C&H Matter Number: 1025-00006
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
by and between
PENTERRA PHARMACEUTICALS CORP.
and
CALISTON BIOSCIENCES, INC.
Dated as of November 27, 2023
C&H Draft v.7.3 (Execution Version) C&H Matter Number: 1025-00006
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November 27, 2023, is entered into by and between PENTERRA PHARMACEUTICALS CORP., a Delaware corporation ("Parent"), and CALISTON BIOSCIENCES, INC., a Delaware corporation (the "Company").
RECITALS
WHEREAS, Parent is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with its principal executive offices located at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540, whose shares of common stock are listed on the New York Stock Exchange under the ticker symbol "PPHR" (CIK No. 0001587342; EIN 22-3847195);
WHEREAS, the Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with its principal executive offices located at 88 Harbor Point Road, Cambridge, Massachusetts 02142 (EIN 84-4219063);
WHEREAS, the Board of Directors of Parent (the "Parent Board"), acting upon the unanimous recommendation of the Special Committee of the Board of Directors of Parent (the "Special Committee"), comprised solely of independent directors Diane Prescott (Chair), James Okafor, and Dr. Helen Ng, has determined that the Merger (as defined herein) is advisable, fair to, and in the best interests of Parent and its stockholders, and has approved and declared advisable this Agreement and the transactions contemplated hereby, including the Merger and the Share Issuance;
WHEREAS, the Special Committee was formed by resolution of the Parent Board on June 2, 2023, and was granted sole and exclusive authority to evaluate, negotiate, and recommend (or decline to recommend) the Merger, and in connection therewith retained Calderwood & Harkness LLP as its independent legal counsel and Thorngate Partners LLC as its independent financial advisor;
WHEREAS, Thorngate Partners LLC delivered to the Special Committee its written opinion dated November 15, 2023 (the "Thorngate Fairness Opinion") to the effect that, as of such date and based upon and subject to the assumptions, qualifications, limitations, and other matters set forth therein, the Merger Consideration of $925,000,000 in the aggregate (excluding the CVR Payment Amount) is fair, from a financial point of view, to Parent;
WHEREAS, Parent's Chairman of the Board and Chief Executive Officer, Dr. Marcus Hale, holds a 28.5% equity interest in the Company and serves as a board observer of the Company, and such circumstances constitute an interested-party transaction requiring the procedural protections described herein, including, without limitation, the formation and empowerment of the Special Committee, the engagement of independent advisors, and the implementation of an information barrier, all in accordance with Sections 141(a) and 144 of the Delaware General Corporation Law (the "DGCL");
WHEREAS, Dr. Marcus Hale, Angela Whitmore (a director of Parent), and Raymond Tusk (a director of Parent) (collectively, the "Interested Directors") recused themselves from all deliberations and votes of the Parent Board regarding the Merger and the transactions contemplated hereby, and the information barrier and independence protocol established under the internal code name "Project Coriander" has been maintained throughout the process;
WHEREAS, the Board of Directors of the Company (the "Company Board") has determined that this Agreement and the transactions contemplated hereby, including the Merger, are advisable, fair to, and in the best interests of the Company and its stockholders, has approved and declared advisable this Agreement, and has recommended that the stockholders of the Company approve and adopt this Agreement;
WHEREAS, the stockholders of the Company holding at least a majority of the outstanding shares of Company Common Stock are expected to approve and adopt this Agreement by written consent in lieu of a meeting of stockholders pursuant to Section 228 of the DGCL;
WHEREAS, Parent and the Company desire to set forth the terms and conditions of the merger of the Company with and into Parent, with Parent continuing as the surviving corporation, pursuant to Sections 251 and 144 of the DGCL; and
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to the willingness of Parent and the Company to enter into this Agreement, certain ancillary agreements are being executed and delivered, including the CVR Agreement, the Escrow Agreement, the Stockholder Support Agreements, the Voting and Recusal Agreement, and the Non-Competition and Non-Solicitation Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual representations, warranties, covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Acquiror" means Penterra Pharmaceuticals Corp., a Delaware corporation.
"Action" means any claim, action, suit, arbitration, inquiry, examination, hearing, proceeding, or investigation by or before any Governmental Authority or arbitral body.
"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. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Aggregate Equity Value" means Nine Hundred Twenty-Five Million Dollars ($925,000,000).
"Alternative Acquisition Proposal" means any bona fide proposal or offer (other than a proposal or offer by Parent or any of its Affiliates) relating to any (a) direct or indirect acquisition of assets of the Company (including equity interests in any Subsidiary of the Company) equal to twenty percent (20%) or more of the consolidated assets of the Company or to which twenty percent (20%) or more of the revenues or earnings of the Company on a consolidated basis are attributable, (b) direct or indirect acquisition of twenty percent (20%) or more of the outstanding equity interests of the Company, (c) tender offer or exchange offer that, if consummated, would result in any Person beneficially owning twenty percent (20%) or more of the outstanding equity interests of the Company, or (d) merger, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution, or similar transaction involving the Company.
"Ancillary Agreements" means the CVR Agreement, the Escrow Agreement, the Stockholder Support Agreements, the Voting and Recusal Agreement, the Non-Competition and Non-Solicitation Agreement, and the Stockholder Representative Agreement.
"Business Day" means any day other than a Saturday, Sunday, or a day on which banking institutions in New York, New York, Philadelphia, Pennsylvania, or Wilmington, Delaware are authorized or obligated by Law or executive order to close.
"Cancelled Shares" means any shares of Company Common Stock held in the treasury of the Company or owned by Parent or any Subsidiary of Parent immediately prior to the Effective Time.
"Cash Consideration" means Six Hundred Ninety-Three Million Seven Hundred Fifty Thousand Dollars ($693,750,000), being seventy-five percent (75%) of the Aggregate Equity Value.
"Caliston" or "Company" means Caliston BioSciences, Inc., a Delaware corporation.
"Certificate of Merger" means the certificate of merger to be filed with the Secretary of State of the State of Delaware in connection with the Merger, substantially in the form attached hereto as Exhibit A.
"Change of Recommendation" means (a) the withdrawal, modification, or qualification (or public proposal to withdraw, modify, or qualify), in a manner adverse to Parent, of the recommendation of the Company Board that the stockholders of the Company approve and adopt this Agreement, (b) the approval or recommendation by the Company Board of any Alternative Acquisition Proposal, or (c) the failure of the Company Board to publicly reaffirm its recommendation of this Agreement within five (5) Business Days after receipt of a written request from Parent to do so (which request may be made no more than once with respect to any given Alternative Acquisition Proposal, unless such proposal is materially modified).
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended, together with all regulations promulgated thereunder.
"Company Board" means the Board of Directors of the Company.
"Company Common Stock" means the common stock, par value $0.0001 per share, of the Company.
"Company Disclosure Schedule" means the disclosure schedule delivered by the Company to Parent concurrently with the execution and delivery of this Agreement.
"Company Material Adverse Effect" means any change, event, circumstance, development, condition, occurrence, or effect (each, an "Effect") that, individually or in the aggregate with all other Effects, (a) is, or would reasonably be expected to be, materially adverse to the business, financial condition, assets, liabilities, or results of operations of the Company and its Subsidiaries, taken as a whole, or (b) prevents or would reasonably be expected to prevent or materially impair or delay the ability of the Company to consummate the transactions contemplated by this Agreement; provided, however, that, for purposes of clause (a) of this definition, no Effect arising from or related to any of the following, individually or in the aggregate, shall be taken into account in determining whether a Company Material Adverse Effect has occurred: (i) changes in general economic, financial, or market conditions; (ii) changes in the pharmaceutical or biotechnology industries generally; (iii) changes in applicable Law or GAAP (or interpretations thereof); (iv) natural disasters, pandemics, epidemics, acts of war, sabotage, terrorism, or military actions; (v) the announcement or pendency of this Agreement or the transactions contemplated hereby, including any impact on relationships with customers, suppliers, employees, or regulators; (vi) any failure by the Company to meet internal or published projections, forecasts, or estimates (it being understood that the underlying causes of such failure may be considered); or (vii) any action taken by the Company at the written request or with the written consent of Parent; provided, further, that, with respect to clauses (i) through (iv) above, such Effects shall be taken into account to the extent they disproportionately affect the Company relative to similarly situated companies in the pharmaceutical and biotechnology industries.
"Company Stockholder Approval" means the adoption and approval of this Agreement and the Merger by the holders of a majority of the outstanding shares of Company Common Stock entitled to vote thereon, obtained by written consent in lieu of a meeting of stockholders pursuant to Section 228 of the DGCL.
"Company Termination Fee" means Twenty-Seven Million Seven Hundred Fifty Thousand Dollars ($27,750,000), which amount equals three percent (3.0%) of the Aggregate Equity Value.
"Confidentiality Agreement" means the Mutual Confidentiality Agreement dated March 14, 2023, by and between Parent and the Company, as amended.
"Contingent Value Rights Agreement" or "CVR Agreement" means the Contingent Value Rights Agreement, dated as of the date hereof, by and between Parent and Columnar Trust Services, Inc. (as CVR Trustee), for the benefit of the former holders of Company Common Stock, substantially in the form attached hereto as Exhibit B.
"Contract" means any contract, agreement, lease, sublease, license, sublicense, instrument, note, bond, mortgage, indenture, arrangement, understanding, or commitment, whether written or oral.
"CVR" means a Contingent Value Right, representing a contractual right to receive a pro rata portion of the CVR Payment Amount upon achievement of the CVR Milestone, issued and governed pursuant to the CVR Agreement.
"CVR Milestone" means the approval by the U.S. Food and Drug Administration of a New Drug Application (or Biologics License Application, as applicable) for CLT-4019 (IND 158429) for any indication, with such approval occurring on or before December 31, 2026.
"CVR Payment Amount" means One Hundred Twenty-Five Million Dollars ($125,000,000) in the aggregate, payable upon achievement of the CVR Milestone in accordance with the terms of the CVR Agreement.
"CVR Trustee" means Columnar Trust Services, Inc., a national trust company, acting in its capacity as trustee under the CVR Agreement.
"DGCL" means the Delaware General Corporation Law, Title 8 of the Delaware Code, as amended.
"Dissenting Shares" means shares of Company Common Stock held by any holder who has properly demanded and perfected appraisal rights with respect to such shares in accordance with Section 262 of the DGCL and has not effectively withdrawn or lost the right to appraisal.
"Effective Time" has the meaning set forth in Section 2.3.
"Environmental Laws" means all Laws relating to pollution, protection of the environment, natural resources, or human health and safety (as related to exposure to Hazardous Materials), including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, and all analogous state and local Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Escrow Agent" means Greystone National Bank, N.A., acting in its capacity as escrow agent under the Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement, dated as of the date hereof, by and among Parent, the Stockholder Representative, and Greystone National Bank, N.A. (as Escrow Agent), substantially in the form attached hereto as Exhibit C.
"Escrow Amount" means Forty-Six Million Two Hundred Fifty Thousand Dollars ($46,250,000), which amount equals five percent (5%) of the Aggregate Equity Value.
"Escrow Period" means the period commencing on the Closing Date and ending on the date that is eighteen (18) months after the Closing Date.
"Exchange Agent" means Columnar Trust Services, Inc., acting in its capacity as exchange agent and transfer agent pursuant to Section 3.5.
"Exchange Ratio" means the number of shares of Parent Common Stock issuable per share of Company Common Stock, calculated so as to deliver, in the aggregate, the Stock Consideration, based on a per-share price of Parent Common Stock equal to the Parent VWAP. Specifically, the Exchange Ratio equals the quotient of (a) the aggregate number of shares of Parent Common Stock constituting the Share Issuance (5,903,497 shares) divided by (b) the total number of shares of Company Common Stock outstanding immediately prior to the Effective Time (other than Cancelled Shares and Dissenting Shares).
"FDA" means the U.S. Food and Drug Administration, or any successor agency thereto.
"Fundamental Representations" means, with respect to the Company, the representations and warranties set forth in Section 4.1 (Organization, Good Standing, and Qualification), Section 4.2 (Capitalization), Section 4.3 (Authorization; Validity of Agreement), Section 4.13 (Tax Matters), and Section 4.18 (Brokers and Finders); and with respect to Parent, the representations and warranties set forth in Section 5.1 (Organization, Good Standing, and Qualification), Section 5.2 (Capitalization), Section 5.3 (Authorization; Validity of Agreement), and Section 5.10 (Brokers and Finders).
"GAAP" means United States generally accepted accounting principles, as in effect from time to time, consistently applied throughout the applicable periods.
"Governmental Authority" means any federal, state, local, domestic, foreign, or supranational government, governmental, regulatory, or administrative authority, agency, department, bureau, commission, or instrumentality, any court, tribunal, or arbitral body, or any self-regulatory organization (including the NYSE).
"Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination, ruling, award, or assessment entered by or with any Governmental Authority.
"Hazardous Materials" means any pollutant, contaminant, toxic or hazardous substance, material, or waste, as defined or regulated under any Environmental Law, including petroleum, petroleum by-products, asbestos, polychlorinated biphenyls, radioactive materials, and per- and polyfluoroalkyl substances.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"IND" means an Investigational New Drug Application filed with the FDA pursuant to 21 C.F.R. Part 312, as amended. As used herein with respect to CLT-4019, IND means IND 158429.
"intellectual Property" means all intellectual property rights of any kind or nature, including (a) patents, patent applications, patent disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof (collectively, "Patents"); (b) trademarks, service marks, trade names, trade dress, logos, domain names, and other source identifiers, including all goodwill associated therewith, and all applications, registrations, renewals, and extensions thereof (collectively, "Trademarks"); (c) copyrights, including all applications, registrations, renewals, and extensions thereof; (d) trade secrets, know-how, inventions, processes, techniques, data, formulae, algorithms, technology, and other confidential or proprietary information (collectively, "Trade Secrets"); and (e) all other intellectual property rights recognized under applicable Law.
"Interested Directors" means Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk.
"Knowledge" means, (a) with respect to the Company, the actual knowledge of Dr. Nadia Sorensen (Chief Executive Officer), Dr. Raj Malhotra (Chief Scientific Officer), Michael Chen (Chief Financial Officer), and Dr. Evan Whitmore (Head of Clinical Development), in each case after reasonable inquiry of the employees reporting directly to such individual; and (b) with respect to Parent, the actual knowledge of Dr. Marcus Hale (Chairman and Chief Executive Officer), Lawrence Whittaker (General Counsel and Corporate Secretary), Patricia Engström (Chief Financial Officer), and Dr. Sung Park (Chief Medical Officer), in each case after reasonable inquiry of the employees reporting directly to such individual; provided, however, that with respect to the transactions contemplated by this Agreement, the Knowledge of Parent shall not include the knowledge of Dr. Marcus Hale to the extent such knowledge was obtained solely in his capacity as a board observer of the Company and was not shared with the Special Committee or the non-recused members of the Parent Board due to the information barrier established under Project Coriander.
"Law" means any statute, law, ordinance, regulation, rule, code, order, requirement, or rule of law (including common law) of any Governmental Authority.
"Letter of Transmittal" means the letter of transmittal and instructions for surrendering certificates or book-entry shares representing Company Common Stock in exchange for the Merger Consideration, to be provided by the Exchange Agent to holders of Company Common Stock following the Effective Time.
"Liens" means any mortgage, pledge, lien, security interest, charge, claim, encumbrance, hypothecation, option, right of first refusal, right of first offer, preemptive right, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.
"Material Contracts" has the meaning set forth in Section 4.11.
"Maximum Transaction Value" means One Billion Fifty Million Dollars ($1,050,000,000), which equals the sum of the Aggregate Equity Value ($925,000,000) and the CVR Payment Amount ($125,000,000).
"Merger" means the merger of the Company with and into Parent in accordance with the terms and conditions of this Agreement and the DGCL, with Parent continuing as the Surviving Corporation.
"Merger Consideration" means the aggregate consideration payable to the holders of Company Common Stock in connection with the Merger, comprising (a) the Cash Consideration, (b) the Stock Consideration, and (c) the right to receive the CVR Payment Amount upon achievement of the CVR Milestone pursuant to the CVR Agreement.
"NDA" means a New Drug Application submitted to the FDA pursuant to Section 505 of the Federal Food, Drug, and Cosmetic Act, as amended (21 U.S.C. § 355), and the regulations promulgated thereunder.
"NYSE" means the New York Stock Exchange.
"Outside Date" means November 27, 2024 (the date that is twelve (12) months after the date of this Agreement); provided, however, that if, as of November 27, 2024, all conditions to Closing set forth in Article VII have been satisfied or waived other than conditions related to the HSR Act or other regulatory approvals, either party may, by written notice to the other party, extend the Outside Date to February 27, 2025 (an additional three (3) months).
"Parent" means Penterra Pharmaceuticals Corp., a Delaware corporation.
"Parent Board" means the Board of Directors of Parent.
"Parent Common Stock" means the common stock, par value $0.001 per share, of Parent, listed on the NYSE under ticker symbol "PPHR."
"Parent Disclosure Schedule" means the disclosure schedule delivered by Parent to the Company concurrently with the execution and delivery of this Agreement.
"Parent Material Adverse Effect" means any Effect that, individually or in the aggregate with all other Effects, (a) is, or would reasonably be expected to be, materially adverse to the business, financial condition, assets, liabilities, or results of operations of Parent and its Subsidiaries, taken as a whole, or (b) prevents or would reasonably be expected to prevent or materially impair or delay the ability of Parent to consummate the transactions contemplated by this Agreement; provided, however, that, for purposes of clause (a) of this definition, no Effect arising from or related to any of the following, individually or in the aggregate, shall be taken into account in determining whether a Parent Material Adverse Effect has occurred: (i) changes in general economic, financial, or market conditions; (ii) changes in the pharmaceutical or biotechnology industries generally; (iii) changes in applicable Law or GAAP (or interpretations thereof); (iv) natural disasters, pandemics, epidemics, acts of war, sabotage, terrorism, or military actions; (v) the announcement or pendency of this Agreement or the transactions contemplated hereby; (vi) any failure by Parent to meet internal or published projections, forecasts, or estimates (it being understood that the underlying causes of such failure may be considered); (vii) changes in the market price or trading volume of Parent Common Stock (it being understood that the underlying causes of such changes may be considered); or (viii) any action taken by Parent at the written request or with the written consent of the Company; provided, further, that, with respect to clauses (i) through (iv) above, such Effects shall be taken into account to the extent they disproportionately affect Parent relative to similarly situated companies in the pharmaceutical industry.
"Parent Shares Outstanding" means the approximately 121,400,000 shares of Parent Common Stock issued and outstanding as of the date hereof.
"Parent Stockholder Approval" means the approval of the Share Issuance by the holders of a majority of the votes cast at the Parent Stockholder Meeting, as required under the applicable listing rules of the NYSE.
"Parent Stockholder Meeting" means the meeting of the stockholders of Parent at which the Share Issuance will be submitted for approval.
"Parent VWAP" means $39.17 per share, the thirty (30)-day volume-weighted average price of Parent Common Stock on the NYSE for the period ending on (and including) June 1, 2023.
"Per Share Cash Consideration" means, with respect to each share of Company Common Stock outstanding immediately prior to the Effective Time (other than Cancelled Shares and Dissenting Shares), the quotient of (a) the Cash Consideration divided by (b) the total number of such shares.
"Per Share Stock Consideration" means, with respect to each share of Company Common Stock outstanding immediately prior to the Effective Time (other than Cancelled Shares and Dissenting Shares), the number of shares of Parent Common Stock equal to the quotient of (a) the aggregate number of shares of Parent Common Stock constituting the Share Issuance divided by (b) the total number of such shares.
"Permitted Liens" means (a) Liens for Taxes not yet due and payable or being contested in good faith by appropriate proceedings (and for which adequate reserves have been established in accordance with GAAP), (b) mechanics', carriers', workers', repairers', and similar Liens arising or incurred in the ordinary course of business for amounts not yet due and payable, (c) zoning, entitlement, building, and other land use regulations imposed by Governmental Authorities having jurisdiction over any leased real property that are not violated by the current use or occupancy of such property, (d) statutory Liens in favor of lessors arising under lease agreements, (e) Liens that will be released at or prior to the Effective Time, and (f) other non-monetary Liens that do not materially impair the use or value of the assets subject thereto.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, Governmental Authority, or other entity of any kind.
"Reverse Termination Fee" or "Parent Termination Fee" means Thirty-Two Million Three Hundred Seventy-Five Thousand Dollars ($32,375,000), which amount equals three and one-half percent (3.5%) of the Aggregate Equity Value.
"SEC" means the U.S. Securities and Exchange Commission.
"Share Issuance" means the issuance by Parent of 5,903,497 shares of Parent Common Stock, calculated as the quotient of (a) the Stock Consideration ($231,250,000) divided by (b) the Parent VWAP ($39.17 per share), in connection with the Merger.
"Special Committee" means the Special Committee of the Parent Board, comprising Diane Prescott (Chair), James Okafor, and Dr. Helen Ng, each of whom has been determined by the Parent Board to be independent of Parent management, the Company, and the Interested Directors, and to satisfy the independence requirements of NYSE listing rules and applicable Law.
"Stock Consideration" means Two Hundred Thirty-One Million Two Hundred Fifty Thousand Dollars ($231,250,000) in newly issued shares of Parent Common Stock, being twenty-five percent (25%) of the Aggregate Equity Value.
"Stockholder Representative" means Ridgeline Ventures, LP, a Delaware limited partnership, acting in its capacity as representative of the former holders of Company Common Stock pursuant to Article X and the Stockholder Representative Agreement.
"Subsidiary" means, with respect to any Person, any corporation, partnership, limited liability company, joint venture, or other entity of which such Person (a) beneficially owns, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities or equity interests, or (b) otherwise has the power to vote, direct, or cause the direction of the management and policies of such entity.
"Superior Proposal" means a bona fide written Alternative Acquisition Proposal (with the percentages set forth in the definition of "Alternative Acquisition Proposal" changed to fifty percent (50%)) made by a third party that the Company Board determines in good faith (after consultation with its outside legal counsel and financial advisor), taking into account all relevant legal, financial, regulatory, and other aspects of the proposal, including the terms and conditions of such proposal and of this Agreement (including any revisions to this Agreement proposed by Parent in response thereto), (a) would, if consummated, result in a transaction more favorable to the Company's stockholders than the transactions contemplated by this Agreement (taking into account the Cash Consideration, the Stock Consideration, and the CVR Payment Amount), (b) is reasonably capable of being consummated on the terms proposed, and (c) for which financing, to the extent required, is committed or reasonably expected to be obtained.
"Surviving Corporation" means Parent, as the surviving entity after the Effective Time of the Merger.
"Tax" or "Taxes" means all federal, state, local, and foreign taxes of any kind, including income, franchise, profits, gross receipts, value added, excise, property, sales, use, payroll, employment, social security, withholding, transfer, capital gains, alternative minimum, estimated, and other taxes, including any interest, penalties, or additions to tax thereon.
"Tax Return" means any return, declaration, report, claim for refund, information return, or statement relating to Taxes, including any schedule or attachment thereto and any amendment thereof.
"Thorngate Fairness Opinion" means the written opinion of Thorngate Partners LLC, dated November 15, 2023, delivered to the Special Committee, to the effect that, as of such date and based upon and subject to the assumptions, qualifications, limitations, and other matters set forth therein, the Merger Consideration of $925,000,000 in the aggregate (excluding the CVR Payment Amount) is fair, from a financial point of view, to Parent.
"Transfer Agent" means Columnar Trust Services, Inc., in its capacity as transfer agent for Parent Common Stock.
Section 1.2 — Other Definitional Provisions
(a) Unless the context otherwise requires, (i) references in this Agreement to "Articles," "Sections," "Exhibits," and "Schedules" shall refer to Articles, Sections, Exhibits, and Schedules of this Agreement, (ii) all Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein, (iii) any capitalized term used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning set forth in this Agreement, and (iv) any reference to any federal, state, local, or foreign statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context otherwise requires.
(b) Whenever the words "include," "includes," or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The words "hereof," "herein," "hereto," "hereunder," and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word "or" is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.
(c) The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
(d) Any reference to "days" shall mean calendar days unless the term "Business Days" is used. If the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, the time for the giving of such notice or the performance of such act shall be extended to the next succeeding Business Day.
(e) References to "dollars" or "$" shall mean U.S. dollars.
ARTICLE II — THE MERGER
Section 2.1 — The Merger
Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with Section 251 of the DGCL, at the Effective Time, the Company shall be merged with and into Parent. At the Effective Time, the separate corporate existence of the Company shall cease, and Parent shall continue as the surviving corporation in the Merger (Parent, in its capacity as the surviving corporation, shall sometimes be referred to herein as the "Surviving Corporation"). The Merger shall have the effects set forth in Section 259 of the DGCL and the other applicable provisions of the DGCL.
Section 2.2 — Closing
The closing of the Merger (the "Closing") shall take place on the third (3rd) Business Day following the satisfaction or waiver (to the extent permitted by applicable Law) of all conditions set forth in Article VII (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing), or on such other date as Parent and the Company may mutually agree in writing (the "Closing Date"). The Closing shall take place at the offices of Calderwood & Harkness LLP, 1700 Market Street, Suite 3400, Philadelphia, Pennsylvania 19103, commencing at 10:00 a.m. Eastern time, or remotely by electronic exchange of executed documents and other Closing deliverables, or at such other time and place as the parties may mutually agree in writing. All proceedings to be taken and all documents to be executed and delivered by all parties at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed, and delivered.
Section 2.3 — Effective Time
On the Closing Date, the parties shall cause a Certificate of Merger, substantially in the form attached hereto as Exhibit A, to be executed, acknowledged, and filed with the Secretary of State of the State of Delaware in accordance with the applicable provisions of the DGCL. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware or at such later date and time as is agreed upon by the parties and specified in the Certificate of Merger in accordance with the DGCL (such date and time, the "Effective Time").
Section 2.4 — Certificate of Incorporation of the Surviving Corporation
At the Effective Time, the certificate of incorporation of Parent, as in effect immediately prior to the Effective Time, shall be and remain the certificate of incorporation of the Surviving Corporation, without amendment by reason of the Merger, until thereafter duly amended in accordance with the DGCL and such certificate of incorporation. Nothing in this Section 2.4 shall be deemed to amend, modify, or otherwise affect the rights of the former holders of Company Common Stock under this Agreement or any Ancillary Agreement.
Section 2.5 — Bylaws of the Surviving Corporation
At the Effective Time, the bylaws of Parent, as in effect immediately prior to the Effective Time, shall be and remain the bylaws of the Surviving Corporation, without amendment by reason of the Merger, until thereafter duly amended in accordance with the DGCL, the certificate of incorporation of the Surviving Corporation, and such bylaws.
Section 2.6 — Directors and Officers of the Surviving Corporation
The directors and officers of Parent immediately prior to the Effective Time shall, from and after the Effective Time, continue as the directors and officers, respectively, of the Surviving Corporation and shall hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified, or until their earlier death, resignation, or removal.
ARTICLE III — MERGER CONSIDERATION; CONVERSION OF SHARES
Section 3.1 — Conversion of Company Common Stock
At the Effective Time, by virtue of the Merger and without any action on the part of Parent, the Company, or any holder of Company Common Stock, each share of Company Common Stock that is issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares and Cancelled Shares) shall automatically be converted into the right to receive, without interest:
(a) Cash Consideration. The Per Share Cash Consideration, representing such holder's pro rata portion of the aggregate Cash Consideration of Six Hundred Ninety-Three Million Seven Hundred Fifty Thousand Dollars ($693,750,000);
(b) Stock Consideration. The Per Share Stock Consideration, representing such holder's pro rata portion of the aggregate Stock Consideration of Two Hundred Thirty-One Million Two Hundred Fifty Thousand Dollars ($231,250,000) in newly issued shares of Parent Common Stock, with an aggregate issuance of 5,903,497 shares of Parent Common Stock, calculated based on the Parent VWAP of $39.17 per share; and
(c) Contingent Value Right. One (1) CVR for each share of Company Common Stock so converted, representing the right to receive such holder's pro rata portion of the CVR Payment Amount of One Hundred Twenty-Five Million Dollars ($125,000,000) upon achievement of the CVR Milestone, subject to and in accordance with the terms and conditions of the CVR Agreement.
The total consideration mix payable at the Closing (excluding the CVR Payment Amount) is comprised of seventy-five percent (75%) cash and twenty-five percent (25%) Parent Common Stock, based on the Aggregate Equity Value of $925,000,000. The Aggregate Equity Value represents a premium of approximately 36.03% over the post-money valuation of $680,000,000 implied by the Company's Series C financing round completed in October 2021. Including the CVR Payment Amount, the Maximum Transaction Value is $1,050,000,000.
As of the Effective Time, all shares of Company Common Stock shall cease to be outstanding and shall be cancelled and retired and shall cease to exist, and each certificate (or evidence of shares held in book-entry form) formerly representing any such share of Company Common Stock shall thereafter represent only the right to receive the applicable Merger Consideration as set forth in this Section 3.1 and any amounts payable pursuant to the CVR Agreement.
Section 3.2 — Treatment of Company Equity Awards
(a) Stock Options. At the Effective Time, each outstanding and unexercised option to purchase shares of Company Common Stock (each, a "Company Option"), whether or not then vested or exercisable, shall be cancelled and converted into the right to receive (without interest) an amount in cash equal to the product of (i) the excess, if any, of the Per Share Cash Consideration plus the value of the Per Share Stock Consideration (determined based on the Parent VWAP) over the per share exercise price of such Company Option, multiplied by (ii) the total number of shares of Company Common Stock then subject to such Company Option, less applicable Tax withholdings. Any Company Option with a per share exercise price equal to or greater than the sum of the Per Share Cash Consideration and the value of the Per Share Stock Consideration (determined based on the Parent VWAP) shall be cancelled without any consideration. In addition, each former holder of a Company Option shall receive one (1) CVR for each share of Company Common Stock subject to such Company Option (other than underwater Company Options cancelled without consideration). The treatment of Company Options is set forth in greater detail in Section 3.2(a) of the Company Disclosure Schedule.
(b) Restricted Stock Units. At the Effective Time, each outstanding restricted stock unit award with respect to shares of Company Common Stock (each, a "Company RSU"), whether or not then vested, shall vest in full (with any performance-based vesting conditions deemed satisfied at target performance levels) and shall be cancelled and converted into the right to receive (without interest) the Merger Consideration that would be payable in respect of the shares of Company Common Stock underlying such Company RSU, less applicable Tax withholdings. The treatment of Company RSUs is set forth in greater detail in Section 3.2(b) of the Company Disclosure Schedule.
(c) Section 280G Analysis. The Company has provided to Parent a draft analysis of the application of Sections 280G and 4999 of the Code to the payments and benefits payable to the Company's "disqualified individuals" (within the meaning of Section 280G(c) of the Code) in connection with the transactions contemplated by this Agreement. To the extent that any payment or benefit to be made or provided in connection with the Merger, either alone or together with other payments or benefits, would constitute an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code, the Company shall, to the extent permitted by applicable Law, use commercially reasonable efforts to obtain waivers and stockholder approvals (in accordance with the procedures set forth in the regulations promulgated under Section 280G of the Code) with respect to such payments to eliminate or mitigate any excise tax liability under Section 4999 of the Code, all as more fully described in Section 3.2(c) of the Company Disclosure Schedule.
Section 3.3 — Cancellation of Treasury and Parent-Owned Shares
At the Effective Time, each Cancelled Share shall, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and retired without any conversion thereof and without any consideration being paid or payable with respect thereto.
Section 3.4 — Dissenting Shares
(a) Notwithstanding any other provision of this Agreement to the contrary, shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and that are held by a holder who has properly demanded appraisal for such shares in accordance with, and who complies in all respects with, Section 262 of the DGCL (the "Dissenting Shares") shall not be converted into the right to receive the Merger Consideration, but instead shall be entitled to receive payment of the fair value of such Dissenting Shares in accordance with Section 262 of the DGCL, unless and until such holder shall have failed to perfect, or shall have effectively withdrawn or lost the right to, appraisal under the DGCL.
(b) If, after the Effective Time, any holder of Dissenting Shares shall have failed to perfect, or shall have effectively withdrawn or lost the right to, appraisal with respect to such shares, then, as of the occurrence of such event, such shares shall automatically be deemed to have been converted at the Effective Time into the right to receive the Merger Consideration as set forth in Section 3.1, without interest thereon, upon surrender of the certificate (or book-entry shares) representing such shares in the manner provided in Section 3.5.
(c) The Company shall give Parent prompt notice of any demands for appraisal of shares of Company Common Stock received by the Company prior to the Effective Time, and Parent shall have the right to participate in and direct all negotiations and proceedings with respect to such demands. Prior to the Effective Time, the Company shall not, except with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned, or delayed), make any payment with respect to, or settle or offer to settle, any such demands, or agree to do any of the foregoing.
Section 3.5 — Exchange Procedures
(a) Deposit of Merger Consideration. Prior to the Effective Time, Parent shall deposit, or cause to be deposited, with Columnar Trust Services, Inc., acting as the Exchange Agent, for the benefit of the holders of Company Common Stock, (i) the aggregate Cash Consideration in immediately available funds, and (ii) certificates (or evidence of shares in book-entry form) representing the aggregate number of shares of Parent Common Stock constituting the Share Issuance, sufficient to pay the Merger Consideration in accordance with Section 3.1 (such cash and shares, together with any dividends or other distributions received by the Exchange Agent on behalf of holders of Company Common Stock, the "Exchange Fund"). The Exchange Agent shall, pursuant to irrevocable instructions from Parent, deliver the Merger Consideration out of the Exchange Fund in accordance with this Agreement.
(b) Letter of Transmittal. Promptly after the Effective Time (and in any event within three (3) Business Days thereof), Parent shall cause the Exchange Agent to mail to each holder of record of Company Common Stock immediately prior to the Effective Time (other than holders of Cancelled Shares and Dissenting Shares) a Letter of Transmittal (which shall specify that delivery shall be effected, and risk of loss and title to any certificates representing shares of Company Common Stock shall pass, only upon proper delivery of such certificates (or affidavits of loss in lieu thereof in accordance with Section 3.9) or transfer of book-entry shares to the Exchange Agent) and instructions for effecting the surrender of certificates (or book-entry shares) in exchange for the Merger Consideration.
(c) Payment of Merger Consideration. Upon (i) surrender to the Exchange Agent of a certificate (or certificates) representing shares of Company Common Stock for cancellation, together with a duly completed and validly executed Letter of Transmittal and any other customary documents as the Exchange Agent may reasonably require, or (ii) receipt of an "agent's message" in the case of book-entry shares, the Exchange Agent shall promptly, and in any event within five (5) Business Days following such surrender or receipt, deliver to the holder of such shares the applicable Merger Consideration (consisting of the Per Share Cash Consideration, the Per Share Stock Consideration, and one CVR per share), and the certificate(s) so surrendered (or book-entry shares so transferred) shall forthwith be cancelled.
(d) Fractional Shares. No fractional shares of Parent Common Stock shall be issued in the Merger. Instead, each holder of Company Common Stock who would otherwise be entitled to a fraction of a share of Parent Common Stock shall receive, in lieu thereof, a cash payment (without interest) equal to such fraction multiplied by the Parent VWAP.
(e) No Interest. No interest shall be paid or shall accrue on any cash payable as Merger Consideration, on any cash payable in lieu of fractional shares, or on any other amounts payable hereunder.
(f) Unclaimed Funds. Any portion of the Exchange Fund that remains undistributed to former holders of Company Common Stock for twelve (12) months after the Effective Time shall be delivered to the Surviving Corporation upon demand, and any former holders of Company Common Stock who have not theretofore complied with this Section 3.5 shall thereafter look only to the Surviving Corporation for payment of the Merger Consideration to which they are entitled. Neither Parent, the Surviving Corporation, nor the Exchange Agent shall be liable to any Person for any portion of the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat, or similar Law.
Section 3.6 — Withholding Rights
Parent, the Surviving Corporation, and the Exchange Agent shall be entitled to deduct and withhold from the Merger Consideration otherwise payable to any holder of Company Common Stock, Company Options, or Company RSUs, such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Code, the rules and regulations promulgated thereunder, or any provision of applicable state, local, or foreign Tax Law. To the extent amounts are so deducted and withheld and paid over to the appropriate Governmental Authority in accordance with applicable Law, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. Parent and the Exchange Agent shall use commercially reasonable efforts to provide at least three (3) Business Days' prior written notice to the Stockholder Representative before any withholding other than standard backup withholding.
Section 3.7 — Escrow
(a) Deposit. At the Closing, Parent shall deposit, or cause to be deposited, in escrow with Greystone National Bank, N.A. (the "Escrow Agent"), by wire transfer of immediately available funds, the Escrow Amount of Forty-Six Million Two Hundred Fifty Thousand Dollars ($46,250,000), being five percent (5%) of the Aggregate Equity Value, pursuant to and in accordance with the Escrow Agreement. The Escrow Amount shall be deposited from the Cash Consideration otherwise payable to the former holders of Company Common Stock, reducing on a pro rata basis the Cash Consideration distributable to each such holder at the Closing. Each former holder of Company Common Stock shall be deemed to have contributed its pro rata share of the Escrow Amount.
(b) Purpose. The Escrow Amount shall be available to satisfy indemnification claims of Parent Indemnified Parties under Article IX, and shall be the first source of recovery for such indemnification claims (subject to the limitations set forth in Section 9.4). The Escrow Amount shall be held and released in accordance with the terms of the Escrow Agreement.
(c) Escrow Period. The Escrow Period shall commence on the Closing Date and shall end on the date that is eighteen (18) months after the Closing Date. Subject to the terms of the Escrow Agreement, any amounts remaining in escrow at the expiration of the Escrow Period (less any amounts reserved for pending but unresolved indemnification claims) shall be released to the former holders of Company Common Stock through the Stockholder Representative.
(d) Investment of Escrow Funds. During the Escrow Period, the Escrow Agent shall invest the Escrow Amount in accordance with the investment instructions set forth in the Escrow Agreement. All interest and earnings on the Escrow Amount shall be held in escrow and shall be treated as additional Escrow Amount for all purposes hereunder.
Section 3.8 — Contingent Value Rights
(a) Issuance of CVRs. At the Effective Time, each former holder of Company Common Stock (and each holder of Company Options and Company RSUs treated as having received shares of Company Common Stock pursuant to Section 3.2) shall be entitled to receive one (1) CVR for each share of Company Common Stock held (or deemed held) by such holder immediately prior to the Effective Time. CVRs shall be issued and shall be governed by the CVR Agreement dated as of the date hereof by and between Parent and Columnar Trust Services, Inc. (as CVR Trustee), substantially in the form attached hereto as Exhibit B.
(b) CVR Payment Amount. The CVR Payment Amount is One Hundred Twenty-Five Million Dollars ($125,000,000) in the aggregate, which shall become payable to the holders of CVRs upon the achievement of the CVR Milestone. The CVR Milestone shall be deemed achieved upon the approval by the FDA of a New Drug Application (or Biologics License Application, as applicable) for CLT-4019 (IND 158429) for any indication, with such approval occurring on or before December 31, 2026. The CVR Payment Amount shall be paid in cash, without interest, within thirty (30) days following achievement of the CVR Milestone, in accordance with the procedures set forth in the CVR Agreement.
(c) Maximum Transaction Value. Including the CVR Payment Amount, the Maximum Transaction Value payable in connection with the Merger and the CVR Agreement is One Billion Fifty Million Dollars ($1,050,000,000).
(d) Development Obligations. Parent shall use commercially reasonable efforts (which, for the avoidance of doubt, shall constitute "diligent efforts" as defined in the CVR Agreement) to continue the development of CLT-4019 toward FDA approval, including the continuation, completion, and reporting of ongoing and planned clinical trials, the preparation and submission of an NDA, and the prosecution of regulatory interactions with the FDA, all in accordance with a development plan to be agreed and attached as an exhibit to the CVR Agreement. The specific development obligations and milestones of Parent with respect to CLT-4019 are set forth in the CVR Agreement.
(e) Non-Transferability. The CVRs shall not be transferable, except by operation of law (including by will, intestate succession, or in connection with the dissolution, liquidation, or termination of any entity holding CVRs), and shall not be listed or traded on any securities exchange or over-the-counter market.
(f) No Security. The CVRs shall not represent equity or debt interests in Parent and shall not entitle any holder to any voting, dividend, or other rights as a stockholder or creditor of Parent, except as expressly set forth in the CVR Agreement.
Section 3.9 — Lost Certificates
In the event any certificate representing shares of Company Common Stock has been lost, stolen, or destroyed, the Exchange Agent shall deliver the applicable Merger Consideration upon the making of an affidavit of that fact by the holder thereof and, if required by the Surviving Corporation or the Exchange Agent, the posting by such holder of a bond, in such reasonable and customary amount as the Surviving Corporation or the Exchange Agent may direct, as indemnity against any claim that may be made against the Surviving Corporation or the Exchange Agent with respect to such certificate. The Surviving Corporation shall not unreasonably require the posting of a bond by any former holder of Company Common Stock who provides a reasonably satisfactory affidavit of loss and evidence of ownership.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule (it being understood and agreed that disclosure of any item in any section or subsection of the Company Disclosure Schedule shall be deemed disclosure with respect to any other section or subsection of this Article IV to the extent the relevance of such disclosure to such other section or subsection is reasonably apparent on the face of such disclosure), the Company hereby represents and warrants to Parent as follows:
Section 4.1 — Organization, Good Standing, and Qualification
The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted. The Company's registered agent in the State of Delaware is Pemberton Industries, 251 Little Falls Drive, Wilmington, Delaware 19808. The Company is duly qualified or licensed to do business as a foreign corporation and is in good standing (or its equivalent) in each jurisdiction where the character of the properties owned, leased, or operated by it or the nature of its business makes such qualification or licensure necessary, including the Commonwealth of Massachusetts (where the Company maintains its principal office at 88 Harbor Point Road, Cambridge, Massachusetts 02142), except where the failure to be so qualified or licensed would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. The Company has made available to Parent true, correct, and complete copies of the Company's certificate of incorporation and bylaws, each as currently in effect.
Section 4.2 — Capitalization
(a) The authorized capital stock of the Company and the outstanding shares of Company Common Stock (including all series of preferred stock on an as-converted basis) are as set forth in Section 4.2(a) of the Company Disclosure Schedule. All outstanding shares of Company Common Stock are duly authorized, validly issued, fully paid, and nonassessable and are not subject to, and were not issued in violation of, any preemptive rights, rights of first refusal, or similar rights.
(b) The fully diluted capitalization table of the Company is set forth in Section 4.2(b) of the Company Disclosure Schedule. As of the date hereof, the capitalization of the Company on a fully diluted basis is as follows:
(i) Dr. Marcus Hale holds 28.5% of the outstanding Company equity. Dr. Hale acquired his interests in the Company for an aggregate personal investment of Forty-Two Million Dollars ($42,000,000) across the Seed, Series A, and Series B financing rounds. At the Aggregate Equity Value of $925,000,000, Dr. Hale's implied proceeds are approximately Two Hundred Sixty-Three Million Six Hundred Twenty-Five Thousand Dollars ($263,625,000), representing an implied gain of approximately Two Hundred Twenty-One Million Six Hundred Twenty-Five Thousand Dollars ($221,625,000).
(ii) Ridgeline Ventures, LP holds 22.3% of the outstanding Company equity.
(iii) Meridian Life Sciences Fund III, LP holds 18.7% of the outstanding Company equity.
(iv) The founders and management equity pool holds 30.5% of the outstanding Company equity, allocated as follows: Dr. Nadia Sorensen (Chief Executive Officer) holds 14.2%, Dr. Raj Malhotra (Chief Scientific Officer) holds 9.8%, and other employees and advisors hold 6.5% in the aggregate.
(c) The Company has raised aggregate equity capital of Three Hundred Forty-Seven Million Dollars ($347,000,000) from the Company's formation through the date hereof, from the Seed round through the Series C financing round completed in October 2021.
(d) Except as set forth in Section 4.2(d) of the Company Disclosure Schedule, there are no outstanding options, warrants, convertible securities, stock appreciation rights, phantom equity, profit interests, or other rights or agreements obligating the Company to issue, sell, or otherwise transfer any equity securities of the Company, and there are no outstanding or authorized equity compensation plans, equity appreciation, or similar rights with respect to the Company.
Section 4.3 — Authorization; Validity of Agreement
The Company Board has duly adopted resolutions approving this Agreement and the transactions contemplated hereby, including the Merger, declaring this Agreement and the Merger advisable and in the best interests of the Company and its stockholders, and recommending that the stockholders of the Company adopt and approve this Agreement. The Company Stockholder Approval is the only vote of the holders of any class or series of capital stock of the Company necessary to adopt and approve this Agreement and consummate the Merger. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution, and delivery by Parent, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and other similar Laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law).
Section 4.4 — No Conflict; Required Consents
(a) The executio