for such Registration Statement, and shall, subject to Section 7(d) hereof, use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act until the earlier of (i) the date that is three years after the effectiveness of the Registration Statement and (ii) the date on which all securities under such Registration Statement have ceased to be Registrable Securities (the “Effectiveness Period”). Notwithstanding the foregoing, the Company shall be entitled to suspend the effectiveness of the Registration Statement at any time prior to the expiration of the Effectiveness Period for up to an aggregate of 30 consecutive Trading Days or an aggregate of 60 Trading Days (which need not be consecutive) in any given 360-day period, if the Company determines (and the Chief Executive Officer or Chief Financial Officer of the Company certifies in writing to the Purchaser) that the continued effectiveness of the Registration Statement during the applicable period will

 

4


be materially detrimental to the Company. In the event of any suspension as aforesaid, the Effectiveness Period of the applicable Registration Statement will be extended by the number of Trading Days in the Effectiveness Period during which the Registration Statement was suspended. It is agreed and understood that the Company shall, from time to time, be obligated to file one or more additional Registration Statements to cover any Registrable Securities which are not registered for resale pursuant to a pre-existing Registration Statement. In connection with the written request of the Purchaser to the Company to prepare and file a Registration Statement, the Purchaser (or Holder(s), as applicable) shall, concurrently with such written request, deliver to the Company the completed Selling Stockholder Questionnaire in the form of Appendix II to the Purchase Agreement.

(b) Notwithstanding anything contained herein to the contrary, in the event that the Commission limits the amount of Registrable Securities that may be included and sold by Holders in any Registration Statement, including the Initial Registration Statement, pursuant to Rule 415 or any other basis, the Company may reduce the number of Registrable Securities included in such Registration Statement on behalf of the Holders in whole or in part (in case of an exclusion as to a portion of such Registrable Securities, such portion shall be allocated pro rata among such Holders first in proportion to the respective numbers of Registrable Securities represented by shares requested to be registered by each such Holder over the total amount of Registrable Securities represented by shares) (such Registrable Securities, the “Reduction Securities”). In such event, the Company shall give the Holders prompt notice of the number of such Reduction Securities excluded and the Company will not be liable for any damages under this Agreement in connection with the exclusion of such Reduction Securities. The Company shall use its commercially reasonable efforts at the first opportunity that is permitted by the Commission to register for resale the Reduction Securities. Such new Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Reduction Securities on Form S-3, in which case such registration shall be on another appropriate form for such purpose) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” in substantially the form attached hereto as Annex A (which may be modified to respond to comments, if any, provided by the Commission or at the written request of the Purchaser to address any modifications to the Plan of Distribution at the time that Purchaser issues a request for registration of the Registrable Securities in accordance with Section 2 hereof). The Company shall use its commercially reasonable efforts to cause each such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than the Effectiveness Date, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act during the entire Effectiveness Period, subject to Section 7(c) hereof. Notwithstanding the foregoing, the Company shall be entitled to suspend the effectiveness of such Registration Statement at any time prior to the expiration of the Effectiveness Period for an aggregate of no more than 30 consecutive Trading Days or an aggregate of 60 Trading Days (which need not be consecutive) in any given 360-day period.

 

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3. Registration Procedures.

In connection with the Company’s registration obligations hereunder, the Company shall:

(a) Not less than three Trading Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, furnish to the Holders copies of all such documents proposed to be filed (other than those incorporated by reference). Notwithstanding the foregoing, the Company shall not be required to furnish to the Holders any prospectus supplement being prepared and filed solely to name new or additional selling securityholders unless such Holders are named in such prospectus supplement. In addition, in the event that any Registration Statement is on Form S-1 (or other form which does not permit incorporation by reference), the Company shall not be required to furnish to the Holders any prospectus supplement containing information included in a report or proxy statement filed under the Exchange Act that would be incorporated by reference in such Registration Statement if such Registration Statement were on Form S-3 (or other form which permits incorporation by reference). The Company shall duly consider any comments made by Holders and received by the Company not later than two Trading Days prior to the filing of the Registration Statement, but shall not be required to accept any such comments to which it reasonably objects.

(b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to each Registration Statement or any amendment thereto; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities covered by each Registration Statement.

(c) Notify the Holders as promptly as reasonably possible (and, in the case of (i)(A) below, not less than three Trading Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day: (i)(A) when a Prospectus or any prospectus supplement (but only to the extent notice is required under Section 3(a) above) or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (in which case the Company shall, solely to the extent such comments relate to the Selling Stockholder or the Plan of Distribution, provide true and complete copies thereof and all written responses thereto to each of the Holders that pertain to the Holders as a Selling Stockholder; for purposes of clarity the Company shall have no obligation to provide any information that it reasonably believes would constitute material and non-public information); and (C) with respect to each Registration Statement or any post-effective amendment, when the same has been declared effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information that pertains to the Holders as selling stockholders or the Plan of Distribution; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the

 

6


initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included or incorporated by reference in a Registration Statement ineligible for inclusion or incorporation by reference therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, that any and all of such information shall remain confidential to each Holder until such information otherwise becomes public, unless disclosure by a Holder is required by law.

(d) Use its reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(e) Furnish to each Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent reasonably requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that the Company shall have no obligation to provide any document pursuant to this clause that is available on the EDGAR system.

(f) Promptly deliver to each Holder, without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. Subject to Section 7(c) hereof, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

(g) Prior to any public offering of Registrable Securities, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of those jurisdictions within the United States as any Holder reasonably requests in writing to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statements; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or subject the Company to any material tax in any such jurisdiction where it is not then so subject.

 

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(h) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates or book-entry statements representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statements, which certificates or book-entry statements shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request.

(i) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and any Affiliate thereof, the natural persons thereof that have voting and dispositive control over the shares and any other information with respect to such Holder as the Commission requests.

4. Holder’s Obligations. Each Holder agrees, by acquisition of the Registrable Securities, that no Holder shall be entitled to sell any of such Registrable Securities pursuant to a Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with all material information required to be set forth in the Purchaser Questionnaire to be delivered at the Closing and the Selling Stockholder Questionnaire to be delivered in accordance with Section 2 hereof. Any sale of any Registrable Securities by any Holder pursuant to a Prospectus delivered by such Holder shall constitute a representation and warranty by such Holder that the information regarding such Holder is as set forth in such Prospectus, and that such Prospectus does not as of the time of such sale contain any untrue statement of a material fact regarding such Holder or omit to state any material fact regarding such Holder necessary to make the statements in such Prospectus, in the light of the circumstances under which they were made, not misleading, solely to the extent such facts are based upon information regarding such Holder furnished in writing to the Company by such Holder for use in such Prospectus.

5. Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Principal Market on which the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) reasonable fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) reasonable fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation

 

8


of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders. To the extent that underwriting discounts and selling commissions are incurred in connection with the sale of Registrable Securities in an Underwritten Offering hereunder, such underwriting discounts and selling commissions shall be borne by the Holders of Registrable Securities sold pursuant to such Underwritten Offering, pro rata on the basis of the number of Registrable Securities sold on their behalf in such Underwritten Offering.

6. Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, partners, members, stockholders and employees of each Holder, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents, partners, members, stockholders and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose), or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (1) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing (in accordance with Section 7(g) below) that the Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice (as defined below) or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement.

 

9


(b) Indemnification by Holders. Each Holder shall, notwithstanding any termination of this Agreement, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents, partners, members, stockholders or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon: (x) for so long as the Company is not a eligible to use Form S-3 under the Securities Act for a primary offering in reliance on General Instruction I.B.1 of such form and the prospectus delivery requirements of the Securities Act apply to sales by such Holder, such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent that, (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing (in accordance with Section 7(g) below) that the Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

 

10


An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party); provided, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties pursuant to this Section 6(c). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within 10 Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

(d) Contribution. If a claim for indemnification under Section 6(a) or 6(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 6(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

 

11


The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 6(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section 6 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

7. Miscellaneous.

(a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(b) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement.

(c) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of an any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

(d) Furnishing of Information. Each Holder shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably requested by the Company to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

 

12


(e) Amendments and Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Holder or Holders (as applicable) of no less than a majority of the then outstanding Registrable Securities. The Company shall provide prior notice to all Holders of any proposed waiver or amendment. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

(f) Termination of Registration Rights. For the avoidance of doubt, it is expressly agreed and understood that (i) in the event that there are no Registrable Securities outstanding as of a Filing Date, then the Company shall have no obligation to file, cause to be declared effective or to keep effective any Registration Statement hereunder (including any Registration Statement previously filed pursuant to this Agreement) and (ii) all registration rights granted to the Holders hereunder, shall terminate in their entirety effective on the first date on which there shall cease to be any Registrable Securities outstanding. If not previously terminated pursuant to the foregoing sentence, it is expressly agreed and understood that the registration rights granted to the Holder pursuant to this Agreement shall terminate as to the Holder in the event that the Holder fails to make a written request to the Company to register the Registrable Securities by the date that is two years following the Termination Date or, if earlier, such date that the Holders own in the aggregate less than 30% of the number of Registrable Securities that the Holders owned in the aggregate as of the date of the Closing (as adjusted for stock splits, combinations, dividends, recapitalizations and the like).

(g) Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be sent by confirmed facsimile or electronic mail, or mailed by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, and shall be deemed given when so sent in the case of facsimile or electronic mail transmission, or when so received in the case of mail or courier, and addressed as follows:

if to the Company, to:

Aimmune Therapeutics, Inc.

8000 Marine Blvd., Suite 300

Brisbane, California 94005

Attention: General Counsel

Facsimile: (650) 616-0075

E-Mail: GC@aimmune.com

 

13


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

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Attention: Patrick A. Pohlen and Miles P. Jennings

Facsimile: (650) 463-2600

E-Mail: [***]

              [***]

if to the Purchaser, to:

Nestle Health Science US Holdings, Inc.

900 Long Ridge Road, Building 2

Stamford, CT 06902

Attention: Andrew Glass

F: (480) 379-5510

E-Mail: [***]

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

Nestlé Health Science S.A.

Avenue Nestlé, 55

1800 Vevey

Switzerland

Attention: General Counsel

Facsimile: 011-41-21-924-2875

with a further copy (which shall not constitute notice) to:

Mayer Brown LLP

1221 Avenue of the Americas

New York, NY 10020

Attention: David A. Carpenter

Facsimile: (212) 849-5795

E-Mail: [***]

if to any other Person who is then the registered Holder, to the address of such Holder as it appears in the stock transfer books of the Company,

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. Each Holder may assign its respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement; provided that, such transferee or assignee agrees in writing to be bound by the terms of the Standstill Agreement (as such term is defined in the Purchase Agreement) if the Standstill Agreement remains in effect as of the date of the transfer.

 

14


(i) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.

(j) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement shall be commenced exclusively in the state and federal courts sitting in the City and County of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City and County of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

(k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

(l) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(m) Use of Terms. The parties agree and acknowledge that when, in this Agreement, the Company is required to use its reasonable best efforts to perform any covenant under this Agreement, such requirement shall not obligate the Company, in the reasonable judgment of the disinterested members of its Board of Directors, to perform any act that will have a material adverse effect on the Company.

 

15


(n) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(o) Entire Agreement. This Agreement and the other Transaction Documents (as such term is defined in the Purchase Agreement) contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto. Upon the effectiveness of this Agreement, except under the circumstances contemplated by the last sentence of Section 7(f), the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Agreement, and shall be of no further force or effect.

[Signature pages follow]

 

16


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

 

AIMMUNE THERAPEUTICS, INC.
By:   /s/ Jayson Dallas
Name:   Jayson Dallas, M.D.
Title:   President and Chief Executive Officer

Signature Pages to Registration Rights Agreement


NESTLÉ HEALTH SCIENCE US HOLDINGS, INC.
By:   /s/ James Pepin
Name:   James Pepin
Title:   President
Address:
900 Long Ridge Road, Building 2
Stamford, CT 06902
Attention: Andrew Glass
F: (480) 379-5510
E-Mail: [***]

Signature Pages to Registration Rights Agreement


ANNEX A

PLAN OF DISTRIBUTION

The selling stockholders and any of their pledgees, donees, transferees, assignees or other successors-in-interest may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. The selling stockholders may use one or more of the following methods when disposing of the shares or interests therein:

 

   

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

   

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

   

through brokers, dealers or underwriters that may act solely as agents;

 

   

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

   

an exchange distribution in accordance with the rules of the applicable exchange;

 

   

privately negotiated transactions;

 

   

through the writing or settlement of options or other hedging transactions entered into after the effective date of the registration statement of which this prospectus is a part, whether through an options exchange or otherwise;

 

   

broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

 

   

a combination of any such methods of disposition; and

 

   

any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the Securities Act of 1933, as amended, or Securities Act, if available, rather than under this prospectus.

Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.


The selling stockholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of common stock from time to time under this prospectus, or under a supplement or amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.

Upon being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, we will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon being notified in writing by a selling stockholder that a donee or pledge intends to sell more than 500 shares of common stock, we will file a supplement to this prospectus if then required in accordance with applicable securities law.

The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of the shares of common stock or interests in shares of common stock, the selling stockholders may enter into hedging transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of common stock short after the effective date of the registration statement of which this prospectus is a part and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The selling stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The maximum commission or discount to be received by any member of the Financial Industry Regulatory Authority (FINRA) or independent broker-dealer will not be greater than 8% of the initial gross proceeds from the sale of any security being sold.


We have advised the selling stockholders that they are required to comply with Regulation M promulgated under the Securities Exchange Act of 1934, as amended, during such time as they may be engaged in a distribution of the shares. The foregoing may affect the marketability of the common stock.

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering.

We are required to pay all fees and expenses incident to the registration of the shares. We have agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act or otherwise.

We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (a) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (b) the date on which the shares of common stock covered by this prospectus may be sold or transferred by non-affiliates without any volume limitations or pursuant to Rule 144 of the Securities Act.

EX-4.2

Exhibit 4.2

Nestle Health Science US Holdings, Inc.

900 Long Ridge Road, Building 2

Stamford, CT 06902

February 4, 2020

Aimmune Therapeutics, Inc.

8000 Marine Blvd., Suite 300

Brisbane, California 94005

Attention: Chief Executive Officer

 

  Re:

Amended and Restated Standstill Agreement

Ladies and Gentlemen:

In connection with the acquisition of Common Stock, par value $0.0001 per share (the “Common Stock”), and Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) of Aimmune Therapeutics, Inc., a Delaware corporation (the “Company”), by Nestle Health Science US Holdings, Inc., a Delaware corporation (the “Purchaser”), pursuant to the Securities Purchase Agreement, dated as of February 4, 2020, between the Company and the Purchaser (the “Purchase Agreement”), the Company and the Purchaser desire to amend and restate that certain amended and restated standstill agreement, dated November 11, 2018 (the “Prior Agreement”) to accept the rights and covenants hereof in lieu of their rights and covenants in the Prior Agreement. In connection therewith, the Purchaser hereby delivers this amended and restated standstill agreement (this “Standstill Agreement”) to the Company in accordance with the terms of the Purchase Agreement. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Purchase Agreement.

In consideration of the mutual covenants contained in the Purchase Agreement and this Standstill Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

1. Standstill. During the period beginning on the date hereof and ending at 11:59 pm Pacific Time on November 11, 2020 (the “Termination Date”), neither the Purchaser nor any of its Affiliates (as defined below) shall, directly or indirectly, without the prior written consent of a majority of the members of the Board of Directors of the Company (the “Board”) who are not affiliated with the Purchaser:

 

  a.

effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or in any way advise, assist, knowingly facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause:

 

  i.

any acquisition, or obtaining any economic interest in, any right to direct the voting or disposition of, or any other right with respect to, any securities


  of the Company or any of its subsidiaries (or any rights, options or other securities convertible into or exercisable or exchangeable for such securities or any obligations measured by the price or value of any securities of the Company or any of its subsidiaries, including without limitation any swaps or other derivative arrangements (“Derivative Securities”)), in each case, whether or not any of the foregoing may be acquired or obtained immediately or only after the passage of time or upon the satisfaction of one or more conditions pursuant to any agreement, arrangement or understanding, without the prior consent of the Board;

 

  ii.

any tender or exchange offer, merger, consolidation, business combination or acquisition or disposition of assets of the Company or any of its subsidiaries;

 

  iii.

any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries; or

 

  iv.

any “solicitation” of “proxies” (as such terms are used in Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or consents to vote any voting securities of the Company, or become a “participant” in any “election contest” (as such terms are defined in Rule 14a-11 of the Exchange Act) or propose, or solicit stockholders of the Company for the approval of, any stockholder proposals with respect to the Company or seek to advise or influence any person with respect to the voting of any voting securities of the Company;

 

  b.

form, join or in any way participate in a “group” (as defined under the securities laws) with respect to any securities of the Company or any securities convertible into Common Stock or any other voting securities of the Company or otherwise act in concert with any person in respect of any such securities;

 

  c.

otherwise act, alone or in concert with others, to seek to control or influence the management, Board or policies of the Company;

 

  d.

take any action which would reasonably be expected to result in the Company or its representatives being obligated to make a public announcement regarding any of the types of matters set forth in this Section 1;

 

  e.

enter into any discussions or arrangements with any third party with respect to any of the foregoing; or

 

  f.

publicly disclose any intention, plan or arrangement regarding any of the matters referred to in this Section 1;


provided that, the foregoing restrictions shall not apply after (A) a public announcement by the Company of the initiation of any merger, consolidation, acquisition, scheme, business combination or other extraordinary transaction in which the Company or any of its subsidiaries is a constituent corporation or party and following consummation of such transaction, either (i) substantially all of the persons or entities who, immediately prior to such transaction, had beneficial ownership of 50% or more of the voting power of the Company would not continue to beneficially own at least 50% of the voting power of the combined entity and would not have the ability to elect a majority of the directors of the combined entity or (ii) all or a substantial part of the assets of the Company and its subsidiaries would be transferred to a third party (a “Business Combination”) or (B) the submission of any bona fide offer by any third party to acquire all or a substantial portion of the securities or assets of the Company or its subsidiaries (which for the avoidance of doubt shall exclude any offer with respect to which the Company elects not to engage in substantive negotiations), prompt notice of which shall be provided to the Purchaser; provided, further, that nothing in this Section 1 is intended to (X) restrict the Purchaser’s right to vote its shares of Common Stock purchased pursuant to the Purchase Agreement (or any prior purchase agreement entered into with the Company) or shares of Common Stock issuable upon conversion of the Series A Preferred Stock purchased pursuant to the Purchase Agreement or otherwise in its discretion on matters brought to a vote of the stockholders of the Company, (Y) restrict the activities of the Purchaser or the discussions among the representatives of the Company and the Purchaser, in each case, as contemplated by that certain Amended and Restated Collaboration Agreement, dated the date hereof, by and among the Company and Société des Produits Nestlé S.A. (the successor to Nestec Ltd.). or (Z) restrict the Purchaser’s or any of its Affiliates’ right to acquire any rights, title or interest in any options or other securities of the Company granted to members of the Board who are affiliated with the Purchaser.

For purposes of this letter agreement, (i) “Affiliates” shall mean (1) any person, corporation, partnership, trust, limited liability company or other entity, whether existing now or in the future, that, directly or indirectly, controls, is controlled by or is under common control with, the Purchaser and (ii) “Beneficially Owns” (including the terms “Beneficial Ownership”, “Beneficially Owned” or “Beneficially Owning”) shall mean beneficial ownership within the meaning of Rule 13d-3 under the Exchange Act.

2. No Effect. Notwithstanding any of the foregoing, the provisions set forth in Section 1 shall in no way limit (i) the ability of any individual who is serving as a director of the Company to take any actions (or to refrain from taking any actions) in his/her capacity as a director of the Company or (ii) the ability of the Purchaser or its Affiliates to initiate and engage in confidential discussions with the Board regarding the transactions referred to in clauses (a)(i)-(iii) of Section 1.

3. Market Standoff. During the period beginning on the date hereof and ending at 11:59 pm Pacific Time on November 11, 2021 (the “Market Standoff Termination Date”), neither the Purchaser nor any of its Affiliates shall, directly or indirectly, without the prior written consent of a majority of the members of the Board who are not affiliated with the Purchaser:

 

  a.

sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer


  or dispose of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including, without limitation, the Series A Preferred Stock), whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”); or

 

  b.

enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities (a “Hedging Transaction”), whether any such swap or transaction is to be settled by delivery of Common Stock or other securities (including, without limitation, the Series A Preferred Stock), in cash or otherwise; or

 

  c.

publicly announce any intention to do any of the foregoing.

4. Limitation on Sales. Notwithstanding anything herein to the contrary, during the period beginning on the date hereof and ending on the Market Standoff Termination Date, no sales of Common Stock or Series A Preferred Stock (or Common Stock issuable upon conversion of the Series A Preferred Stock) Beneficially Owned by the Purchaser or any of its Affiliates shall be made to DBV Technologies SA pursuant to a private sale or other exemption from the registration requirements of the Securities Act of 1933, as amended, without the prior written consent of the Company.

5. Change of Control Transaction. In connection with any Change of Control Transaction approved by the Board during the period beginning on the date hereof and ending on the Market Standoff Termination Date, the Purchaser on behalf of itself and its Affiliates agrees not to seek an appraisal remedy under Section 262 of the Delaware General Corporation Law with respect to any shares of Common Stock held by it as of the date of the consummation of the Change of Control Transaction. For purposes hereof, “Change of Control Transaction” shall mean any transaction (or series of related transactions) after the date hereof (including the consummation of a scheme of arrangement/amalgamation, merger, de-merger, share purchase, recapitalization, redemption, issuance of capital stock, consolidation, tender offer, combination of shares, reorganization or otherwise) pursuant to which (a) a person (or group of persons) Beneficially Owns immediately upon completion of such transaction (or series of related transactions) securities representing more than fifty percent (50%) of the combined voting power for the election of directors of the outstanding voting securities of the entity surviving or resulting from such transaction (or series of related transactions) or (b) the Company sells or otherwise disposes of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis to a person (or group of persons).

6. Representations. Each party represents to the other that: (a) this Letter Agreement has been duly authorized by all necessary corporate or partnership action, as the case may be; and (b) this letter agreement is a valid and binding agreement of such party, enforceable against it in accordance with its terms, subject to the Enforceability Limitations. The Company represents that this Letter Agreement was approved by the vote a majority of the members of the Board who are not affiliated with the Purchaser.


7. Specific Enforcement; Legal Effect. The parties hereto agree that any breach of this Letter Agreement would result in irreparable injury to other party and that money damages would not be an adequate remedy for such breach. Accordingly, without prejudice to the rights and remedies otherwise available under applicable law, either party shall be entitled to specific performance and equitable relief by way of injunction or otherwise if the other party breaches or threatens to breach any of the provisions of this letter agreement. It is further understood and agreed that no failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. This Letter Agreement contains the entire agreement between the parties hereto concerning the matters addressed herein. No modification of this Letter Agreement or waiver of the terms and conditions hereof shall be binding upon either party hereto, unless approved in writing by each such party; provided, however, that no waiver or amendment shall be effective as against the Company unless such waiver or amendment is approved in writing by the vote a majority of the members of the Board who are not affiliated with the Purchaser. This Letter Agreement shall be governed by and construed in accordance with the law of the State of New York without regard to principles of conflicts of law that would cause the application of the laws of any jurisdiction other than the State of New York. Any dispute arise under or in connection with this Agreement shall be resolved in accordance with the dispute resolution procedures set out in Section 13.6 of the Purchase Agreement, which procedures are incorporated herein by this reference.

8. Counterparts. This Standstill Agreement may be executed and delivered (including by facsimile or portable document format (“pdf”) in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

9. Entire Agreement. This Standstill Agreement and the other Transaction Documents contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto. Upon the effectiveness of this Standstill Agreement, the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Standstill Agreement, and shall be of no further force or effect.

[Remainder of page left blank intentionally.]


IN WITNESS WHEREOF, the parties hereto have executed this Standstill Agreement effective as of the Closing.

 

NESTLE HEALTH SCIENCE US HOLDINGS, INC.
By:   /s/ James Pepin
Name:   James Pepin
Title:   President

 

Confirmed and Agreed:
AIMMUNE THERAPEUTICS, INC.
By:   /s/ Jayson Dallas
Name:   Jayson Dallas, M.D.
Title:   President and Chief Executive Officer
EX-10.1

Exhibit 10.1

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

 

 

AMENDED AND RESTATED

STRATEGIC COLLABORATION AGREEMENT

between

SOCIÉTÉ DES PRODUITS NESTLÉ S.A.

and

AIMMUNE THERAPEUTICS, INC.

 

 


ARTICLE 1

  

DEFINITIONS

     2  

1.1

   Definitions      2  

ARTICLE 2

  

OBJECTIVES; COLLABORATION

     7  

2.1

   Objectives      7  

2.2

   Scope of Collaboration      7  

2.3

   Formation and Composition of the Strategic Collaboration Committee      7  

2.4

   Role of Strategic Collaboration Committee      8  

2.5

   Information Sharing      8  

2.6

   Opportunities      8  

2.7

   Meetings of SCC      9  

ARTICLE 3

  

LICENSE OPPORTUNITIES

     9  

3.1

   Proposal by NHSc to Explore Combination Therapy      9  

ARTICLE 4

  

REPRESENTATIONS AND WARRANTIES

     10  

4.1

   Organization      10  

4.2

   Authorization      10  

4.3

   Binding Agreement      10  

4.4

   No Conflict      11  

4.5

   No Consents      11  

ARTICLE 5

  

INTELLECTUAL PROPERTY

     11  

5.1

   Ownership of Intellectual Property      11  

5.2

   New Opportunities Proposed by NHSc      11  

5.3

   No License; Implied Rights      11  

ARTICLE 6

  

CONFIDENTIAL INFORMATION

     12  

6.1

   Nondisclosure      12  

6.2

   Authorized Disclosure      12  

6.3

   Terms of this Agreement      13  

6.4

   Securities Filings      13  

6.5

   Expiration or Termination      13  

ARTICLE 7

  

ADDITIONAL AGREEMENTS

     14  

7.1

   Non-Competition      14  

7.2

   Non-Solicitation of Employees      15  

7.3

   Director Nomination      15  

ARTICLE 8

  

TERM AND TERMINATION

     16  

8.1

   Effectiveness; Term      16  

8.2

   Termination Rights      16  

8.3

   Effect of Termination      16  

 

i


ARTICLE 9

  

MISCELLANEOUS

     16  

9.1

   Expenses      16  

9.2

   Severability      17  

9.3

   Notices      17  

9.4

   Assignment      18  

9.5

   Further Assurances      18  

9.6

   Waivers and Modifications      18  

9.7

   Choice of Law      18  

9.8

   Injunctive Relief      18  

9.9

   Publicity      19  

9.10

   Relationship of the Parties      19  

9.11

   Entire Agreement      19  

9.12

   Counterparts      19  

9.13

   Exports      19  

9.14

   Amendments      20  

9.15

   Interpretation      20  

 

Exhibits

    
Exhibit A    -         Development Programs

 

ii


AMENDED AND RESTATED STRATEGIC COLLABORATION AGREEMENT

This AMENDED AND RESTATED STRATEGIC COLLABORATION AGREEMENT (this “Agreement”) is made as of February 4, 2020 (the “Effective Date”), by and between Société des Produits Nestlé S.A., a company organized and existing under the laws of Switzerland and the successor to Nestec Ltd., having an office located at Avenue Nestlé 55, 1800 Vevey, Switzerland (“NHSc”), and Aimmune Therapeutics, Inc., a corporation incorporated and existing under the laws of the State of Delaware, having an office located at 8000 Marina Boulevard, Suite 300, Brisbane, CA 94005, USA (“Aimmune”). NHSc and Aimmune are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, Aimmune is engaged in the development of immunotherapeutic products for the treatment of food allergies;

WHEREAS, NHSc and certain of its Affiliates are engaged in the research, development and commercialization of food products for the management of food allergies and has expertise in regulatory and market access matters relevant to such products;

WHEREAS, the Parties entered into that certain Strategic Collaboration Agreement (as amended and/or restated, the “Original Agreement”), effective as of November 3, 2016 (the “Original Effective Date”), under which the Parties began a collaboration in connection with the development of Aimmune’s products, which was subsequently extended on November 11, 2018 (the “Extension Date”); and

WHEREAS, the Parties wish to amend and restate the Original Agreement with effect from the Effective Date of this Agreement.

NOW, THEREFORE in consideration of the foregoing and the mutual agreements set forth below, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions. The terms in this Agreement with initial letters capitalized, whether used in the singular or the plural, shall have the respective meanings either set forth below or another part of this Agreement.

Acceptance Notice” has the meaning set forth in Section 2.6.1.

Affiliate” of a Party means an entity that (directly or indirectly) is controlled by, controls, or is under common control with such Party where control means the direct or indirect ownership of voting securities entitled to cast at least fifty percent (50%) of the votes in the election of directors, or such other relationship as results in the power to control the management, business, assets and affairs of an entity.

 

2


Aimmune Product” means a drug or biologic product for use as OIT for the treatment of food allergies that is being researched or developed by Aimmune or its Affiliates from time to time during the Term.

Aimmune-Owned Inventions and IP has the meaning set forth in Section 5.1.

AR101” means Aimmune’s proprietary OIT product for the treatment of peanut allergy known as AR101.

BLA” means a Biologics License Application, as defined in the United States Public Health Service Act (42 U.S.C. § 262), and applicable regulations promulgated thereunder by the FDA.

Business Day” means a day other than Saturday, Sunday or any day on which commercial banks located in San Francisco, California or Geneva, Switzerland, are authorized or obligated by applicable Law to close.

Calendar Quarter” means, with respect to any given Calendar Year, the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 or December 31.

Change of Control” means, with respect to a Party, any of the following events: (a) any Third Party (or group of Third Parties acting in concert) acquires, directly or indirectly, shares of such Party representing at least a majority of the voting power (where voting refers to being entitled to vote for the election of directors) then outstanding of such Party; (b) such Party consolidates with or merges into another corporation or entity which is a Third Party, or any corporation or entity which is a Third Party consolidates with or merges into such Party, in either event pursuant to a transaction in which at least a majority of the voting power of the acquiring or resulting entity outstanding immediately after such consolidation or merger is not held by the holders of the outstanding voting power of such Party immediately preceding such consolidation or merger; or (c) such Party sells, conveys, transfers and/or exclusively licenses all or substantially all of its assets to a Third Party.

Closing” has the meaning set forth in the Purchase Agreement.

Combination Discussion Period has the meaning set forth in Section 3.1.

Combination Proposal Period has the meaning set forth in Section 3.1.

Competitive OIT Product” has the meaning set forth in Section 7.1.1.

Confidential Information” means any and all technical, business or other Information, of a Party or its Affiliates provided orally, visually, in writing, graphically, electronically, or in another form by or on behalf of such Party or its Affiliates to the other Party or its Affiliates in connection with this Agreement, including the terms of this Agreement, any Aimmune Product, any exploitation of any Aimmune Product, any know-how with respect thereto developed by or on behalf of the disclosing Party or its Affiliates, or the scientific, regulatory or business affairs or other activities of the disclosing Party or its Affiliates.

 

3


Controlled” or “Control”, when used in reference to any intellectual property, intellectual property right, material, know-how or information, means the legal authority or right of a Party hereto (or its Affiliates) to: (i) grant, or procure the grant of, a license or sublicense, to the extent provided for herein, under or to specified intellectual property, intellectual property rights, materials, know-how or information to the other Party; or (ii) in relation to materials, know-how and information only, disclose or provide access to, to the extent provided for herein, such material, know-how or information to the other Party, and in each case without (1) breaching the terms of any agreement with a Third Party, or (2) misappropriating the material, know-how or information of a Third Party.

Development” means non-clinical and clinical drug development activities reasonably related to the development and submission of information to a Regulatory Authority or otherwise to the research, identification, testing and validation of a therapeutic agent, including, without limitation, toxicology, pharmacology and other discovery and pre-clinical efforts, test method development and stability testing, manufacturing process and chemistry, manufacturing and controls development, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, clinical trials (including, without limitation, pre- and post-approval studies), whether for purposes of label expansion or otherwise. Development shall include post-approval Development activities. When used as a verb, “Develop” means to engage in Development.

Development Program” means Aimmune’s and/or its Affiliates’ activities directed towards the Development of a specific Aimmune Product for the treatment of allergies to one (1) or more particular types of food, including [***] and [***]. The Development Programs as of the date of this Agreement are described on Exhibit A hereto.

Disclosing Party” has the meaning set forth in Section 6.1.

Effective Date” means the effective date of this Agreement as set forth in the preamble hereto.

European Union” means, at any given time, the then-current member states of the European Union.

FD&C Act” means the United States Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and modifications thereto).

Governmental Authority” means any multi-national, federal, state, local, municipal, provincial or other governmental authority of any nature (including any governmental division, prefecture, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).

In-Scope Programs” has the meaning set forth in Section 2.2.

 

4


IND” means an Investigational New Drug Application (as such term is defined in the FD&C Act and the regulations promulgated thereunder), Clinical Trial Authorisation (as such term is defined in the Directive 2001/20/EC, as amended), clinical trial exemption, or similar application or submission for approval to conduct human clinical investigations that is filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.

Information” means all technical, scientific and other know-how and information, inventions, discoveries, trade secrets, knowledge, technology, means, methods, processes, formulations, practices, formulae, instructions, skills, techniques, procedures, experiences, expressed ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results, materials (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical), pre-clinical, clinical, safety, manufacturing and quality control data and information (including study designs and protocols) and assays and biological methodology, in each case, whether or not confidential, proprietary or patentable and in written, oral, electronic or any other form now known or hereafter developed.

Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision.

Major Territory” means any of (i) [***], (ii) [***], (iii) [***], and (iv) [***].

NDA” means a New Drug Application, as defined in the FD&C Act.

New Opportunities” has the meaning set forth in Section 2.6.

OIT means a therapy involving the oral delivery of quantities of a naturally-occurring allergen, whether obtained from a natural source or generated by synthetic means, to a patient in order to desensitize the patient to such allergen.

OIT Allergy Company” has the meaning set forth in Section 7.1.2.

OIT Combination has the meaning set forth in Section 3.1.

OIT Combination Opportunity has the meaning set forth in Section 3.1.

OIT Combination Constituent” means any drug or biologic product (i.e., any product which, if it were marketed in the United States, must be approved by the FDA pursuant to a BLA or NDA), such as but not limited to a probiotic or other microbiome-based product, that can be combined with an OIT product and that is intended to improve the efficacy or safety of such OIT product for the treatment of one (1) or more food allergies.

Pass Notice” has the meaning set forth in Section 2.6.1.

Patents” means (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents or patent applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, nonprovisionals,

 

5


converted provisionals and requests for continued examinations, (c) any and all patents that have issued or in the future issue from the foregoing patent applications (i.e., those set forth in subsections (a) and (b)), including utility models, innovation patents, petty patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, and all revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications (i.e., those set forth in subsections (a), (b) and (c)) and (e) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents.

Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, foundation, joint venture or other similar entity, organization or combination thereof, including a government or political subdivision, department, or agency.

Prohibited Development” has the meaning set forth in Section 7.1.1.

Prohibited Drug Research” has the meaning set forth in Section 7.1.1.

Purchase Agreement” means the Securities Purchase Agreement, dated the date hereof, by and between Aimmune and Nestlé Health Science US Holdings, Inc.

Receiving Party” has the meaning set forth in Section 6.1.

Single Product Asset Sale” means the sale, transfer, or license to a Third Party by Aimmune of a single Aimmune Product or Development Program that could reasonably be considered to constitute the sale, transfer or exclusive license of all or substantially all of Aimmune’s assets such that the transaction would be considered a Change of Control under clause (c) of the definition.

Strategic Collaboration Committee” or “SCC” has the meaning set forth in Section 2.3.

Term” has the meaning set forth in Section 8.1.

Third Party” means any entity other than NHSc, Aimmune and their respective Affiliates.

Transfer” means the sale, transfer, or license to a Third Party by Aimmune, or grant to a Third Party by Aimmune of any option to acquire or license, any commercial rights to an Aimmune Product or Development Program; provided, however, for purposes of clarity, other than a Single Product Asset Sale, a Change of Control shall not constitute or be deemed to constitute a Transfer. “Transfers,” “Transferred” and “Transferring” have correlative meanings.

 

6


United States” or “U.S.” means the United States of America, including its territories and possessions.

ARTICLE 2

OBJECTIVES; COLLABORATION

2.1 Objectives. This Agreement sets forth the terms on which the Parties will collaborate with one another and share information on a confidential basis to support Aimmune’s Development Programs to the extent they are In-Scope Programs. Such collaboration and information sharing shall be achieved primarily through the Strategic Collaboration Committee, in accordance with this Article 2.

2.2 Scope of Collaboration. This Agreement and the collaboration contemplated hereby shall relate to all of Aimmune’s Development Programs, including those existing as of the Original Effective Date and those undertaken from time-to-time during the Term, and commercialization plans for AR101; provided, however, that (i) in the event that Aimmune effects a Transfer in respect of an Aimmune Product under Development pursuant to a particular Development Program in all Major Territories, such Development Program shall automatically be excluded from the scope of this Agreement and the collaboration contemplated hereunder, (ii) in the event that Aimmune effects a Transfer in respect of an Aimmune Product under Development pursuant to a particular Development Program in one (1) or more, but not all, Major Territories, then the scope of this Agreement and the collaboration contemplated hereunder shall automatically be adjusted to exclude such Development Program solely in respect of such Major Territory(ies) in respect of which Aimmune has effected such Transfer in respect of such Aimmune Product, and (iii) in the event Aimmune effects a Transfer in respect of the commercialization of AR101 in one (1) or more countries, then the scope of this Agreement and the collaboration contemplated hereunder shall automatically be adjusted to exclude the country(ies) in respect of which Aimmune has effected such Transfer in respect of such Aimmune Product. Aimmune shall disclose to NHSc each new Development Program upon Aimmune’s decision to commence such Development Program and such new Development Program shall automatically be included within the scope of this Agreement and the collaboration contemplated hereby. All Development Programs or parts thereof, as well as commercialization plans for AR101 that are conducted during the Term, in each case that are within the scope of this Agreement at a particular time during the Term, in accordance with this Section 2.2, are referred to herein as the “In-Scope Programs”. For clarity, In-Scope Programs shall not include any products or programs of any counterparty in a Change of Control of Aimmune that were not Aimmune Products or Development Programs immediately preceding the closing of the relevant Change of Control.

2.3 Formation and Composition of the Strategic Collaboration Committee. The governing body for matters within the scope of this Agreement shall be the “Strategic Collaboration Committee” or “SCC”. The SCC shall be comprised of three (3) to five (5) representatives of each Party. The initial members of the SCC shall be:

 

From Aimmune

   From NHSc

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

 

7


Either Party may replace one (1) or more of its SCC members from time to time with the prior written consent of the other Party, not to be unreasonably withheld, delayed or conditioned. Any member of the SCC may designate a substitute to attend and perform the functions of that member at any meeting of the SCC, provided that the other Party has provided its prior written consent to such substitute, not to be unreasonably withheld, delayed or conditioned. For clarity, during the Term, the Parties shall consider whether to include alternative members of the SCC having expertise in areas relevant to the collaboration contemplated hereby at such time.

2.4 Role of Strategic Collaboration Committee. The SCC shall serve as a forum for the Parties, through their SCC members, to share information and discuss the In-Scope Programs, including with respect to commercialization plans for AR101. The SCC shall have no decision-making role and neither the SCC nor the SCC members shall have the capacity to bind either Party in any way. Any advice provided by NHSc’s SCC members shall be non-binding in all respects.

2.5 Information Sharing. At each meeting of the SCC, Aimmune’s representatives shall provide (i) an update on material Development activities in respect of In-Scope Programs, including with respect to material results or data from in vitro and in vivo testing, regulatory developments and strategies, manufacturing activities and commercial plans, and (ii) an overview of Aimmune’s future plans in respect of the In-Scope Programs. All such information provided by Aimmune shall be Confidential Information of Aimmune, including with respect to commercialization plans for AR101, provided that in no event shall Aimmune be required to share any information that is subject to any confidentiality obligations to Third Parties with respect to the In-Scope Programs. NHSc’s representatives may, but shall not be obligated to, disclose non-public information of NHSc or its Affiliates to Aimmune’s SCC members as further described in Section 2.6. All such information disclosed by NHSc shall be Confidential Information of NHSc.

2.6 Opportunities. Through the SCC, either Party may, but would not be obligated to, share opportunities (excluding Development Programs, which Aimmune is obligated to disclose pursuant to Section 2.2) to apply innovative technologies for use in, or in conjunction with, OIT for the treatment of food allergies or food intolerance (“New Opportunities”), as set forth in Sections 2.6.1 and 2.6.2.

2.6.1 If either Party wishes to share a New Opportunity with the other Party, it shall first provide to the other Party a written, high level description of the nature of the New Opportunity, to allow the other Party to determine whether it wishes to engage in a detailed discussion of such New Opportunity pursuant to this Agreement. A copy of such description shall be provided concurrently to the other Party’s general counsel as provided in Section 9.3. The Party receiving such high level description shall respond in writing within fifteen (15) days,

 

8


or such longer period as the Parties may agree to in writing, whether it wishes to engage in a detailed discussion of such New Opportunity (an “Acceptance Notice”) or whether it declines to engage in such a detailed discussion (a “Pass Notice”). If either the receiving Party provides a Pass Notice, or the receiving Party does not respond in writing to such high level description of such New Opportunity within such period, then the Party wishing to share such New Opportunity shall not provide any further information to the receiving Party with respect to such New Opportunity. If the receiving Party delivers an Acceptance Notice, then the Parties, through the SCC, shall be free to discuss the New Opportunity, subject to the terms of Article 5 and Article 6, or subject to such alternative or modified terms relating to intellectual property and/or Confidential Information as the Parties may have agreed to in writing prior to the receiving Party’s delivery of such Acceptance Notice.

2.6.2 For the sake of clarity, Information disclosed by a Party in respect of any New Opportunity shall be Confidential Information of such Party (subject to the exceptions set forth in Section 6.1.1). Neither Party shall obtain any intellectual property or other rights in any Information so disclosed by the other Party with respect to such New Opportunity or in respect of such New Opportunity, unless and until the Parties enter into a separate written agreement in respect thereof.

2.7 Meetings of SCC. The SCC will meet at least once per Calendar Quarter, or more frequently, if agreed by the SCC. The location of regularly scheduled meetings shall alternate between the offices of the Parties unless otherwise agreed by the SCC. Meetings of the SCC may also be held telephonically, by video conference or by any other media agreed to by the SCC. Members of the SCC shall have the right to participate in meetings by telephone. Each Party shall be responsible for expenses incurred by its employees and its members of the SCC in attending or otherwise participating in SCC meetings, including travel and related costs. Either Party may invite additional representatives of the Party who have relevant expertise to attend SCC meetings when appropriate for the issues being addressed at the meeting with five (5) Business Days’ prior notice to the other Party’s SCC representatives, provided that any such additional representatives shall be bound by obligations of confidentiality at least as stringent as those set forth in Section 6 and obligations with respect to Information arising in the course of activities under this Agreement consistent with those set forth in Section 5, and further provided that any such additional representatives shall be subject to the other Party’s prior written approval.

ARTICLE 3

LICENSE OPPORTUNITIES

3.1 Proposal by NHSc to Explore Combination Therapy. If (i) NHSc or its Affiliate possesses any commercial rights (whether by ownership, license or an option or similar right) to an OIT Combination Constituent, and (ii) NHSc’s or its Affiliate’s senior management has affirmatively determined to pursue Development (including research) of a combination of such OIT Combination Constituent with an OIT drug or biologic (an “OIT Combination”), then NHSc shall so notify Aimmune in writing. Such notice shall identify the OIT Combination Constituent that NHSc is contemplating for an OIT Combination, and the general nature of the activities that NHSc proposes to conduct, with respect to such OIT Combination, including the applicable geographies (collectively, in each case, the “OIT Combination Opportunity”).

 

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Within [***] ([***]) days of its receipt of such notice (the “Combination Proposal Period”), Aimmune shall have the right, in its sole discretion, to notify NHSc in writing that it wishes to negotiate an agreement with NHSc in respect of such OIT Combination Opportunity. In the event Aimmune so makes such an election during the Combination Proposal Period, the Parties shall negotiate exclusively and in good faith for a period of three (3) months or such longer period as the Parties may mutually agree upon (as applicable, the “Combination Discussion Period”) the terms of a definitive agreement in respect of such OIT Combination Opportunity. During the Combination Proposal Period and, if applicable, the Combination Discussion Period, NHSc shall not solicit from, discuss with, or enter into any agreement in respect of, any OIT Combination Opportunity with any Third Party. If the Parties have not entered into a definitive agreement governing the OIT Combination Opportunity as of the end of the Combination Discussion Period, NHSc shall be free to partner or collaborate with a Third Party with respect to such OIT Combination Opportunity, including to modify the scope or other terms of the OIT Combination Opportunity in connection with any such transaction with a Third Party. To the extent that the Term of this Agreement expires (and is not terminated pursuant to Section 9.2), this Section 3.1 shall survive and continue in accordance with its terms until the end of any then-ongoing Combination Proposal Period or any then-ongoing Combination Discussion Period, and any Combination Discussion Period resulting from such Combination Proposal Period. The Parties agree and acknowledge that the OIT Combination Constituent that is the subject of any OIT Combination Opportunity may be part of a licensing, collaboration or other transaction between NHSc or is Affiliate and one (1) or more Third Parties and that such Third Parties may be involved in any such discussions contemplated in this Section 3.1.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

Aimmune and NHSc each represents and warrants to the other, as of the Original Effective Date, as follows:

4.1 Organization. It is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver, and perform this Agreement.

4.2 Authorization. The execution and delivery of this Agreement and the performance by it of its obligations contemplated hereby have been duly authorized by all necessary corporate action, and do not violate (i) such Party’s charter documents, bylaws, or other organizational documents, (ii) any agreement, instrument, or contractual obligation to which such Party is bound, (iii) any requirement of any applicable Law, or (iv) any order, writ, judgment, injunction, decree, determination, or award of any court or governmental agency presently in effect applicable to such Party.

4.3 Binding Agreement. This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms and conditions, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance, and general principles of equity (whether enforceability is considered a proceeding at law or equity).

 

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4.4 No Conflict. The execution and delivery of this Agreement, the performance of such Party’s obligations hereunder and the licenses and sublicenses to be granted pursuant to this Agreement (i) do not and will not conflict with or violate any requirement of applicable Law; (ii) do not and will not conflict with or violate the certificate of incorporation, by-laws or other organizational documents of such Party; and (iii) do not and will not conflict with, violate, breach or constitute a default under any contractual obligations of such Party or any of its Affiliates.

4.5 No Consents. No authorization, consent, approval of a Third Party, nor any license, permit, exemption of or filing or registration with or notification to any court or Governmental Authority is or will be necessary (i) for the valid execution, delivery or performance of this Agreement by such Party; or (ii) for the consummation by such Party of the transactions contemplated hereby.

ARTICLE 5

INTELLECTUAL PROPERTY

5.1 Ownership of Intellectual Property. As between the Parties, except as may otherwise be agreed by the Parties in writing, Aimmune shall solely own all right, title, and interest in and to any and all Information relating to, or that is useful or necessary for, the conduct of the Development Programs, In-Scope Programs or the manufacture, use or sale of Aimmune Products, that is conceived, discovered, or otherwise made (a) solely by or on behalf of Aimmune, (b) jointly by or on behalf of Aimmune and NHSc, or (c) solely by or on behalf of NHSc, in each case of subsections (a) through (c), as a result of NHSc’s participation in the SCC or with reference to Aimmune’s Confidential Information, whether or not patented or patentable, and any and all Patents and other intellectual property rights therein (“Aimmune-Owned Inventions and IP”). NHSc shall, and hereby does, assign to Aimmune all right, title and interest that NHSc may have in and to all Aimmune-Owned Inventions and IP, and shall execute all documents and take all actions necessary or reasonably required to effect such assignment. For the sake of clarity, except as may otherwise be agreed by the Parties in writing, any Information, and any Patents or other intellectual property rights in respect thereof, that are (i) Controlled, discovered or conceived by NHSc or its Affiliates prior to the Original Effective Date, or (ii) conceived, discovered or obtained by NHSc or its Affiliates during or after the Term and independent of the collaboration pursuant to this Agreement shall be solely owned by NHSc or its Affiliate.

5.2 New Opportunities Proposed by NHSc. Section 5.1 notwithstanding, if NHSc discloses or presents a New Opportunity to the SCC, and the SCC proceeds to discuss such New Opportunity as contemplated in Section 2.6, then if any Information is conceived, discovered or otherwise made solely by or on behalf of a Party, or jointly by or on behalf of the Parties, in the course of such discussion that relates to such New Opportunity, such Information shall be owned solely by NHSc or its Affiliate.

5.3 No License; Implied Rights. Neither Party shall obtain any license or other rights to any Information or intellectual property rights therein by virtue of this Agreement. Without limiting the foregoing, nothing contained in this Agreement confers or will be construed to confer any rights or licenses by implication, estoppel or otherwise, in, to or under any intellectual property rights.

 

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ARTICLE 6

CONFIDENTIAL INFORMATION

6.1 Nondisclosure. Each Party agrees that during the Term and for a period of ten (10) years thereafter, a Party (the “Receiving Party”) receiving Confidential Information of the other Party (the “Disclosing Party”) shall (i) maintain in confidence such Confidential Information, which shall include without limitation using not less than the efforts such Receiving Party uses to maintain in confidence its own proprietary industrial information of similar kind and value, which shall be no less than a reasonable degree of care, (ii) not disclose such Confidential Information to any Third Party without the prior written consent of the Disclosing Party, except for disclosures expressly permitted below, and (iii) not use such Confidential Information for any purpose except those expressly permitted by this Agreement. The Parties agree that any Confidential Information (within the meaning of the Prior CDA) disclosed by the Parties or their Affiliates pursuant to the Prior CDA shall be Confidential Information within the meaning of, and shall be subject to, this Article 6.

6.1.1 Exceptions. The obligations in Section 6.1 shall not apply with respect to any portion of the Confidential Information that the Receiving Party receives, to the extent that such information:

(a) is publicly disclosed by the Disclosing Party, either before or after it is disclosed to the Receiving Party hereunder;

(b) was known to the Receiving Party or any of its Affiliates, without any obligation to keep it confidential or any restriction on its use, prior to disclosure by the Disclosing Party, provided that such prior knowledge can be properly documented by the Receiving Party;

(c) is subsequently disclosed to the Receiving Party or any of its Affiliates by a Third Party lawfully in possession thereof and without any obligation to keep it confidential or any restriction on its use;

(d) is published by a Third Party or otherwise becomes publicly available or enters the public domain, either before or after it is disclosed to the Receiving Party without the fault or cause of the Receiving Party or any of its Affiliates; or

(e) is independently developed by employees or contractors of the Receiving Party or any of its Affiliates without the aid, application or use of Confidential Information of the Disclosing Party, and such independent development can be properly documented by the Receiving Party.

6.2 Authorized Disclosure. Subject to Section 6.4, the Receiving Party may disclose Confidential Information belonging to the Disclosing Party to the extent such disclosure is necessary, in the reasonable opinion of the Receiving Party’s counsel, to comply with applicable Laws and regulations (including, without limitation, the rules and regulations of the Securities

 

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and Exchange Commission or any national securities exchange) and with judicial processes. If and whenever any Confidential Information is disclosed in accordance with this Section 6.2, such disclosure shall not cause any such information to cease to be Confidential Information, except to the extent that such disclosure results in a public disclosure of such information (other than by breach of this Agreement). Where reasonably possible and subject to Section 6.4, the Receiving Party shall: (i) give the Disclosing Party reasonable advance notice of the Receiving Party’s intent to make such disclosure pursuant to this Section 6.2, to the extent practicable; and (ii) provide reasonable cooperation to the Disclosing Party regarding the timing and content of such disclosure and regarding any action which the Disclosing Party may deem appropriate to protect the confidentiality of the information by appropriate legal means.

6.3 Terms of this Agreement. The Parties acknowledge that the terms of this Agreement shall be treated as Confidential Information of both Parties, subject to the terms of this Section 6.

6.4 Securities Filings. In the event either Party determines that it is required to file with the U.S. Securities and Exchange Commission (and/or the securities regulators of any state or other jurisdiction) a registration statement or any other disclosure document which describes any of the terms and conditions of this Agreement, such Party shall promptly notify the other Party of such intention. The Party required to make such filing shall provide such other Party with a copy of relevant portions of the proposed filing not less than ten (10) Business Days (or such shorter period of time as may be required, under the circumstances, to comply with applicable Laws, but in no event less than three (3) Business Days) prior to such filing (and any revisions to such portions of the proposed filing a reasonable time prior to the filing thereof), including any exhibits thereto relating to the terms and conditions of this Agreement. The Party required to file shall use reasonable efforts to obtain confidential treatment of the terms and conditions of this Agreement that such other Party requests be kept confidential, and shall only disclose Confidential Information which it is advised by legal counsel is legally required to be disclosed in order to comply. No such notice shall be required under this Section 6.4 if and to the extent that the specific information contained in the proposed filing has previously been included in any previous filing or disclosure made by either Party hereunder pursuant to this Article 6, or is otherwise approved in advance in writing by the other Party.

6.5 Expiration or Termination. Upon the expiration or termination of this Agreement, any and all Confidential Information possessed in a tangible form by a Receiving Party, its Affiliates, sublicensees or subcontractors and belonging to a Disclosing Party shall, upon written request of the Disclosing Party, be destroyed to the extent practicable, with written confirmation of such destruction. Notwithstanding anything to the contrary herein, so long as such materials are maintained in accordance with this Agreement, each Party (i) may retain any attorney work product created in connection with this Agreement, (ii) may retain copies of any Confidential Information to the extent required by legal, regulatory or judicial requirements that are applicable to a Party or its Affiliates; and, (iii) will not be obligated to erase or extinguish any Confidential Information contained in an archived computer system backup in accordance with normal document retention policies or security and disaster recovery procedures, provided that any such retained Confidential Information shall continue to remain confidential and subject to the terms of this Agreement.

 

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ARTICLE 7

ADDITIONAL AGREEMENTS

7.1 Non-Competition.

7.1.1 NHSc agrees that it will not, and will ensure that its Affiliates do not, directly or indirectly, alone or with or through its Affiliates or its sublicensees, or other Third Parties directed or controlled by NHSc or its Affiliate in relation to the applicable activities, by contract or otherwise:

(a) until the later of (i) the date that is [***] ([***]) [***] after the Original Effective Date and (ii) the date that is [***] ([***]) [***] after the final day of the Term, engage in Prohibited Drug Research in respect of, or any Prohibited Development of, or commercialize, any Competitive OIT Product for the treatment of peanut allergies;

(b) until the later of (i) the date that is [***] ([***]) [***] after the Original Effective Date and (ii) the date that is [***] ([***]) [***] after the final day of the Term, engage in any Prohibited Development of, or commercialize, any Competitive OIT Product for the treatment of any allergies to [***], or [***] (including but not limited to [***]); or

(c) until the later of (i) the date that is [***] ([***]) [***] after the Original Effective Date and (ii) [***] the Term, commercialize any Competitive OIT Product for the treatment of any food allergies [***] of this Section 7.1.1. As used herein, the following terms have the following meanings:

Competitive OIT Product” means any drug or biologic product (i.e., any product which, if it were marketed in the United States, must be approved by the FDA pursuant to a BLA or NDA) that is intended for use in OIT for a particular food allergy; provided, however, that no product that comprises such a drug or biological product in combination with any OIT Combination Constituent for which NHSc complies with its obligations under Section 3.1, shall be a “Competitive OIT Product”.

Prohibited Development” means any Development activities undertaken for a given drug or biologic product (i.e., any product which, if it were marketed in the United States, must be approved by the FDA pursuant to a BLA or NDA) for the treatment of the applicable allergy after the commencement of manufacturing of the clinical supply of such drug or biologic products. For clarity, Prohibited Development shall include without limitation Development activities undertaken after the filing of an IND with a Regulatory Authority in respect of such drug or biologic product.

Prohibited Drug Research” means research undertaken specifically in respect of, and during the course of, Development activities for a given drug or biologic product (i.e., any product which, if it were marketed in the United States, must be approved by the FDA pursuant to a BLA or NDA) that is intended for use in OIT for the treatment of the applicable allergy, prior to Prohibited Development Activities for such drug or biologic product.

 

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For the sake of clarity, nothing contained herein shall preclude, limit or restrict in any way NHSc or any of its Affiliates from, directly or indirectly, alone or with or through their Affiliates, sublicensees or other Third Parties, from undertaking any Development, commercialization or any other activities in respect of (i) any product that is not a drug or biologic (i.e., any product which, if it were marketed in the United States, would not require the approval of the FDA pursuant to a BLA or NDA), including medical foods and supplements or (ii) any product for the prevention of food allergies to [***] Developed as part of the development program being pursued as of the Original Effective Date by NHSc or its Affiliate and the National Institutes of Allergy and Infectious Diseases (NIAID), including any such products that are intended for use by individuals with food allergies. Aimmune expressly acknowledges that NHSc and its Affiliates are currently researching, Developing and commercializing such products and will continue to do so during and after the Term, directly or indirectly, alone or with or through its Affiliates, sublicensees or other Third Parties.

7.1.2 During the Term, NHSc will [***] (an “OIT Allergy Company”).

7.1.3 Nothing contained herein shall preclude NHSc or its Affiliates from [***].

7.2 Non-Solicitation of Employees. [***], neither Party shall, and each party shall cause its Affiliates not to, directly or indirectly, solicit, encourage, recruit or induce any employee of the other Party who has been involved in activities or discussions conducted pursuant to this Agreement to terminate his or her employment with such other Party; provided that the foregoing restriction shall not preclude a Party or its Affiliates from (a) undertaking any general solicitation not targeted at the employees of the other Party or hiring an employee of the other Party who seeks employment as a result of such general solicitation or (b) hiring any former employee of the other Party if such former employee either (i) was involuntarily terminated by the other Party, or (ii) voluntarily terminated his or her employment with such other Party (without inducement on the part of the hiring Party or its Affiliates) and such termination of employment has been effective for no less than [***] ([***]) months prior to the date of hire by the hiring Party or its Affiliates.

7.3 Director Nomination. NHSc shall be entitled to designate one (1) nominee to serve as a director on Aimmune’s Board of Directors, which initial designee shall be Greg Behar. For so long as NHSc has the right to nominate a director pursuant to this Section 7.3, in the event of Mr. Behar’s resignation, removal or death (or a replacement designee’s resignation, removal or death), NHSc shall be entitled to designate a replacement designee, subject to the reasonable approval of Aimmune’s Board of Directors or an applicable committee thereof. Aimmune covenants and agrees that, for so long as NHSc has the right set forth in this Section 7.3, it shall nominate NHSc’s designee for election by its stockholders at each Annual Stockholder Meeting or Special Meeting of Stockholders in which the class of directors for which NHSc’s designee is appointed is considered by the stockholders for election. In connection with Mr. Behar’s initial appointment to Aimmune’s Board of Directors (or, if applicable, a replacement designee’s appointment to Aimmune’s Board of Directors), Aimmune shall enter into an indemnification agreement with Mr. Behar (or, if applicable, the replacement designee), which indemnification agreement shall be in the form of and with terms previously approved by Aimmune’s Board of Directors. The rights set forth in this Section 7.3 shall terminate upon such time as NHSc or its Affiliates hold less than fourteen percent (14%) of the shares of Aimmune’s outstanding Common Stock.

 

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ARTICLE 8

TERM AND TERMINATION

8.1 Effectiveness; Term. This Agreement shall automatically become binding and effective upon the Original Effective Date and shall continue in force until the earlier of (i) the date that is three (3) years after the Extension Date on November 11, 2021, (ii) the effective date of a termination in accordance with Section 8.2, and (iii) the termination of this Agreement by mutual written agreement of the Parties (the “Term”); provided, however, that the Term may be extended upon the mutual written agreement of the Parties.

8.2 Termination Rights.

8.2.1 Termination for Material Breach. A Party shall have the right to terminate this Agreement in such Party’s sole discretion, upon delivery of written notice to the other Party in the event of any material breach by such other Party of this Agreement, provided that such breach has not been cured within sixty (60) calendar days after written notice thereof is given by the terminating Party specifying the nature of the alleged material breach in reasonable detail.

8.2.2 Change of Control. Either Party may terminate this Agreement upon written notice to the other Party in the event such other Party undergoes a Change of Control.

8.2.3 Third Party Transaction. In the event that any Development Program, Aimmune Product or Major Territory ceases to be, or be part of, an In-Scope Program by virtue of a Transfer involving one (1) or more of the Aimmune Product(s), as contemplated by Section 2.2, then NHSc may terminate this Agreement upon written notice to Aimmune given within sixty (60) days after NHSc gains knowledge of Aimmune’s entering into an agreement in respect of such Transfer.

8.2.4 NHSc Transaction. Aimmune may terminate this Agreement upon written notice to NHSc during the sixty (60) day period following the closing of an acquisition or combination of the nature contemplated in Section 7.1.3.

8.3 Effect of Termination. At the end of the Term, this Agreement shall become void and have no effect, provided that (i) the following provisions hereof shall survive any such termination and remain in full force and effect in accordance with the terms thereof: Sections 3.1, 7.1, 7.3 and 8.3 and Articles 5, 6 and 9; (ii) such termination shall not relieve either Party of any obligation, or deprive either Party from any benefit, accruing prior thereto, and (iii) such termination shall be without prejudice to the rights and remedies of any party with respect to any antecedent breach of the provisions of this Agreement.

ARTICLE 9

MISCELLANEOUS

9.1 Expenses. All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such fees and expenses.

 

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9.2 Severability. If and to the extent that any provision (or any part thereof) of this Agreement is held to be invalid, illegal or unenforceable, in any respect in any jurisdiction, the provision (or the relevant part thereof) shall be considered severed from this Agreement and shall not serve to invalidate the remainder of such provision or any other provisions hereof. The Parties shall make a good faith effort to replace any invalid, illegal or unenforceable provision (or any part thereof) with a valid, legal and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

9.3 Notices. Any notice required or permitted to be given by the Parties pursuant to this Agreement shall be in writing and shall be (i) delivered by hand, (ii) delivered by overnight courier with tracking capabilities, (iii) mailed postage prepaid by first class, registered or certified mail, or (iv) transmitted by facsimile or electronic mail, in either case (facsimile or electronic mail) with receipt confirmed by the recipient or followed by a confirmation copy by mail as provided in (iii), and in each case (clauses (i) through (iv)) addressed to the recipient Party as set forth below, unless changed by notice so given:

If to NHSc:

Société des Produits Nestlé S.A.

Avenue Nestlé 55

1800 Vevey

Switzerland

Attention: General Counsel, Nestlé Health Science

with a copy to:

Mayer Brown LLP

1221 Avenue of the Americas

New York, NY 10020

Attention:   David A. Carpenter

Reb D. Wheeler

If to Aimmune:

Aimmune Therapeutics, Inc.

8000 Marina Boulevard, Suite 300

Brisbane, CA 94005

Attention: General Counsel

with a copy to:

Latham & Watkins LLP

140 Scott Road

Menlo Park, CA 94025

Attention:   Patrick Pohlen

Judith Hasko

 

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(A) with respect to any notice delivered pursuant to clauses (i) or (iv), such notice shall be deemed effective upon submission to such other Party, (B) with respect to any notice delivered pursuant to clause (ii), such notice shall be deemed effective the Business Day following the date of submission to the carrier, and (C) with respect to any notice delivered pursuant to clause (iii), such notice shall be deemed effective five (5) Business Days after the earlier of (x) confirmation of receipt by the recipient or (y) the date of submission of such facsimile or electronic mail, as applicable. A Party may add, delete, or change the person or address to whom notices should be sent at any time upon written notice delivered to the other Party in accordance with this Section 9.3.

9.4 Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned or transferred by either Party without the prior written consent of the other Party, such consent not to be unreasonably withheld, delayed or conditioned; provided, however, that either Party may, without the other Party’s consent, but with written notice to the other Party, assign or transfer all of its rights and obligations hereunder to any Affiliate or to a Third Party with which it is combined, or which acquires such Party’s shares or assets, pursuant to a Change of Control of such Party. The assigning Party shall in any event remain responsible for and liable hereunder with respect to the acts and omissions of the assignee in the performance of this Agreement. This Agreement shall inure to the benefit of and be binding on the Parties’ successors and assigns. Any assignment or transfer in violation of the foregoing shall be null and void and wholly invalid, the assignee or transferee in any such assignment or transfer shall acquire no rights whatsoever, and the non-assigning non-transferring Party shall not recognize, nor shall it be required to recognize, such assignment or transfer.

9.5 Further Assurances. Each Party agrees, at its own expense, to do, or procure the doing of, all such further acts and things and shall execute and deliver such other agreements, certificates, instruments and documents as are reasonably necessary in order to give full effect to this Agreement.

9.6 Waivers and Modifications. No waiver, modification, release or amendment of any obligation under or provision of this Agreement shall be valid or effective unless in writing and signed by all Parties hereto. The failure of any Party to insist on the performance of any obligation hereunder shall not be deemed to be a waiver of such obligation. Waiver of any provision hereunder or of any breach of any provision hereof shall not be deemed to be a continuing waiver or a waiver of any other breach of such provision (or any other provision) on such occasion or any succeeding occasion.

9.7 Choice of Law. This Agreement (and any claims or disputes arising out of or relating hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein or therein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by, enforced, and shall be construed in accordance with the laws of the State of New York, without regard to its conflicts of law provisions.

9.8 Injunctive Relief. Notwithstanding anything herein to the contrary, each party shall be entitled to seek injunctive relief and specific performance (including but not limited to any relief or recovery under this Agreement) in any court of competent jurisdiction in the world.

 

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9.9 Publicity. Upon execution of this Agreement, each Party may issue a press release announcing the existence of this Agreement in a form, and containing substance, to be agreed in good faith between the Parties (such agreement not to be unreasonably withheld or delayed by either Party). Subject to Section 6.4, each Party agrees not to issue any other press release or other public statement disclosing other information relating to this Agreement or the transactions contemplated hereby without the prior written consent of the other Party. Each Party shall use all reasonable efforts to provide to the other Party a copy of any public announcement regarding this Agreement or the subject matter hereof as soon as reasonably practicable under the circumstances prior to its scheduled release (but in no event less than three (3) Business Days prior to its scheduled release, unless a shorter period is required to comply with applicable Law under the circumstances). Each Party shall have the right to expeditiously review and recommend changes to any such announcement and the Party whose announcement has been reviewed shall remove any Confidential Information of the reviewing Party that the reviewing Party reasonably deems to be inappropriate for disclosure except to the extent such disclosure is required by applicable Law or rules of a securities exchange or the Securities and Exchange Commission or the securities regulators of any state or other jurisdiction. The contents of any announcement or similar publicity, which has been reviewed and approved by the reviewing Party, (including the press release referred to at the beginning of this Section 9.9), and any filing with the Securities and Exchange Commission, can be re-released by either Party without a requirement for re-approval.

9.10 Relationship of the Parties. Each Party is an independent contractor under this Agreement. Nothing herein is intended or is to be construed so as to constitute Aimmune and NHSc as partners, agents or joint venturers. Neither Party shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking with any Third Party. There are no express or implied third party beneficiaries hereunder.

9.11 Entire Agreement. The Parties agree that this Agreement and the attached Exhibits, as amended as of the Effective Date, constitutes the entire agreement between the Parties as to the subject matter of this Agreement, and hereby supersedes all prior negotiations, representations, agreements and understandings (whether written or verbal) regarding the same, including the Original Agreement. Each Party acknowledges that in entering into this Agreement it has not relied on, nor shall it be entitled to rely upon, any representation, warranty, collateral contract or other assurances made by or on behalf of the other Party except for those which are expressly set forth in this Agreement.

9.12 Counterparts. This Agreement may be executed in two or more counterparts, including counterparts delivered by facsimile or other electronic transmission, with the same effect as if both Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall together constitute one and the same instrument.

9.13 Exports. Each Party agrees not to export or re-export, directly or indirectly, any information, technical data, the direct product of such data, samples or equipment received or generated under this Agreement in violation of any applicable export control Laws.

 

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9.14 Amendments. Any amendment of this Agreement shall not be binding on the Parties unless set out in writing, expressed to amend this Agreement and signed by authorized representatives of each of the Parties.

9.15 Interpretation. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or). The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term “including,” “include,” or “includes” as used herein shall mean including, without limiting the generality of any description preceding such term. Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein), (ii) any reference to any applicable Laws herein will be construed as referring to such Laws as from time to time enacted, repealed or amended, (iii) any reference herein to any person will be construed to include the person’s successors and permitted assigns, (iv) the words “herein”, “hereof” and “hereunder”, and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (v) any reference herein to the words “mutually agree” or “mutual written agreement” will not impose any obligation on either Party to agree to any terms relating thereto relating to such terms except as such Party may determine in such Party’s sole discretion, (vi) all references herein to Sections or Exhibits will be construed to refer to Sections and Exhibits to this Agreement, (vii) the word “days” means calendar days unless otherwise specified, (viii) except as otherwise expressly provided herein all references to “$” or “dollars” refer to the lawful money of the U.S., and (ix) the words “copy” and “copies” and words of similar import when used in this Agreement include, to the extent available, electronic copies, files or databases containing the information, files, items, documents or materials to which such words apply. The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions. The language in this Agreement is to be construed in all cases according to its fair meaning.

[Signature page follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized officers.

 

AIMMUNE THERAPEUTICS, INC.
By:   /s/ Jayson Dallas
  (Signature)
Name:   Jayson Dallas
Title:   President and Chief Executive Officer

 

SOCIÉTÉ DES PRODUITS NESTLÉ S.A.
By:   /s/ James Pepin
  (Signature)
Name:   James Pepin
Title:   President

 

Solely for purposes of Section 9.11:
NESTLÉ HEALTH SCIENCE S.A.
By:   /s/ Claudio Kuoni
  (Signature)
Name:   Claudio Kuoni
Title:   General Counsel Nestle Health Science

[Signature page to Collaboration Agreement]


Exhibit A

Development Programs

The treatment of allergies to the following foods:

Peanut, including the program designated AR-101

[***]

 

 

EX-10.2

Exhibit 10.2

AIMMUNE THERAPEUTICS, INC.

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (“Agreement”) is made as of February 4, 2020 (the “Effective Date”), between Aimmune Therapeutics, Inc., a Delaware corporation (the “Company”), and Nestle Health Science US Holdings, Inc., a Delaware corporation (the “Purchaser”).

AGREEMENT

In consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and the Purchaser hereby agree as follows:

SECTION 1. AUTHORIZATION OF SALE OF SECURITIES.

The Company has authorized the sale and issuance to the Purchaser of 1,000,000 shares of its Common Stock, par value $0.0001 per share (the “Common Stock”) and 525,634 shares of its Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), on the terms and subject to the conditions set forth in this Agreement. The shares of Common Stock and the shares of Series A Preferred Stock sold hereunder at the Closing (as defined below) shall be referred to as the “Shares.”

SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.

At the Closing (as defined in Section 3), the Company will sell to Purchaser, and Purchaser will purchase from the Company 1,000,000 shares of Common Stock at a purchase price of $31.97 per share for an aggregate purchase price of $31,970,000.00 and 525,634 shares of Series A Preferred Stock at a purchase price of $319.675 per share for an aggregate purchase price of $168,032,048.95 (the aggregate purchase price for the Common Stock and Series A Preferred Stock together, the “Aggregate Purchase Price”).

SECTION 3. CLOSING AND DELIVERY.

3.1 Closing. Subject to the terms and conditions set forth herein, the closing of the purchase and sale of the Shares pursuant to this Agreement (the “Closing”) shall be held on the date (the “Closing Date”) that is three (3) business days following the satisfaction of the conditions precedent set out in Sections 6 and 7 hereof at the offices of Latham & Watkins LLP, 140 Scott Drive, Menlo Park, California 94025, or on such other date and place as may be agreed to by the Company and the Purchaser. At the Closing, the Purchaser shall pay the Aggregate Purchase Price to the Company in accordance with Section 6.1, and each of the Purchaser and the Company shall execute and deliver to the other, each of the agreements or other documents required to be executed by it as of the Closing Date pursuant to this Section 3 and Sections 6 and 7 hereof.


3.2 Issuance of the Securities at the Closing. At the Closing, the Company shall issue or deliver to the Purchaser evidence of a book entry position evidencing the Shares purchased by the Purchaser hereunder, registered in the name of the Purchaser, or in such nominee name(s) as designated by the Purchaser, representing the Shares to be purchased by the Purchaser at the Closing against payment of the purchase price for the Shares. The name(s) in which the shares are to be issued to the Purchaser is set forth in the Purchaser Questionnaire in the form attached hereto as Appendix I (the “Purchaser Questionnaire”), as completed by the Purchaser, which shall be provided to the Company no later than the Closing Date.

3.3 Delivery of the Registration Rights Agreement. As of the Effective Date, the Company and the Purchaser shall have executed and delivered the Amended and Restated Registration Rights Agreement in the form attached hereto as Appendix III (the “Registration Rights Agreement”), with respect to the registration of the Shares under the Securities Act of 1933, as amended (the “Securities Act”). In connection with such Registration Rights Agreement, the Purchaser (or the Holder(s) (as defined in the Registration Rights Agreement)), shall deliver to the Company, concurrently with the written request to the Company as contemplated by Section 2(a) thereof, the Selling Stockholder Notice and Questionnaire in the form attached hereto as Appendix II (the “Selling Stockholder Questionnaire”).

3.4 Delivery of the Collaboration Agreement. As of the Effective Date, the Company and the Purchaser shall have executed and delivered the Amended and Restated Collaboration Agreement in the form attached hereto as Appendix IV (the “Collaboration Agreement”).

3.5 Delivery of Standstill Agreement. As of the Effective Date, the Company and the Purchaser shall have executed and delivered the Amended and Restated Standstill Agreement in form attached hereto as Appendix V (the “Standstill Agreement”).

3.6 Certificate of Designation The Company shall adopt and file with the Secretary of State of the State of Delaware on or before the Closing Date, the Certificate of Designation in the form attached hereto as Appendix VI (the “Certificate of Designation”).

SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

Except as set forth on the Schedule of Exceptions delivered to the Purchaser concurrently with the execution of this Agreement (the “Schedule of Exceptions”) or as otherwise described in the SEC Documents (as defined below), which disclosures qualify these representations and warranties in their entirety, the Company hereby represents and warrants as of the date hereof to, and covenants with, the Purchaser as follows:

4.1 Organization and Standing. The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of Delaware, with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as presently conducted, and (ii) is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification, except in the case of clause (ii) above, to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to result in a material adverse effect on the condition (financial or otherwise), earnings, business, properties or prospects of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”).

 

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4.2 Subsidiaries. Each “significant subsidiary” of the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each, a “Subsidiary” and, collectively, the “Subsidiaries”) (i) has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its incorporation or organization, has corporate or similar power and authority to own, lease and operate its properties and to conduct its business as presently conducted, and (ii) is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except in the case of clause (ii) above, to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to result in a Material Adverse Effect. All of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. The only Subsidiaries of the Company are the subsidiaries listed in Section 4.2 of the Schedule of Exceptions.

4.3 Corporate Power; Authorization. The Company has all requisite corporate power and authority, and has taken all requisite corporate action, to execute and deliver this Agreement, the Registration Rights Agreement, the Standstill Agreement and the Collaboration Agreement (collectively, the “Transaction Documents”), sell and issue the Shares and carry out and perform all of its obligations under the Transaction Documents. Each Transaction Document constitutes, or when executed and delivered in accordance with the terms hereof, will constitute, the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors’ rights generally, (ii) as limited by equitable principles generally and (iii) as rights to indemnity or contribution may be limited by state or federal laws or public policy underlying such laws (collectively, the “Enforceability Limitations”).

4.4 Issuance and Delivery of the Shares. The Shares have been duly authorized and, when issued and paid for in compliance with the provisions of this Agreement, will be validly issued, fully paid and non-assessable, and will be free and clear of any security interests, liens or other encumbrances created by or on behalf of the Company (other than restrictions on transfer under the Transaction Documents and applicable securities laws). Assuming the accuracy of the representations made by the Purchaser in Section 5, the offer and issuance by the Company of the Shares is exempt from registration under the Securities Act. The Common Stock issuable upon conversion of the Series A Preferred Stock has been duly reserved for issuance, and upon issuance in accordance with the terms of the Certificate of Designation will be validly issued, fully paid and non-assessable, and will be free and clear of any security interests, liens or other encumbrances created by or on behalf of the Company (other than restrictions on transfer under the Transaction Documents and applicable securities laws).

4.5 SEC Documents; Financial Statements. The Company has filed in a timely manner all documents that the Company was required to file with the Securities and Exchange Commission (the “Commission”) under Sections 13, 14(a) and 15(d) the Securities Exchange Act

 

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of 1934, as amended (the “Exchange Act”), since becoming subject to the requirements of the Exchange Act. As of their respective filing dates (or, if amended prior to the date of this Agreement, when amended), all documents filed by the Company with the Commission (the “SEC Documents”) complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder. None of the SEC Documents as of their respective dates contained any untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. The consolidated financial statements of the Company and its subsidiaries included in the SEC Documents (the “Financial Statements”) present fairly the financial condition, results of operations and cash flows of the Company on a consolidated basis as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Exchange Act and have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein). KPMG, LLP, who have certified certain financial statements of the Company delivered their report with respect to the audited consolidated financial statements and schedules included in the SEC Documents, are independent public accountants with respect to the Company within the meaning of the Exchange Act and the applicable published rules and regulations thereunder.

4.6 Capitalization. The authorized capital stock of the Company consists of 290,000,000 shares of Common Stock and 10,000,000 shares of undesignated preferred stock, par value $0.0001 per share, of the Company (“Preferred Stock”), 525,634 of which have been designated Series A Preferred Stock. As of February 3, 2020, there are no shares of Preferred Stock issued and outstanding and there are 63,885,587 shares of Common Stock issued and outstanding, of which no shares are owned by the Company. There are no other shares of any other class or series of capital stock of the Company issued or outstanding. All of the issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and non-assessable. The Company has no capital stock reserved for issuance, except that, as of February 3, 2020, there are (i) 12,652,296 shares of Common Stock reserved for issuance pursuant to the Company’s stock incentive plans, of which 7,502,804 shares are issuable upon the exercise of stock options outstanding on the date hereof, 524,345 shares are issuable upon vesting of restricted stock units outstanding on the date hereof and 4,625,147 shares of Common Stock reserved for issuance pursuant to future awards under the Company’s stock incentive plans and (ii) 2,303,797 shares of Common Stock reserved for issuance pursuant to the Company’s employee stock purchase plan. There are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) (“Voting Debt”) of the Company issued and outstanding. Except as stated above, there are no existing options, warrants, calls, subscriptions or other rights, agreements, arrangements or commitments relating to the issued or unissued capital stock of the Company, obligating the Company to issue, transfer, sell, redeem, purchase, repurchase or otherwise acquire or cause to be issued, transferred, sold, redeemed, purchased, repurchased or otherwise acquired any capital stock or Voting Debt of, or other equity interest in, the Company or securities or rights convertible into or exchangeable for such shares or equity interests or obligations of the Company to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment. The issuance of the Shares pursuant to this Agreement will not give rise to any preemptive rights or rights of first refusal on behalf of any third-party. Other than the Amended and Restated

 

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Investors’ Rights Agreement, dated January 20, 2015, by and among the Company and the parties listed therein (as amended to date), and the Registration Rights Agreement, there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their securities under the Securities Act. The rights, privileges and preferences of the Series A Preferred Stock are as stated in the Certificate of Designation and as provided by the Delaware General Corporation Law.

4.7 Litigation. Except as set forth in Section 4.7 of the Schedule of Exceptions or the SEC Documents, no action, suit, investigation or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or any of its or their property or any officer or director of the Company in their capacity as such (collectively, “Actions”), is pending or, to the best knowledge of the Company, threatened, which if adversely determined will have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business. There is no Action pending, or to the Company’s best knowledge threatened, which if adversely determined could materially and adversely effect the Company’s ability to consummate the transactions contemplated by the Transaction Documents.

4.8 Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state, or local governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by the Transaction Documents, except as contemplated by Section 6.4 and for (a) the filing of the Certificate of Designation, which will have been filed as of the Closing, (b) the filing of a Form D with the Commission under the Securities Act and compliance with applicable securities and blue sky laws in the jurisdictions in which Shares are offered and/or sold, which compliance will be effected in accordance with such laws, (c) the approval by The Nasdaq Global Select Market of the listing of the Shares and (d) the filing of one or more registration statements and all amendments thereto with the Commission as and when contemplated by the Registration Rights Agreement.

4.9 No Default or Consents. Neither the execution, delivery or performance of the Transaction Documents by the Company nor the consummation of any of the transactions contemplated thereby (including, without limitation, the issuance and sale by the Company of the Shares) will conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter or by-laws of the Company, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of its subsidiaries is a party or bound or to which its or their property is subject, including the Material Agreements (defined below) or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their property, except in the case of clauses (ii) and (iii) above, for any conflict, breach or violation of, or imposition that would not, individually or in the aggregate, have a Material Adverse Effect.

 

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4.10 No Material Adverse Change. Since September 30, 2019: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to have a Material Adverse Effect; (ii) there have not been any changes in the authorized capital, assets, liabilities, financial condition, business, Material Agreements or operations of the Company and its subsidiaries, taken as a whole, from that reflected in the Financial Statements, except for any such changes in the ordinary course of business which have not had or would not reasonably be expected to have, either individually or in the aggregate, materially adverse to the business, properties, financial condition or results of operations of the Company and its subsidiaries, taken as a whole and (iii) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders (other than repurchases of unvested shares of Common Stock in connection with the cessation of service by employees or consultants of the Company).

4.11 No General Solicitation. None of the Company, any of its subsidiaries or any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D promulgated under the Securities Act) in connection with the offer or sale of the Shares.

4.12 No Integrated Offering. None of the Company, any of its subsidiaries or any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security of the Company or any of its subsidiaries, under circumstances that would adversely affect reliance by the Company on Section 4(a)(2) of the Securities Act or require registration of any of the Shares under the Securities Act or cause this offering of the Shares to be integrated with prior offerings by the Company or any of its subsidiaries for purposes of the Securities Act.

4.13 Sarbanes-Oxley Act. There is and has been no failure on the part of the Company, any of its subsidiaries and any of its or their directors or officers, in their capacities as such, to comply with any applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including, without limitation, Section 402 relating to loans.

4.14 Intellectual Property. The Company and its subsidiaries own or possess, or have valid licenses to, or can acquire on reasonable terms, all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of the Company’s and its subsidiaries’ business as now conducted or as proposed in the SEC Documents to be conducted (the “Company Intellectual Property”). The conduct of the Company’s business as currently conducted or as proposed in the SEC Documents to be conducted does not infringe or violate the Intellectual Property rights of any third party, except for any such infringement or violation that will not have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of any infringement, misappropriation or other violation of, or conflict with any Intellectual Property rights of any third party. The Company is not aware of any facts or circumstances which would form a reasonable basis to render invalid or unenforceable any issued patents, or any facts or circumstances, apart from such facts or circumstances raised during prosecution, which would form a reasonable basis to render unpatentable or unenforceable any pending patent applications material to the Company’s business as currently conducted or as proposed in the SEC

 

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Documents, in each case, owned by or exclusively licensed to the Company or any of its subsidiaries. There is no pending or, to the Company’s knowledge, threatened Action or claim by others challenging the Company’s or any of its subsidiaries rights in or to any Company Intellectual Property. The Company and its subsidiaries have taken commercially reasonable steps to obtain and maintain in force all third party licenses and other permissions in relation to Company Intellectual Property as may be necessary to conduct their respective businesses.

4.15 Compliance with Nasdaq Continued Listing Requirements. The Company is in compliance with applicable Nasdaq Stock Market, LLC continued listing requirements. There are no proceedings pending or, to the Company’s knowledge, threatened against the Company relating to the continued listing of the Common Stock on The Nasdaq Global Select Market and the Company has not received any notice of, nor to the Company’s knowledge is there any reasonable basis for, the delisting of the Common Stock from The Nasdaq Global Select Market.

4.16 Disclosure. The Company understands that the Purchaser will rely on the foregoing representations in effecting the purchase of the Shares. The Transaction Documents and the SEC Documents, when taken together with the Schedule of Exceptions and the due diligence materials regarding the Company furnished by or on behalf of the Company to the Purchasers, are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

4.17 Contracts. Each franchise, contract or other document of a character required to be described in the SEC Documents or to be filed as an exhibit to the SEC Documents under the Securities Act and the rules and regulations promulgated thereunder (collectively, the “Material Contracts”) is so described or filed. The Company is in compliance with and not in default of its obligations under the Material Contracts, except for such non-compliance or default that will not have a Material Adverse Effect.

4.18 Properties and Assets. The Company and its subsidiaries own or lease all such properties as are necessary to the conduct of its and their operations as presently conducted. Such assets which are owned by the Company are held free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, except as described in Section 4.18 of the Schedule of Exceptions.

4.19 Compliance. Except as would not, individually or in the aggregate, result in a Material Adverse Effect or as disclosed in the SEC Documents: (i) each of the Company and each of its subsidiaries is and has been in compliance with statutes, laws, ordinances, rules and regulations applicable to the Company or its subsidiaries for the ownership, testing, development, manufacture, packaging, processing, use, labeling, storage, or disposal of any product manufactured by or on behalf of the Company and its subsidiaries or out-licensed by the Company and its subsidiaries (a “Company Product”), including without limitation, the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq., the Public Health Service Act, 42 U.S.C. § 262, similar laws of other governmental entities and the regulations promulgated pursuant to such laws (collectively, “Applicable Laws”); (ii) the Company and its subsidiaries possess all licenses, certificates, approvals, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws and/or for the ownership of their properties or the conduct

 

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of their business as it relates to a Company Product and as described in the SEC Documents (collectively, “Authorizations”) and such Authorizations are valid and in full force and effect and neither the Company nor any of its subsidiaries is in violation of any term of any such Authorizations; (iii) neither the Company nor any of its subsidiaries has received any written notice of adverse finding, warning letter or other written correspondence or notice from the U.S. Food and Drug Administration (the “FDA”) or any other governmental entity alleging or asserting noncompliance with any Applicable Laws or Authorizations relating to a Company Product; (iv) neither the Company nor any of its subsidiaries has received written notice of any ongoing claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any governmental entity or third party alleging that any Company Product, operation or activity related to a Company Product is in violation of any Applicable Laws or Authorizations; and (v) neither the Company nor any of its subsidiaries has received written notice that any governmental entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations.

4.20 Taxes. Except as disclosed in Section 4.20 of the Schedule of Exceptions or the SEC Documents, (i) the Company and its subsidiaries have filed all tax returns that are required to have been be filed by each of them or has requested extensions of the filing date thereof and (ii) the Company and its subsidiaries have paid all taxes required to be paid by any of them and any other assessment, fine or penalty levied against any of them, to the extent that any of the foregoing is due and payable, except in the case of clause (i) and (ii), for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business and (iii) there are no tax audits ongoing of which the Company has received written notice.

4.21 Transfer Taxes. There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance by the Company or sale by the Company of the Shares.

4.22 Investment Company. The Company is not and, after giving effect to the offering and sale of the Shares, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended.

4.23 Insurance. The Company and its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are reasonable and customary in the business in which it is engaged; all policies of insurance and fidelity or surety bonds insuring the Company and its subsidiaries or their businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business.

 

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4.24 Price of Common Stock. Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action designed to cause or result in, or that has constituted or that might reasonably be expected to constitute the stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Shares.

4.25 Governmental Permits, Etc. The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by all applicable authorities necessary to conduct its business, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business.

4.26 Internal Control over Financial Reporting; Sarbanes-Oxley Matters. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company’s internal controls over financial reporting are effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and the Company is not aware of any material weakness in its internal controls over financial reporting. The Company maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure controls and procedures are effective as of September 30, 2019.

4.27 Foreign Corrupt Practices/Money Laundering Laws. None of the Company, its subsidiaries or, to the knowledge of the Company, any director, officer, agent, or employee of the Company or any of its subsidiaries has taken any action, directly or indirectly, that is in violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA. The operations of the Company and its subsidiaries have been conducted in compliance with all applicable money laundering laws and the rules and regulations thereunder.

 

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4.28 Labor. Neither the Company nor any subsidiary of the Company is bound by or subject to any collective bargaining agreement or any similar agreement with any organization representing its employees. No labor problem or dispute with the employees of the Company and its subsidiaries exists or, to the knowledge of the Company, is threatened, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers or contractors, that could have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business, except as contemplated in the SEC Documents.

4.29 ERISA. None of the following events has occurred or exists: (i) a failure to fulfill the obligations, if any, under the minimum funding standards of Section 302 of the United States Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the regulations and published interpretations thereunder with respect to a Plan that is required to be funded, determined without regard to any waiver of such obligations or extension of any amortization period; (ii) an audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other federal or state governmental agency or any foreign regulatory agency with respect to the employment or compensation of employees by any of the Company or any of its subsidiaries that could have a Material Adverse Effect; (iii) any breach of any contractual obligation, or any violation of law or applicable qualification standards, with respect to the employment or compensation of employees by the Company or any of its subsidiaries that would reasonably be expected to have a Material Adverse Effect. None of the following events has occurred or is reasonably likely to occur: (i) a material increase in the aggregate amount of contributions required to be made to all Plans in the current fiscal year of the Company compared to the amount of such contributions made in the most recently completed fiscal year of the Company; (ii) a material increase in the “accumulated post-retirement benefit obligations” (within the meaning of Statement of Financial Accounting Standards 106) of the Company compared to the amount of such obligations in the most recently completed fiscal year of the Company; (iii) any event or condition giving rise to a liability under Title IV of ERISA that could have a Material Adverse Effect; or (iv) the filing of a claim by one or more employees or former employees of the Company or any of its subsidiaries related to their employment that could have a Material Adverse Effect. For purposes of this paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to which the Company or any of its subsidiaries may have any liability.

4.30 Environmental Laws. The Company and each of its subsidiaries (i) is in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received and is in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct its business and (iii) has not received notice of any actual or potential liability under any environmental law, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate, have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business. The Company has not been named as a “potentially responsible party” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

4.31 Related Party Transactions. No director or Affiliate of the Company, nor any family member of any officer, director or Affiliate of the Company has entered into any transaction with the Company or any of its subsidiaries that would be required to be disclosed under Item 404 of Regulation S-K that has not been disclosed in the SEC Documents as required by the rules and regulations of the Commission.

 

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4.32 Certain Fees. Except as disclosed in Section 4.32 of the Schedule of Exceptions, no brokerage or finder’s fee or commissions are payable by the Company to any broker, financial advisor, consultant, finder placement agent, investment banker or other person or entity with respect to the transactions contemplated hereby.

SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.

5.1 Representations and Warranties. The Purchaser represents and warrants to and covenants with the Company that:

(a) The Purchaser is a validly existing corporation, limited partnership or limited liability company and has all requisite corporate, partnership or limited liability company power and authority to enter into and consummate the transactions contemplated by the Transaction Documents and to carry out its obligations hereunder and thereunder, and to purchase the Shares pursuant to this Agreement.

(b) The Purchaser acknowledges that it can bear the economic risk and complete loss of its investment in the Shares and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby. The Purchaser has had an opportunity to receive, review and understand all information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Shares, and has conducted and completed its own independent due diligence. The Purchaser acknowledges that the Company has made available the SEC Documents. Based on the information the Purchaser has deemed appropriate, and without reliance upon any third-party, it has independently made its own analysis and decision to enter into the Transaction Documents. The Purchaser is relying exclusively on its own investment analysis and due diligence (including professional advice it deems appropriate) with respect to the execution, delivery and performance of the Transaction Documents, the Shares and the business, condition (financial and otherwise), management, operations, properties and prospects of the Company, including but not limited to all business, legal, regulatory, accounting, credit and tax matters, and has received no representations with regard to the Company or its business, condition (financial and otherwise), management, operations, properties and prospects, except for those set forth in the Transaction Documents.

(c) The Shares will be acquired for the Purchaser’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act without prejudice, however, to the Purchaser’s right at all times to sell or otherwise dispose of all or any part of such Shares in compliance with applicable federal and state securities laws. The Purchaser is not a broker-dealer registered with the SEC under the Exchange Act or an entity engaged in a business that would require it to be so registered. The Purchaser understands that

 

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the Shares are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the securities purchased hereunder except in compliance with the Standstill Agreement, the Securities Act, applicable blue sky laws, and the rules and regulations promulgated thereunder. The Purchaser has no present intent to effect a “change of control” of the Company as such term is understood under the rules promulgated pursuant to Section 13(d) of the Exchange Act.

(d) The Purchaser is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act. The Purchaser has determined based on its own independent review and such professional advice as it deems appropriate that its purchase of the Shares and participation in the transactions contemplated by the Transaction Documents (i) are fully consistent with its financial needs, objectives and condition, (ii) comply and are fully consistent with all investment policies, guidelines and other restrictions applicable to the Purchaser, (iii) have been duly authorized and approved by all necessary action, (iv) do not and will not violate or constitute a default under the Purchaser’s charter, by-laws or other constituent document or under any law, rule, regulation, agreement or other obligation by which the Purchaser is bound and (v) are a fit, proper and suitable investment for the Purchaser, notwithstanding the substantial risks inherent in investing in or holding the Shares.

(e) The execution, delivery and performance by the Purchaser of the Transaction Documents to which the Purchaser is a party have been duly authorized and each has been duly executed and delivered and constitute the valid and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with their respective terms, subject to the Enforceability Limitations.

(f) The execution, delivery and performance by the Purchaser of the Transaction Documents and the consummation by the Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Purchaser to perform its obligations under the Transaction Documents.

(g) No third-party will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Purchaser. Purchaser is not a broker or dealer registered pursuant to Section 15 of the Exchange Act (a “registered broker-dealer”) and is not affiliated with a registered broker dealer. Purchaser is not party to any agreement for distribution of any of the Shares.

 

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(h) Purchaser shall have completed or caused to be completed and delivered to the Company no later than the Closing Date, the Purchaser Questionnaire, and the answers to the Purchaser Questionnaire are true and correct in all material respects as of the date of this Agreement and will be true and correct as of the Closing Date and the effective date of the any registration statement; provided that the Purchasers shall be entitled to update such information by providing notice thereof to the Company before the effective date of such registration statement.

(i) To the extent the Purchaser provides a written request to the Company to file a registration statement pursuant to the Registration Rights Agreement, the Purchaser shall have completed or caused to be completed and delivered to the Company concurrently with such written request to the Company, the Selling Stockholder Questionnaire, and the answers to the Selling Stockholder Questionnaire are true and correct as of the date of such written request and the effective date of the registration statement; provided that the Purchasers shall be entitled to update such information by providing notice thereof to the Company before the effective date of such registration statement.

(j) The Purchaser understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Shares.

(k) The Purchaser has not taken any of the actions set forth in, and is not subject to, the disqualification provisions of Rule 506(d)(1) of the Securities Act.

(l) The Purchaser did not learn of the investment in the Shares as a result of any general solicitation or general advertising.

(m) Other than pursuant to this Agreement and the 11,727,113 shares of Common Stock held by Purchaser as of the date hereof, neither the Purchaser nor any of its Affiliates currently owns any interest in or has contracted to purchase any shares of Common Stock or any securities convertible into or exerciseable or exchangeable for shares of Common Stock.

(n) The Purchaser is aware that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of Common Stock and other activities with respect to the Shares purchased by the Purchaser.

5.2 Short Sales. Other than consummating the transactions contemplated hereunder, the Purchaser has not, nor has any person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed any purchases or sales, including all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock) (“Short Sales”), of the securities of the Company during the period commencing as of the time that the Purchaser first contacted by the Company or any other person regarding the transactions contemplated hereby and ending immediately prior to the Effective Date. The Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

 

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5.3 Tax Advice. Purchaser understands that nothing in this Agreement or any other materials presented to Purchaser in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice. Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Shares.

5.4 Transfer Restrictions.

(a) Compliance with Laws. Notwithstanding any other provision of this Agreement, the Purchaser covenants that the Shares may be disposed of only pursuant to (x) an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state and federal securities laws and (y) in accordance with the terms of the Standstill Agreement (for so long as the restrictions set forth therein shall remain in effect). In connection with any transfer of the Shares other than (i) pursuant to an effective registration statement, (ii) to the Company, (iii) to an Affiliate (as defined below) of the Purchaser or (iv) pursuant to Rule 144 (provided that the Purchaser provides the Company with reasonable assurances (in the form of seller and broker representation letters) that the securities may be sold pursuant to such rule) or Rule 144A, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred securities under the Securities Act. During the term of the Standstill Agreement, the Purchaser may not, without the consent of the Company, transfer the shares of Common Stock or the shares of Common Stock issuable upon conversion of the Series A Preferred Stock to any person or entity, other than an Affiliate of the Purchaser. As a condition of transfer of any shares of Common Stock or any shares of Common Stock issuable upon conversion of the Series A Preferred Stock to any such Affiliate, any such Affiliate (i) shall agree in writing to be bound by the terms of this Agreement and shall have the rights of the Purchaser under this Agreement and the Registration Rights Agreement, and (ii) for so long as the restrictions set forth the Standstill Agreement shall remain in effect, shall agree in writing to be bound by the applicable terms of the Standstill Agreement (unless otherwise agreed in writing by the Company). For the purposes hereof, “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 144. With respect to a Purchaser that is an entity, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. For purposes hereof, “Control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

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(b) Legends. Each of the book entry notations evidencing the shares of Common Stock or any shares of Common Stock issuable upon conversion of the Series A Preferred Stock shall bear any legend as required by the “blue sky” laws of any state and the restrictive legends in substantially the following form, as applicable, until such time as they are not required under Section 5.4(c) (and a stock transfer order may be placed against transfer of the certificates for the shares of Common Stock or any shares of Common Stock issuable upon conversion of the Series A Preferred Stock):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS PROVIDED BY SECTION 5 OF THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF FEBRUARY 4, 2020, BETWEEN AIMMUNE THERAPEUTICS, INC. AND NESTLE HEALTH SCIENCE US HOLDINGS, INC.

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND CERTAIN OTHER RESTRICTIONS, ALL AS SET FORTH IN AN AMENDED AND RESTATED STANDSTILL AGREEMENT, DATED AS OF FEBRUARY 4, 2020, BETWEEN AIMMUNE THERAPEUTICS, INC. AND NESTLE HEALTH SCIENCE US HOLDINGS, INC.

(c) Removal of Legends. The legends set forth in Section 5.4(b) above shall be removed and the Company shall issue a certificate without such legends or any other legend to the holder of the applicable shares of Common Stock or any shares of Common Stock issuable upon conversion of the Series A Preferred Stock upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at the Depository Trust Company (“DTC”), if (A) such Shares have been or may be transferred in accordance with the terms of the Standstill Agreement without restriction; and (B) (i) such shares are sold or transferred pursuant to an effective registration statement covering the resale of such Shares by the Purchaser, (ii) such shares are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company), or (iii) such shares are eligible for sale without any restrictions under Rule 144 (any Securities meeting such criteria being referred to as “Unrestricted Securities”). Following such time as a legend is no longer required for certain shares, the Company will no later than three (3) business days (or such shorter time as may in the future be required pursuant to applicable law or regulation for the settlement of trades in securities on The Nasdaq Global Select Market) following the delivery by the Purchaser to the Company or the Company’s transfer agent of a certificate representing the shares of Common Stock or any shares of Common Stock issuable upon conversion of the Series A Preferred Stock and if such shares are certificated, issued with a restrictive legend, together with such representations and covenants of the Purchaser or the Purchaser’s executing broker as the Company may reasonably require in connection therewith, deliver or cause to be delivered to the Purchaser a book entry position representing such shares that is free from any legend referring to the Securities Act. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on

 

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transfer set forth in this Section 5.4. In lieu of delivering physical certificates, upon the written request of any Purchaser, the Company shall use its commercially reasonable efforts to transmit certificates for the shares of Common Stock or any shares of Common Stock issuable upon conversion of the Series A Preferred Stock subject to full legend removal hereunder to such Purchaser by crediting the account of the transferee’s Purchaser’s prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system, or any successor system thereto. The time periods for delivery shall apply to the electronic transmittals described herein. Any delivery not effected by electronic transmission shall be effected by delivery of physical certificates. The Purchaser agrees that the removal of (x) the restrictive legend referring to the Standstill Agreement from any certificates representing the shares of Common Stock or any shares of Common Stock issuable upon conversion of the Series A Preferred Stock as set forth in this Section 5.4(c) is predicated upon either (A) a transfer of such shares in strict compliance with the terms of the Standstill Agreement or (B) the termination of the restrictions set forth in the Standstill Agreement; and (y) the restrictive legend referring to the Securities Act from any certificates representing shares as set forth in this Section 5.4(c) above is predicated upon the Company’s reliance that such Purchaser would sell, transfer, assign, pledge, hypothecate or otherwise dispose of such shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if such Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein.

(d) Acknowledgment. Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and, accordingly, will not sell or otherwise transfer any of the shares of Common Stock or any shares of Common Stock issuable upon conversion of the Series A Preferred Stock or any interest therein without complying with the requirements of the Securities Act. While any registration statement remains effective, Purchaser hereunder may, subject to the provisions of the Standstill Agreement, sell the shares of Common Stock issuable upon conversion of the Series A Preferred Stock in accordance with the plan of distribution contained in such registration statement and, if it does so, it will comply therewith and with the related prospectus delivery requirements unless an exemption therefrom is available. The Purchaser agrees that if it is notified by the Company in writing at any time that a registration statement registering the resale of any of the shares of Common Stock issuable upon conversion of the Series A Preferred Stock is not effective or that the prospectus included in such registration statement no longer complies with the requirements of Section 10 of the Securities Act, the Purchaser will refrain from selling such shares until such time as the Purchaser is notified by the Company that such registration statement is effective or such prospectus is compliant with Section 10 of the Exchange Act, unless such Purchaser is able to, and does, sell such shares pursuant to an available exemption from the registration requirements of Section 5 of the Securities Act.

 

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SECTION 6. CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING.

The Company’s obligation to complete the sale and issuance of the Shares and deliver Shares to the Purchaser at the Closing shall be subject to the following conditions to the extent not waived by the Company:

6.1 Receipt of Payment. The Company shall have received payment of the Aggregate Purchase Price, by wire transfer of immediately available funds to such account as the Company shall be designated in writing to the Purchaser not less than two (2) business days prior to the Closing Date.

6.2 Representations and Warranties. The representations and warranties made by the Purchaser in Section 5 hereof shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The Purchaser shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

6.3 Receipt of Executed Documents. The Purchaser shall have executed and delivered to the Company the Registration Rights Agreement, the Standstill Agreement, the Collaboration Agreement and the Purchaser Questionnaire as of the Effective Date.

SECTION 7. CONDITIONS TO PURCHASER’S OBLIGATIONS AT THE CLOSING.

The Purchaser’s obligation to accept delivery of the Shares and to pay the Aggregate Purchase Price for the Shares shall be subject to the following conditions to the extent not waived by the Purchaser:

7.1 Representations and Warranties Correct. The representations and warranties made by the Company in Section 4 hereof shall be true and correct in all material respects as of, and as if made on, the date of this Agreement and as of the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date. The Company shall have performed in all material respects all obligations and covenants herein required to be performed by it on or prior to the Closing Date.

7.2 Receipt of Executed Registration Rights Agreement. The Company shall have executed and delivered to the Purchaser the Registration Rights Agreement as of the Effective Date.

7.3 Receipt of Executed Collaboration Agreement. The Company shall have executed and delivered to the Purchaser the Collaboration Agreement as of the Effective Date.

7.4 Legal Opinion. The Purchaser shall have received an opinion of Latham & Watkins LLP, special counsel to the Company, dated as of the Closing Date, in form and substance reasonably acceptable to the Purchaser.

7.5 Certificate. The Purchaser shall have received a certificate signed by the Chief Executive Officer or the Chief Financial Officer to the effect that the representations and warranties of the Company in Section 4 hereof are true and correct in all material respects as of, and as if made on, the date of this Agreement and as of the Closing Date and that the Company has satisfied all of the conditions set forth in this Section 7.

 

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7.6 Good Standing. The Company shall have delivered to the Purchaser a good standing certificate for the Company, issued by the Secretary of State of the State of Delaware, dated not less than five (5) business days prior to the Closing Date.

7.7 Nasdaq Approval. The Company shall have filed with The Nasdaq Global Select Market a Notification Form: Listing of Additional Shares for the listing of the Common Stock and the Common Stock issuable upon conversion of the Series A Preferred Stock, and furnished to the Purchaser evidence of the filing thereof.

7.8 Judgments. No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby.

7.9 Stop Orders. No stop order or suspension of trading shall have been imposed by The Nasdaq Global Select Market, the Commission or any other governmental regulatory body with respect to public trading in the Common Stock.

7.10 Board Approval. The Company shall have delivered to the Purchaser resolutions of the Board certified by the Company’s Secretary, approving (i) the transactions contemplated by the Transaction Documents (ii) the Purchaser continuing as an “interested stockholder” as defined in Section 203 of the Delaware General Corporation Law, (iii) the Certificate of Designation and (iv) subject to the Standstill Agreement, such additional purchase(s) of Common Stock by the Purchaser during the three year period following the Closing, or through the date that is six (6) months following the termination of the Collaboration Agreement, if later, which result in NHSc owning up to 19.99% of the Company’s outstanding Common Stock.

7.11 Certificate of Designation. The Company shall have filed the Certificate of Designation with the Secretary of State of Delaware on or prior to the Closing, which shall continue to be in full force and effect as of the Closing.

SECTION 8. RESERVED.

SECTION 9. RESERVED.

SECTION 10. ADDITIONAL AGREEMENTS OF THE PARTIES.

10.1 Nasdaq Listing. The Company will use commercially reasonable efforts to continue the listing and trading of its Common Stock on The Nasdaq Global Select Market and, in accordance, therewith, will use commercially reasonable efforts to comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable.

10.2 Access to Information. From the date hereof until the Closing, the Company will make reasonably available to the Purchaser’s representatives, consultants and counsel for inspection, such information and documents as the Purchaser reasonably request, and will make available at reasonable times and to a reasonable extent officers and employees of the Company to discuss the business and affairs of the Company.

 

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10.3 Termination of Covenants. The provisions of Section 10.1 and 10.2 shall terminate and be of no further force and effect on the date on which the Company’s obligations under the Registration Rights Agreement to register or maintain the effectiveness of any registration covering the Registrable Securities (as such term is defined in the Registration Rights Agreement) shall terminate.

10.4 Use of Proceeds. The Company agrees that until the second anniversary of the Closing date, the proceeds from the sale and issuance of the Shares to the Purchaser shall be used to fund the costs and expenses of clinical trials and for general working capital and will not be used for purposes of any cash dividend or cash distribution to any stockholder of the Company (other than in respect of repurchases or redemptions of capital stock pursuant to contractual arrangements as in effect on the date hereof for such repurchases or redemptions).

10.5 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Shares and to provide a copy thereof, promptly upon request of the Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Shares for, sale to the Purchaser at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of the Purchaser.

10.6 Integration. The Company shall not, and shall use its commercially reasonable efforts to ensure that no affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that will be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares to the Purchaser, or that will be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any trading market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.

10.7 Short Sales and Confidentiality After the Date Hereof. The Purchaser covenants that neither it nor any Affiliates acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period from the date hereof until the earlier of such time as (i) after the transactions contemplated by this Agreement are first publicly announced or (ii) this Agreement is terminated in full. The Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company in accordance with Section 10.8, the Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). The Purchaser understands and acknowledges that the Commission currently takes the position that coverage of short sales of shares of the Common Stock “against the box” prior to effectiveness of a resale registration statement with securities included in such registration statement would be a violation of Section 5 of the Securities Act, as set forth in Item 239.10 of the Securities Act Rules Compliance and Disclosure Interpretations compiled by the Office of Chief Counsel, Division of Corporation Finance.

 

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10.8 Securities Laws Disclosure; Publicity. By 5:00 P.M., New York City time, on the trading day immediately following the Effective Date, the Company shall issue a press release disclosing the material terms of the transactions contemplated hereby. On or before 9:00 A.M., New York City time, on the third trading day immediately following the execution of this Agreement, the Company will file a Current Report on Form 8-K (the “8-K”) with the Commission describing the terms of the Transaction Documents.

10.9 Regulatory Approvals; Efforts of the Parties. Subject to the terms and conditions of this Agreement, each of the Company and the Purchaser agree to use commercially reasonable efforts to take, or cause to be taken, all necessary actions, and to do, or cause to be done, all things necessary under applicable law to consummate the transactions contemplated by this Agreement. Nothing in this Section 10.9 shall require, or be deemed to require, the Company or the Purchaser (a) to propose, negotiate, offer to, commit to or effect any sale, divestiture, or disposition of assets or businesses, or licenses or (b) to agree to hold separate any assets or agree to any similar arrangements or to commit to restrict the dominion or control of its business or to conduct its business in a specified manner, in each case, in order to secure any government approval required in connection with the transactions contemplated hereby.

10.10 Further Assurances. Each of the parties shall execute such further documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations or other actions by, or giving notices to, or making any filings with, any governmental entity, if necessary) as may be reasonably requested by the other party to fully implement the intent and purpose of this Agreement.

SECTION 11. INDEMNIFICATION.

11.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless the Purchaser and each Person (defined below), if any, who controls or is under common control with the Purchaser within the meaning of the Securities Act (each, an “Indemnified Party”), against any losses, claims, damages, liabilities or expenses, joint or several, to which such Indemnified Party may become subject under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law (including in settlement of any litigation, if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are based in whole or in part on any inaccuracy in the representations and warranties of the Company contained in this Agreement or any failure of the Company to perform its obligations hereunder, and will reimburse each Indemnified Party for legal and other expenses reasonably incurred as such expenses are reasonably incurred by such Indemnified Party in connection with investigating, defending, settling, compromising or paying such loss, claim, damage, liability, expense or action. For purposes of clarity, the Company will not be liable to any Indemnified Party to the extent that any loss, claim, damage, liability or expense arises out of or is based upon (i) the failure of such Indemnified Party to comply with the covenants and agreements contained in this Agreement, or (ii) the inaccuracy of any representations made by such Indemnified Party herein. The term Person means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

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11.2 Indemnification by the Purchaser. The Purchaser shall indemnify and hold harmless the Company, each of its directors, and each Person, if any, who controls or is under common control with the Company within the meaning of the Securities Act (the “Company Indemnified Parties”), against any losses, claims, damages, liabilities or expenses to which the Company, each of its directors or each of its controlling Persons may become subject, under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Purchaser) insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are based in whole or in part on any inaccuracy in the representations and warranties of the Purchaser contained in this Agreement or any failure of the Purchaser to perform its obligations hereunder , and will reimburse the applicable Company Indemnified Parties for any legal and other expense reasonably incurred, as such expenses are reasonably incurred by any Company Indemnified Parties in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. For purposes of clarity, the Purchaser will not be liable to any Company Indemnified Party to the extent that any loss, claim, damage, liability or expense arises out of or is based upon (i) the failure of a Company Indemnified Party to comply with the covenants and agreements contained in this Agreement, or (ii) the inaccuracy of any representations made by a Company Indemnified Party herein.

SECTION 12. NOTICES.

All notices, requests, consents and other communications hereunder shall be in writing, shall be sent by confirmed facsimile or electronic mail, or mailed by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, and shall be deemed given when so sent in the case of facsimile or electronic mail transmission, or when so received in the case of mail or courier, and addressed as follows:

 

  (a)

if to the Company, to:

Aimmune Therapeutics, Inc.

8000 Marine Blvd., Suite 300

Brisbane, California, 94005

Attention: General Counsel

Facsimile: (650) 616-0075

E-Mail: GC@aimmune.com

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

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Attention: Patrick A. Pohlen and Miles P. Jennings Facsimile: (650) 463-2600

E-Mail: [***]

[***]

or to such other person at such other place as the Company shall designate to the Purchaser in writing; and

 

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  (b)

if to the Purchaser, to:

Nestle Health Science US Holdings, Inc.

900 Long Ridge Road, Building 2

Stamford, CT 06902

Attention: Andrew Glass

F: (480) 379-5510

E-Mail: [***]

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

Nestlé Health Science S.A.

Avenue Nestlé, 55

1800 Vevey

Switzerland

Attention: General Counsel

Facsimile: 011-41-21-924-2875

with a further copy (which shall not constitute notice) to:

Mayer Brown LLP

1221 Avenue of the Americas

New York, NY 10020

Attention:     David A. Carpenter

Facsimile: (212) 849-5795

E-Mail: [***]

or to such other address or addresses as may have been furnished to the Company in writing.

SECTION 13. MISCELLANEOUS.

13.1 Waivers and Amendments. Neither this Agreement nor any provision hereof may be changed, waived, discharged, terminated, modified or amended except upon the written consent of the Company and the Purchaser.

13.2 Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.

13.3 Severability. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

13.4 Replacement of Shares. If the Shares are certificated and any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of

 

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and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company and the Company’s transfer agent of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company and the Company’s transfer agent for any losses in connection therewith or, if required by the transfer agent, a bond in such form and amount as is required by the transfer agent. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares. If a replacement certificate or instrument evidencing any Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

13.5 Specific Performance. The parties hereto agree that irreparable damages would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms hereof, in addition to any other remedy to which the party may be entitled under applicable law.

13.6 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City and County of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City and County of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

13.7 Counterparts. This Agreement may be executed and delivered (including by facsimile or portable document format (“pdf”) in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

 

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13.8 Successors and Assigns. Without the prior written consent of the Company, the rights and obligations of the Purchaser under this Agreement may only be assigned to a transferee of the Shares that is an Affiliate of the Purchaser and only upon compliance with the transfer restrictions set out in Section 5.4 hereof. Without the consent of the Purchaser, the Company may not assign its rights and obligations under this Agreement. The provisions hereof shall inure to the benefit of, and be binding upon, the successors and permitted assigns of the parties hereto.

13.9 Entire Agreement. This Agreement and other documents delivered pursuant hereto, including the exhibit and the Schedule of Exceptions, constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

13.10 Payment of Fees and Expenses. Each of the Company and the Purchaser shall bear its own expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions contemplated hereby. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

13.11 Survival. The representations, warranties, covenants and agreements made in this Agreement shall survive any investigation made by the Company or the Purchaser and the Closing.

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day and year first above written.

 

AIMMUNE THERAPEUTICS, INC.
By:   /s/ Jayson Dallas
Name:   Jayson Dallas M.D.
Title:   President and Chief Executive Officer

 

SIGNATURE PAGES TO

SECURITIES PURCHASE AGREEMENT


NESTLE HEALTH SCIENCE US
HOLDINGS, INC.
By:   /s/ James Pepin
Name:   James Pepin
Title:   President

 

SIGNATURE PAGES TO

SECURITIES PURCHASE AGREEMENT


APPENDIX I

Purchaser Questionnaire

Omitted pursuant to Regulation S-K, Item 601(a)(5)


APPENDIX II

Selling Stockholder Questionnaire

Omitted pursuant to Regulation S-K, Item 601(a)(5)


APPENDIX III

Registration Rights Agreement


AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

This Amended and Restated Registration Rights Agreement (this “Agreement”) is made and entered into as of February 4, 2020, between Aimmune Therapeutics, Inc., a Delaware corporation (the “Company”), and Nestle Health Science US Holdings, Inc., a Delaware corporation (the “Purchaser”).

WHEREAS, the Purchaser is purchasing shares of the Company’s Series A Preferred Stock and Common Stock pursuant to that certain Securities Purchase Agreement, dated as of February 4, 2020, between the Company and the Purchaser (the “Purchase Agreement”);

WHEREAS, the obligations in the Purchase Agreement are conditioned upon the execution and delivery of this Agreement; and

WHEREAS, the Company and the Purchaser are parties to that certain Amended and Restated Registration Rights Agreement, dated as of November 11, 2018 (the “Prior Agreement”) and desire to amend and restate the Prior Agreement to accept the rights and covenants hereof in lieu of their rights and covenants under the Prior Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the respective meanings set forth in this Section 1:

Advice” shall have the meaning set forth in Section 7(c).

Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act.

Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

Commission” means the United States Securities and Exchange Commission, or any successor entity or entities, including, if applicable, the staff of the Commission.

Common Stock” means the common stock, par value $0.0001 per share, of the Company.

 

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Effectiveness Date” means: (a) with respect to the Initial Registration Statement required to be filed hereunder, the date that is forty (45) days following the Permitted Request Date, but no earlier than the Termination Date (or the 60th day following the Permitted Request Date in the event the Initial Registration Statement is reviewed by the Commission) and (b) with respect to any additional Registration Statements which may be required pursuant to Section 2, the 60th day following the date on which the Permitted Request Date applicable to such additional Registration Statement as is required under such Section (or the 90th day following such date in the event such additional Registration Statement is reviewed by the Commission). If the Effectiveness Date falls on a Saturday, Sunday or other date that the Commission is closed for business, the Effectiveness Date shall be extended to the next day on which the Commission is open for business.

Effectiveness Period” shall have the meaning set forth in Section 2(a).

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

Indemnified Party” shall have the meaning set forth in Section 6(c).

Indemnifying Party” shall have the meaning set forth in Section 6(c).

Initial Registration Statement” shall mean the initial Registration Statement required to be filed to cover the resale by the Holders of the Registrable Securities pursuant to Section 2(a).

Losses” shall have the meaning set forth in Section 6(a).

Permitted Request Date” means the date on which the Purchaser requests that the Company register the Registrable Securities under Section 2, (a) which date with respect to the Initial Registration Statement, may not be a date that precedes the date that is 45th calendar days prior to the Termination Date, and (b) which date with respect to any additional Registration Statements that may be required pursuant to Section 2 hereof, may be any day following the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement is required under such Section, prompt notice of which shall be provided to the Purchaser.

Person means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

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Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A or Rule 430B promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

Reduction Securities” shall have the meaning set forth in Section 2(b).

Registrable Securities” means (i) the shares of Common Stock issued pursuant to the Purchase Agreement and the shares of Common Stock issuable upon conversion of the shares of the Company’s Series A Preferred Stock issued pursuant to the Purchase Agreement, (ii) the shares of Common Stock issued pursuant to that certain Securities Purchase Agreement, dated November 11, 2018, (iii) the shares of Common Stock issued pursuant to that certain Securities Purchase Agreement, dated November 3, 2016, by and among the Company and the Purchaser, and (iv) any other shares of Common Stock issued as (or issuable upon conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, in exchange for or in replacement of the shares referenced in clauses (i) through (iii); provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold or transferred in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Company’s transfer agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the Company.

Registration Statement” means each of the following: (i) an initial registration statement which is required to register the resale of the Registrable Securities, and (ii) each additional registration statement, if any, contemplated by Section 2, and including, in each case, the Prospectus, amendments and supplements to each such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

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Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

Securities Act” means the Securities Act of 1933, as amended.

Termination Date” shall mean February 4, 2021.

Trading Day” means any day on which the Common Stock is traded on The Nasdaq Global Select Market, or, if The Nasdaq Global Select Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded.

Transaction Documents” shall have the meaning set forth in the Purchase Agreement.

Underwritten Offering” means a registration in which Registrable Securities are sold to an underwriter for reoffering to the public.

2. Registration.

(a) At the written request of the Purchaser, at any time after the Permitted Request Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” in substantially the form attached hereto as Annex A (which may be modified to respond to comments, if any, provided by the Commission or at the written request of the Purchaser to address any modifications to the Plan of Distribution at the time that Purchaser issues a request for registration of the Registrable Securities in accordance with Section 2 hereof). The Company shall use its commercially reasonable efforts to cause a Registration Statement filed under this Agreement to be declared effective under the Securities Act promptly but, in any event, no later than the Effectiveness Date for such Registration Statement, and shall, subject to Section 7(d) hereof, use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act until the earlier of (i) the date that is three years after the effectiveness of the Registration Statement and (ii) the date on which all securities under such Registration Statement have ceased to be Registrable Securities (the “Effectiveness Period”). Notwithstanding the foregoing, the Company shall be entitled to suspend the effectiveness of the Registration Statement at any time prior to the expiration of the Effectiveness Period for up to an aggregate of 30 consecutive Trading Days or an aggregate of 60 Trading Days (which need not be consecutive) in any given 360-day period, if the Company determines (and the Chief Executive Officer or Chief Financial Officer of the Company certifies in writing to the Purchaser) that the continued effectiveness of the Registration Statement during the applicable period will

 

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be materially detrimental to the Company. In the event of any suspension as aforesaid, the Effectiveness Period of the applicable Registration Statement will be extended by the number of Trading Days in the Effectiveness Period during which the Registration Statement was suspended. It is agreed and understood that the Company shall, from time to time, be obligated to file one or more additional Registration Statements to cover any Registrable Securities which are not registered for resale pursuant to a pre-existing Registration Statement. In connection with the written request of the Purchaser to the Company to prepare and file a Registration Statement, the Purchaser (or Holder(s), as applicable) shall, concurrently with such written request, deliver to the Company the completed Selling Stockholder Questionnaire in the form of Appendix II to the Purchase Agreement.

(b) Notwithstanding anything contained herein to the contrary, in the event that the Commission limits the amount of Registrable Securities that may be included and sold by Holders in any Registration Statement, including the Initial Registration Statement, pursuant to Rule 415 or any other basis, the Company may reduce the number of Registrable Securities included in such Registration Statement on behalf of the Holders in whole or in part (in case of an exclusion as to a portion of such Registrable Securities, such portion shall be allocated pro rata among such Holders first in proportion to the respective numbers of Registrable Securities represented by shares requested to be registered by each such Holder over the total amount of Registrable Securities represented by shares) (such Registrable Securities, the “Reduction Securities”). In such event, the Company shall give the Holders prompt notice of the number of such Reduction Securities excluded and the Company will not be liable for any damages under this Agreement in connection with the exclusion of such Reduction Securities. The Company shall use its commercially reasonable efforts at the first opportunity that is permitted by the Commission to register for resale the Reduction Securities. Such new Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Reduction Securities on Form S-3, in which case such registration shall be on another appropriate form for such purpose) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” in substantially the form attached hereto as Annex A (which may be modified to respond to comments, if any, provided by the Commission or at the written request of the Purchaser to address any modifications to the Plan of Distribution at the time that Purchaser issues a request for registration of the Registrable Securities in accordance with Section 2 hereof). The Company shall use its commercially reasonable efforts to cause each such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than the Effectiveness Date, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act during the entire Effectiveness Period, subject to Section 7(c) hereof. Notwithstanding the foregoing, the Company shall be entitled to suspend the effectiveness of such Registration Statement at any time prior to the expiration of the Effectiveness Period for an aggregate of no more than 30 consecutive Trading Days or an aggregate of 60 Trading Days (which need not be consecutive) in any given 360-day period.

 

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3. Registration Procedures.

In connection with the Company’s registration obligations hereunder, the Company shall:

(a) Not less than three Trading Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, furnish to the Holders copies of all such documents proposed to be filed (other than those incorporated by reference). Notwithstanding the foregoing, the Company shall not be required to furnish to the Holders any prospectus supplement being prepared and filed solely to name new or additional selling securityholders unless such Holders are named in such prospectus supplement. In addition, in the event that any Registration Statement is on Form S-1 (or other form which does not permit incorporation by reference), the Company shall not be required to furnish to the Holders any prospectus supplement containing information included in a report or proxy statement filed under the Exchange Act that would be incorporated by reference in such Registration Statement if such Registration Statement were on Form S-3 (or other form which permits incorporation by reference). The Company shall duly consider any comments made by Holders and received by the Company not later than two Trading Days prior to the filing of the Registration Statement, but shall not be required to accept any such comments to which it reasonably objects.

(b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to each Registration Statement or any amendment thereto; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities covered by each Registration Statement.

(c) Notify the Holders as promptly as reasonably possible (and, in the case of (i)(A) below, not less than three Trading Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day: (i)(A) when a Prospectus or any prospectus supplement (but only to the extent notice is required under Section 3(a) above) or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (in which case the Company shall, solely to the extent such comments relate to the Selling Stockholder or the Plan of Distribution, provide true and complete copies thereof and all written responses thereto to each of the Holders that pertain to the Holders as a Selling Stockholder; for purposes of clarity the Company shall have no obligation to provide any information that it reasonably believes would constitute material and non-public information); and (C) with respect to each Registration Statement or any post-effective amendment, when the same has been declared effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information that pertains to the Holders as selling stockholders or the Plan of Distribution; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the

 

35


initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included or incorporated by reference in a Registration Statement ineligible for inclusion or incorporation by reference therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, that any and all of such information shall remain confidential to each Holder until such information otherwise becomes public, unless disclosure by a Holder is required by law.

(d) Use its reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(e) Furnish to each Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent reasonably requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that the Company shall have no obligation to provide any document pursuant to this clause that is available on the EDGAR system.

(f) Promptly deliver to each Holder, without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. Subject to Section 7(c) hereof, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

(g) Prior to any public offering of Registrable Securities, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of those jurisdictions within the United States as any Holder reasonably requests in writing to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statements; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or subject the Company to any material tax in any such jurisdiction where it is not then so subject.

 

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(h) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates or book-entry statements representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statements, which certificates or book-entry statements shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request.

(i) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and any Affiliate thereof, the natural persons thereof that have voting and dispositive control over the shares and any other information with respect to such Holder as the Commission requests.

4. Holder’s Obligations. Each Holder agrees, by acquisition of the Registrable Securities, that no Holder shall be entitled to sell any of such Registrable Securities pursuant to a Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with all material information required to be set forth in the Purchaser Questionnaire to be delivered at the Closing and the Selling Stockholder Questionnaire to be delivered in accordance with Section 2 hereof. Any sale of any Registrable Securities by any Holder pursuant to a Prospectus delivered by such Holder shall constitute a representation and warranty by such Holder that the information regarding such Holder is as set forth in such Prospectus, and that such Prospectus does not as of the time of such sale contain any untrue statement of a material fact regarding such Holder or omit to state any material fact regarding such Holder necessary to make the statements in such Prospectus, in the light of the circumstances under which they were made, not misleading, solely to the extent such facts are based upon information regarding such Holder furnished in writing to the Company by such Holder for use in such Prospectus.

5. Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Principal Market on which the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) reasonable fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) reasonable fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation

 

37


of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders. To the extent that underwriting discounts and selling commissions are incurred in connection with the sale of Registrable Securities in an Underwritten Offering hereunder, such underwriting discounts and selling commissions shall be borne by the Holders of Registrable Securities sold pursuant to such Underwritten Offering, pro rata on the basis of the number of Registrable Securities sold on their behalf in such Underwritten Offering.

6. Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, partners, members, stockholders and employees of each Holder, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents, partners, members, stockholders and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose), or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (1) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing (in accordance with Section 7(g) below) that the Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice (as defined below) or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement.

 

38


(b) Indemnification by Holders. Each Holder shall, notwithstanding any termination of this Agreement, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents, partners, members, stockholders or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon: (x) for so long as the Company is not a eligible to use Form S-3 under the Securities Act for a primary offering in reliance on General Instruction I.B.1 of such form and the prospectus delivery requirements of the Securities Act apply to sales by such Holder, such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading to the extent, but only to the extent that, (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing (in accordance with Section 7(g) below) that the Prospectus is outdated or defective and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

 

39


An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party); provided, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties pursuant to this Section 6(c). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within 10 Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

(d) Contribution. If a claim for indemnification under Section 6(a) or 6(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 6(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

 

40


The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 6(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section 6 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

7. Miscellaneous.

(a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(b) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement.

(c) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of an any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

(d) Furnishing of Information. Each Holder shall furnish in writing to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably requested by the Company to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

 

41


(e) Amendments and Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Holder or Holders (as applicable) of no less than a majority of the then outstanding Registrable Securities. The Company shall provide prior notice to all Holders of any proposed waiver or amendment. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

(f) Termination of Registration Rights. For the avoidance of doubt, it is expressly agreed and understood that (i) in the event that there are no Registrable Securities outstanding as of a Filing Date, then the Company shall have no obligation to file, cause to be declared effective or to keep effective any Registration Statement hereunder (including any Registration Statement previously filed pursuant to this Agreement) and (ii) all registration rights granted to the Holders hereunder, shall terminate in their entirety effective on the first date on which there shall cease to be any Registrable Securities outstanding. If not previously terminated pursuant to the foregoing sentence, it is expressly agreed and understood that the registration rights granted to the Holder pursuant to this Agreement shall terminate as to the Holder in the event that the Holder fails to make a written request to the Company to register the Registrable Securities by the date that is two years following the Termination Date or, if earlier, such date that the Holders own in the aggregate less than 30% of the number of Registrable Securities that the Holders owned in the aggregate as of the date of the Closing (as adjusted for stock splits, combinations, dividends, recapitalizations and the like).

(g) Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be sent by confirmed facsimile or electronic mail, or mailed by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, and shall be deemed given when so sent in the case of facsimile or electronic mail transmission, or when so received in the case of mail or courier, and addressed as follows:

if to the Company, to:

Aimmune Therapeutics, Inc.

8000 Marine Blvd., Suite 300

Brisbane, California 94005

Attention: General Counsel

Facsimile: (650) 616-0075

E-Mail: GC@aimmune.com

 

42


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

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Attention: Patrick A. Pohlen and Miles P. Jennings

Facsimile: (650) 463-2600

E-Mail: [***]

              [***]

if to the Purchaser, to:

Nestle Health Science US Holdings, Inc.

900 Long Ridge Road, Building 2

Stamford, CT 06902

Attention: Andrew Glass

F: (480) 379-5510

E-Mail: [***]

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

Nestlé Health Science S.A.

Avenue Nestlé, 55

1800 Vevey

Switzerland

Attention: General Counsel

Facsimile: 011-41-21-924-2875

with a further copy (which shall not constitute notice) to:

Mayer Brown LLP

1221 Avenue of the Americas

New York, NY 10020

Attention: David A. Carpenter

Facsimile: (212) 849-5795

E-Mail: [***]

if to any other Person who is then the registered Holder, to the address of such Holder as it appears in the stock transfer books of the Company,

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. Each Holder may assign its respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement; provided that, such transferee or assignee agrees in writing to be bound by the terms of the Standstill Agreement (as such term is defined in the Purchase Agreement) if the Standstill Agreement remains in effect as of the date of the transfer.

 

43


(i) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.

(j) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement shall be commenced exclusively in the state and federal courts sitting in the City and County of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City and County of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

(k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

(l) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(m) Use of Terms. The parties agree and acknowledge that when, in this Agreement, the Company is required to use its reasonable best efforts to perform any covenant under this Agreement, such requirement shall not obligate the Company, in the reasonable judgment of the disinterested members of its Board of Directors, to perform any act that will have a material adverse effect on the Company.

 

44


(n) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(o) Entire Agreement. This Agreement and the other Transaction Documents (as such term is defined in the Purchase Agreement) contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto. Upon the effectiveness of this Agreement, except under the circumstances contemplated by the last sentence of Section 7(f), the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Agreement, and shall be of no further force or effect.

[Signature pages follow]

 

45


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

 

AIMMUNE THERAPEUTICS, INC.
By:   /s/ Jayson Dallas
Name:   Jayson Dallas, M.D.
Title:   President and Chief Executive Officer

Signature Pages to Registration Rights Agreement


NESTLÉ HEALTH SCIENCE US HOLDINGS, INC.
By:   /s/ James Pepin
Name:   James Pepin
Title:   President
Address:
900 Long Ridge Road, Building 2
Stamford, CT 06902
Attention: Andrew Glass
F: (480) 379-5510
E-Mail: [***]

Signature Pages to Registration Rights Agreement


ANNEX A

PLAN OF DISTRIBUTION

The selling stockholders and any of their pledgees, donees, transferees, assignees or other successors-in-interest may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. The selling stockholders may use one or more of the following methods when disposing of the shares or interests therein:

 

   

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

   

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

   

through brokers, dealers or underwriters that may act solely as agents;

 

   

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

   

an exchange distribution in accordance with the rules of the applicable exchange;

 

   

privately negotiated transactions;

 

   

through the writing or settlement of options or other hedging transactions entered into after the effective date of the registration statement of which this prospectus is a part, whether through an options exchange or otherwise;

 

   

broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

 

   

a combination of any such methods of disposition; and

 

   

any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the Securities Act of 1933, as amended, or Securities Act, if available, rather than under this prospectus.

Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.


The selling stockholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of common stock from time to time under this prospectus, or under a supplement or amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.

Upon being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, we will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon being notified in writing by a selling stockholder that a donee or pledge intends to sell more than 500 shares of common stock, we will file a supplement to this prospectus if then required in accordance with applicable securities law.

The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of the shares of common stock or interests in shares of common stock, the selling stockholders may enter into hedging transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of common stock short after the effective date of the registration statement of which this prospectus is a part and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The selling stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The maximum commission or discount to be received by any member of the Financial Industry Regulatory Authority (FINRA) or independent broker-dealer will not be greater than 8% of the initial gross proceeds from the sale of any security being sold.


We have advised the selling stockholders that they are required to comply with Regulation M promulgated under the Securities Exchange Act of 1934, as amended, during such time as they may be engaged in a distribution of the shares. The foregoing may affect the marketability of the common stock.

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering.

We are required to pay all fees and expenses incident to the registration of the shares. We have agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act or otherwise.

We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (a) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (b) the date on which the shares of common stock covered by this prospectus may be sold or transferred by non-affiliates without any volume limitations or pursuant to Rule 144 of the Securities Act.


APPENDIX IV

Standstill Agreement


Nestle Health Science US Holdings, Inc.

900 Long Ridge Road, Building 2

Stamford, CT 06902

February 4, 2020

Aimmune Therapeutics, Inc.

8000 Marine Blvd., Suite 300

Brisbane, California 94005

Attention: Chief Executive Officer

 

  Re:

Amended and Restated Standstill Agreement

Ladies and Gentlemen:

In connection with the acquisition of Common Stock, par value $0.0001 per share (the “Common Stock”), and Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) of Aimmune Therapeutics, Inc., a Delaware corporation (the “Company”), by Nestle Health Science US Holdings, Inc., a Delaware corporation (the “Purchaser”), pursuant to the Securities Purchase Agreement, dated as of February 4, 2020, between the Company and the Purchaser (the “Purchase Agreement”), the Company and the Purchaser desire to amend and restate that certain amended and restated standstill agreement, dated November 11, 2018 (the “Prior Agreement”) to accept the rights and covenants hereof in lieu of their rights and covenants in the Prior Agreement. In connection therewith, the Purchaser hereby delivers this amended and restated standstill agreement (this “Standstill Agreement”) to the Company in accordance with the terms of the Purchase Agreement. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Purchase Agreement.

In consideration of the mutual covenants contained in the Purchase Agreement and this Standstill Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

1. Standstill. During the period beginning on the date hereof and ending at 11:59 pm Pacific Time on November 11, 2020 (the “Termination Date”), neither the Purchaser nor any of its Affiliates (as defined below) shall, directly or indirectly, without the prior written consent of a majority of the members of the Board of Directors of the Company (the “Board”) who are not affiliated with the Purchaser:

 

  a.

effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause or in any way advise, assist, knowingly facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect, or announce any intention to effect or cause:

 

  i.

any acquisition, or obtaining any economic interest in, any right to direct the voting or disposition of, or any other right with respect to, any securities


  of the Company or any of its subsidiaries (or any rights, options or other securities convertible into or exercisable or exchangeable for such securities or any obligations measured by the price or value of any securities of the Company or any of its subsidiaries, including without limitation any swaps or other derivative arrangements (“Derivative Securities”)), in each case, whether or not any of the foregoing may be acquired or obtained immediately or only after the passage of time or upon the satisfaction of one or more conditions pursuant to any agreement, arrangement or understanding, without the prior consent of the Board;

 

  ii.

any tender or exchange offer, merger, consolidation, business combination or acquisition or disposition of assets of the Company or any of its subsidiaries;

 

  iii.

any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries; or

 

  iv.

any “solicitation” of “proxies” (as such terms are used in Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or consents to vote any voting securities of the Company, or become a “participant” in any “election contest” (as such terms are defined in Rule 14a-11 of the Exchange Act) or propose, or solicit stockholders of the Company for the approval of, any stockholder proposals with respect to the Company or seek to advise or influence any person with respect to the voting of any voting securities of the Company;

 

  b.

form, join or in any way participate in a “group” (as defined under the securities laws) with respect to any securities of the Company or any securities convertible into Common Stock or any other voting securities of the Company or otherwise act in concert with any person in respect of any such securities;

 

  c.

otherwise act, alone or in concert with others, to seek to control or influence the management, Board or policies of the Company;

 

  d.

take any action which would reasonably be expected to result in the Company or its representatives being obligated to make a public announcement regarding any of the types of matters set forth in this Section 1;

 

  e.

enter into any discussions or arrangements with any third party with respect to any of the foregoing; or

 

  f.

publicly disclose any intention, plan or arrangement regarding any of the matters referred to in this Section 1;


provided that, the foregoing restrictions shall not apply after (A) a public announcement by the Company of the initiation of any merger, consolidation, acquisition, scheme, business combination or other extraordinary transaction in which the Company or any of its subsidiaries is a constituent corporation or party and following consummation of such transaction, either (i) substantially all of the persons or entities who, immediately prior to such transaction, had beneficial ownership of 50% or more of the voting power of the Company would not continue to beneficially own at least 50% of the voting power of the combined entity and would not have the ability to elect a majority of the directors of the combined entity or (ii) all or a substantial part of the assets of the Company and its subsidiaries would be transferred to a third party (a “Business Combination”) or (B) the submission of any bona fide offer by any third party to acquire all or a substantial portion of the securities or assets of the Company or its subsidiaries (which for the avoidance of doubt shall exclude any offer with respect to which the Company elects not to engage in substantive negotiations), prompt notice of which shall be provided to the Purchaser; provided, further, that nothing in this Section 1 is intended to (X) restrict the Purchaser’s right to vote its shares of Common Stock purchased pursuant to the Purchase Agreement (or any prior purchase agreement entered into with the Company) or shares of Common Stock issuable upon conversion of the Series A Preferred Stock purchased pursuant to the Purchase Agreement or otherwise in its discretion on matters brought to a vote of the stockholders of the Company, (Y) restrict the activities of the Purchaser or the discussions among the representatives of the Company and the Purchaser, in each case, as contemplated by that certain Amended and Restated Collaboration Agreement, dated the date hereof, by and among the Company and Société des Produits Nestlé S.A. (the successor to Nestec Ltd.). or (Z) restrict the Purchaser’s or any of its Affiliates’ right to acquire any rights, title or interest in any options or other securities of the Company granted to members of the Board who are affiliated with the Purchaser.

For purposes of this letter agreement, (i) “Affiliates” shall mean (1) any person, corporation, partnership, trust, limited liability company or other entity, whether existing now or in the future, that, directly or indirectly, controls, is controlled by or is under common control with, the Purchaser and (ii) “Beneficially Owns” (including the terms “Beneficial Ownership”, “Beneficially Owned” or “Beneficially Owning”) shall mean beneficial ownership within the meaning of Rule 13d-3 under the Exchange Act.

2. No Effect. Notwithstanding any of the foregoing, the provisions set forth in Section 1 shall in no way limit (i) the ability of any individual who is serving as a director of the Company to take any actions (or to refrain from taking any actions) in his/her capacity as a director of the Company or (ii) the ability of the Purchaser or its Affiliates to initiate and engage in confidential discussions with the Board regarding the transactions referred to in clauses (a)(i)-(iii) of Section 1.

3. Market Standoff. During the period beginning on the date hereof and ending at 11:59 pm Pacific Time on November 11, 2021 (the “Market Standoff Termination Date”), neither the Purchaser nor any of its Affiliates shall, directly or indirectly, without the prior written consent of a majority of the members of the Board who are not affiliated with the Purchaser:

 

  a.

sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer


  or dispose of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (including, without limitation, the Series A Preferred Stock), whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”); or

 

  b.

enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities (a “Hedging Transaction”), whether any such swap or transaction is to be settled by delivery of Common Stock or other securities (including, without limitation, the Series A Preferred Stock), in cash or otherwise; or

 

  c.

publicly announce any intention to do any of the foregoing.

4. Limitation on Sales. Notwithstanding anything herein to the contrary, during the period beginning on the date hereof and ending on the Market Standoff Termination Date, no sales of Common Stock or Series A Preferred Stock (or Common Stock issuable upon conversion of the Series A Preferred Stock) Beneficially Owned by the Purchaser or any of its Affiliates shall be made to DBV Technologies SA pursuant to a private sale or other exemption from the registration requirements of the Securities Act of 1933, as amended, without the prior written consent of the Company.

5. Change of Control Transaction. In connection with any Change of Control Transaction approved by the Board during the period beginning on the date hereof and ending on the Market Standoff Termination Date, the Purchaser on behalf of itself and its Affiliates agrees not to seek an appraisal remedy under Section 262 of the Delaware General Corporation Law with respect to any shares of Common Stock held by it as of the date of the consummation of the Change of Control Transaction. For purposes hereof, “Change of Control Transaction” shall mean any transaction (or series of related transactions) after the date hereof (including the consummation of a scheme of arrangement/amalgamation, merger, de-merger, share purchase, recapitalization, redemption, issuance of capital stock, consolidation, tender offer, combination of shares, reorganization or otherwise) pursuant to which (a) a person (or group of persons) Beneficially Owns immediately upon completion of such transaction (or series of related transactions) securities representing more than fifty percent (50%) of the combined voting power for the election of directors of the outstanding voting securities of the entity surviving or resulting from such transaction (or series of related transactions) or (b) the Company sells or otherwise disposes of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis to a person (or group of persons).

6. Representations. Each party represents to the other that: (a) this Letter Agreement has been duly authorized by all necessary corporate or partnership action, as the case may be; and (b) this letter agreement is a valid and binding agreement of such party, enforceable against it in accordance with its terms, subject to the Enforceability Limitations. The Company represents that this Letter Agreement was approved by the vote a majority of the members of the Board who are not affiliated with the Purchaser.


7. Specific Enforcement; Legal Effect. The parties hereto agree that any breach of this Letter Agreement would result in irreparable injury to other party and that money damages would not be an adequate remedy for such breach. Accordingly, without prejudice to the rights and remedies otherwise available under applicable law, either party shall be entitled to specific performance and equitable relief by way of injunction or otherwise if the other party breaches or threatens to breach any of the provisions of this letter agreement. It is further understood and agreed that no failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. This Letter Agreement contains the entire agreement between the parties hereto concerning the matters addressed herein. No modification of this Letter Agreement or waiver of the terms and conditions hereof shall be binding upon either party hereto, unless approved in writing by each such party; provided, however, that no waiver or amendment shall be effective as against the Company unless such waiver or amendment is approved in writing by the vote a majority of the members of the Board who are not affiliated with the Purchaser. This Letter Agreement shall be governed by and construed in accordance with the law of the State of New York without regard to principles of conflicts of law that would cause the application of the laws of any jurisdiction other than the State of New York. Any dispute arise under or in connection with this Agreement shall be resolved in accordance with the dispute resolution procedures set out in Section 13.6 of the Purchase Agreement, which procedures are incorporated herein by this reference.

8. Counterparts. This Standstill Agreement may be executed and delivered (including by facsimile or portable document format (“pdf”) in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.

9. Entire Agreement. This Standstill Agreement and the other Transaction Documents contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto. Upon the effectiveness of this Standstill Agreement, the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Standstill Agreement, and shall be of no further force or effect.

[Remainder of page left blank intentionally.]


IN WITNESS WHEREOF, the parties hereto have executed this Standstill Agreement effective as of the Closing.

 

NESTLE HEALTH SCIENCE US HOLDINGS, INC.
By:   /s/ James Pepin
Name:   James Pepin
Title:   President

 

Confirmed and Agreed:
AIMMUNE THERAPEUTICS, INC.
By:   /s/ Jayson Dallas
Name:   Jayson Dallas, M.D.
Title:   President and Chief Executive Officer


APPENDIX V

Collaboration Agreement


[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

 

 

AMENDED AND RESTATED

STRATEGIC COLLABORATION AGREEMENT

between

SOCIÉTÉ DES PRODUITS NESTLÉ S.A.

and

AIMMUNE THERAPEUTICS, INC.

 

 


ARTICLE 1

  

DEFINITIONS

     2  

1.1

   Definitions      2  

ARTICLE 2

  

OBJECTIVES; COLLABORATION

     7  

2.1

   Objectives      7  

2.2

   Scope of Collaboration      7  

2.3

   Formation and Composition of the Strategic Collaboration Committee      7  

2.4

   Role of Strategic Collaboration Committee      8  

2.5

   Information Sharing      8  

2.6

   Opportunities      8  

2.7

   Meetings of SCC      9  

ARTICLE 3

  

LICENSE OPPORTUNITIES

     9  

3.1

   Proposal by NHSc to Explore Combination Therapy      9  

ARTICLE 4

  

REPRESENTATIONS AND WARRANTIES

     10  

4.1

   Organization      10  

4.2

   Authorization      10  

4.3

   Binding Agreement      10  

4.4

   No Conflict      11  

4.5

   No Consents      11  

ARTICLE 5

  

INTELLECTUAL PROPERTY

     11  

5.1

   Ownership of Intellectual Property      11  

5.2

   New Opportunities Proposed by NHSc      11  

5.3

   No License; Implied Rights      11  

ARTICLE 6

  

CONFIDENTIAL INFORMATION

     12  

6.1

   Nondisclosure      12  

6.2

   Authorized Disclosure      12  

6.3

   Terms of this Agreement      13  

6.4

   Securities Filings      13  

6.5

   Expiration or Termination      13  

ARTICLE 7

  

ADDITIONAL AGREEMENTS

     14  

7.1

   Non-Competition      14  

7.2

   Non-Solicitation of Employees      15  

7.3

   Director Nomination      15  

ARTICLE 8

  

TERM AND TERMINATION

     16  

8.1

   Effectiveness; Term      16  

8.2

   Termination Rights      16  

8.3

   Effect of Termination      16  

 

i


ARTICLE 9

  

MISCELLANEOUS

     16  

9.1

   Expenses      16  

9.2

   Severability      17  

9.3

   Notices      17  

9.4

   Assignment      18  

9.5

   Further Assurances      18  

9.6

   Waivers and Modifications      18  

9.7

   Choice of Law      18  

9.8

   Injunctive Relief      18  

9.9

   Publicity      19  

9.10

   Relationship of the Parties      19  

9.11

   Entire Agreement      19  

9.12

   Counterparts      19  

9.13

   Exports      19  

9.14

   Amendments      20  

9.15

   Interpretation      20  

 

Exhibits

    
Exhibit A    -         Development Programs

 

ii


AMENDED AND RESTATED STRATEGIC COLLABORATION AGREEMENT

This AMENDED AND RESTATED STRATEGIC COLLABORATION AGREEMENT (this “Agreement”) is made as of February 4, 2020 (the “Effective Date”), by and between Société des Produits Nestlé S.A., a company organized and existing under the laws of Switzerland and the successor to Nestec Ltd., having an office located at Avenue Nestlé 55, 1800 Vevey, Switzerland (“NHSc”), and Aimmune Therapeutics, Inc., a corporation incorporated and existing under the laws of the State of Delaware, having an office located at 8000 Marina Boulevard, Suite 300, Brisbane, CA 94005, USA (“Aimmune”). NHSc and Aimmune are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, Aimmune is engaged in the development of immunotherapeutic products for the treatment of food allergies;

WHEREAS, NHSc and certain of its Affiliates are engaged in the research, development and commercialization of food products for the management of food allergies and has expertise in regulatory and market access matters relevant to such products;

WHEREAS, the Parties entered into that certain Strategic Collaboration Agreement (as amended and/or restated, the “Original Agreement”), effective as of November 3, 2016 (the “Original Effective Date”), under which the Parties began a collaboration in connection with the development of Aimmune’s products, which was subsequently extended on November 11, 2018 (the “Extension Date”); and

WHEREAS, the Parties wish to amend and restate the Original Agreement with effect from the Effective Date of this Agreement.

NOW, THEREFORE in consideration of the foregoing and the mutual agreements set forth below, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions. The terms in this Agreement with initial letters capitalized, whether used in the singular or the plural, shall have the respective meanings either set forth below or another part of this Agreement.

Acceptance Notice” has the meaning set forth in Section 2.6.1.

Affiliate” of a Party means an entity that (directly or indirectly) is controlled by, controls, or is under common control with such Party where control means the direct or indirect ownership of voting securities entitled to cast at least fifty percent (50%) of the votes in the election of directors, or such other relationship as results in the power to control the management, business, assets and affairs of an entity.

 

2


Aimmune Product” means a drug or biologic product for use as OIT for the treatment of food allergies that is being researched or developed by Aimmune or its Affiliates from time to time during the Term.

Aimmune-Owned Inventions and IP has the meaning set forth in Section 5.1.

AR101” means Aimmune’s proprietary OIT product for the treatment of peanut allergy known as AR101.

BLA” means a Biologics License Application, as defined in the United States Public Health Service Act (42 U.S.C. § 262), and applicable regulations promulgated thereunder by the FDA.

Business Day” means a day other than Saturday, Sunday or any day on which commercial banks located in San Francisco, California or Geneva, Switzerland, are authorized or obligated by applicable Law to close.

Calendar Quarter” means, with respect to any given Calendar Year, the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 or December 31.

Change of Control” means, with respect to a Party, any of the following events: (a) any Third Party (or group of Third Parties acting in concert) acquires, directly or indirectly, shares of such Party representing at least a majority of the voting power (where voting refers to being entitled to vote for the election of directors) then outstanding of such Party; (b) such Party consolidates with or merges into another corporation or entity which is a Third Party, or any corporation or entity which is a Third Party consolidates with or merges into such Party, in either event pursuant to a transaction in which at least a majority of the voting power of the acquiring or resulting entity outstanding immediately after such consolidation or merger is not held by the holders of the outstanding voting power of such Party immediately preceding such consolidation or merger; or (c) such Party sells, conveys, transfers and/or exclusively licenses all or substantially all of its assets to a Third Party.

Closing” has the meaning set forth in the Purchase Agreement.

Combination Discussion Period has the meaning set forth in Section 3.1.

Combination Proposal Period has the meaning set forth in Section 3.1.

Competitive OIT Product” has the meaning set forth in Section 7.1.1.

Confidential Information” means any and all technical, business or other Information, of a Party or its Affiliates provided orally, visually, in writing, graphically, electronically, or in another form by or on behalf of such Party or its Affiliates to the other Party or its Affiliates in connection with this Agreement, including the terms of this Agreement, any Aimmune Product, any exploitation of any Aimmune Product, any know-how with respect thereto developed by or on behalf of the disclosing Party or its Affiliates, or the scientific, regulatory or business affairs or other activities of the disclosing Party or its Affiliates.

 

3


Controlled” or “Control”, when used in reference to any intellectual property, intellectual property right, material, know-how or information, means the legal authority or right of a Party hereto (or its Affiliates) to: (i) grant, or procure the grant of, a license or sublicense, to the extent provided for herein, under or to specified intellectual property, intellectual property rights, materials, know-how or information to the other Party; or (ii) in relation to materials, know-how and information only, disclose or provide access to, to the extent provided for herein, such material, know-how or information to the other Party, and in each case without (1) breaching the terms of any agreement with a Third Party, or (2) misappropriating the material, know-how or information of a Third Party.

Development” means non-clinical and clinical drug development activities reasonably related to the development and submission of information to a Regulatory Authority or otherwise to the research, identification, testing and validation of a therapeutic agent, including, without limitation, toxicology, pharmacology and other discovery and pre-clinical efforts, test method development and stability testing, manufacturing process and chemistry, manufacturing and controls development, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, clinical trials (including, without limitation, pre- and post-approval studies), whether for purposes of label expansion or otherwise. Development shall include post-approval Development activities. When used as a verb, “Develop” means to engage in Development.

Development Program” means Aimmune’s and/or its Affiliates’ activities directed towards the Development of a specific Aimmune Product for the treatment of allergies to one (1) or more particular types of food, including [***] and [***]. The Development Programs as of the date of this Agreement are described on Exhibit A hereto.

Disclosing Party” has the meaning set forth in Section 6.1.

Effective Date” means the effective date of this Agreement as set forth in the preamble hereto.

European Union” means, at any given time, the then-current member states of the European Union.

FD&C Act” means the United States Food, Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and modifications thereto).

Governmental Authority” means any multi-national, federal, state, local, municipal, provincial or other governmental authority of any nature (including any governmental division, prefecture, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).

In-Scope Programs” has the meaning set forth in Section 2.2.

 

4


IND” means an Investigational New Drug Application (as such term is defined in the FD&C Act and the regulations promulgated thereunder), Clinical Trial Authorisation (as such term is defined in the Directive 2001/20/EC, as amended), clinical trial exemption, or similar application or submission for approval to conduct human clinical investigations that is filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.

Information” means all technical, scientific and other know-how and information, inventions, discoveries, trade secrets, knowledge, technology, means, methods, processes, formulations, practices, formulae, instructions, skills, techniques, procedures, experiences, expressed ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results, materials (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical), pre-clinical, clinical, safety, manufacturing and quality control data and information (including study designs and protocols) and assays and biological methodology, in each case, whether or not confidential, proprietary or patentable and in written, oral, electronic or any other form now known or hereafter developed.

Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision.

Major Territory” means any of (i) [***], (ii) [***], (iii) [***], and (iv) [***].

NDA” means a New Drug Application, as defined in the FD&C Act.

New Opportunities” has the meaning set forth in Section 2.6.

OIT means a therapy involving the oral delivery of quantities of a naturally-occurring allergen, whether obtained from a natural source or generated by synthetic means, to a patient in order to desensitize the patient to such allergen.

OIT Allergy Company” has the meaning set forth in Section 7.1.2.

OIT Combination has the meaning set forth in Section 3.1.

OIT Combination Opportunity has the meaning set forth in Section 3.1.

OIT Combination Constituent” means any drug or biologic product (i.e., any product which, if it were marketed in the United States, must be approved by the FDA pursuant to a BLA or NDA), such as but not limited to a probiotic or other microbiome-based product, that can be combined with an OIT product and that is intended to improve the efficacy or safety of such OIT product for the treatment of one (1) or more food allergies.

Pass Notice” has the meaning set forth in Section 2.6.1.

Patents” means (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents or patent applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, nonprovisionals,

 

5


converted provisionals and requests for continued examinations, (c) any and all patents that have issued or in the future issue from the foregoing patent applications (i.e., those set forth in subsections (a) and (b)), including utility models, innovation patents, petty patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, and all revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications (i.e., those set forth in subsections (a), (b) and (c)) and (e) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents.

Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, foundation, joint venture or other similar entity, organization or combination thereof, including a government or political subdivision, department, or agency.

Prohibited Development” has the meaning set forth in Section 7.1.1.

Prohibited Drug Research” has the meaning set forth in Section 7.1.1.

Purchase Agreement” means the Securities Purchase Agreement, dated the date hereof, by and between Aimmune and Nestlé Health Science US Holdings, Inc.

Receiving Party” has the meaning set forth in Section 6.1.

Single Product Asset Sale” means the sale, transfer, or license to a Third Party by Aimmune of a single Aimmune Product or Development Program that could reasonably be considered to constitute the sale, transfer or exclusive license of all or substantially all of Aimmune’s assets such that the transaction would be considered a Change of Control under clause (c) of the definition.

Strategic Collaboration Committee” or “SCC” has the meaning set forth in Section 2.3.

Term” has the meaning set forth in Section 8.1.

Third Party” means any entity other than NHSc, Aimmune and their respective Affiliates.

Transfer” means the sale, transfer, or license to a Third Party by Aimmune, or grant to a Third Party by Aimmune of any option to acquire or license, any commercial rights to an Aimmune Product or Development Program; provided, however, for purposes of clarity, other than a Single Product Asset Sale, a Change of Control shall not constitute or be deemed to constitute a Transfer. “Transfers,” “Transferred” and “Transferring” have correlative meanings.

 

6


United States” or “U.S.” means the United States of America, including its territories and possessions.

ARTICLE 2

OBJECTIVES; COLLABORATION

2.1 Objectives. This Agreement sets forth the terms on which the Parties will collaborate with one another and share information on a confidential basis to support Aimmune’s Development Programs to the extent they are In-Scope Programs. Such collaboration and information sharing shall be achieved primarily through the Strategic Collaboration Committee, in accordance with this Article 2.

2.2 Scope of Collaboration. This Agreement and the collaboration contemplated hereby shall relate to all of Aimmune’s Development Programs, including those existing as of the Original Effective Date and those undertaken from time-to-time during the Term, and commercialization plans for AR101; provided, however, that (i) in the event that Aimmune effects a Transfer in respect of an Aimmune Product under Development pursuant to a particular Development Program in all Major Territories, such Development Program shall automatically be excluded from the scope of this Agreement and the collaboration contemplated hereunder, (ii) in the event that Aimmune effects a Transfer in respect of an Aimmune Product under Development pursuant to a particular Development Program in one (1) or more, but not all, Major Territories, then the scope of this Agreement and the collaboration contemplated hereunder shall automatically be adjusted to exclude such Development Program solely in respect of such Major Territory(ies) in respect of which Aimmune has effected such Transfer in respect of such Aimmune Product, and (iii) in the event Aimmune effects a Transfer in respect of the commercialization of AR101 in one (1) or more countries, then the scope of this Agreement and the collaboration contemplated hereunder shall automatically be adjusted to exclude the country(ies) in respect of which Aimmune has effected such Transfer in respect of such Aimmune Product. Aimmune shall disclose to NHSc each new Development Program upon Aimmune’s decision to commence such Development Program and such new Development Program shall automatically be included within the scope of this Agreement and the collaboration contemplated hereby. All Development Programs or parts thereof, as well as commercialization plans for AR101 that are conducted during the Term, in each case that are within the scope of this Agreement at a particular time during the Term, in accordance with this Section 2.2, are referred to herein as the “In-Scope Programs”. For clarity, In-Scope Programs shall not include any products or programs of any counterparty in a Change of Control of Aimmune that were not Aimmune Products or Development Programs immediately preceding the closing of the relevant Change of Control.

2.3 Formation and Composition of the Strategic Collaboration Committee. The governing body for matters within the scope of this Agreement shall be the “Strategic Collaboration Committee” or “SCC”. The SCC shall be comprised of three (3) to five (5) representatives of each Party. The initial members of the SCC shall be:

 

From Aimmune

   From NHSc

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

 

7


Either Party may replace one (1) or more of its SCC members from time to time with the prior written consent of the other Party, not to be unreasonably withheld, delayed or conditioned. Any member of the SCC may designate a substitute to attend and perform the functions of that member at any meeting of the SCC, provided that the other Party has provided its prior written consent to such substitute, not to be unreasonably withheld, delayed or conditioned. For clarity, during the Term, the Parties shall consider whether to include alternative members of the SCC having expertise in areas relevant to the collaboration contemplated hereby at such time.

2.4 Role of Strategic Collaboration Committee. The SCC shall serve as a forum for the Parties, through their SCC members, to share information and discuss the In-Scope Programs, including with respect to commercialization plans for AR101. The SCC shall have no decision-making role and neither the SCC nor the SCC members shall have the capacity to bind either Party in any way. Any advice provided by NHSc’s SCC members shall be non-binding in all respects.

2.5 Information Sharing. At each meeting of the SCC, Aimmune’s representatives shall provide (i) an update on material Development activities in respect of In-Scope Programs, including with respect to material results or data from in vitro and in vivo testing, regulatory developments and strategies, manufacturing activities and commercial plans, and (ii) an overview of Aimmune’s future plans in respect of the In-Scope Programs. All such information provided by Aimmune shall be Confidential Information of Aimmune, including with respect to commercialization plans for AR101, provided that in no event shall Aimmune be required to share any information that is subject to any confidentiality obligations to Third Parties with respect to the In-Scope Programs. NHSc’s representatives may, but shall not be obligated to, disclose non-public information of NHSc or its Affiliates to Aimmune’s SCC members as further described in Section 2.6. All such information disclosed by NHSc shall be Confidential Information of NHSc.

2.6 Opportunities. Through the SCC, either Party may, but would not be obligated to, share opportunities (excluding Development Programs, which Aimmune is obligated to disclose pursuant to Section 2.2) to apply innovative technologies for use in, or in conjunction with, OIT for the treatment of food allergies or food intolerance (“New Opportunities”), as set forth in Sections 2.6.1 and 2.6.2.

2.6.1 If either Party wishes to share a New Opportunity with the other Party, it shall first provide to the other Party a written, high level description of the nature of the New Opportunity, to allow the other Party to determine whether it wishes to engage in a detailed discussion of such New Opportunity pursuant to this Agreement. A copy of such description shall be provided concurrently to the other Party’s general counsel as provided in Section 9.3. The Party receiving such high level description shall respond in writing within fifteen (15) days,

 

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or such longer period as the Parties may agree to in writing, whether it wishes to engage in a detailed discussion of such New Opportunity (an “Acceptance Notice”) or whether it declines to engage in such a detailed discussion (a “Pass Notice”). If either the receiving Party provides a Pass Notice, or the receiving Party does not respond in writing to such high level description of such New Opportunity within such period, then the Party wishing to share such New Opportunity shall not provide any further information to the receiving Party with respect to such New Opportunity. If the receiving Party delivers an Acceptance Notice, then the Parties, through the SCC, shall be free to discuss the New Opportunity, subject to the terms of Article 5 and Article 6, or subject to such alternative or modified terms relating to intellectual property and/or Confidential Information as the Parties may have agreed to in writing prior to the receiving Party’s delivery of such Acceptance Notice.

2.6.2 For the sake of clarity, Information disclosed by a Party in respect of any New Opportunity shall be Confidential Information of such Party (subject to the exceptions set forth in Section 6.1.1). Neither Party shall obtain any intellectual property or other rights in any Information so disclosed by the other Party with respect to such New Opportunity or in respect of such New Opportunity, unless and until the Parties enter into a separate written agreement in respect thereof.

2.7 Meetings of SCC. The SCC will meet at least once per Calendar Quarter, or more frequently, if agreed by the SCC. The location of regularly scheduled meetings shall alternate between the offices of the Parties unless otherwise agreed by the SCC. Meetings of the SCC may also be held telephonically, by video conference or by any other media agreed to by the SCC. Members of the SCC shall have the right to participate in meetings by telephone. Each Party shall be responsible for expenses incurred by its employees and its members of the SCC in attending or otherwise participating in SCC meetings, including travel and related costs. Either Party may invite additional representatives of the Party who have relevant expertise to attend SCC meetings when appropriate for the issues being addressed at the meeting with five (5) Business Days’ prior notice to the other Party’s SCC representatives, provided that any such additional representatives shall be bound by obligations of confidentiality at least as stringent as those set forth in Section 6 and obligations with respect to Information arising in the course of activities under this Agreement consistent with those set forth in Section 5, and further provided that any such additional representatives shall be subject to the other Party’s prior written approval.

ARTICLE 3

LICENSE OPPORTUNITIES

3.1 Proposal by NHSc to Explore Combination Therapy. If (i) NHSc or its Affiliate possesses any commercial rights (whether by ownership, license or an option or similar right) to an OIT Combination Constituent, and (ii) NHSc’s or its Affiliate’s senior management has affirmatively determined to pursue Development (including research) of a combination of such OIT Combination Constituent with an OIT drug or biologic (an “OIT Combination”), then NHSc shall so notify Aimmune in writing. Such notice shall identify the OIT Combination Constituent that NHSc is contemplating for an OIT Combination, and the general nature of the activities that NHSc proposes to conduct, with respect to such OIT Combination, including the applicable geographies (collectively, in each case, the “OIT Combination Opportunity”).

 

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Within [***] ([***]) days of its receipt of such notice (the “Combination Proposal Period”), Aimmune shall have the right, in its sole discretion, to notify NHSc in writing that it wishes to negotiate an agreement with NHSc in respect of such OIT Combination Opportunity. In the event Aimmune so makes such an election during the Combination Proposal Period, the Parties shall negotiate exclusively and in good faith for a period of three (3) months or such longer period as the Parties may mutually agree upon (as applicable, the “Combination Discussion Period”) the terms of a definitive agreement in respect of such OIT Combination Opportunity. During the Combination Proposal Period and, if applicable, the Combination Discussion Period, NHSc shall not solicit from, discuss with, or enter into any agreement in respect of, any OIT Combination Opportunity with any Third Party. If the Parties have not entered into a definitive agreement governing the OIT Combination Opportunity as of the end of the Combination Discussion Period, NHSc shall be free to partner or collaborate with a Third Party with respect to such OIT Combination Opportunity, including to modify the scope or other terms of the OIT Combination Opportunity in connection with any such transaction with a Third Party. To the extent that the Term of this Agreement expires (and is not terminated pursuant to Section 9.2), this Section 3.1 shall survive and continue in accordance with its terms until the end of any then-ongoing Combination Proposal Period or any then-ongoing Combination Discussion Period, and any Combination Discussion Period resulting from such Combination Proposal Period. The Parties agree and acknowledge that the OIT Combination Constituent that is the subject of any OIT Combination Opportunity may be part of a licensing, collaboration or other transaction between NHSc or is Affiliate and one (1) or more Third Parties and that such Third Parties may be involved in any such discussions contemplated in this Section 3.1.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

Aimmune and NHSc each represents and warrants to the other, as of the Original Effective Date, as follows:

4.1 Organization. It is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver, and perform this Agreement.

4.2 Authorization. The execution and delivery of this Agreement and the performance by it of its obligations contemplated hereby have been duly authorized by all necessary corporate action, and do not violate (i) such Party’s charter documents, bylaws, or other organizational documents, (ii) any agreement, instrument, or contractual obligation to which such Party is bound, (iii) any requirement of any applicable Law, or (iv) any order, writ, judgment, injunction, decree, determination, or award of any court or governmental agency presently in effect applicable to such Party.

4.3 Binding Agreement. This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms and conditions, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance, and general principles of equity (whether enforceability is considered a proceeding at law or equity).

 

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4.4 No Conflict. The execution and delivery of this Agreement, the performance of such Party’s obligations hereunder and the licenses and sublicenses to be granted pursuant to this Agreement (i) do not and will not conflict with or violate any requirement of applicable Law; (ii) do not and will not conflict with or violate the certificate of incorporation, by-laws or other organizational documents of such Party; and (iii) do not and will not conflict with, violate, breach or constitute a default under any contractual obligations of such Party or any of its Affiliates.

4.5 No Consents. No authorization, consent, approval of a Third Party, nor any license, permit, exemption of or filing or registration with or notification to any court or Governmental Authority is or will be necessary (i) for the valid execution, delivery or performance of this Agreement by such Party; or (ii) for the consummation by such Party of the transactions contemplated hereby.

ARTICLE 5

INTELLECTUAL PROPERTY

5.1 Ownership of Intellectual Property. As between the Parties, except as may otherwise be agreed by the Parties in writing, Aimmune shall solely own all right, title, and interest in and to any and all Information relating to, or that is useful or necessary for, the conduct of the Development Programs, In-Scope Programs or the manufacture, use or sale of Aimmune Products, that is conceived, discovered, or otherwise made (a) solely by or on behalf of Aimmune, (b) jointly by or on behalf of Aimmune and NHSc, or (c) solely by or on behalf of NHSc, in each case of subsections (a) through (c), as a result of NHSc’s participation in the SCC or with reference to Aimmune’s Confidential Information, whether or not patented or patentable, and any and all Patents and other intellectual property rights therein (“Aimmune-Owned Inventions and IP”). NHSc shall, and hereby does, assign to Aimmune all right, title and interest that NHSc may have in and to all Aimmune-Owned Inventions and IP, and shall execute all documents and take all actions necessary or reasonably required to effect such assignment. For the sake of clarity, except as may otherwise be agreed by the Parties in writing, any Information, and any Patents or other intellectual property rights in respect thereof, that are (i) Controlled, discovered or conceived by NHSc or its Affiliates prior to the Original Effective Date, or (ii) conceived, discovered or obtained by NHSc or its Affiliates during or after the Term and independent of the collaboration pursuant to this Agreement shall be solely owned by NHSc or its Affiliate.

5.2 New Opportunities Proposed by NHSc. Section 5.1 notwithstanding, if NHSc discloses or presents a New Opportunity to the SCC, and the SCC proceeds to discuss such New Opportunity as contemplated in Section 2.6, then if any Information is conceived, discovered or otherwise made solely by or on behalf of a Party, or jointly by or on behalf of the Parties, in the course of such discussion that relates to such New Opportunity, such Information shall be owned solely by NHSc or its Affiliate.

5.3 No License; Implied Rights. Neither Party shall obtain any license or other rights to any Information or intellectual property rights therein by virtue of this Agreement. Without limiting the foregoing, nothing contained in this Agreement confers or will be construed to confer any rights or licenses by implication, estoppel or otherwise, in, to or under any intellectual property rights.

 

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ARTICLE 6

CONFIDENTIAL INFORMATION

6.1 Nondisclosure. Each Party agrees that during the Term and for a period of ten (10) years thereafter, a Party (the “Receiving Party”) receiving Confidential Information of the other Party (the “Disclosing Party”) shall (i) maintain in confidence such Confidential Information, which shall include without limitation using not less than the efforts such Receiving Party uses to maintain in confidence its own proprietary industrial information of similar kind and value, which shall be no less than a reasonable degree of care, (ii) not disclose such Confidential Information to any Third Party without the prior written consent of the Disclosing Party, except for disclosures expressly permitted below, and (iii) not use such Confidential Information for any purpose except those expressly permitted by this Agreement. The Parties agree that any Confidential Information (within the meaning of the Prior CDA) disclosed by the Parties or their Affiliates pursuant to the Prior CDA shall be Confidential Information within the meaning of, and shall be subject to, this Article 6.

6.1.1 Exceptions. The obligations in Section 6.1 shall not apply with respect to any portion of the Confidential Information that the Receiving Party receives, to the extent that such information:

(a) is publicly disclosed by the Disclosing Party, either before or after it is disclosed to the Receiving Party hereunder;

(b) was known to the Receiving Party or any of its Affiliates, without any obligation to keep it confidential or any restriction on its use, prior to disclosure by the Disclosing Party, provided that such prior knowledge can be properly documented by the Receiving Party;

(c) is subsequently disclosed to the Receiving Party or any of its Affiliates by a Third Party lawfully in possession thereof and without any obligation to keep it confidential or any restriction on its use;

(d) is published by a Third Party or otherwise becomes publicly available or enters the public domain, either before or after it is disclosed to the Receiving Party without the fault or cause of the Receiving Party or any of its Affiliates; or

(e) is independently developed by employees or contractors of the Receiving Party or any of its Affiliates without the aid, application or use of Confidential Information of the Disclosing Party, and such independent development can be properly documented by the Receiving Party.

6.2 Authorized Disclosure. Subject to Section 6.4, the Receiving Party may disclose Confidential Information belonging to the Disclosing Party to the extent such disclosure is necessary, in the reasonable opinion of the Receiving Party’s counsel, to comply with applicable Laws and regulations (including, without limitation, the rules and regulations of the Securities

 

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and Exchange Commission or any national securities exchange) and with judicial processes. If and whenever any Confidential Information is disclosed in accordance with this Section 6.2, such disclosure shall not cause any such information to cease to be Confidential Information, except to the extent that such disclosure results in a public disclosure of such information (other than by breach of this Agreement). Where reasonably possible and subject to Section 6.4, the Receiving Party shall: (i) give the Disclosing Party reasonable advance notice of the Receiving Party’s intent to make such disclosure pursuant to this Section 6.2, to the extent practicable; and (ii) provide reasonable cooperation to the Disclosing Party regarding the timing and content of such disclosure and regarding any action which the Disclosing Party may deem appropriate to protect the confidentiality of the information by appropriate legal means.

6.3 Terms of this Agreement. The Parties acknowledge that the terms of this Agreement shall be treated as Confidential Information of both Parties, subject to the terms of this Section 6.

6.4 Securities Filings. In the event either Party determines that it is required to file with the U.S. Securities and Exchange Commission (and/or the securities regulators of any state or other jurisdiction) a registration statement or any other disclosure document which describes any of the terms and conditions of this Agreement, such Party shall promptly notify the other Party of such intention. The Party required to make such filing shall provide such other Party with a copy of relevant portions of the proposed filing not less than ten (10) Business Days (or such shorter period of time as may be required, under the circumstances, to comply with applicable Laws, but in no event less than three (3) Business Days) prior to such filing (and any revisions to such portions of the proposed filing a reasonable time prior to the filing thereof), including any exhibits thereto relating to the terms and conditions of this Agreement. The Party required to file shall use reasonable efforts to obtain confidential treatment of the terms and conditions of this Agreement that such other Party requests be kept confidential, and shall only disclose Confidential Information which it is advised by legal counsel is legally required to be disclosed in order to comply. No such notice shall be required under this Section 6.4 if and to the extent that the specific information contained in the proposed filing has previously been included in any previous filing or disclosure made by either Party hereunder pursuant to this Article 6, or is otherwise approved in advance in writing by the other Party.

6.5 Expiration or Termination. Upon the expiration or termination of this Agreement, any and all Confidential Information possessed in a tangible form by a Receiving Party, its Affiliates, sublicensees or subcontractors and belonging to a Disclosing Party shall, upon written request of the Disclosing Party, be destroyed to the extent practicable, with written confirmation of such destruction. Notwithstanding anything to the contrary herein, so long as such materials are maintained in accordance with this Agreement, each Party (i) may retain any attorney work product created in connection with this Agreement, (ii) may retain copies of any Confidential Information to the extent required by legal, regulatory or judicial requirements that are applicable to a Party or its Affiliates; and, (iii) will not be obligated to erase or extinguish any Confidential Information contained in an archived computer system backup in accordance with normal document retention policies or security and disaster recovery procedures, provided that any such retained Confidential Information shall continue to remain confidential and subject to the terms of this Agreement.

 

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ARTICLE 7

ADDITIONAL AGREEMENTS

7.1 Non-Competition.

7.1.1 NHSc agrees that it will not, and will ensure that its Affiliates do not, directly or indirectly, alone or with or through its Affiliates or its sublicensees, or other Third Parties directed or controlled by NHSc or its Affiliate in relation to the applicable activities, by contract or otherwise:

(a) until the later of (i) the date that is [***] ([***]) [***] after the Original Effective Date and (ii) the date that is [***] ([***]) [***] after the final day of the Term, engage in Prohibited Drug Research in respect of, or any Prohibited Development of, or commercialize, any Competitive OIT Product for the treatment of peanut allergies;

(b) until the later of (i) the date that is [***] ([***]) [***] after the Original Effective Date and (ii) the date that is [***] ([***]) [***] after the final day of the Term, engage in any Prohibited Development of, or commercialize, any Competitive OIT Product for the treatment of any allergies to [***], or [***] (including but not limited to [***]); or

(c) until the later of (i) the date that is [***] ([***]) [***] after the Original Effective Date and (ii) [***] the Term, commercialize any Competitive OIT Product for the treatment of any food allergies [***] of this Section 7.1.1. As used herein, the following terms have the following meanings:

Competitive OIT Product” means any drug or biologic product (i.e., any product which, if it were marketed in the United States, must be approved by the FDA pursuant to a BLA or NDA) that is intended for use in OIT for a particular food allergy; provided, however, that no product that comprises such a drug or biological product in combination with any OIT Combination Constituent for which NHSc complies with its obligations under Section 3.1, shall be a “Competitive OIT Product”.

Prohibited Development” means any Development activities undertaken for a given drug or biologic product (i.e., any product which, if it were marketed in the United States, must be approved by the FDA pursuant to a BLA or NDA) for the treatment of the applicable allergy after the commencement of manufacturing of the clinical supply of such drug or biologic products. For clarity, Prohibited Development shall include without limitation Development activities undertaken after the filing of an IND with a Regulatory Authority in respect of such drug or biologic product.

Prohibited Drug Research” means research undertaken specifically in respect of, and during the course of, Development activities for a given drug or biologic product (i.e., any product which, if it were marketed in the United States, must be approved by the FDA pursuant to a BLA or NDA) that is intended for use in OIT for the treatment of the applicable allergy, prior to Prohibited Development Activities for such drug or biologic product.

 

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For the sake of clarity, nothing contained herein shall preclude, limit or restrict in any way NHSc or any of its Affiliates from, directly or indirectly, alone or with or through their Affiliates, sublicensees or other Third Parties, from undertaking any Development, commercialization or any other activities in respect of (i) any product that is not a drug or biologic (i.e., any product which, if it were marketed in the United States, would not require the approval of the FDA pursuant to a BLA or NDA), including medical foods and supplements or (ii) any product for the prevention of food allergies to [***] Developed as part of the development program being pursued as of the Original Effective Date by NHSc or its Affiliate and the National Institutes of Allergy and Infectious Diseases (NIAID), including any such products that are intended for use by individuals with food allergies. Aimmune expressly acknowledges that NHSc and its Affiliates are currently researching, Developing and commercializing such products and will continue to do so during and after the Term, directly or indirectly, alone or with or through its Affiliates, sublicensees or other Third Parties.

7.1.2 During the Term, NHSc will [***] (an “OIT Allergy Company”).

7.1.3 Nothing contained herein shall preclude NHSc or its Affiliates from [***].

7.2 Non-Solicitation of Employees. [***], neither Party shall, and each party shall cause its Affiliates not to, directly or indirectly, solicit, encourage, recruit or induce any employee of the other Party who has been involved in activities or discussions conducted pursuant to this Agreement to terminate his or her employment with such other Party; provided that the foregoing restriction shall not preclude a Party or its Affiliates from (a) undertaking any general solicitation not targeted at the employees of the other Party or hiring an employee of the other Party who seeks employment as a result of such general solicitation or (b) hiring any former employee of the other Party if such former employee either (i) was involuntarily terminated by the other Party, or (ii) voluntarily terminated his or her employment with such other Party (without inducement on the part of the hiring Party or its Affiliates) and such termination of employment has been effective for no less than [***] ([***]) months prior to the date of hire by the hiring Party or its Affiliates.

7.3 Director Nomination. NHSc shall be entitled to designate one (1) nominee to serve as a director on Aimmune’s Board of Directors, which initial designee shall be Greg Behar. For so long as NHSc has the right to nominate a director pursuant to this Section 7.3, in the event of Mr. Behar’s resignation, removal or death (or a replacement designee’s resignation, removal or death), NHSc shall be entitled to designate a replacement designee, subject to the reasonable approval of Aimmune’s Board of Directors or an applicable committee thereof. Aimmune covenants and agrees that, for so long as NHSc has the right set forth in this Section 7.3, it shall nominate NHSc’s designee for election by its stockholders at each Annual Stockholder Meeting or Special Meeting of Stockholders in which the class of directors for which NHSc’s designee is appointed is considered by the stockholders for election. In connection with Mr. Behar’s initial appointment to Aimmune’s Board of Directors (or, if applicable, a replacement designee’s appointment to Aimmune’s Board of Directors), Aimmune shall enter into an indemnification agreement with Mr. Behar (or, if applicable, the replacement designee), which indemnification agreement shall be in the form of and with terms previously approved by Aimmune’s Board of Directors. The rights set forth in this Section 7.3 shall terminate upon such time as NHSc or its Affiliates hold less than fourteen percent (14%) of the shares of Aimmune’s outstanding Common Stock.

 

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ARTICLE 8

TERM AND TERMINATION

8.1 Effectiveness; Term. This Agreement shall automatically become binding and effective upon the Original Effective Date and shall continue in force until the earlier of (i) the date that is three (3) years after the Extension Date on November 11, 2021, (ii) the effective date of a termination in accordance with Section 8.2, and (iii) the termination of this Agreement by mutual written agreement of the Parties (the “Term”); provided, however, that the Term may be extended upon the mutual written agreement of the Parties.

8.2 Termination Rights.

8.2.1 Termination for Material Breach. A Party shall have the right to terminate this Agreement in such Party’s sole discretion, upon delivery of written notice to the other Party in the event of any material breach by such other Party of this Agreement, provided that such breach has not been cured within sixty (60) calendar days after written notice thereof is given by the terminating Party specifying the nature of the alleged material breach in reasonable detail.

8.2.2 Change of Control. Either Party may terminate this Agreement upon written notice to the other Party in the event such other Party undergoes a Change of Control.

8.2.3 Third Party Transaction. In the event that any Development Program, Aimmune Product or Major Territory ceases to be, or be part of, an In-Scope Program by virtue of a Transfer involving one (1) or more of the Aimmune Product(s), as contemplated by Section 2.2, then NHSc may terminate this Agreement upon written notice to Aimmune given within sixty (60) days after NHSc gains knowledge of Aimmune’s entering into an agreement in respect of such Transfer.

8.2.4 NHSc Transaction. Aimmune may terminate this Agreement upon written notice to NHSc during the sixty (60) day period following the closing of an acquisition or combination of the nature contemplated in Section 7.1.3.

8.3 Effect of Termination. At the end of the Term, this Agreement shall become void and have no effect, provided that (i) the following provisions hereof shall survive any such termination and remain in full force and effect in accordance with the terms thereof: Sections 3.1, 7.1, 7.3 and 8.3 and Articles 5, 6 and 9; (ii) such termination shall not relieve either Party of any obligation, or deprive either Party from any benefit, accruing prior thereto, and (iii) such termination shall be without prejudice to the rights and remedies of any party with respect to any antecedent breach of the provisions of this Agreement.

ARTICLE 9

MISCELLANEOUS

9.1 Expenses. All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such fees and expenses.

 

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9.2 Severability. If and to the extent that any provision (or any part thereof) of this Agreement is held to be invalid, illegal or unenforceable, in any respect in any jurisdiction, the provision (or the relevant part thereof) shall be considered severed from this Agreement and shall not serve to invalidate the remainder of such provision or any other provisions hereof. The Parties shall make a good faith effort to replace any invalid, illegal or unenforceable provision (or any part thereof) with a valid, legal and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

9.3 Notices. Any notice required or permitted to be given by the Parties pursuant to this Agreement shall be in writing and shall be (i) delivered by hand, (ii) delivered by overnight courier with tracking capabilities, (iii) mailed postage prepaid by first class, registered or certified mail, or (iv) transmitted by facsimile or electronic mail, in either case (facsimile or electronic mail) with receipt confirmed by the recipient or followed by a confirmation copy by mail as provided in (iii), and in each case (clauses (i) through (iv)) addressed to the recipient Party as set forth below, unless changed by notice so given:

If to NHSc:

Société des Produits Nestlé S.A.

Avenue Nestlé 55

1800 Vevey

Switzerland

Attention: General Counsel, Nestlé Health Science

with a copy to:

Mayer Brown LLP

1221 Avenue of the Americas

New York, NY 10020

Attention:   David A. Carpenter

Reb D. Wheeler

If to Aimmune:

Aimmune Therapeutics, Inc.

8000 Marina Boulevard, Suite 300

Brisbane, CA 94005

Attention: General Counsel

with a copy to:

Latham & Watkins LLP

140 Scott Road

Menlo Park, CA 94025

Attention:   Patrick Pohlen

Judith Hasko

 

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(A) with respect to any notice delivered pursuant to clauses (i) or (iv), such notice shall be deemed effective upon submission to such other Party, (B) with respect to any notice delivered pursuant to clause (ii), such notice shall be deemed effective the Business Day following the date of submission to the carrier, and (C) with respect to any notice delivered pursuant to clause (iii), such notice shall be deemed effective five (5) Business Days after the earlier of (x) confirmation of receipt by the recipient or (y) the date of submission of such facsimile or electronic mail, as applicable. A Party may add, delete, or change the person or address to whom notices should be sent at any time upon written notice delivered to the other Party in accordance with this Section 9.3.

9.4 Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned or transferred by either Party without the prior written consent of the other Party, such consent not to be unreasonably withheld, delayed or conditioned; provided, however, that either Party may, without the other Party’s consent, but with written notice to the other Party, assign or transfer all of its rights and obligations hereunder to any Affiliate or to a Third Party with which it is combined, or which acquires such Party’s shares or assets, pursuant to a Change of Control of such Party. The assigning Party shall in any event remain responsible for and liable hereunder with respect to the acts and omissions of the assignee in the performance of this Agreement. This Agreement shall inure to the benefit of and be binding on the Parties’ successors and assigns. Any assignment or transfer in violation of the foregoing shall be null and void and wholly invalid, the assignee or transferee in any such assignment or transfer shall acquire no rights whatsoever, and the non-assigning non-transferring Party shall not recognize, nor shall it be required to recognize, such assignment or transfer.

9.5 Further Assurances. Each Party agrees, at its own expense, to do, or procure the doing of, all such further acts and things and shall execute and deliver such other agreements, certificates, instruments and documents as are reasonably necessary in order to give full effect to this Agreement.

9.6 Waivers and Modifications. No waiver, modification, release or amendment of any obligation under or provision of this Agreement shall be valid or effective unless in writing and signed by all Parties hereto. The failure of any Party to insist on the performance of any obligation hereunder shall not be deemed to be a waiver of such obligation. Waiver of any provision hereunder or of any breach of any provision hereof shall not be deemed to be a continuing waiver or a waiver of any other breach of such provision (or any other provision) on such occasion or any succeeding occasion.

9.7 Choice of Law. This Agreement (and any claims or disputes arising out of or relating hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein or therein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by, enforced, and shall be construed in accordance with the laws of the State of New York, without regard to its conflicts of law provisions.

9.8 Injunctive Relief. Notwithstanding anything herein to the contrary, each party shall be entitled to seek injunctive relief and specific performance (including but not limited to any relief or recovery under this Agreement) in any court of competent jurisdiction in the world.

 

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9.9 Publicity. Upon execution of this Agreement, each Party may issue a press release announcing the existence of this Agreement in a form, and containing substance, to be agreed in good faith between the Parties (such agreement not to be unreasonably withheld or delayed by either Party). Subject to Section 6.4, each Party agrees not to issue any other press release or other public statement disclosing other information relating to this Agreement or the transactions contemplated hereby without the prior written consent of the other Party. Each Party shall use all reasonable efforts to provide to the other Party a copy of any public announcement regarding this Agreement or the subject matter hereof as soon as reasonably practicable under the circumstances prior to its scheduled release (but in no event less than three (3) Business Days prior to its scheduled release, unless a shorter period is required to comply with applicable Law under the circumstances). Each Party shall have the right to expeditiously review and recommend changes to any such announcement and the Party whose announcement has been reviewed shall remove any Confidential Information of the reviewing Party that the reviewing Party reasonably deems to be inappropriate for disclosure except to the extent such disclosure is required by applicable Law or rules of a securities exchange or the Securities and Exchange Commission or the securities regulators of any state or other jurisdiction. The contents of any announcement or similar publicity, which has been reviewed and approved by the reviewing Party, (including the press release referred to at the beginning of this Section 9.9), and any filing with the Securities and Exchange Commission, can be re-released by either Party without a requirement for re-approval.

9.10 Relationship of the Parties. Each Party is an independent contractor under this Agreement. Nothing herein is intended or is to be construed so as to constitute Aimmune and NHSc as partners, agents or joint venturers. Neither Party shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any contract, agreement or undertaking with any Third Party. There are no express or implied third party beneficiaries hereunder.

9.11 Entire Agreement. The Parties agree that this Agreement and the attached Exhibits, as amended as of the Effective Date, constitutes the entire agreement between the Parties as to the subject matter of this Agreement, and hereby supersedes all prior negotiations, representations, agreements and understandings (whether written or verbal) regarding the same, including the Original Agreement. Each Party acknowledges that in entering into this Agreement it has not relied on, nor shall it be entitled to rely upon, any representation, warranty, collateral contract or other assurances made by or on behalf of the other Party except for those which are expressly set forth in this Agreement.

9.12 Counterparts. This Agreement may be executed in two or more counterparts, including counterparts delivered by facsimile or other electronic transmission, with the same effect as if both Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall together constitute one and the same instrument.

9.13 Exports. Each Party agrees not to export or re-export, directly or indirectly, any information, technical data, the direct product of such data, samples or equipment received or generated under this Agreement in violation of any applicable export control Laws.

 

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9.14 Amendments. Any amendment of this Agreement shall not be binding on the Parties unless set out in writing, expressed to amend this Agreement and signed by authorized representatives of each of the Parties.

9.15 Interpretation. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or). The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term “including,” “include,” or “includes” as used herein shall mean including, without limiting the generality of any description preceding such term. Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein), (ii) any reference to any applicable Laws herein will be construed as referring to such Laws as from time to time enacted, repealed or amended, (iii) any reference herein to any person will be construed to include the person’s successors and permitted assigns, (iv) the words “herein”, “hereof” and “hereunder”, and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (v) any reference herein to the words “mutually agree” or “mutual written agreement” will not impose any obligation on either Party to agree to any terms relating thereto relating to such terms except as such Party may determine in such Party’s sole discretion, (vi) all references herein to Sections or Exhibits will be construed to refer to Sections and Exhibits to this Agreement, (vii) the word “days” means calendar days unless otherwise specified, (viii) except as otherwise expressly provided herein all references to “$” or “dollars” refer to the lawful money of the U.S., and (ix) the words “copy” and “copies” and words of similar import when used in this Agreement include, to the extent available, electronic copies, files or databases containing the information, files, items, documents or materials to which such words apply. The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions. The language in this Agreement is to be construed in all cases according to its fair meaning.

[Signature page follows]

 

20


IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized officers.

 

AIMMUNE THERAPEUTICS, INC.
By:   /s/ Jayson Dallas
  (Signature)
Name:   Jayson Dallas
Title:   President and Chief Executive Officer

 

SOCIÉTÉ DES PRODUITS NESTLÉ S.A.
By:   /s/ James Pepin
  (Signature)
Name:   James Pepin
Title:   President

 

Solely for purposes of Section 9.11:
NESTLÉ HEALTH SCIENCE S.A.
By:   /s/ Claudio Kuoni
  (Signature)
Name:   Claudio Kuoni
Title:   General Counsel Nestle Health Science

[Signature page to Collaboration Agreement]


Exhibit A

Development Programs

The treatment of allergies to the following foods:

Peanut, including the program designated AR-101

[***]

 

 


APPENDIX VI

Certificate of Designation


AIMMUNE THERAPEUTICS, INC.

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES A CONVERTIBLE PREFERRED STOCK

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

The undersigned, Jayson Dallas, does hereby certify that:

 

  1.

He is the President and Chief Executive Officer of Aimmune Therapeutics, Inc., a Delaware corporation (the “Corporation”).

 

  2.

The Corporation is authorized to issue 10,000,000 shares of preferred stock, 525,634 of which have been designated.

 

  3.

In accordance with the provisions of Sections 103 and 151 of the Delaware General Corporation Law (the “DGCL”) the Board of Directors of the Corporation (the “Board of Directors”) does hereby certify that the following resolutions were duly adopted by the Board of Directors or by a duly authorized committee thereof, on January 28, 2020:

WHEREAS, the Amended and Restated Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), provides for a class of its authorized stock known as preferred stock, consisting of 10,000,000 shares, $0.0001 par value per share, issuable from time to time in one or more series;

WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a new series of the preferred stock, which shall consist of, up to 525,634 shares of the preferred stock which the Corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:

RESOLVED, pursuant to authority expressly set forth in the Certificate of Incorporation, the issuance of a series of Preferred Stock designated as the Series A Convertible Preferred Stock, par value $0.0001 per share, of the Corporation is hereby authorized and the designation, number of shares, powers, preferences, rights, qualifications, limitations and restrictions thereof (in addition to any provisions set forth in the Certificate of Incorporation that are applicable to the Preferred Stock of all classes and series) are hereby fixed, and the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock is hereby approved as follows:


SERIES A CONVERTIBLE PREFERRED STOCK

Section 1. Definitions. For the purposes hereof, the following terms shall have the following meanings:

Affiliate” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Holder will be deemed to be an Affiliate of such Holder.

Alternate Consideration” shall have the meaning set forth in Section 7(b).

Beneficial Ownership Limitation” shall have the meaning set forth in Section 6(c).

Business Day” means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

Buy-In” shall have the meaning set forth in Section 6(d)(iii).

Closing Sale Price” means, for any security as of any date, the last closing trade price for such security prior to 4:00 p.m., New York City time, on the principal securities exchange or trading market where such security is listed or traded, as reported by Bloomberg, L.P. (or an equivalent, reliable reporting service mutually acceptable to and hereafter designated by Holders of a majority of the then-outstanding Series A Preferred Stock and the Corporation), or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, L.P., or, if no last trade price is reported for such security by Bloomberg, L.P., the average of the bid prices of any market makers for such security as reported on the OTC Pink Market by OTC Markets Group, Inc. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as determined in good faith by the Board of Directors of the Corporation.

Commission” means the Securities and Exchange Commission.

Common Stock” means the Corporation’s common stock, par value $0.0001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed into.

Conversion Date” shall have the meaning set forth in Section 6(a).

Conversion Ratio” shall have the meaning set forth in Section 6(b).

Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series A Preferred Stock in accordance with the terms hereof.

Daily Failure Amount” means the product of (x) 0.005 multiplied by (y) the Closing Sale Price of the Common Stock on the applicable Share Delivery Date.

DGCL” shall mean the Delaware General Corporation Law.

Distributions” shall have the meaning set forth in Section 5(a).

DTC” shall have the meaning set forth in Section 6(a).

DWAC Delivery” shall have the meaning set forth in Section 6(a).

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


Fundamental Transaction” shall have the meaning set forth in Section 7(b).

Holder” means any holder of Series A Preferred Stock.

Issuance Date” means on or after February 7, 2020.

Junior Securities” shall have the meaning set forth in Section 5(a).

Notice of Conversion” shall have the meaning set forth in Section 6(a).

Parity Securities” shall have the meaning set forth in Section 5(a).

Person” means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

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

Senior Securities” shall have the meaning set forth in Section 5(a).

Series A Preferred Stock” shall have the meaning set forth in Section 2(a).

Series A Preferred Stock Register” shall have the meaning set forth in Section 2(b).

Share Delivery Date” shall have the meaning set forth in Section 6(d)(i).

Trading Day” means a day on which the Common Stock is traded for any period on the principal securities exchange or if the Common Stock is not traded on a principal securities exchange, on a day that the Common Stock is traded on another securities market on which the Common Stock is then being traded.

Section 2. Designation, Amount and Par Value; Assignment.

 

  (a)

The series of preferred stock designated by this Certificate of Designation shall be designated as the Corporation’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and the number of shares so designated shall be 525,634. Each share of Series A Preferred Stock shall have a par value of $0.0001 per share. The Series A Preferred Stock may be issued in certificated form or in book-entry form at the election of the Holder. To the extent that any shares of Series A Preferred Stock are issued in book-entry form, references herein to “certificates” shall instead refer to the book-entry notation relating to such shares.

 

  (b)

The Corporation shall register shares of the Series A Preferred Stock, upon records to be maintained by the Corporation for that purpose (the “Series A Preferred Stock Register”), in the name of the Holders thereof from time to time. The Corporation may deem and treat the registered Holder as the absolute owner thereof for the purpose of any conversion thereof and for all other purposes. The Corporation shall register the transfer of any shares of Series A Preferred Stock in the Series A Preferred Stock Register, upon surrender of the certificates evidencing such shares to be transferred, duly endorsed by the Holder thereof, to the Corporation at its address specified herein. Upon any such registration or transfer, a new certificate evidencing the shares of Series A Preferred Stock so transferred shall be issued to the transferee and a new certificate evidencing the remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder, in each case, within three (3) Business Days. The provisions of this Certificate of Designation are intended to be for the benefit of all Holders from time to time and shall be enforceable by any such Holder.


Section 3. Dividends. Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of the Series A Preferred Stock at a rate equal (on an as-if-converted-to-Common-Stock basis, without regard to the Beneficial Ownership Limitation) to and in the same form, and in the same manner, as dividends (other than dividends in the form of the issuance of Common Stock) actually paid on shares of the Common Stock when, as and if such dividends (other than dividends in the form of the issuance of Common Stock) are paid on shares of the Common Stock, whenever funds are legally available and when and as declared by the Board. Other than as set forth in the previous sentence, no other dividends shall be paid on shares of the Series A Preferred Stock, and the Corporation shall pay no dividends (other than dividends in the form of the issuance of Common Stock) on shares of the Common Stock unless it simultaneously complies with the previous sentence.

Section 4. Voting Rights; Amendments.

 

  (a)

Except as otherwise provided herein or as otherwise required by the DGCL, the Holders shall have no voting rights.

 

  (b)

So long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval of the Holders of not less than a majority of the then-outstanding shares of Series A Preferred Stock, or their designees, voting separately as a single class:

 

  (i)

alter, repeal or change the powers, preferences or rights of the Series A Preferred Stock or alter or amend this Certificate of Designation so as to adversely affect the Series A Preferred Stock;

 

  (ii)

supplement, amend, restate, repeal, or waive any provision of the Certificate of Incorporation or Corporation’s bylaws, or file any articles of amendment, certificate of designation, preferences, limitations and relative rights of any series of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock, regardless of whether any of the foregoing actions shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise (it being understood that the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock shall not be considered to be adversely altered or changed solely because of the issuance of shares of another series of preferred stock of the Corporation, including a series of preferred stock that ranks senior to the Series A Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, occurrence of a Fundamental Transaction, and/or the payment of dividends);

 

  (iii)

increase or decrease (other than by conversion) the number of authorized shares of Series A Preferred Stock; or

 

  (iv)

enter into any agreement with respect to any of the foregoing.

Section 5. Rank; Liquidation.

 

  (a)

The Series A Preferred Stock shall rank (i) senior to all of the Common Stock; (ii) senior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms junior to any Series A Preferred Stock (“Junior Securities”); (iii) on parity with any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms on parity with


  the Series A Preferred Stock (the “Parity Securities”); and (iv) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms senior to any Series A Preferred Stock (“Senior Securities”), in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntarily or involuntarily (all such distributions being referred to collectively as “Distributions”) and/or the right to receive dividends.

 

  (b)

Subject to the prior and superior rights of the holders of any Senior Securities of the Corporation, upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, each Holder shall be entitled to receive, in preference to any distributions of any of the assets or surplus funds of the Corporation to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, (i) an amount equal to $0.0001 per share of Series A Preferred Stock, plus any dividends declared but unpaid on such shares, plus (ii) such amount per share as would have been payable to such Holder if all shares of Series A Preferred Stock held by such Holder had been converted to Common Stock pursuant to Section 6 hereof (without giving effect to any limitation on conversion pursuant to Section 6(c) thereof) immediately prior to such liquidation, dissolution or winding up of the Corporation, before any payments shall be made or any assets distributed to holders of any class of Common Stock or Junior Securities; provided, however, that, in the event that the assets to be distributed pursuant to this clause (ii) constitute equity securities or convertible securities of the Corporation (or any successor thereof) and, following any such distribution, any Holder (together with its Attribution Parties) would hold or have a right to acquire greater than 19.99% of the number of shares of Common Stock or voting power of the Corporation (or any successor thereof) outstanding immediately after giving effect to all such distributions (such amount of securities being referred to as the “Surplus Amount”), then, unless the distribution thereof is approved by the stockholders of the Corporation, such Holder or any of its Attribution Parties shall be entitled to receive in lieu of such securities and in the sole discretion of the Corporation, either (x) the Surplus Amount of securities of the Corporation (or any successor thereof) with substantially similar preferences, rights, privileges, powers of, and restrictions provided for the benefit of the Series A Preferred Stock or (y) the equivalent monetary value in cash of such Surplus Amount from the Corporation (or any successor thereof), as determined by the Board of Directors. If, upon any such liquidation, dissolution or winding up of the Corporation, the assets of the Corporation shall be insufficient to pay the Holders the amount required under the preceding sentence, then all remaining assets of the Corporation shall be distributed pro rata to holders of the shares of the Series A Preferred Stock and Parity Securities.

Section 6. Conversion.

 

  (a)

Conversions at Option of Holder. Each share of Series A Preferred Stock shall be convertible, at any time and from time to time from and after the Issuance Date, at the option of the Holder thereof, into a number of shares of Common Stock equal to the Conversion Ratio (as defined below). Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”), duly completed and executed. Other than a conversion following a Fundamental Transaction or following a notice provided for under Section 7(d)(ii) hereof, the Notice of Conversion must specify at least a number of shares of Series A Preferred Stock to be converted equal to the lesser of (x) 1,000 shares (such number subject to appropriate adjustment following the occurrence of an event specified in Section 7(a) hereof) and (y) the number of shares of Series A Preferred Stock then held by the Holder. Provided the Corporation’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, the Notice of Conversion may specify, at the Holder’s election, whether the applicable Conversion Shares shall be credited to the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission system (a “DWAC Delivery”). The “Conversion Date,” or the date on which a conversion shall be deemed effective,


  shall be defined as the Trading Day that the Notice of Conversion, completed and executed, is sent by facsimile to, and received during regular business hours by, the Corporation; provided that the original certificate(s) (if applicable) representing such shares of Series A Preferred Stock being converted, duly endorsed, and the accompanying Notice of Conversion, are received by the Corporation within two (2) Trading Days thereafter. In all other cases, the Conversion Date shall be defined as the Trading Day on which the original share certificate(s) (if applicable) of Series A Preferred Stock being converted, duly endorsed, and the accompanying Notice of Conversion, are received by the Corporation. The calculations set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error.

 

  (b)

Conversion Ratio. Each share of Series A Preferred Stock is convertible at a rate of ten (10) shares of Common Stock for each share of Series A Preferred Stock, subject to adjustment as set forth in Section 7 below (this rate, as adjusted from time to time, the “Conversion Ratio”).

 

  (c)

Beneficial Ownership Limitation. Notwithstanding anything herein to the contrary, the Corporation shall not effect any conversion of the Series A Preferred Stock, and a Holder shall not have the right to convert any portion of the Series A Preferred Stock, to the extent that, after giving effect to an attempted conversion set forth on an applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any other Person whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act and the applicable regulations of the Commission, including any “group” of which the Holder is a member (the foregoing, “Attribution Parties”)) would beneficially own a number of shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock subject to the Notice of Conversion with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted Series A Preferred Stock beneficially owned by such Holder or any of its Attribution Parties, and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation (including any warrants) beneficially owned by such Holder or any of its Attribution Parties that are subject to a limitation on conversion or exercise similar to the limitation contained herein. For purposes of this Section 6(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable regulations of the Commission. For purposes of this Section 6(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (A) the Corporation’s most recent periodic or annual filing with the Commission, as the case may be, (B) a more recent public announcement by the Corporation that is filed with the Commission, or (C) a more recent notice by the Corporation or the Corporation’s transfer agent to the Holder setting forth the number of shares of Common Stock then outstanding. Upon the written request of a Holder (which may be by email), the Corporation shall, within three (3) Trading Days thereof, confirm in writing to such Holder (which may be via email) the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to any actual conversion or exercise of securities of the Corporation, including shares of Series A Preferred Stock, by such Holder or its Attribution Parties since the date as of which such number of outstanding shares of Common Stock was last publicly reported or confirmed to the Holder. The “Beneficial Ownership Limitation” means 19.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock pursuant to such Notice of Conversion (to the extent permitted pursuant to this Section 6(c)). The Corporation shall be entitled to rely on representations made to it by the Holder in any Notice of Conversion regarding its Beneficial Ownership Limitation.


  (d)

Mechanics of Conversion

 

  (i)

Delivery of Certificate or Electronic Issuance Upon Conversion. Not later than three (3) Trading Days after the applicable Conversion Date, or if the Holder requests the issuance of physical certificate(s), two (2) Trading Days after receipt by the Corporation of the original certificate(s) representing such shares of Series A Preferred Stock being converted, duly endorsed, and the accompanying Notice of Conversion (the “Share Delivery Date”), the Corporation shall (a) deliver, or cause to be delivered, to the converting Holder a physical certificate or certificates representing the number of Conversion Shares being acquired upon the conversion of shares of Series A Preferred Stock or (b) in the case of a DWAC Delivery, electronically transfer such Conversion Shares by crediting the account of the Holder’s prime broker with DTC through its DWAC system. If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by or, in the case of a DWAC Delivery, such shares are not electronically delivered to or as directed by, the applicable Holder by the Share Delivery Date, the applicable Holder shall be entitled to elect to rescind such Notice of Conversion by written notice to the Corporation at any time on or before its receipt of such certificate or certificates for Conversion Shares or electronic receipt of such shares, as applicable, in which event the Corporation shall promptly return to such Holder any original Series A Preferred Stock certificate delivered to the Corporation and such Holder shall promptly return to the Corporation any Common Stock certificates or otherwise direct the return of any shares of Common Stock delivered to the Holder through the DWAC system, representing the shares of Series A Preferred Stock unsuccessfully tendered for conversion to the Corporation.

 

  (ii)

Obligation Absolute. Subject to Section 6(c) hereof and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6(d)(i) above, the Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of Series A Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares. Subject to Section 6(c) hereof and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6(d)(i) above, in the event a Holder shall elect to convert any or all of its Series A Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Series A Preferred Stock of such Holder shall have been sought and obtained by the Corporation, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the value of the Conversion Shares into which would be converted the Series A Preferred Stock which is subject to such injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Corporation shall, subject to Section 6(c) hereof and subject to Holder’s right to rescind a Notice of Conversion pursuant to Section 6(d)(i) above, issue Conversion Shares upon a properly noticed conversion. If the Corporation fails to deliver to a Holder such certificate or certificates, or electronically deliver (or cause its transfer agent to electronically deliver) such shares in the case of a DWAC Delivery, pursuant to Section 6(d)(i) on or prior to the fifth (5th) Trading Day after the Share Delivery Date


  applicable to such conversion (other than a failure caused by incorrect or incomplete information provided by Holder to the Corporation), then, unless the Holder has rescinded the applicable Notice of Conversion pursuant to Section 6(d)(i) above, the Corporation shall pay (as liquidated damages and not as a penalty) to such Holder an amount payable, at the Corporation’s option, either (a) in cash or (b) to the extent that it would not cause the Holder or its Attribution Parties to exceed the Beneficial Ownership Limitation, in shares of Common Stock that are valued for these purposes at the Closing Sale Price on the date of such calculation, in each case equal to the product of (x) the number of Conversion Shares required to have been issued by the Corporation on such Share Delivery Date, (y) an amount equal to the Daily Failure Amount and (z) the number of Trading Days actually lapsed after such fifth (5th) Trading Day after the Share Delivery Date during which such certificates have not been delivered, or, in the case of a DWAC Delivery, such shares have not been electronically delivered; provided, however, the Holder shall only receive up to such amount of shares of Common Stock such that Holder and its Attribution Parties and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which the Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) shall not collectively beneficially own greater than the Beneficial Ownership Limitation. Nothing herein shall limit a Holder’s right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief; provided, that Holder shall not receive duplicate damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

  (iii)

Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. If the Corporation fails to deliver to a Holder the applicable certificate or certificates or to effect a DWAC Delivery, as applicable, by the Share Delivery Date pursuant to Section 6(d)(i) (other than a failure caused by incorrect or incomplete information provided by Holder to the Corporation), and if after such Share Delivery Date such Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount by which (x) such Holder’s total purchase price (including any brokerage commissions) for the shares of Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Series A Preferred Stock equal to the number of shares of Series A Preferred Stock submitted for conversion or deliver to such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(d)(i). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Series A Preferred Stock with respect to which the actual sale price (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder


  $1,000. The Holder shall provide the Corporation written notice, within three (3) Trading Days after the occurrence of a Buy-In, indicating the amounts payable to such Holder in respect of such Buy-In together with applicable confirmations and other evidence reasonably requested by the Corporation. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to timely deliver certificates representing shares of Common Stock upon conversion of the shares of Series A Preferred Stock as required pursuant to the terms hereof; provided, however, that the Holder shall not be entitled to both (i) require the reissuance of the shares of Series A Preferred Stock submitted for conversion for which such conversion was not timely honored and (ii) receive the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(d)(i).

(iv) Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of the Series A Preferred Stock, not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments of Section 7) upon the conversion of all outstanding shares of Series A Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and non-assessable.

(v) Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the conversion of the Series A Preferred Stock. As to any fraction of a share which a Holder would otherwise be entitled to receive upon such conversion, such fraction shall be rounded down to the next whole share.

 

  (vi)

Transfer Taxes. The issuance of certificates for shares of the Common Stock upon conversion of the Series A Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the registered Holder(s) of such shares of Series A Preferred Stock and the Corporation shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

 

  (e)

Status as Stockholder. Upon each Conversion Date, (i) the shares of Series A Preferred Stock being converted shall be deemed converted into shares of Common Stock; (ii) the Holders of such converted shares shall assume the rights, privileges, and obligations of a holder of Common Stock of the Corporation; and (iii) the Holder’s rights as a holder of such converted shares of Series A Preferred Stock shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Corporation to comply with the terms of this Certificate of Designation. In all cases, the Holder shall retain all of its rights and remedies for the Corporation’s failure to convert Series A Preferred Stock.


Section 7. Certain Adjustments.

 

  (a)

Stock Dividends and Stock Splits. If the Corporation, at any time while this Series A Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of this Series A Preferred Stock) with respect to the then-outstanding shares of Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the Conversion Ratio shall be divided by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event (excluding any treasury shares of the Corporation). Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination.

 

  (b)

Fundamental Transaction. If, at any time while this Series A Preferred Stock is outstanding, (i) the Corporation effects any merger or consolidation of the Corporation with or into another Person or any stock sale to, or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, share exchange or scheme of arrangement) with or into another Person (other than such a transaction in which the Corporation is the surviving or continuing entity and its Common Stock is not exchanged for or converted into other securities, cash or property), (ii) the Corporation effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which more than 50% of the Common Stock not held by the Corporation or such Person is exchanged for or converted into other securities, cash or property, or (iv) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant (other than as a result of a dividend, subdivision or combination covered by Section 7(a) above) to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent conversion of this Series A Preferred Stock the Holders shall, notwithstanding anything to the contrary in Section 6(c), have the right to receive, in lieu of the right to receive Conversion Shares, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”); provided, however, that, in the event that the assets to be distributed pursuant to this Section 7(b) constitute equity securities or convertible securities of the Corporation (or any successor thereof) and, following any such distribution, any Holder (together with its Attribution Parties) would hold or have a right to acquire a Surplus Amount, then, unless the distribution thereof is approved by the stockholders of the Corporation, such Holder or any of its Attribution Parties shall be entitled to receive in lieu of such securities and in the sole discretion of the Corporation, either (x) the Surplus Amount of securities of the Corporation (or any successor thereof) with substantially similar preferences, rights, privileges, powers of, and restrictions provided for the benefit of the Series A Preferred Stock or (y) the equivalent monetary value in cash of such Surplus Amount from the Corporation (or any successor thereof), as determined by the Board of Directors. For purposes of any such subsequent conversion, the determination of the Conversion Ratio shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall adjust the Conversion Ratio in a reasonable manner reflecting the relative value of any different components


  of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holders shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Series A Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The terms of any agreement to which the Corporation is a party and pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 7(b) and insuring that this Series A Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. The Corporation shall cause to be delivered to each Holder, at its last address as it shall appear upon the stock books of the Corporation, written notice of any Fundamental Transaction at least 20 calendar days prior to the date on which such Fundamental Transaction is expected to become effective or close.

 

  (c)

Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

 

  (d)

Notice to the Holders.

 

  (i)

Adjustment to Conversion Ratio. Whenever the Conversion Ratio is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Ratio after such adjustment and setting forth a brief statement of the facts requiring such adjustment; provided, that no certificate or other notice of adjustment in the Conversion Rate will be required unless the adjustment would result in an increase or decrease of at least one percent (1.0%) in the Conversion Rate.

 

  (ii)

Other Notices. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Series A Preferred Stock, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is


  expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.

Section 8. Miscellaneous.

 

  (a)

Redemption. The Series A Preferred Stock is not redeemable.

 

  (b)

Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at 8000 Marina Blvd Suite #300, Brisbane, California 94005, or such other facsimile number or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by email, facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the email address, facsimile number or mailing address of such Holder appearing on the books of the Corporation, or if no such email address, facsimile number or mailing address appears on the books of the Corporation, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the date immediately following the date of transmission, if such notice or communication is delivered via email at the email address or facsimile at the facsimile number specified between 5:30 p.m. and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

  (b)

Lost or Mutilated Series A Preferred Stock Certificate. If a Holder’s Series A Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series A Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership thereof, reasonably satisfactory to the Corporation and, in each case, customary and reasonable indemnity, if requested. Applicants for a new certificate under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Corporation may prescribe.

 

  (c)

Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation. Any waiver by the Corporation or a Holder must be in writing. Notwithstanding any provision in this Certificate of Designation to the contrary, any provision contained herein and any right of the Holders of Series A Preferred Stock granted hereunder may be waived as to all shares of Series A Preferred Stock (and the Holders thereof) upon the written consent of the Holders of not less than a majority of the shares of Series A Preferred Stock then outstanding, unless a higher percentage is required by the DGCL, in which case the written consent of the Holders of not less than such higher percentage shall be required.


  (d)

Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

 

  (e)

Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

 

  (f)

Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

 

  (g)

Status of Converted Series A Preferred Stock. If any shares of Series A Preferred Stock shall be converted or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series A Preferred Stock.

 

  (h)

No Impairment. The Corporation will not, by amendment of its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Certificate of Designations and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders against impairment.


IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation this 4th day of February 2020.

 

/s/ Jayson Dallas
Jayson Dallas
President and Chief Executive Officer

SIGNATURE PAGE TO CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND

LIMITATIONS OF SERIES A CONVERTIBLE PREFERRED STOCK


ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES A PREFERRED STOCK)

The undersigned Holder hereby irrevocably elects to convert the number of shares of Series A Preferred Stock indicated below, represented by stock certificate No(s).(the “Preferred Stock Certificates”), into shares of common stock, par value $0.0001 per share (the “Common Stock”), of Aimmune Therapeutics, Inc., a Delaware corporation (the “Corporation”), as of the date written below. If securities are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate”) filed by the Corporation with the Secretary of State of the State of Delaware on February 4, 2020.

As of the date hereof, the number of shares of Common Stock beneficially owned by the undersigned Holder (together with such Holder’s Affiliates, and any other Person whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act and the applicable regulations of the Commission, including any “group” of which the Holder is a member (the foregoing, “Attribution Parties”)), including the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock subject to this Notice of Conversion, but excluding the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted Series A Preferred Stock beneficially owned by such Holder or any of its Attribution Parties, and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation (including any warrants) beneficially owned by such Holder or any of its Attribution Parties that are subject to a limitation on conversion or exercise similar to the limitation contained in Section 6(c) of the Certificate of Designation, is _______%. For purposes hereof, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable regulations of the Commission.

Conversion calculations:

 

Date to Effect

Conversion:

Number of shares of Series

A Preferred Stock owned prior to Conversion:

Number of shares of Series

A Preferred Stock to be Converted:

Number of shares of Common Stock to be Issued:

Address for delivery of physical certificates:

or

for DWAC Delivery:

DWAC Instructions:

Broker no:

Account no:


SCHEDULE OF EXCEPTIONS

This Schedule of Exceptions is being furnished by Aimmune Therapeutics, Inc., a Delaware corporation (the “Company”), to Nestle Health Science US Holdings, Inc., a Delaware corporation (the “Purchaser”), pursuant to that certain Securities Purchase Agreement of even date herewith between the Company and the Purchaser (the “Agreement”) in connection with the execution and delivery of the Agreement, pursuant to Section 4 of the Agreement. Unless the context otherwise requires, all capitalized terms used in this Schedule of Exceptions shall have the respective meanings ascribed to such terms in the Agreement.

This Schedule of Exceptions and the information, descriptions and disclosures included herein is intended to set forth exceptions to the representations and warranties of the Company contained in the Agreement. The contents of all agreements and other documents referred to in a particular section of this Schedule of Exceptions are incorporated by reference into such particular section as though fully set forth in such section.

 

4.2

Subsidiaries

Aimmune Therapeutics (Bermuda), Ltd.

Aimmune Therapeutics UK Limited

 

4.6

Capitalization

In connection with the entry into a license agreement (the “License Agreement”), dated on or about the date hereof, by and between the Company and Xencor, Inc. (“Xencor”), the Company issued to Xencor, 156,238 shares Common Stock, pursuant to a securities issuance agreement (the “Securities Issuance Agreement”), dated February 4, 2020, with Xencor (the “Xencor Transactions”). Pursuant to the agreement, Aimmune is also obligated to issue to Xencor additional shares of Common Stock upon the achievement of certain milestones (the “Milestone Shares”). The number of Milestone Shares to be issued shall be equal to the quotient obtained by dividing (x) $5.0 million by (y) the volume-weighted average price of the Common Stock as reported by the Nasdaq Global Select Market during the seven-day period immediately preceding the date of achievement of the applicable milestone.

 

4.10

No Material Adverse Change

Xencor License

In connection with the entry into a License Agreement with Xencor, the Company issued to Xencor, 156,238 shares Common Stock and is also obligated to issue to Xencor additional shares of Common Stock upon the achievement of certain milestones. The number of Milestone Shares to be issued shall be equal to the quotient obtained by dividing (x) $5.0 million by (y) the volume-weighted average price of the Common Stock as reported by the Nasdaq Global Select Market during the seven-day period immediately preceding the date of achievement of the applicable milestone.


KKR Loan Drawdown

On the date hereof, the Company delivered notice to drawdown $85 million of available term loans under that certain Credit Agreement, dated January 3, 2019, by and between the Company and KKR Peanut Aggregator L.P. promptly following the date hereof (the “KKR Drawdown”).

 

4.14

Disclosure

See disclosures set forth in Sections 4.6 and 4.10 hereof.

 

4.18

Properties and Assets

The Company’s obligations under that certain Credit Agreement, dated January 3, 2019, by and between the Company and KKR Peanut Aggregator L.P., are secured by a lien on substantially all of the Company’s tangible and intangible property.

 

4.22

Price of Common Stock

On January 31, 2020, the Company announced the approval of Biologics License Application for AR101.

On January 31, 2020, the Company expects to announce the Xencor Transactions, the KKR Drawdown and the transactions contemplated by the Agreement.

EX-10.3

Exhibit 10.3

[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.

Execution Copy

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

DATED AS OF FEBRUARY 4, 2020

BY AND BETWEEN

XENCOR, INC.

AND

AIMMUNE THERAPEUTICS, INC.


TABLE OF CONTENTS

 

     Page  

ARTICLE 1 Definitions

     1  

ARTICLE 2 Licenses

     13  

ARTICLE 3 Development

     16  

ARTICLE 4 Regulatory

     17  

ARTICLE 5 Commercialization

     19  

ARTICLE 6 Supply

     20  

ARTICLE 7 Payments

     21  

ARTICLE 8 Payment; Records; Audits

     24  

ARTICLE 9 Intellectual Property Matters

     26  

ARTICLE 10 Representations, Warranties and Covenants; Compliance

     31  

ARTICLE 11 Indemnification

     34  

ARTICLE 12 Confidentiality

     36  

ARTICLE 13 Term and Termination

     40  

ARTICLE 14 Effects of Expiration Or Termination

     40  

ARTICLE 15 Miscellaneous

     43  

Schedule 1.10 Antibody

     50  

Schedule 1.79 Xencor General Patents

     51  

Schedule 1.81 Xencor Product Specific Patents

     52  

Schedule 2.7 Xencor Know-How, Regulatory Materials, and Regulatory Data

     53  

Schedule 6.1 Initial Product Supply

     54  

Schedule 10.2.6 Exceptions

     55  

Schedule 12.2 Initial Press Release

     56  


LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

This License, Development and Commercialization Agreement (this Agreement), dated as of February 4, 2020 (the Effective Date), is made by and between Xencor, Inc. (Xencor), and Aimmune Therapeutics, Inc. (Aimmune). Xencor and Aimmune are sometimes referred to herein individually as a Party and collectively as the Parties.

RECITALS

WHEREAS, Xencor has developed the Antibody (as defined below);

WHEREAS, Aimmune is interested in further developing and commercializing the Antibody; and

WHEREAS, Xencor wishes to grant a license to Aimmune under certain intellectual property rights related to the Antibody to develop, manufacture and commercialize the Product (as defined below), and Aimmune wishes to take such license, in each case in accordance with the terms and conditions set forth below.

NOW THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, and for other good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following initially capitalized terms shall have the meanings set forth in this ARTICLE 1 or as otherwise defined elsewhere in this Agreement:

1.1 Active Ingredient means any substance (whether chemical or biologic) or mixture of substances intended to be used in the manufacture of a drug (medicinal) product that, when used in the production of such drug, becomes a therapeutically active ingredient of the drug product, and which such substance or mixture of substances is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment or prevention of disease or to affect the structure or function of the body.

1.2 Affiliate means with respect to any person, any other person directly or indirectly controlling, controlled by, or under common control with such person; provided, that, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any person, shall mean (i) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or by contract or otherwise, or (ii) the ownership, directly or indirectly, of fifty percent (50%) or more of the voting securities of such person. For purposes of this Section 1.2, “person” means mean an individual, corporation, partnership, limited partnership, limited liability company, limited liability partnership, syndicate, person (including a “person” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder), trust, association, entity or government or political subdivision, agency or instrumentality of a government.

 

1


1.3 “Aimmune Agreement Entities” means Aimmune’s Affiliates and Sublicensees (excluding distributors).

1.4 Aimmune Common Stock means Aimmune’s common stock, par value $0.0001 per share.

1.5 “Aimmune Field” means the field of [***].

1.6 “Aimmune Invention” means an Invention that is Invented, solely or jointly with a Third Party, by or on behalf of Aimmune or its Affiliates.

1.7 Aimmune Know-How means any and all Know-How, whether or not patented or patentable, that is Controlled by Aimmune or its Affiliates as of the Effective Date or at any time during the Term that is necessary or reasonably useful in connection with the Development, Manufacture, Commercialization or other use of the Antibody or Product.

1.8 Aimmune Patent means any Patent that (i) (a) is Controlled by Aimmune (or its Affiliates) as of the Effective Date or comes under the Control of Aimmune (or its Affiliates) during the Term (other than as a result of the licenses granted by Xencor to Aimmune under this Agreement) and (b) that would be infringed by the Development, Manufacture, Commercialization or use of the Antibody or Product or that claims or Covers Aimmune Know-How, or (ii) is an Aimmune Collaboration Patent.

1.9 “Aimmune Technology” means Aimmune Know-How and Aimmune Patents.

1.10 Antibody means Xencor’s humanized antibody known as XmAb7195 having the sequence listed in Schedule 1.10.

1.11 Anti-Corruption Laws means the U.S. Foreign Corrupt Practices Act, as amended, the UK Bribery Act 2010, as amended, as well as Applicable Law related to the prevention of fraud, racketeering, money laundering or terrorism.

1.12 “Applicable Law” means any applicable United States federal, state or local or foreign or multinational law, statute, standard, ordinance, code, rule, regulation, resolution or promulgation, or any order, writ, judgment, injunction, decree, stipulation, ruling, determination or award entered by or with any Governmental Authority, or any license, franchise, permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law. For the avoidance of doubt, any specific references to any Applicable Law or any portion thereof, shall be deemed to include all then-current amendments thereto or any replacement or successor law, statute, standard, ordinance, code, rule, regulation, resolution, order, writ, judgment, injunction, decree, stipulation, ruling, or determination thereto.

 

2


1.13 Baseline Quarter Net Sales means, on a country-by-country and Product-by-Product basis, the average cumulative Net Sales of such Product in such country during the [***] Calendar Quarters that [***]precede the Calendar Quarter during which a Generic Product with respect to such Product is first commercially sold in such country. For example, if a Generic Product with respect to a given Product is commercially sold in the U.S. for the first time on [***], then the Baseline Quarter Net Sales with respect to such Product and U.S. are the cumulative Net Sales of such Product in the U.S. during the [***] Calendar Quarters of [***] divided by [***].

1.14 “Business Day” means a day other than a Saturday, Sunday, or bank or other public holiday in California.

1.15 “Calendar Quarter” means each three (3) month period commencing January 1, April 1, July 1 or October 1 of any year; provided, however, that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the end of the first full Calendar Quarter thereafter, and (b) the last Calendar Quarter of the Term shall end upon the expiration or termination of this Agreement.

1.16 “Calendar Year” means the period beginning on the 1st of January and ending on the 31st of December of the same year; provided, however, that (a) the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the same year and (b) the last Calendar Year of the Term shall commence on January 1 of the Calendar Year in which this Agreement terminates or expires and end on the date of termination or expiration of this Agreement.

1.17 Clinical Trial means a clinical trial, including any a Phase I Clinical Trial, Phase II Clinical Trial, Phase III Clinical Trial, or Phase IV Clinical Trial, as the case may be, and as any such trial is defined by an applicable Regulatory Authority.

1.18 “Co-pay Program” means a program to support patient access to a Product whereby the Product manufacturer makes payments to a Third Party equal to all or part of the difference between the price of Product prescribed to a patient and the amount such patient pays for such Product through such patient’s insurance plan.

1.19 Combination Product means any Product containing an Active Ingredient that is not an Antibody. Such Combination Product shall be either (a) priced and sold in a single package containing such multiple products or (b) packaged separately but sold together for a single price.

1.20 Commercialize means, with respect to the Product, to promote, market, distribute, sell (and offer for sale or contract to sell), import, export, or otherwise commercially exploit or provide product support for the Product and to conduct activities, other than Development or Manufacturing, in preparation for conducting the foregoing activities, including activities to produce commercialization support data and to secure and maintain market access and reimbursement. “Commercializing” and “Commercialization” shall have correlative meanings. For the avoidance of doubt, Commercialization does not include Development and Manufacturing.

 

3


1.21 Commercially Reasonable Efforts means, with respect to the efforts to be expended by a Party with respect to any objective (e.g., Development Activities and Commercialization hereunder), the level of efforts consistent with the efforts and resources [***] of similar market potential, at a similar stage in development or product lifecycle, taking into account the stage of development or product lifecycle of other of [***] product candidates, safety and efficacy, product profile, cost of goods, the competitiveness of the marketplace, such company’s patent position with respect to such product (including such company’s ability to obtain or enforce, or have obtained or enforced, such patent rights), the Third Party patent landscape relevant to the product, the regulatory structure involved, the likelihood of regulatory approval, the likelihood and extent of anticipated or actual profitability of the applicable product, and other technical, legal, scientific and medical considerations. Without limiting the foregoing, Commercially Reasonable Efforts requires, with respect to such obligations, that a Party: (i) promptly assign responsibility for such obligation to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis, (ii) set objectives for carrying out such obligations, and (iii) allocate resources designed to advance progress with respect to such objectives.

1.22 Control or Controlled by means, with respect to any Know-How, Invention, Patent, technology, copyright, trademark or other intellectual property right, possession by a Party or its Affiliates (whether by ownership, license grant or other means) of the legal right to grant the right to access or use, or to grant a license or a sublicense to, such Know-How, Invention, Patent, technology, copyright, trademark or other intellectual property right as provided for herein without violating the proprietary rights of any Third Party or any terms of any agreement or other arrangement between such Party (or any of its Affiliates) and any Third Party.

1.23 Cover or Covering means, with respect to a particular subject matter at issue and a relevant Patent, that the manufacture, use, sale, offer for sale or importation of such subject matter would, but for the existence of this Agreement, infringe one or more claims in such Patents (or in the case of a Patent application, would infringe if such application were to issue).

1.24 “Designated Officer” means, with respect to Xencor, the Chief Executive Officer of Xencor (or its designee), and, with respect to Aimmune, the Chief Executive Officer of Aimmune (or its designee).

1.25 Develop means to research, develop, analyze, test and conduct preclinical trials, Clinical Trials (including, for the avoidance of doubt, Phase IV Clinical Trials and any preclinical/clinical/CMC commitments following Regulatory Approval) and all other regulatory trials, for the Product, as well as any and all activities pertaining to manufacturing development, formulation development, medical affairs and lifecycle management, including new indications, new formulations and all other activities, including regulatory activities, related to securing and maintaining Regulatory Approval for the Product, or otherwise characterizing or understanding the properties and uses of the Antibody or the Product. “Developing” and “Development” shall have correlative meanings.

 

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1.26 Development Activities means those Development activities undertaken by or on behalf of Aimmune with respect to the Product.

1.27 “Dollar” or “$” means the legal tender of the United States of America.

1.28 “E.U. Major Countries” means the United Kingdom, France, Germany, Italy, and Spain.

1.29 “FDA” means the United States Food and Drug Administration and any successor Regulatory Authority having substantially the same function.

1.30 FD&C Act means the U.S. Federal Food, Drug and Cosmetic Act, as amended, and the regulations promulgated thereunder.

1.31 “First Commercial Sale” means, with respect to a Product in any country, the first shipment of such Product to a Third Party in such country for end use or consumption of such Product in such country after Regulatory Approval of such Product in such country or, if earlier, the invoicing of a Third Party for such shipment.

1.32 Force Majeure means any circumstances whatsoever which are not within the reasonable control of the Party affected thereby, potentially including an act of God, war, act of terrorism, insurrection, riot, strike or labor dispute, shortage of materials, fire, explosion, flood, earthquake, government requisition or allocation, breakdown of or damage to plant, equipment or facilities, interruption or delay in transportation, fuel supplies or electrical power, embargo, boycott, order or act of civil or military authority.

1.33 Generic Product means, with respect to a Product and on a country-by-country basis, a product that (a) is marketed for sale in such country [***], (b) contains or comprises an antibody with the [***], (c) is approved [***], and (d) such product, as and to the extent required, is approved through an abbreviated process based in reliance, at least in part, on the safety and efficacy data generated for the prior Regulatory Approval of such Product by Aimmune or an Aimmune Agreement Entity in such country (similar, with respect to the United States, to an Abbreviated New Drug Applications under Section 505(j) of the FD&C Act (21 USC 355(j))) or is approved as a “Biosimilar Biologic Product” under Title VII, Subtitle A Biologics Price Competition and Innovation Act of 2009, Section 42 U.S.C. 262, Section 351 of the PHSA, or, outside the United States, in accordance with European Directive 2001/83/EC on the Community Code for medicinal products (Article 10(4) and Section 4, Part II of Annex I) and European Regulation EEC/2309/93 establishing the community procedures for the authorization and evaluation of medicinal products, each as amended, and together with all associated guidance, and any counterparts thereof or equivalent process inside or outside of the United States or EU to the foregoing.

1.34 Good Clinical Practices or GCP means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials, including, as applicable, (i) as set forth in the International Conference on Harmonisation of Technical Requirements for Registration of

 

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Pharmaceuticals for Human Use (ICH) Harmonised Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for trials on medicinal products, (ii) the Declaration of Helsinki (1964) as last amended at the 64th World Medical Association in October 2013 and any further amendments or clarifications thereto, (iii) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), as may be amended from time to time, and (iv) the equivalent Applicable Law in any relevant country, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects.

1.35 “Good Laboratory Practices” or “GLP” means all applicable Good Laboratory Practice standards, including, as applicable, (i) as set forth in the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C.F.R. Part 58, and (ii) the equivalent Applicable Law in any relevant country, each as may be amended and applicable from time to time.

1.36 “Good Manufacturing Practices” or “GMP” means all applicable Good Manufacturing Practices including, as applicable, (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Sections 210, 211, 601 and 610, (ii) the principles detailed in the ICH Q7 guidelines, and (iii) the equivalent Applicable Law in any relevant country, each as may be amended and applicable from time to time.

1.37 Government Official means: (i) any official, officer, employee, representative, or anyone acting in an official capacity on behalf of: (a) any government or any department or agency thereof; (b) any public international organization (such as the United Nations, the International Monetary Fund, the International Red Cross, or the World Health Organization), or any department, agency, or institution thereof; or (c) any government-owned or controlled company, institution, or other entity, including a government-owned hospital or university; (ii) any political party or party official; and (iii) any candidate for political office.

1.38 Governmental Authority means any United States federal, state or local, or any foreign, government or political subdivision thereof, or any multinational organization or authority, or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau or division thereof), or any governmental arbitrator or arbitral body. For clarity, any Regulatory Authority shall be a Governmental Authority.

1.39 IFRS means international financial reporting standards, or with respect to the U.S., as appropriate, generally accepted accounting principles in the U.S. (GAAP), in each case, consistently applied.

1.40 IND means an investigational new drug application, clinical trial authorization or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.

 

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1.41 Invented means the acts of (an) inventor(s), as determined in accordance with Applicable Law relating to inventorship set forth in the patent laws of the United States (Title 35, United States Code), in first conceiving an Invention.

1.42 Invention means any discovery or invention, whether or not patentable, conceived or otherwise made by either Party, or by both Parties, in exercising its rights or performing its obligations under this Agreement.

1.43 “Joint Invention” means an Invention that is Invented jointly by an employee of, or Person under an obligation of assignment to, each of Xencor and Aimmune or their respective Affiliates.

1.44 Know-How means all technical, scientific, regulatory and other information, results, knowledge, techniques and data, in whatever form and whether or not confidential, patented or patentable, including Inventions, invention disclosures, discoveries, plans, processes, practices, methods, knowledge, trade secrets, know-how, instructions, skill, experience, ideas, concepts, data (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, safety, quality control, and preclinical and clinical data), formulae, formulations, compositions, specifications, marketing, pricing, distribution, cost, sales and manufacturing data or descriptions. Know-How does not include any Patent claiming any of the foregoing.

1.45 “Licensed Field” means the diagnosis, treatment or prevention of human diseases and conditions.

1.46 “Major Territory” means the [***].

1.47 Manufacture or Manufacturing or Manufactured means, with respect to the Antibody and Product, the receipt, handling and storage of Active Ingredients, drug substance or drug product, medical devices and other materials, the manufacturing, processing, Packaging and Labeling, holding (including storage), quality assurance and quality control testing (including release) of the Antibody and Product (other than quality assurance and quality control related to development of the manufacturing process, which activities shall be considered Development Activities) and shipping of the Antibody and Product.

1.48 Marketing Authorization Application or MAA means an application to the appropriate Regulatory Authority for approval to sell the Product (but excluding Pricing Approval) in any particular country or regulatory jurisdiction, including a Biologics License Application as described in 21 C.F.R. §601.2, as amended.

1.49 “Medical Science Liaison” means an individual who is employed by or on behalf of Aimmune or its Affiliates and who provides educational services and other educational efforts directed towards the medical and/or scientific community.

 

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1.50 Net Sales means, with respect to a Product, the gross amount invoiced for sales of a Product by a Selling Party to Third Parties for end use, less the following deductions from such gross amounts to the extent attributable to such Product and to the extent actually incurred, allowed, accrued or specifically allocated:

(a) credits or allowances actually granted for damaged Product, returns or rejections of Product, price adjustments and billing errors;

(b) governmental and other rebates (or equivalents thereof) granted to managed health care organizations, pharmacy benefit managers (or equivalents thereof), federal, state, provincial, local and other governments, their agencies and purchasers and reimbursers or to trade customers;

(c) normal and customary trade, cash and quantity discounts, allowances and credits actually allowed or paid;

(d) payments made as part of a Co-pay Program for a Product; and

(e) sales taxes, VAT taxes and other taxes directly linked to the sales of Product;

all as determined in accordance with IFRS on a basis consistent with the Selling Party’s annual audited financial statements.

Net Sales shall not include sales to Affiliates, Sublicensees or contractors engaged by Aimmune to Develop, Manufacture, or Commercialize the Product, solely to the extent that such Affiliate, Sublicensees or contractor purchasing the Product resells such Product to a Third Party. However, subsequent sales of Product by such Aimmune Affiliates, Sublicensees or contractors to a Third Party shall be included in the Net Sales when sold in the market for end-user use.

Further, any use, supply or provision of Product by Aimmune or Aimmune Agreement Entities at no cost or at a de minimis cost not to exceed [***] percent ([***]%) of the fully burdened cost thereof (i) in connection with patient assistance programs, (ii) for charitable or promotional purposes, (iii) for preclinical, clinical, regulatory or governmental purposes, or compassionate use or other similar programs, or (iv) for tests or studies reasonably necessary to comply with any Applicable Law, regulation or request by a Regulatory Authority shall not be included in Net Sales of Product. Sale or transfer of Products among the Aimmune Agreement Entities shall not result in any Net Sales, in which case Net Sales shall be based only on any subsequent sales or dispositions to a Third Party; provided that the Aimmune Agreement Entity is not an end user.

In no event shall any particular amount identified above be deducted more than once in calculating Net Sales (i.e., no “double counting” of reductions).

In the event that Product is sold as part of a financial bundle with other products or included in financial package deals to customers and in such case, the price of Product relevant for the calculation of Net Sales will be the average invoiced sales price of Product in the preceding Calendar Quarter sold separately less the average discount of all products sold as part of such bundle or package.

 

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For Net Sales of a Combination Product, the Net Sales applicable to such Combination Product in a country will be determined by multiplying the total Net Sales of such combined product by the fraction A/(A+B), where A is the actual price of the Product that is included in such Combination Product in the same dosage amount or quantities in the applicable country during the applicable quarter if sold separately, and B is the sum of the actual prices of all other products with which such Product is combined in such Combination Product, in the same dosage amount or quantities in the applicable country during the applicable quarter if sold separately. If A or B cannot be determined because values for such Product or such other products with which such Product is combined are not available separately in a particular country, then the Parties shall discuss an appropriate allocation for the fair market value of such Product and such other products with which such Product is combined to mutually determine Net Sales for the relevant transactions based on an equitable method of determining the same that takes into account, in the applicable territory, the relative contribution of each Active Ingredient, variations in dosage formulation and relative value to the end user of each Active Ingredient.

1.51 Patents means any and all (i) issued patents, (ii) pending patent applications, including all provisional applications, substitutions, continuations, continuations-in-part, divisionals and renewals, and all patents granted thereon, (iii) patents-of-addition, reissues, and reexaminations, including patent term adjustments, Patent Term Extensions, supplementary protection certificates or the equivalent thereof, (iv) inventor’s certificates, (v) other forms of government-issued rights substantially similar to any of the foregoing, and (vi) United States and foreign counterparts of any of the foregoing.

1.52 Patent Term Extension means any term extensions, supplementary protection certificates and equivalents thereof offering Patent protection beyond the initial term with respect to any issued Patents.

1.53 Person means any individual, firm, corporation, partnership, limited liability company, trust, business trust, joint venture, Governmental Authority, association or other entity.

1.54 Phase I Clinical Trial means a study in humans which provides for the first introduction into humans of a product, conducted in normal volunteers or patients to generate information on product safety, tolerability, pharmacological activity or pharmacokinetics, as more fully defined in 21 CFR §312.21(a) or comparable regulations in any country or jurisdiction outside the U.S., and any amended or successor regulations.

1.55 Phase II Clinical Trial means a study in humans for which a primary endpoint is a preliminary determination of efficacy in patients with the disease being studied, as more fully defined in 21 CFR §312.21(b) or comparable regulations in any country or jurisdiction outside the U.S., and any amended or successor regulations. Phase II Clinical Trial shall include in all cases any phase I/II clinical trial.

1.56 Phase III Clinical Trial means a controlled study in humans that is performed after preliminary evidence suggesting effectiveness of a product has been obtained, and is intended to demonstrate or confirm the therapeutic benefit of such product and to gather the additional information about effectiveness and safety that is needed to evaluate the overall

 

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benefit-risk relationship of such product and to provide support for filing for Regulatory Approval and for such product’s labeling and summary of product characteristics, as more fully defined in 21 CFR §312.21(c) or comparable regulations in any country or jurisdiction outside the U.S., and any amended or successor regulations. For the sake of clarity, with respect to what is commonly called a phase II/III study, the Phase III Clinical Trial definition is met upon [***], as further defined in Federal Regulation 21 C.F.R. §312.21(c) and its foreign equivalents.

1.57 Phase IV Clinical Trial means a clinical study in humans initiated in a country after receipt of Regulatory Approval for a biopharmaceutical product in such country, usually within or in support of the approved product labeling.

1.58 Pre-Marketing means all sales and marketing activities undertaken prior to and in preparation for the launch of the Product. Pre-Marketing shall include market research, key opinion leader development, advisory boards, medical education, disease-related public relations, health care economic studies, sales force training and other pre-launch activities prior to the First Commercial Sale of the Product in a given country or other regulatory jurisdiction.

1.59 Pricing Approval means, with respect to any country where a Governmental Authority authorizes reimbursement or access, or approves or determines pricing, for biopharmaceutical products, receipt (or, if required to make such authorization, approval of determination effective publication) of such reimbursement or access authorization or pricing approval or determination (as the case may be).

1.60 “Product” means any biopharmaceutical product containing or comprising (i) the Antibody; and (ii) any Variant of the Antibody that: (a) [***] and (b) [***]; provided, that a Product does not include any Active Ingredient that is [***], other than the Antibody as described in the foregoing subsections (i) and (ii). For clarity, Product excludes: (1) [***]; (2) [***]; (3) [***]; (4) [***]; (5) [***]; or (6) [***].

1.61 “Product Approval” means the approval by a Governmental Authority necessary for the marketing and sale of the Product in a given country or regulatory jurisdiction, which may include the approval of an MAA (but shall not include any Pricing Approvals).

1.62 Product Complaint means any written, verbal or electronic expression of dissatisfaction regarding any Product sold by or on behalf of a Selling Party, including reports of actual or suspected product tampering, contamination, mislabeling or inclusion of improper ingredients.

1.63 Promotional Materials means all written, printed, video or graphic advertising, promotional, educational and communication materials (other than the Product labels and package inserts) for marketing, advertising and promoting of the Product, for use (i) by a Sales Representative or a Medical Science Liaison or (ii) in advertisements, web sites or direct mail pieces.

 

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1.64 Regulatory Approval means, with respect to any biopharmaceutical product in any regulatory jurisdiction for a given indication, approval from the applicable Regulatory Authority permitting the manufacture, sale, distribution or Commercialization of such biopharmaceutical product in such regulatory jurisdiction for such indication in accordance with Applicable Law, including any Pricing Approvals.

1.65 Regulatory Authority means, in a particular country or regulatory jurisdiction, any applicable Governmental Authority involved in granting Regulatory Approval and/or, to the extent required in such country or regulatory jurisdiction, governmental Pricing Approval of a biopharmaceutical product in such country or regulatory jurisdiction.

1.66 Regulatory Data means any and all research data, pharmacology data, chemistry, manufacturing and control data, preclinical data, clinical data and all other documentation submitted, or required to be submitted, to Regulatory Authorities in association with regulatory filings for the Product (including any applicable Drug Master Files, Chemistry, Manufacturing and Control (CMC) data, or similar documentation).

1.67 “Regulatory Materials” means regulatory applications, submissions, notifications, communications, correspondence, meeting minutes, registrations, Regulatory Approvals and/or other filings made to, received from or otherwise conducted with a Regulatory Authority that are necessary in order to Develop, Manufacture, obtain marketing authorization, market, sell, distribute or otherwise Commercialize the Product in a particular country or regulatory jurisdiction. Regulatory Materials include INDs, MAAs, presentations, responses, and applications for Product Approvals.

1.68 Royalty Term means, with respect to a Product on a country-by-country basis, the period of time beginning on the First Commercial Sale of such Product in such country and ending the later of (i) the expiration of the last to expire Valid Claim Covering the Antibody or Product in such country, or (ii) [***] ([***]) years from the First Commercial Sale of such Product in such country. Notwithstanding subsections (i) and (ii) above, the Royalty Term for a Product in a country shall not [***].

1.69 “Sales Representative” means an individual who is employed by a Party and who performs details and other promotional efforts with respect to the Product.

1.70 Selling Party means Aimmune or another Aimmune Agreement Entity.

1.71 “Third Party” means any Person other than Xencor, Aimmune or their respective Affiliates.

1.72 United States or U.S. means the United States of America and its possessions and territories.

1.73 Upstream Agreement means that certain [***] Agreement by and between Xencor and the [***] dated [***].

 

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1.74 Valid Claim means, with respect to a particular country, (i) a claim of [***] that (a) has not been specifically held permanently revoked, unenforceable or invalid by a decision of a court or other Governmental Authority of competent jurisdiction, which decision is unappealed or unappealable within the time allowed for appeal, and (b) has not been cancelled, withdrawn, abandoned, disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (ii) a bona fide claim of a pending patent application [***] that has not been (a) cancelled, withdrawn or abandoned without being re-filed in another application in the applicable jurisdiction, or (b) finally rejected by an administrative agency action from which no appeal can be taken or that has not been appealed within the time allowed for appeal.

1.75 Variant means [***].

1.76 “Xencor [***]” means a [***].

1.77 “Xencor Invention” means an Invention that is Invented solely or jointly with a Third Party, by or on behalf of Xencor or its Affiliates.

1.78 Xencor Know-How means any and all Know-How, whether or not patented or patentable, (i) to the extent Controlled by Xencor or its Affiliates as of the Effective Date, or, if transferred to Aimmune thereafter during the Term of this Agreement, and that is necessary in connection with the Development, Manufacture, Commercialization or other use of the Antibody or Product or (ii) constituting a Xencor Invention. Notwithstanding the foregoing, in all cases, Xencor Know-How does not include (a) [***], (b) [***], (c) [***], (d) [***], (e) [***], or (f) [***].

1.79 Xencor General Patent means (i) the Patents identified on Schedule 1.79, including patents issuing from any patent application set forth on Schedule 1.79, (ii) with respect to such Patents set forth on Schedule 1.79, all provisional applications, substitutions, continuations, continuations-in-part, divisionals, renewals, patents-of-addition, reissues, reexaminations and extensions, (iii) all international and domestic counterparts of any of the foregoing, and (iv) any other Patents Controlled by Xencor that claim inventions necessary for the Development, Manufacture, Commercialization or other use of the Antibody or Product as the Antibody and Product exist as of the Effective Date.

1.80 Xencor Patent means Xencor General Patents and Xencor Product Specific Patents.

1.81Xencor Product Specific Patent” means (i) the Patents identified on Schedule 1.81, including patents issuing from any patent application set forth on Schedule 1.81, (ii) with respect to all Patents set forth on Schedule 1.81, all provisional applications, substitutions, continuations, continuations-in-part, divisionals, renewals, patents-of-addition, reissues, reexaminations and extensions, (iii) any [***], and (iv) all international and domestic counterparts of any of the foregoing.

1.82 “Xencor Technology” means Xencor Know-How and Xencor Patents.

 

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1.83 Additional Definitions. The following terms have the meanings set forth in the corresponding Sections of this Agreement:

 

Term

  

Section

“Agreement”    Preamble
“Bankrupt Party”    14.7
“Breaching Party”    13.2
[***]    1.73
“Claim”    11.1
“CMC”    1.66
“Commercialization Data”    5.5
“Confidential Information”    12.1.1
“Controlling Party”    9.4.1(a)
“Court”    15.13.3
“Dispute”    15.1
“Effective Date”    Preamble
“ICH”    1.34

Term

  

Section

“Indemnified Party”    11.3.1
“Indemnifying Party”    11.3.1
“Infringement Claim”    9.4.1
“Joint Collaboration Patents”    9.1.1
“Aimmune”    Preamble
“Aimmune Collaboration Patents”    9.1.1
“Xencor”    Preamble
“Xencor Collaboration Patents”    9.1.1
“Losses”    11.1
“Packaging and Labeling”    6.2

Term

  

Section

“Party” or “Parties”    Preamble
“Product Trade Dress”    5.4.1
“Product Trademark”    5.4.1
“Recovery”    9.4.2(c)(iv)
“Shares”    7.1
“Stock Issuance Agreement”    7.1
“Sublicensee”    2.3.2
“Term”    13.1
“Third Party Patent”    7.3.2(b)
“Upfront Payment”    7.1
“VAT”    8.3.3
 

 

ARTICLE 2

LICENSES

2.1 Grant to Aimmune. Subject to the terms and conditions of this Agreement, Xencor hereby grants to Aimmune during the Term an exclusive, worldwide, payment-bearing license under and with respect to Xencor Patents and Xencor’s interest in Joint Collaboration Patents, and a non-exclusive, payment bearing license under and with respect to Xencor Know-How, in each case, with the right to sublicense solely in accordance with Section 2.3.2, solely to Develop, Manufacture and Commercialize the Product in and for the Licensed Field; provided that notwithstanding the foregoing, Xencor shall retain the right under and with respect to Xencor Patents and Xencor’s interest in Joint Collaboration Patents to the extent necessary to perform its obligations under this Agreement.

2.2 Additional Licensing Provisions.

2.2.1 Negative Covenant. Aimmune covenants that it will not use or practice any of Xencor’s rights to and under the Xencor Patents, Xencor Know-How or other intellectual property rights licensed (or sublicensed, as applicable) to it under this ARTICLE 2, except for the purposes expressly permitted in the applicable license grant. Aimmune covenants that it will not research or develop (including Develop) the Antibody itself, including not developing any modification, variant, fragment, progeny or derivatives of such Antibody, in each case, in a way that would produce a molecule that is neither the Antibody nor a molecule that falls within the definition of a Product.

 

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2.2.2 No Implied Licenses; Retained Rights. Except as explicitly set forth in this Agreement, Xencor does not grant any license, express or implied, under its intellectual property rights to Aimmune, whether by implication, estoppel or otherwise.

2.2.3 Upstream Agreement. Aimmune acknowledges, understands and agrees that (i) the Xencor Know-How licensed to Aimmune pursuant to Section 2.1 includes certain Know-How licensed to Xencor pursuant to the Upstream Agreement, (ii) the license to such Xencor Know-How constitutes a sublicense under the Upstream Agreement, (iii) Aimmune’s rights to such Xencor Know-How are subject and subordinate to the terms and conditions of the Upstream Agreement, (iv) Aimmune will comply with the Upstream Agreement, including undertaking such activities as Xencor reasonably requests to so comply, (v) [***] is responsible for any and all payments due under the Upstream Agreement (following the Effective Date) in connection with Developing, Manufacturing and Commercializing the Product by or on behalf of Aimmune (including by or on behalf of its Affiliates or sublicensees), and (vi) Aimmune received a copy of the Upstream Agreement prior to the Effective Date.

2.3 Performance by Affiliates and Sublicensees.

2.3.1 Performance by Affiliates. The Parties recognize that each may perform some or all of its obligations under this Agreement through Affiliates; provided, however, that each Party shall remain responsible for and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Each Party hereby expressly waives any requirement that the other Party exhausts any right, power or remedy, or proceed against an Affiliate, for any obligation or performance hereunder prior to proceeding directly against such Party. Wherever in this Agreement the Parties delegate responsibility to Affiliates, the Parties agree that such entities may not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way.

2.3.2 Sublicensees. Aimmune shall [***] the right (but not the obligation) to sublicense the rights granted to it under Section 2.1 to its Affiliates or Third Parties (each, a Sublicensee); provided, however, that Aimmune shall remain responsible for the performance by any of its direct and indirect Sublicensees and shall cause its direct and indirect Sublicensees to comply with the applicable provisions of this Agreement in connection with such performance. Without limiting the foregoing, Aimmune shall cause its direct and indirect Sublicensees to accept in writing all applicable terms and conditions of this Agreement, including the reporting, audit, inspection and confidentiality provisions hereunder and Sections 2.2.1 and 2.4. For the avoidance of doubt, (a) Aimmune will remain directly responsible for all amounts owed to Xencor under this Agreement, and (b) Aimmune shall cause each Sublicensee (including each tier of Sublicensee) to be subject to the negative and restrictive covenants set forth in Sections 2.2.1 and 2.4, respectively. Aimmune hereby expressly waives any requirement that Xencor exhaust any right, power or remedy, or proceed against a subcontractor, for any obligation or performance hereunder prior to proceeding directly against Aimmune.

2.4 Restrictive Covenants. Aimmune hereby covenants and agrees that it shall not (and shall cause the other Aimmune Agreement Entities not to), either directly or indirectly,

 

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Develop, Manufacture, or Commercialize the Product for use outside the Licensed Field. Furthermore, Xencor hereby covenants and agrees that it shall not (and shall cause its Affiliates not to), either directly or through granting a license or other right to, or otherwise facilitating, a Third Party to (a) Develop, Manufacture or Commercialize the Antibody or the Product during the Term, (b) commence any [***] of any [***] that is not the Antibody or a Product and that [***] for use in the Licensed Field, prior to the [***] ([***]th) anniversary of the Effective Date, or (c) Develop, Manufacture or Commercialize any [***] that is not the Antibody or a Product and that [***] for use in the Aimmune Field during the Term. It is the desire and intent of the Parties that the restrictive covenants contained in this Section 2.4 be enforced to the fullest extent permissible under Applicable Laws and public policies applied in each jurisdiction in which enforcement is sought. Xencor and Aimmune believe that the restrictive covenants in this Section 2.4 are valid and enforceable. However, if any restrictive covenant should for any reason become or be declared by a competent court or competition authority to be invalid or unenforceable in any jurisdiction, such restrictive covenant shall be deemed to have been amended to the extent necessary in order that such provision be valid and enforceable, such amendment shall apply only with respect to the operation of such provision of this Section 2.4 in the particular jurisdiction in which such declaration is made. Further, both Parties agree that [***] of this Agreement.

2.5 Progress Updates. Aimmune shall keep Xencor informed as to its progress and activities relating to the Development, Manufacture and Commercialization of the Product on [***] basis (i.e., every [***] ([***]) months), including by providing updates on the status of studies necessary for obtaining Regulatory Approval with respect to the Product, regulatory matters and meetings with Regulatory Authorities with respect to the Product, and Commercialization activities commencing no later than [***] ([***]) year prior to the date on which Aimmune estimates the First Commercial Sale of Product will occur. Additionally, to the extent applicable, such updates shall include summaries of Aimmune’s Development plans for the Product for the ensuing [***] ([***]) year time period. Any information disclosed under this Section 2.5 shall be treated as Confidential Information as defined in Section 12.1.

2.6 Upstream Agreement. During the Term, neither Xencor nor any of its Affiliates shall (a) encumber any GPEx Technology, as defined in the Upstream Agreement, to the extent included within the Xencor Technology, or commit any act or permit the occurrence of any omission that would cause the breach or termination of the Upstream Agreement, or otherwise knowingly take actions or permit omissions that would adversely affect the rights granted to Aimmune hereunder with respect to the Xencor Patents and Xencor Know-How, or (b) without Aimmune’s prior written consent, amend or otherwise modify or permit to be amended or modified, the Upstream Agreement in any respect that would adversely affect Aimmune’s rights with respect to, the Antibody or Products. Xencor shall promptly notify Aimmune upon Xencor’s becoming aware of any alleged, threatened, or actual breach of the Upstream Agreement by either Party and shall not take any action that would reasonably give rise to the right of the counterparty to terminate the Upstream Agreement.

2.7 Technology Transfer. Xencor shall use Commercially Reasonable Efforts to transfer, and Aimmune shall use Commercially Reasonable Efforts to receive, the Xencor Know-How, Regulatory Materials, and Regulatory Data, in each case, as identified on Schedule 2.7 to

 

15


permit and enable Aimmune or its Affiliates to Develop and Manufacture the Product pursuant to the terms of this Agreement no later than [***] ([***]) Business Days after the Effective Date. The technology transfer under this Section 2.7 shall occur in an orderly fashion and in a manner reasonably agreed by the Parties. The implementation and transfer of information pursuant hereto shall be conducted through electronic, email and teleconference consultation between the Parties. [***] shall be responsible for any Development or Manufacturing related out-of-pocket costs associated with such technology transfer, including lab runs, pilot scale testing and demo batches. Xencor will allocate adequate appropriately qualified representatives to enable Aimmune to practice and understand the Xencor Know-How, Regulatory Materials, and Regulatory Data, including in connection with the transition of Manufacturing responsibility to Aimmune, Xencor’s obligations under this Section 2.7 shall not exceed an aggregate of [***] ([***]) full-time equivalent hours unless the Parties otherwise agree in writing [***].

ARTICLE 3

DEVELOPMENT

3.1 Overview of Development. Subject to the terms and conditions of this Agreement, Aimmune shall be responsible for the Development of the Product as set forth herein. Aimmune, itself or with or through its Affiliates and Sublicensees, shall use Commercially Reasonable Efforts to perform the Development Activities for the Product to (i) achieve the development milestones set forth in Section 7.2, and (ii) obtain Regulatory Approval for the Product.

3.2 Compliance. Aimmune shall conduct the Development Activities in accordance with sound and ethical business and scientific practices, and in compliance with all Applicable Law, including GCPs and GLPs, and also including all applicable data privacy and data protection laws. In addition, Aimmune shall not use in any capacity, in connection with its Development (or Commercialization) of the Product hereunder, any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Applicable Law outside of the U.S.), or who is the subject of a conviction described in such section, and Aimmune shall inform Xencor in writing promptly if it or any Person who is performing services for Aimmune hereunder is debarred or is the subject of a conviction described in Section 306 (or similar Applicable Law outside of the U.S.), or if any action, suit, claim, investigation or legal administrative proceeding is pending or, to Aimmune’s knowledge, is threatened, relating to the debarment of Aimmune or any Person used in any capacity by Aimmune in connection with its Development (or Commercialization) of the Product hereunder. Xencor shall not use in any capacity in connection with performing its obligations under this Agreement, any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Applicable Law outside of the U.S.), or who is the subject of a conviction described in such section. Xencor shall inform Aimmune in writing immediately promptly if it or any Person who is performing services for Xencor hereunder is debarred or is the subject of a conviction described in Section 306 (or similar Applicable Law outside of the U.S.), or if any action, suit, claim, investigation or legal administrative proceeding is pending or, to Xencor’s knowledge, is threatened, relating to the debarment of Xencor or any Person used in any capacity by Xencor in connection with its Development or Manufacture of the Product prior to the Effective Date or performance under this Agreement or during the Term in the course of performing Xencor’s obligations under this Agreement.

 

16


3.3 Development Costs. As between the Parties, Aimmune shall be solely responsible for one hundred percent (100%) of all Development costs incurred with respect to any Development Activities.

3.4 Records, Reports and Information. Aimmune shall, and shall cause each of the other Aimmune Agreement Entities to, maintain current and accurate records of all Development Activities conducted by it and all data and other information resulting from such work (which records shall include, as applicable, books, records, reports, research notes, charts, graphs, comments, computations, analyses, recordings, photographs, computer programs and documentation thereof (e.g., samples of materials and other graphic or written data generated in connection with the Development Activities)). Such records shall properly reflect all work done and results achieved in the performance of the Development Activities in sufficient detail and in good scientific manner appropriate for regulatory and patent purposes. Aimmune shall document all preclinical studies and Clinical Trials to be conducted in formal written study reports according to applicable national and international (e.g., ICH, GCP and GLP) guidelines.

ARTICLE 4

REGULATORY

4.1 Regulatory Filings and Regulatory Approvals.

4.1.1 General Responsibilities; Ownership of Regulatory Approvals. Aimmune shall be responsible for the preparation of all Regulatory Materials necessary or desirable for obtaining and maintaining the Regulatory Approvals for the Product and Aimmune shall submit such Regulatory Materials, as applicable, to the applicable Governmental Authorities. For clarity, to the extent allowed by Applicable Law, all Regulatory Approvals for the Product shall be held and owned by Aimmune in its name.

4.1.2 Pricing Approvals. To the extent that a given country or regulatory jurisdiction requires Pricing Approval for sale of the Product, Aimmune shall (to the extent permitted by Applicable Laws) be solely responsible for (and shall use Commercially Reasonable Efforts toward) obtaining and maintaining Pricing Approvals in all such countries and regulatory jurisdictions in which it obtains Regulatory Approval for Product, in its own name.

4.1.3 Cost of Regulatory Activities. All regulatory costs incurred in connection with the preparation of Regulatory Materials, and obtaining of Product Approvals, for the Product shall be borne solely by Aimmune. Aimmune shall be responsible for all regulatory costs involved in the maintenance of all Regulatory Approvals for the Product.

4.1.4 Reporting and Review. Pursuant to the updates to be provided to Xencor under Section 2.5, Aimmune shall keep Xencor reasonably informed in connection with the preparation of all material Regulatory Materials, Regulatory Authority review of Regulatory Materials, and Regulatory Approvals, in each case with respect to the Product.

 

17


4.1.5 Safety Reporting. Aimmune shall provide a [***] safety report in connection with the Development of the Product. Aimmune shall determine, [***], the contents and frequency of such reports, but in any event such reports will be made as [***] for Xencor to remain informed of the safety status of the Product to assess, monitor and report to Regulatory Authorities information relevant to the safety of Product in connection with Xencor’s efforts to obtain Regulatory Approval of products that are not the Product and that [***], and comply with Applicable Laws. Xencor shall provide a [***] safety report in connection with the development of products (other than Product) that [***]. Xencor shall determine, [***], the contents and frequency of such reports, but in any event such reports will be made as [***] for Aimmune to assess, monitor and report to Regulatory Authorities information relevant to the safety of Product in connection with Aimmune’s efforts to obtain Regulatory Approval of the Product and comply with Applicable Laws.

4.2 No Other Regulatory Filings. Except as otherwise expressly set forth in this ARTICLE 4, Aimmune and Aimmune Agreement Entities shall not file any Regulatory Materials or Regulatory Approvals that are based on any Xencor Technology.

4.3 Pharmacovigilance and Medical Inquiries.

4.3.1 Pharmacovigilance. Subject to Section 4.1.1, Aimmune, as the holder of the Product Approvals, shall be responsible for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Product (whether or not Product Approval has been achieved), in each case in accordance with Applicable Law and this Agreement (and Aimmune shall, in the Development and Commercialization of the Product, record, investigate, summarize, notify, report and review all adverse events in accordance with Applicable Law).

4.3.2 Medical Inquiries for the Product. Following the Effective Date, subject to Section 4.1.1, Aimmune shall be responsible for handling all medical questions or inquiries in each country, including all Product Complaints, with regard to any Product distributed or sold by or on behalf of Aimmune (or any of the other Aimmune Agreement Entities), in each case in accordance with Applicable Law and this Agreement.

4.3.3 Regulatory Authority Communications. In addition to its obligations under this Agreement, each Party shall disclose to the other Party (and each Party shall have the right to subsequently disclose to its Affiliates and subcontractors and licensees, specifically those licensees of the Product in the case of Aimmune, who are bound by obligations of confidentiality substantially consistent with those in ARTICLE 12) the following regulatory information: All material information pertaining to material adverse or potentially material adverse actions taken or that may be taken by Regulatory Authorities, in connection with the Product or Antibody, including any notice, audit notice, notice of initiation by Regulatory Authorities of investigations, detentions, seizures or injunctions concerning the Product or Antibody, notice of violation letter (i.e., an untitled letter), warning letter, service of process or other equivalent

 

18


communication or action. Without limiting the generality of the foregoing, each Party shall promptly, but in any event within [***] ([***]) Business Days, inform the other Party of any material adverse or potentially material adverse actions taken or that may be taken by Regulatory Authorities in connection with the Product or Antibody, including any notice, audit notice, notice of initiation by Regulatory Authorities of investigations, detentions, seizures or injunctions concerning the Product or Antibody, notice of violation letter (i.e., an untitled letter), warning letter, service of process or other equivalent communication or action.

4.3.4 Recall, Withdrawal, or Market Notification of Product. In the event that any Governmental Authority threatens or initiates any action to remove the Product from the market, Aimmune shall notify Xencor of such communication promptly, but in no event later than [***] ([***]) Business Days, after receipt thereof. Aimmune shall [***] any recall, withdrawal or market notification of the Product. As between the Parties, all costs and expenses associated with implementing a recall, withdrawal or market notification with respect to the Product shall be borne by [***].

ARTICLE 5

COMMERCIALIZATION

5.1 Commercialization. During the Term, as between the Parties, Aimmune shall be solely responsible for Commercializing the Product. Aimmune shall be responsible for one hundred percent (100%) of the expenses (including Pre-Marketing and other Commercialization expenses) incurred in connection with the Commercialization of the Product.

5.2 Aimmune’s Performance.

5.2.1 Specific Commercialization Obligations. Without limiting the generality of the provisions of Section 5.1, in connection with the Commercialization of the Product by or on behalf of Aimmune or its Affiliates and Sublicensees hereunder:

(a) Aimmune, itself or with or through its Affiliates and Sublicensees, shall (i) use Commercially Reasonable Efforts to Commercialize the Product in the Licensed Field throughout the Major Territory, (ii) represent the Product accurately and fairly, and (iii) not sell or distribute the Product in a bundle with other products at a discount that is not equitably allocated between Product and other products with which the Product is bundled.

(b) Aimmune shall not (i) [***], or (ii) utilize deceptive, misleading or unethical business practices, in each case in the course of performing activities pursuant to this Agreement.

(c) Aimmune, itself or with or through its Affiliates and Sublicensees, shall be solely responsible for (i) receiving, accepting and filling orders for the Product, (ii) handling all returns of the Product, (iii) controlling invoicing, order processing and collection of accounts receivable for the sales of the Product, and (iv) distributing and managing inventory of the Product.

 

19


5.3 Reports. Without limiting Aimmune’s other reporting obligations hereunder, Aimmune shall, during the fourth Calendar Quarter of each Calendar Year after the First Commercial Sale of a Product, provide Xencor [***] involving Product during the preceding four (4) Calendar Quarters.

5.4 Product Trademarks and Product Trade Dress.

5.4.1 Product Trademark. Aimmune shall Commercialize the Product under the trademark and the trade dress selected by Aimmune (the Product Trademark and the Product Trade Dress, respectively).

5.4.2 Use and Ownership of Product Trademarks and Product Trade Dress. All uses of the Product Trademark and Product Trade Dress by Aimmune (and its other Aimmune Agreement Entities) to identify and/or in connection with the Commercialization of the Product shall be in accordance with Regulatory Approvals and all Applicable Law. Aimmune or the other Aimmune Agreement Entities shall own and retain all rights to the Product Trademark and Product Trade Dress (in each case, together with all goodwill associated therewith). Aimmune or the other Aimmune Agreement Entities shall also own rights to any internet domain names incorporating the Product Trademark or any variation or part of such trademark as its URL address.

5.4.3 Maintenance of Product Trademark. During the Term, Aimmune or the other Aimmune Agreement Entities will use Commercially Reasonable Efforts to establish and maintain the Product Trademark and will [***].

5.4.4 No Inclusion of Xencor Logos on Packaging and Promotional Materials. Notwithstanding anything to the contrary herein, Aimmune shall not use any Xencor trademark, names, logos or housemark in connection with any Promotional Materials or the Product without Xencor’s written consent. Without limiting the foregoing, Aimmune will take no action that will interfere with or diminish Xencor’s rights in its respective trademarks, names and logos, and if Xencor reasonably believes that the use of any trademarks, names and logos by Aimmune hereunder is interfering with or diminishing its rights, Xencor shall notify Aimmune thereof in writing and Aimmune shall promptly cease use of such trademarks, names or logos in such manner.

5.5 Commercialization Data. As between the Parties, Aimmune shall own all marketing and sales data and information resulting from its Commercialization of the Product during the Term (the Commercialization Data), including promotional materials, marketing strategies and market research data.

ARTICLE 6

SUPPLY

6.1 Initial Product Supply. Xencor shall provide a [***] supply of Product to Aimmune in the amounts and in the form set forth on Schedule 6.1, which Aimmune agrees to accept on an as-is basis. Xencor shall make available to Aimmune the quantity of the Product

 

20


specified on Schedule 6.1 within [***] ([***]) Business Days from the Effective Date or otherwise as agreed to by the Parties, and shall provide appropriate documentation at such time (i.e., appropriate certificates of analysis or compliance, as applicable). The Product shall be made available to Aimmune [***]. For clarity, Aimmune shall bear all costs in connection with such supply of Product related to shipping, taxes, additional testing and other matters.

6.2 Packaging and Labeling; Certain Other Manufacturing Activities. Notwithstanding anything to the contrary contained herein, Aimmune or its designated Third Party shall be responsible ([***]) for all final product labeling and packaging (whether in commercial or clinical packaging presentation), including materials such as patient inserts, patient medication guides, professional inserts and any other written, printed or graphic materials accompanying the Product and considered to be part of the finished Product packaging and labeling, and handling, storage, quality control, quality assurance, testing and release (collectively, Packaging and Labeling). Aimmune or its designated Third Party shall ensure that all such Packaging and Labeling complies with Applicable Laws, GMPs and the Regulatory Approvals for the Product. To the extent that a Third Party is involved in Packaging and Labeling or other activities described in this Section 6.2, [***] shall be [***] responsible for[***], qualifying such Third Party to perform such activities.

ARTICLE 7

PAYMENTS

7.1 Upfront Payments. Within [***] ([***]) days after the Effective Date of this Agreement, Aimmune shall issue to Xencor shares of Aimmune Common Stock (the Shares) in accordance with that certain Stock Issuance Agreement, dated the date hereof, by and among Xencor and Aimmune (the Stock Issuance Agreement), and pay to Xencor by wire transfer of immediately available funds, into an account designated in writing by Xencor, an amount equal to five million Dollars ($5,000,000) (together with the issuance of the Shares, the Upfront Payment). The Upfront Payment shall be nonrefundable and noncreditable against any other payments due hereunder.

7.2 Milestone Payments. Aimmune shall pay to Xencor the one-time milestone payments described in this Section 7.2 following achievement (and only upon the first occurrence) of the corresponding milestone event for a Product. Aimmune shall promptly notify Xencor in writing of, but in no event later than [***] ([***]) days after, the achievement of each such milestone event with respect to a Product. Aimmune shall pay the applicable milestone payment by wire transfer of immediately available funds within [***] ([***]) days after the achievement (and only upon the first occurrence) of the applicable milestone event into an account designated by Xencor in writing. Each such milestone payment is nonrefundable and noncreditable against any other payments due hereunder.

 

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Milestone Event

   Milestone Payment  

Development Milestone

 

[***]

   $ [ ***] 

[***]

   $ [ ***] 

[***]

   $ [ ***] 

[***]

   $ [ ***] 

[***]

   $ [ ***] 

[***]

   $ [ ***] 

Sales Milestones

 

[***]

   $ [ ***] 

[***]

   $ [ ***] 

[***]

   $ [ ***] 

[***]

   $ [ ***] 

7.3 Royalty Payments.

7.3.1 Product. On a Product-by-Product and country-by-country basis during the Royalty Term applicable to such Product and such country, Aimmune shall pay to Xencor the following royalties on Net Sales of Products, subject to Section 7.3.2:

 

Aggregate Annual Net Sales

   Royalty Rate  

[***]

     [***]

[***]

     [***]

[***]

     [***]

[***]

     [***]
  

 

 

 

[***]

     [***]
  

 

 

 

[***].

 

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7.3.2 Royalty Reductions.

(a) No Valid Claim. On a country-by-country and Product-by-Product basis, if at any time during the Royalty Term with respect to such country and such Product, such Product is not Covered by any Valid Claim of a [***], the royalty rate applied to Net Sales of such Product shall be the royalty rate in Section 7.3.1 reduced by [***] percent ([***]%) for so long as during the Royalty Term such Product is not Covered by a Valid Claim of a [***] in such country.

(b) Third Party Intellectual Property. Aimmune shall have the right (but not the obligation), at its own expense (subject to the reduction provided for by this Section 7.3.2(b)), to obtain any licenses from any Third Parties that are not Sublicensees of Aimmune with respect to a Product in such country under any issued Patents that would be infringed by the practice of Xencor Technology licensed under Section 2.1 with respect to a given Product in a particular country (each such Patent, a Third Party Patent). If Aimmune obtains such a license to a Third Party Patent, Aimmune shall be entitled to credit [***] percent ([***]%) of the royalties paid to such Third Party during a Calendar Quarter against the royalty payment otherwise payable by Aimmune to Xencor pursuant to this Section 7.3 with respect to such Product and such country in such Calendar Quarter. Notwithstanding the foregoing, Aimmune shall have no right to reduce payments due to Xencor under this Agreement by any amount paid to [***] in connection with the Upstream Agreement or any other agreement entered into between Aimmune and [***].

(c) Generic Competition. On a country-by-country and Product-by-Product basis, if at any time during the Royalty Term with respect to such country and such Product there is one or more Generic Product(s) with respect to such Product being sold for [***]) consecutive Calendar Quarters, then [***] for such country and such Product, the royalty rate for such Product shall be reduced, after giving effect to any reduction applicable to such Product in such country pursuant to [***], on a Calendar Quarter basis as follows:

(i) if the cumulative Net Sales of such Product in such country during such Calendar Quarter are equal to or less than [***] percent ([***]%), but are greater than [***] percent ([***]%), of the Baseline Quarter Net Sales, then the royalty rate will be reduced for such Calendar Quarter by [***] percent ([***]%); and

(ii) if the cumulative Net Sales of such Product in such country during such Calendar Quarter are less than [***] percent ([***]%) of the Baseline Quarter Net Sales of the Baseline Quarter Net Sales, then the royalty rate for such Calendar Quarter will be reduced by [***] percent ([***]%).

provided, that, for clarity, on a country-by-country and Product-by-Product basis, there will be no royalty rate reduction with respect to a given country and Product pursuant to this Section 7.3.2(c) with respect to the initial [***] ([***]) consecutive Calendar Quarter periods during which Generic Product entry with respect to such Product and such country is being established.

 

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(d) Royalty Floor. Notwithstanding any provision set forth in this Agreement to the contrary, none of the permitted reductions to royalties provided in this Section 7.3.2 will reduce any royalty payment payable in a given Calendar Quarter with respect to Net Sales of any Product in any country during the Royalty Term by more than [***] percent ([***]%) of the royalties otherwise owed to Xencor pursuant to Section 7.3.1.

ARTICLE 8

PAYMENT; RECORDS; AUDITS

8.1 Royalty Payments and Reports. The royalty payments due by Aimmune to Xencor under Section 7.3 shall be calculated, reported and paid for each Calendar Quarter within [***] ([***]) days after the end of each Calendar Quarter and shall be accompanied by a report setting forth Net Sales of Products by Aimmune in sufficient detail to permit confirmation of the accuracy of the royalty payment made, including the gross sales and Net Sales of each Product, on a country-by-country basis, and the exchange rates used in accordance with Section 8.2. Without limiting the generality of the foregoing, Aimmune shall require its Affiliates and other Aimmune Agreement Entities to account for its Net Sales and to provide such reports with respect thereto as if such sales were made by Aimmune.

8.2 Manner and Place of Payment. When conversion of payments from any currency other than U.S. Dollars is required, such conversion shall be at an exchange rate equal to the rates of exchange for the currency of the country from which such payments are payable as published by The Wall Street Journal, Western U.S. Edition, on the last Business Day of the Calendar Quarter in which the applicable sales were made in such country. All payments hereunder shall be payable in U.S. Dollars. All payments owed under this Agreement shall be made by wire transfer in immediately available funds to a bank and account designated in writing by Xencor, unless otherwise specified in writing by Xencor.

8.3 Taxes.

8.3.1 The Parties acknowledge and agree that it is their mutual objective and intent to minimize, to the extent feasible, taxes payable with respect to their collaborative efforts under this Agreement to cooperate and coordinate with each other to achieve such objective. For the avoidance of doubt, as between the Parties, Aimmune shall be responsible for any Branded Prescription Drug Fees that may be levied under section 9008 of the Affordable Care Act with respect to any Product sold.

8.3.2 Subject to this Section 8.3.2, Xencor will pay any and all taxes, including withholdings, levied on account of any payments made to it under this Agreement. If any taxes are paid or required to be withheld by Aimmune for the benefit of Xencor on account of any payments payable to Xencor under this Agreement, Aimmune will (i) deduct such taxes from the amount of payments otherwise due to Xencor, (ii) timely pay the taxes to the proper taxing authority, (iii) send proof of payment to Xencor within [***] ([***]) days following such payment and (iv) cooperate with Xencor in any way reasonably required by Xencor to obtain available reductions, credits or refunds of such taxes. Notwithstanding the foregoing, if (a) Aimmune assigns its rights or obligations or delegates its rights under this Agreement, (b) as a

 

24


result of such assignment or delegation, Aimmune (or its assignee) is required by Applicable Law to withhold taxes from or in respect of any amount payable under this Agreement, and (c) such withholding taxes exceed the amount of withholding taxes that would have been applicable but for such assignment or delegation, then any such amount payable shall be increased to take into account such withholding taxes as may be necessary so that, after making all required withholdings (including withholdings on the additional amounts payable), the payee receives an amount equal to the sum it would have received had no such increased withholding been made. Each Party shall cooperate with the other Party in any way reasonably requested by the other Party to minimize the withholding tax implications of any such assignment or delegation.

8.3.3 Aimmune shall be responsible for all Value Added Taxes (VAT), if any, attributable to transactions contemplated by this Agreement without any offset or reimbursement from Xencor. Xencor shall cooperate with Aimmune in any way reasonably requested by Aimmune to obtain available reductions, credits or refunds of any VAT amounts attributable to transactions contemplated by this Agreement.

8.3.4 [***].

8.4 Records; Audits. During the Term and for [***] ([***]) years thereafter, Aimmune shall keep, and shall cause its Affiliates and Sublicensees to keep and provide to Xencor, complete and accurate records pertaining to the sale or other disposition of Product in sufficient detail to permit Xencor to confirm the accuracy of payments due hereunder. Xencor shall have the right, upon [***] ([***]) days’ prior wr