REGISTRATION RIGHTS AGREEMENT
dated as of
March 2, 2023
among
SOLSTICE BIOMEDICAL DEVICES LIMITED
and
GREYSTONE VENTURES FUND III, L.P.
PINNACLE HEALTH INNOVATION FUND, L.P.
ELKRIDGE GROWTH PARTNERS II, L.P.
TABLE OF CONTENTS
Right-click to update Table of Contents
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of March 2, 2023, by and among:
SOLSTICE BIOMEDICAL DEVICES LIMITED, a private company limited by shares incorporated under the laws of Ireland (CRO No. 587412), with its registered office at Unit 7, Lakeview Technology Campus, Parkmore East, Galway, H91 XK72, Ireland (the "Company");
GREYSTONE VENTURES FUND III, L.P., a Delaware limited partnership, having its principal office at 200 Clarendon Street, Suite 4200, Boston, Massachusetts 02116 ("Greystone");
PINNACLE HEALTH INNOVATION FUND, L.P., a Delaware limited partnership, having its principal office at 1600 Market Street, Suite 3600, Philadelphia, Pennsylvania 19103 ("Pinnacle"); and
ELKRIDGE GROWTH PARTNERS II, L.P., a Cayman Islands exempted limited partnership, having its principal office at c/o Elkridge Growth Management II, Ltd., 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands ("Elkridge").
Each of Greystone, Pinnacle, and Elkridge is referred to herein individually as a "Holder" and collectively as the "Holders." The Company and the Holders are referred to herein collectively as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, the Company has filed a Registration Statement on Form S-1 (File No. 333-268514) with the Securities and Exchange Commission (the "SEC") in connection with its initial public offering (the "IPO") of American Depositary Shares ("ADSs"), each representing one (1) ordinary share, nominal value €0.01 per share, of the Company;
WHEREAS, the ADSs are to be listed on the Nasdaq Global Market under the ticker symbol "SBDX" (CUSIP 83472R 109) in connection with the consummation of the IPO;
WHEREAS, Meridian Trust Company, N.A., a national banking association, serves as the depositary for the ADSs pursuant to that certain Deposit Agreement, dated as of March 2, 2023, by and among the Company, Meridian Trust Company, N.A., and the holders and beneficial owners of ADSs issued thereunder (the "Deposit Agreement");
WHEREAS, the Company and the several underwriters named therein have entered into an Underwriting Agreement, dated as of March 2, 2023 (the "Underwriting Agreement"), with Keystone Mercer & Co., LLC acting as the representative of the several underwriters named therein (the "Representative"), in connection with the IPO;
WHEREAS, the Holders are pre-IPO institutional shareholders of the Company and, as of the date hereof, hold the following ordinary shares, nominal value €0.01 per share, of the Company (the "Ordinary Shares"): (a) Greystone holds 5,600,000 Ordinary Shares, representing approximately 20.0% of the 28,000,000 Ordinary Shares outstanding immediately prior to the IPO; (b) Pinnacle holds 4,480,000 Ordinary Shares, representing approximately 16.0% of such pre-IPO shares; and (c) Elkridge holds 2,800,000 Ordinary Shares, representing approximately 10.0% of such pre-IPO shares, for a total of 12,880,000 Ordinary Shares held by the Holders in the aggregate, representing approximately 46.0% of the pre-IPO shares outstanding;
WHEREAS, following the consummation of the IPO (and assuming the full exercise of the overallotment option by the underwriters to purchase up to an additional 1,000,000 ADSs), the Company will have 35,666,667 Ordinary Shares outstanding;
WHEREAS, each Holder has executed a Lock-Up Agreement, dated as of March 2, 2023, in favor of Keystone Mercer & Co., LLC, as Representative of the underwriters, restricting the sale, offer, pledge, or other transfer of Ordinary Shares or ADSs for a period of one hundred eighty (180) days commencing March 2, 2023 and expiring August 29, 2023 (each, a "Lock-Up Agreement" and collectively, the "Lock-Up Agreements"); and
WHEREAS, in connection with the IPO, the Company desires to grant certain registration rights to the Holders with respect to the Registrable Securities (as defined herein) on the terms and subject to the conditions set forth herein, and the Holders desire to obtain such registration rights.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby 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:
"ADSs" means the American Depositary Shares issued pursuant to the Deposit Agreement, each representing one (1) Ordinary Share, nominal value €0.01 per share, of the Company, as such ADSs may be adjusted from time to time to reflect any stock split, reverse stock split, stock dividend, recapitalization, reclassification, or similar event affecting the Ordinary Shares.
"Adverse Disclosure" means any public disclosure of material non-public information that the Board has determined in good faith (after consultation with outside legal counsel) would be required to be made in any Registration Statement or Prospectus in order for such Registration Statement or Prospectus not to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including the terms "controlling," "controlled by," and "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.
"Agreement" has the meaning set forth in the preamble hereto.
"Blackout Period" has the meaning set forth in Section 2.1(i).
"Board" means the board of directors of the Company, which as of the date hereof consists of seven (7) directors, four (4) of whom are independent directors within the meaning of the applicable listing rules of the Nasdaq Global Market.
"Business Day" means any day that is not a Saturday, Sunday, or other day on which commercial banks in New York, New York or Dublin, Ireland are authorized or required by law to remain closed.
"Commission" or "SEC" means the United States Securities and Exchange Commission, or any successor agency.
"Company" means Solstice Biomedical Devices Limited, a private company limited by shares incorporated under the laws of Ireland (CRO No. 587412), and any successor entity thereto, whether by merger, consolidation, reorganization, or otherwise.
"Demand Registration" has the meaning set forth in Section 2.1(a).
"Deposit Agreement" means the Deposit Agreement, dated as of March 2, 2023, by and among the Company, Meridian Trust Company, N.A., as depositary, and the holders and beneficial owners of ADSs issued thereunder, as the same may be amended, supplemented, or otherwise modified from time to time.
"Depositary" means Meridian Trust Company, N.A., a national banking association, with its principal office at 500 Ross Street, Pittsburgh, Pennsylvania 15219, in its capacity as depositary under the Deposit Agreement, and any successor depositary appointed thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"FINRA" means the Financial Industry Regulatory Authority, Inc.
"Form F-1" means a Registration Statement on Form F-1 under the Securities Act, or any successor form thereto.
"Form F-3" means a Registration Statement on Form F-3 under the Securities Act, or any successor form thereto.
"Holders" means, collectively, Greystone Ventures Fund III, L.P., Pinnacle Health Innovation Fund, L.P., and Elkridge Growth Partners II, L.P., and their respective permitted transferees who become parties hereto pursuant to Section 7.2, and "Holder" means any one of them.
"IPO" means the initial public offering of the Company's ADSs pursuant to the Registration Statement on Form S-1 filed with the SEC under File No. 333-268514.
"Lock-Up Agreements" means the lock-up agreements, each dated as of March 2, 2023, executed by each Holder in favor of Keystone Mercer & Co., LLC, as Representative of the several underwriters under the Underwriting Agreement, restricting the sale, offer, pledge, or other transfer of Ordinary Shares or ADSs for a period of one hundred eighty (180) days commencing March 2, 2023 and expiring August 29, 2023.
"Lock-Up Period" means the one hundred eighty (180)-day period commencing on March 2, 2023 and expiring on August 29, 2023.
"Losses" means any and all losses, claims, damages, liabilities (joint or several), costs, and expenses (including reasonable and documented attorneys' fees and disbursements, costs of investigation, and expenses incurred in enforcing indemnification or contribution rights hereunder).
"Nasdaq" means the Nasdaq Global Market, or any successor securities exchange.
"Ordinary Shares" means the ordinary shares, nominal value €0.01 per share, of the Company, and any securities into which such shares may be reclassified, converted, exchanged, or reconstituted.
"Person" means any individual, partnership, limited partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, governmental entity, or other entity.
"Piggyback Registration" has the meaning set forth in Section 2.2(a).
"Prospectus" means the prospectus included in any Registration Statement (including any preliminary prospectus), as amended or supplemented by any prospectus supplement, and all materials incorporated by reference or deemed to be incorporated by reference in such prospectus.
"Registrable Securities" means (i) the Ordinary Shares held by the Holders as of the date hereof and any Ordinary Shares acquired by the Holders after the date hereof, (ii) ADSs representing such Ordinary Shares, and (iii) any securities of the Company issued or issuable as a dividend, distribution, or exchange with respect to, or in replacement of, the Ordinary Shares or ADSs referred to in clauses (i) and (ii); provided, however, that Registrable Securities shall not include any securities that have been (a) sold pursuant to a Registration Statement that has been declared effective under the Securities Act, (b) sold in a transaction pursuant to Rule 144 under the Securities Act, (c) sold in a private transaction in which the applicable registration rights under this Agreement are not assigned in accordance with Section 7.2, or (d) securities that have become eligible for sale under Rule 144 under the Securities Act without volume or manner-of-sale limitations and without the requirement for the Company to be in compliance with Rule 144(c)(1) under the Securities Act.
"Registration Expenses" has the meaning set forth in Section 4.1.
"Registration Statement" means any registration statement filed or to be filed with the SEC under the Securities Act, including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments), and all exhibits and all materials incorporated by reference or deemed to be incorporated by reference therein.
"Representative" means Keystone Mercer & Co., LLC, in its capacity as representative of the several underwriters under the Underwriting Agreement.
"Rule 144" means Rule 144 promulgated by the SEC under the Securities Act, as such rule may be amended from time to time, or any similar successor rule thereto.
"Rule 415" means Rule 415 promulgated by the SEC under the Securities Act, as such rule may be amended from time to time, or any similar successor rule thereto.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Selling Expenses" has the meaning set forth in Section 4.2.
"Shelf Registration Statement" means a Registration Statement filed on Form F-3 (or any successor form) under the Securities Act providing for the registration and resale of Registrable Securities on a delayed or continuous basis pursuant to Rule 415.
"Underwriter Cutback" has the meaning set forth in Section 2.3.
"Underwriting Agreement" means the Underwriting Agreement, dated as of March 2, 2023, by and among the Company and the several underwriters named therein, with Keystone Mercer & Co., LLC acting as Representative of the several underwriters.
Section 1.2 — Interpretation
Unless the context otherwise requires, references in this Agreement to:
(a) any Article, Section, or Schedule shall be to the applicable Article, Section, or Schedule of this Agreement;
(b) any statute or statutory provision shall include any amendment, modification, re-enactment, or replacement thereof and any rules, regulations, and orders promulgated thereunder, in each case as in effect from time to time;
(c) the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa;
(d) the word "including" and words of similar import shall be deemed to be followed by the phrase "without limitation";
(e) headings and captions are inserted for convenience of reference only and shall not affect the interpretation or construction of this Agreement; and
(f) references to "days" shall mean calendar days unless otherwise specified as "Business Days."
ARTICLE II — REGISTRATION RIGHTS
Section 2.1 — Demand Registration Rights
(a) Demand Rights. Subject to the terms and conditions of this Agreement, each Holder shall have the right, at any time and from time to time after the expiration of the Lock-Up Period, to make a written request (a "Demand Registration Request") to the Company that the Company effect the registration under the Securities Act of all or a portion of such Holder's Registrable Securities (each such registration effected pursuant to this Section 2.1, a "Demand Registration"). Each Demand Registration Request shall specify the number of Registrable Securities proposed to be registered and the intended method or methods of disposition thereof (including whether such offering is proposed to be an underwritten offering).
(b) Number of Demands. Each Holder shall be entitled to make up to two (2) Demand Registration Requests. The aggregate maximum number of Demand Registrations that the Company shall be obligated to effect under this Section 2.1 shall be six (6); provided, however, that the Company shall not be obligated to effect more than two (2) Demand Registrations in any twelve (12)-month period.
(c) Lock-Up Restriction. No Demand Registration Request may be submitted by any Holder during the Lock-Up Period. Any Demand Registration Request submitted during the Lock-Up Period shall be deemed void and of no effect and shall not count against the number of Demand Registration Requests available to such Holder. The first date on which a Demand Registration Request may be validly submitted by any Holder is August 30, 2023.
(d) Minimum Threshold. The Company shall not be obligated to effect a Demand Registration unless the Registrable Securities proposed to be included in such registration have an anticipated aggregate offering price (before deducting underwriting discounts, commissions, and expenses) of at least Fifteen Million Dollars ($15,000,000), based on the closing price of the ADSs on the Nasdaq on the Business Day immediately preceding the date of the Demand Registration Request; provided, however, that this minimum threshold shall not apply if the requesting Holder proposes to register all of its remaining Registrable Securities.
(e) Form of Registration. In connection with any Demand Registration, the Company shall file a Registration Statement on Form F-3 if the Company is then eligible to use such form under the Securities Act and the rules and regulations of the SEC. If the Company is not then eligible to use Form F-3, the Company shall file a Registration Statement on Form F-1 (or such other appropriate form under the Securities Act). The Company shall use commercially reasonable efforts to become eligible to file Registration Statements on Form F-3 as promptly as practicable after the date hereof and to remain eligible to use Form F-3 at all times thereafter.
(f) Shelf Registration Statement. If, at the time a Demand Registration Request is received, the Company is eligible to file a Shelf Registration Statement on Form F-3, the Company shall, in lieu of filing a traditional Demand Registration, file a Shelf Registration Statement covering the resale of all Registrable Securities requested to be included therein on a delayed or continuous basis pursuant to Rule 415. The Company shall use commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the SEC as promptly as practicable and shall maintain the effectiveness of such Shelf Registration Statement (including by filing any necessary amendments or supplements thereto) for so long as any Holder holds Registrable Securities covered thereby, subject to the suspension provisions set forth in Section 2.1(i). The filing of a Shelf Registration Statement pursuant to this Section 2.1(f) shall constitute a Demand Registration and shall count against the number of Demand Registration Requests available to the requesting Holder.
(g) Timing. Following receipt of a valid Demand Registration Request, the Company shall:
(i) file a Registration Statement with the SEC within forty-five (45) days of receipt of such Demand Registration Request; and
(ii) use commercially reasonable efforts to cause such Registration Statement to be declared effective by the SEC as promptly as practicable thereafter, and in any event (A) within ninety (90) days of receipt of the Demand Registration Request if the Registration Statement is filed on Form F-1, or (B) within sixty (60) days of receipt of the Demand Registration Request if the Registration Statement is filed on Form F-3.
(h) Participation by Other Holders. Promptly upon receipt of a valid Demand Registration Request from any Holder (and in any event within five (5) Business Days thereof), the Company shall give written notice of such Demand Registration Request to each other Holder. Each other Holder may elect to include its Registrable Securities in such Demand Registration by delivering written notice to the Company within ten (10) Business Days of receipt of the Company's notice, specifying the number of Registrable Securities such Holder wishes to include. Any such Registrable Securities so requested to be included shall be included in the Demand Registration, subject to the priority and cutback provisions of Section 2.3.
(i) Suspension / Blackout. Notwithstanding any other provision of this Section 2.1, the Company may defer the filing of, or suspend the use of, any Registration Statement for a period not to exceed sixty (60) consecutive days (and not more than ninety (90) days in any twelve (12)-month period) (a "Blackout Period") if the Board determines in good faith (after consultation with outside legal counsel) that (i) the filing or maintenance of the effectiveness of such Registration Statement would require the Company to make Adverse Disclosure, and (ii) such Adverse Disclosure, at such time, would be materially detrimental to the Company and its shareholders. The Company shall provide prompt written notice to each Holder of the commencement of any Blackout Period (without disclosing the content or subject matter of the Adverse Disclosure) and shall provide prompt written notice to each Holder upon the termination of such Blackout Period. During any Blackout Period, each Holder shall cease all dispositions of Registrable Securities pursuant to any Registration Statement until the earlier of (A) the termination of such Blackout Period, or (B) the receipt by such Holder of an amended or supplemented Prospectus.
(j) Withdrawal. A Holder that has submitted a Demand Registration Request may withdraw such request at any time prior to the effectiveness of the applicable Registration Statement by delivering written notice to the Company. A withdrawn Demand Registration Request shall not count as one of the two (2) Demand Registration Requests available to such Holder; provided, however, that if, at the time of such withdrawal, the Company has incurred Registration Expenses in connection with such Demand Registration in excess of One Hundred Thousand Dollars ($100,000), such withdrawn request shall count as one of such Holder's permitted Demand Registration Requests unless the withdrawing Holder reimburses the Company for all Registration Expenses actually incurred in connection therewith within thirty (30) days following the Company's delivery of an invoice therefor.
Section 2.2 — Piggyback Registration Rights
(a) Trigger. If, at any time after the expiration of the Lock-Up Period, the Company proposes to file a Registration Statement under the Securities Act for a public offering of any of its securities, whether for its own account or for the account of any other security holder of the Company (other than (i) a registration on Form S-8 or any successor form thereto relating to securities issuable under any employee benefit plan, employee stock purchase plan, or other compensatory arrangement of the Company, (ii) a registration on Form F-4 or any successor form thereto relating to a business combination, acquisition, or similar transaction, or (iii) the Registration Statement on Form S-1 filed in connection with the IPO (File No. 333-268514)), the Company shall give written notice (a "Piggyback Notice") to each Holder of such proposed filing at least fifteen (15) Business Days prior to the anticipated filing date of such Registration Statement, which notice shall describe in reasonable detail the proposed registration, including the number and type of securities to be registered, the proposed method or methods of distribution, and the anticipated filing date (each registration effected pursuant to this Section 2.2, a "Piggyback Registration").
(b) Inclusion. Each Holder may elect to include all or a portion of its Registrable Securities in any such Piggyback Registration by delivering written notice to the Company within ten (10) Business Days of receipt of the applicable Piggyback Notice, specifying the number of Registrable Securities such Holder wishes to include. The Company shall use commercially reasonable efforts to cause such Registrable Securities to be included in the Piggyback Registration and to be covered by the applicable Registration Statement. The Company shall not be required to maintain the effectiveness of the Registration Statement for the benefit of the Holders beyond the period during which the Company maintains effectiveness for its own account or for the account of the other security holder on whose behalf the registration is being effected.
(c) No Demand Count. The exercise of piggyback registration rights by any Holder under this Section 2.2 shall not be counted as a Demand Registration Request for purposes of Section 2.1 and shall not reduce the number of Demand Registration Requests available to any Holder.
(d) Lock-Up Restriction. Piggyback registration rights under this Section 2.2 may not be exercised by any Holder during the Lock-Up Period (i.e., prior to August 29, 2023). Any request for inclusion submitted by a Holder during the Lock-Up Period shall be deemed void and of no effect.
(e) Company Withdrawal. The Company may, at any time prior to the effectiveness of any Registration Statement filed pursuant to this Section 2.2, withdraw such Registration Statement and abandon the proposed offering without any obligation to the Holders, and such withdrawal shall not affect the rights of the Holders under this Agreement.
Section 2.3 — Priority / Underwriter Cutback
(a) Demand Registrations. If the managing underwriter or underwriters of any underwritten offering conducted pursuant to a Demand Registration advise the Company and the participating Holders in writing that, in their reasonable opinion, the total number of Registrable Securities and other securities proposed to be included in such offering exceeds the number of securities that can be sold in such offering without materially and adversely affecting the price, timing, or distribution of such offering or the market for the securities to be offered (an "Underwriter Cutback"), then the number of securities to be included in such offering shall be reduced, and the securities to be included shall be allocated in the following order of priority:
(i) first, the Registrable Securities of the Holder or Holders who initiated the Demand Registration Request, allocated pro rata among such initiating Holders based on the number of Registrable Securities each such initiating Holder has requested to be included;
(ii) second, the Registrable Securities of any other Holders who have elected to participate in such Demand Registration pursuant to Section 2.1(h), allocated pro rata among such participating Holders based on the number of Registrable Securities each such Holder has requested to be included;
(iii) third, any securities that the Company proposes to register for its own account; and
(iv) fourth, any securities of any other Persons having contractual registration rights with the Company.
(b) Piggyback Registrations — Company-Initiated. If the managing underwriter or underwriters of any underwritten offering conducted pursuant to a Piggyback Registration initiated by the Company for its own account advise the Company and the participating Holders in writing that an Underwriter Cutback is necessary, then the number of securities to be included in such offering shall be reduced, and the securities to be included shall be allocated in the following order of priority:
(i) first, the securities that the Company proposes to offer for its own account;
(ii) second, the Registrable Securities of the Holders who have elected to participate in such Piggyback Registration, allocated pro rata among such Holders based on the number of Registrable Securities each such Holder has requested to be included;
(iii) third, any securities of any other Persons having contractual registration rights with the Company.
(c) Piggyback Registrations — Holder-Initiated by Another Security Holder. If the managing underwriter or underwriters of any underwritten offering conducted pursuant to a Piggyback Registration initiated by another security holder of the Company (other than a Holder hereunder) advise the Company and the participating parties in writing that an Underwriter Cutback is necessary, then the number of securities to be included in such offering shall be reduced, and the securities to be included shall be allocated in the following order of priority:
(i) first, the securities of the demanding security holder or holders who initiated the registration;
(ii) second, the Registrable Securities of the Holders who have elected to participate in such Piggyback Registration, allocated pro rata among such Holders based on the number of Registrable Securities each such Holder has requested to be included;
(iii) third, any securities that the Company proposes to register for its own account; and
(iv) fourth, any securities of any other Persons having contractual registration rights with the Company.
(d) Minimum Inclusion. Notwithstanding anything to the contrary in this Section 2.3, in no event shall the Registrable Securities included in any registration effected under this Agreement be reduced to less than twenty-five percent (25%) of the total number of securities included in such registration; provided, however, that this minimum inclusion requirement shall not apply if the managing underwriter or underwriters determine in writing that no Registrable Securities can be included in such registration without a material adverse effect on the price, timing, or distribution of the offering.
Section 2.4 — Withdrawal from Piggyback Registration
A Holder that has elected to include Registrable Securities in any Piggyback Registration pursuant to Section 2.2 may withdraw all or a portion of such Registrable Securities from such registration at any time prior to the effectiveness of the applicable Registration Statement by delivering written notice to the Company. No such withdrawal shall have any adverse consequence to, or impose any obligation or liability upon, the withdrawing Holder, and the Company shall not impose any penalty or condition in connection with any such withdrawal. Any such withdrawal shall not affect such Holder's right to participate in future Piggyback Registrations pursuant to Section 2.2.
ARTICLE III — REGISTRATION PROCEDURES
Section 3.1 — Company Obligations
In connection with any Demand Registration or Piggyback Registration effected pursuant to this Agreement, the Company shall:
(a) prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act covering all Registrable Securities requested to be included therein, and use commercially reasonable efforts to cause such Registration Statement to become effective as promptly as practicable; include all information reasonably requested by the participating Holders or the managing underwriter(s) that is necessary or advisable to effect the registration and the proposed disposition of the Registrable Securities;
(b) prepare and file with the SEC such amendments (including post-effective amendments) and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective and the Prospectus current and in compliance with the Securities Act for a period of at least one hundred eighty (180) days following the date on which the Registration Statement is declared effective (or such shorter period as shall be required for all Registrable Securities covered thereby to have been sold or to have become eligible for sale under Rule 144 without volume or manner-of-sale limitations and without the requirement for the Company to be in compliance with Rule 144(c)(1));
(c) furnish to each participating Holder and the underwriter or underwriters, if any, without charge, a reasonable number of copies of the Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus and any supplement thereto, and such other documents as such Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities;
(d) use commercially reasonable efforts to register or qualify the Registrable Securities under the securities or "blue sky" laws of such jurisdictions within the United States as any participating Holder or managing underwriter reasonably requests and do any and all other acts and things as may be reasonably necessary or advisable to enable such Holder to consummate the disposition of the Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified, (ii) subject itself to taxation in any such jurisdiction, (iii) consent to general service of process in any such jurisdiction, or (iv) qualify the Registrable Securities in more than fifteen (15) jurisdictions;
(e) promptly notify each participating Holder and the managing underwriter(s), if any, in writing of: (i) the effectiveness of the Registration Statement or any post-effective amendment thereto, (ii) the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceedings for that purpose, (iii) any request by the SEC or any state securities authority for amendments or supplements to the Registration Statement or Prospectus or for additional information, (iv) the occurrence of any event as a result of which the Prospectus, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (v) 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;
(f) enter into customary agreements (including, in the case of an underwritten offering, an underwriting agreement in customary form) with the managing underwriter or underwriters, if any, selected in accordance with the provisions of this Agreement, which agreements shall contain customary representations, warranties, covenants, indemnification, and contribution provisions consistent with the provisions of Article V hereof;
(g) upon execution of customary confidentiality agreements in form reasonably satisfactory to the Company, make available for inspection by each participating Holder, any managing underwriter participating in any such offering, and any attorney, accountant, or other agent retained by such Holder or underwriter, all financial and other records, corporate documents, and properties of the Company, and cause the Company's officers, directors, employees, and independent auditors to supply all information reasonably requested by any such Holder, underwriter, attorney, accountant, or agent in connection with such Registration Statement;
(h) use commercially reasonable efforts to cause the Registrable Securities covered by any Registration Statement to be listed on the Nasdaq Global Market (or such other securities exchange on which the Company's ADSs or Ordinary Shares are then listed) on or prior to the date on which such Registration Statement is declared effective;
(i) cooperate with the Depositary, Meridian Trust Company, N.A., and take all actions reasonably necessary to facilitate the deposit of Ordinary Shares by the Holders and the issuance of corresponding ADSs by the Depositary to the extent necessary for the sale of Registrable Securities in the form of ADSs, including the execution and delivery of any additional agreements, certificates, or other documents that may be required under the Deposit Agreement;
(j) provide and maintain a transfer agent and registrar for the Registrable Securities, which as of the date hereof is Meridian Trust Company, N.A., and cause such transfer agent to remove any restrictive legends from certificates (or book-entry notations) representing Registrable Securities at such time as such legends are no longer required under the Securities Act;
(k) obtain and deliver to the managing underwriter(s), if any, and, if customary, the participating Holders, customary comfort letters from the Company's independent registered public accounting firm, Calderwood & Associates LLP, dated the effective date of such Registration Statement and, in the case of an underwritten offering, the date of the closing of such offering, in form and substance as are customary in scope and substance for comfort letters delivered in connection with underwritten public offerings of securities;
(l) obtain and deliver to the managing underwriter(s), if any, and, if customary, the participating Holders, opinions and negative assurance letters of the Company's outside legal counsel, Calderwood & Harkness LLP, 425 Lexington Avenue, New York, New York 10174, dated the effective date of such Registration Statement and, in the case of an underwritten offering, the date of the closing of such offering, addressed to the managing underwriter(s) and, if customary, the participating Holders, in form and substance as are customary for opinions and negative assurance letters delivered in connection with underwritten public offerings of securities; and
(m) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, the Nasdaq, and any other applicable self-regulatory organization in connection with such registration and take all other steps necessary or advisable to effect the registration and the proposed disposition of such Registrable Securities.
Section 3.2 — Holder Obligations
In connection with any Demand Registration or Piggyback Registration effected pursuant to this Agreement:
(a) each participating Holder shall furnish to the Company in writing such information regarding such Holder, the Registrable Securities held by such Holder, and the proposed method or methods of distribution thereof as the Company or the managing underwriter(s) may reasonably request in order to comply with the Securities Act, the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, and shall furnish such information within ten (10) Business Days of the Company's or the managing underwriter's request therefor;
(b) each participating Holder shall comply with all applicable provisions of the Securities Act and the Exchange Act, including any applicable prospectus delivery requirements, with respect to the disposition of Registrable Securities covered by any Registration Statement;
(c) each participating Holder shall, upon receipt of notice from the Company of the occurrence of any event described in Section 3.1(e)(iv), immediately cease all dispositions of Registrable Securities pursuant to the applicable Registration Statement until such Holder's receipt of a supplemented or amended Prospectus correcting such material misstatement or omission, or until such Holder is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and, if so directed by the Company, shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, of the Prospectus covering such Registrable Securities that is then in such Holder's possession; and
(d) each participating Holder shall cooperate with the Company and the managing underwriter(s), if any, in connection with the preparation of the Registration Statement and any Prospectus supplements, and shall participate in due diligence sessions to the extent reasonably requested by the managing underwriter(s).
Section 3.3 — Holdback Agreement
(a) Each Holder hereby agrees that, in connection with any underwritten public offering of the Company's securities (whether or not such Holder is participating in such offering), upon the written request of the managing underwriter or underwriters for such offering, such Holder shall not, without the prior written consent of such managing underwriter(s), directly or indirectly sell, offer to sell, grant any option for the sale of, contract to sell, or otherwise transfer or dispose of (including by means of any short sale, any hedging, swap, or other derivative transaction) any Registrable Securities (other than those Registrable Securities included in such underwritten offering) during the period beginning seven (7) days prior to the expected pricing date of such offering (as notified in writing by the Company to the Holders) and ending ninety (90) days after the date of the final prospectus for such offering (or such shorter period as the managing underwriter(s) may agree in writing).
(b) The Company shall use commercially reasonable efforts to obtain holdback agreements comparable to those set forth in Section 3.3(a) from each of its directors, officers, and holders of one percent (1%) or more of the outstanding securities of the Company. The Company agrees not to effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such equity securities, during the holdback period described in Section 3.3(a) (except as part of such underwritten offering and except pursuant to registrations on Form S-8 or Form F-4 or any successor forms thereto), unless the managing underwriter(s) otherwise agree in writing.
ARTICLE IV — EXPENSES
Section 4.1 — Registration Expenses
All expenses incurred in connection with any Demand Registration or Piggyback Registration effected pursuant to this Agreement (collectively, "Registration Expenses") shall be borne by the Company, whether or not any Registration Statement filed in connection therewith becomes effective. Registration Expenses shall include, without limitation, the following:
(a) all SEC registration and filing fees;
(b) all fees and expenses associated with filings required to be made with the Nasdaq in connection with the listing of the Registrable Securities;
(c) all FINRA filing fees;
(d) all fees and disbursements of the Company's outside legal counsel, Calderwood & Harkness LLP, and the Company's independent registered public accounting firm, Calderwood & Associates LLP, in each case incurred in connection with the preparation, filing, and effectiveness of the Registration Statement and compliance with applicable securities laws;
(e) all fees and expenses of the Depositary, Meridian Trust Company, N.A., related to the issuance, cancellation, or transfer of ADSs in connection with the registration and sale of Registrable Securities;
(f) all fees and expenses associated with the qualification or registration of the Registrable Securities under the securities or "blue sky" laws of applicable jurisdictions pursuant to Section 3.1(d);
(g) all printing, mailing, and distribution expenses relating to the Registration Statement, the Prospectus, and any amendments or supplements thereto;
(h) all transfer agent fees and expenses, including fees and expenses of Meridian Trust Company, N.A. in its capacity as transfer agent and registrar;
(i) all fees and expenses of one (1) counsel to the Holders selected by the Holders holding a majority of the Registrable Securities to be included in such registration, in an amount not to exceed Fifty Thousand Dollars ($50,000) per registration; and
(j) all other reasonable and customary expenses incident to the Company's performance of, or compliance with, its obligations under this Agreement.
Registration Expenses shall specifically exclude all Selling Expenses as defined in Section 4.2.
Section 4.2 — Selling Expenses
All underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and, except as set forth in Section 4.1(i), all fees and disbursements of counsel to any Holder (collectively, "Selling Expenses"), shall be borne by the Holder or Holders selling such Registrable Securities, pro rata based on the number of Registrable Securities sold by each such Holder in the applicable offering.
ARTICLE V — INDEMNIFICATION AND CONTRIBUTION
Section 5.1 — Indemnification by the Company
The Company shall indemnify and hold harmless each Holder, each of such Holder's partners, members, managers, directors, officers, employees, agents, and representatives, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such Holder (each, a "Holder Indemnified Party"), from and against any and all Losses arising out of or based upon:
(a) any untrue or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto), any Prospectus (or any amendment or supplement thereto), any preliminary prospectus, any issuer free writing prospectus (as defined in Rule 433 under the Securities Act), or any other document incident to any registration, qualification, or compliance effected pursuant to this Agreement; or
(b) any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company shall not be liable under this Section 5.1 to any Holder Indemnified Party to the extent that such Losses arise out of or are based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder expressly for use in such Registration Statement, Prospectus, or amendment or supplement thereto. The Company shall also indemnify each Holder Indemnified Party against any Losses arising from any action by the SEC or any state securities regulatory authority to suspend the effectiveness of any Registration Statement or to issue any stop order in connection therewith, except to the extent that such action is attributable to written information furnished by or on behalf of such Holder expressly for use therein. The indemnification provided for under this Section 5.1 shall remain in full force and effect regardless of any investigation made by or on behalf of any Holder Indemnified Party.
Section 5.2 — Indemnification by Holders
In connection with any Demand Registration or Piggyback Registration in which a Holder participates, such Holder shall, severally and not jointly, indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the applicable Registration Statement, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company (each, a "Company Indemnified Party"), from and against any and all Losses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto), any Prospectus (or any amendment or supplement thereto), or any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder expressly for use in such Registration Statement, Prospectus, or amendment or supplement thereto.
The liability of each Holder under this Section 5.2 in respect of any registration shall not exceed the net proceeds (after deducting underwriting discounts, commissions, and all other Selling Expenses) actually received by such Holder from the sale of Registrable Securities in the particular offering giving rise to such liability.
Section 5.3 — Conduct of Indemnification Proceedings
(a) Notice. Any Person entitled to indemnification under Section 5.1 or Section 5.2 (an "Indemnified Party") shall give prompt written notice to the indemnifying party (the "Indemnifying Party") of the commencement of any action, suit, proceeding, investigation, or claim with respect to which indemnification is sought hereunder (a "Claim"); provided, however, that the failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations under this Article V, except to the extent that the Indemnifying Party is actually and materially prejudiced by such failure.
(b) Defense. The Indemnifying Party shall have the right, upon written notice to the Indemnified Party, to assume the defense of such Claim, with counsel reasonably satisfactory to the Indemnified Party. If the Indemnifying Party assumes the defense of any such Claim, the Indemnified Party shall have the right to participate in the defense thereof at its own expense; provided, however, that the Indemnifying Party shall bear the fees and expenses of one (1) separate counsel retained by the Indemnified Party if (i) the Indemnified Party has been advised by counsel that there exists an actual or potential conflict of interest between the Indemnifying Party and the Indemnified Party, or (ii) the Indemnifying Party has failed to timely assume the defense of such Claim. If the Indemnifying Party does not assume the defense of any such Claim, the Indemnified Party may defend against such Claim in such manner as it may deem appropriate, and the Indemnifying Party shall reimburse the Indemnified Party for all reasonable and documented costs and expenses, including attorneys' fees, incurred in connection therewith.
(c) Settlement. No Indemnifying Party shall, without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned, or delayed), consent to the entry of any judgment or settle or compromise any pending or threatened Claim in respect of which indemnification is or could be sought hereunder, unless such settlement, compromise, or judgment (i) includes an unconditional release of the Indemnified Party from all liability arising out of or related to such Claim, (ii) does not include any statement or admission of fault, culpability, or failure to act by or on behalf of the Indemnified Party, and (iii) does not impose any restriction or obligation on the Indemnified Party other than the payment of monetary damages that are fully covered by the indemnification provided hereunder. No Indemnified Party shall consent to the entry of any judgment or settle or compromise any such Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned, or delayed).
Section 5.4 — Contribution
(a) If the indemnification provided for in Section 5.1 or Section 5.2 is held by a court of competent jurisdiction to be unavailable to, or insufficient to hold harmless, an Indemnified Party in respect of any Losses referred to therein, then each applicable 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 (i) the relative benefits received by the Company, on the one hand, and the applicable Holder or Holders, on the other hand, from the offering of securities giving rise to such Losses, and (ii) the relative fault of the Company, on the one hand, and the applicable Holder or Holders, on the other hand, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and a Holder, on the other hand, shall be deemed to be in the same proportion as the total net proceeds received by the Company from the sale of securities in the applicable offering (before deducting expenses) bears to the total net proceeds received by such Holder from the sale of Registrable Securities in such offering (before deducting expenses).
(b) No Holder shall be required to contribute an amount greater than the net proceeds (after deducting underwriting discounts, commissions, and all other Selling Expenses) actually received by such Holder from the sale of Registrable Securities giving rise to such liability.
(c) 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.
(d) The obligation to contribute pursuant to this Section 5.4 shall be several and not joint among the Holders.
ARTICLE VI — COVENANTS
Section 6.1 — Rule 144 Reporting
For so long as any Holder holds Registrable Securities, the Company shall use commercially reasonable efforts to:
(a) file on a timely basis all reports required to be filed by the Company under the Securities Act or the Exchange Act (including, without limitation, all annual reports on Form 20-F and all reports on Form 6-K), and furnish such reports to the Holders promptly upon request;
(b) maintain compliance at all times with the current public information requirements of Rule 144(c)(1) under the Securities Act, so as to enable the Holders to sell Registrable Securities without registration under the Securities Act pursuant to Rule 144 when such rule is available;
(c) cooperate with each Holder and the Depositary to facilitate sales of Registrable Securities under Rule 144, including by providing customary representation letters, legal opinions, or other documentation reasonably required by the Company's transfer agent or the Depositary to remove any applicable legends from Registrable Securities and to facilitate the deposit of Ordinary Shares and the issuance of ADSs in connection with such sales; and
(d) upon the reasonable request of any Holder, furnish to such Holder a written statement as to whether the Company has complied with the reporting requirements of Rule 144(c)(1) and the Exchange Act.
Section 6.2 — Lock-Up Period
(a) Each Holder acknowledges and agrees that such Holder has executed a Lock-Up Agreement, dated as of March 2, 2023, in favor of Keystone Mercer & Co., LLC, as Representative of the underwriters under the Underwriting Agreement, restricting the sale, offer, pledge, or other transfer of Ordinary Shares and ADSs for a period of one hundred eighty (180) days from March 2, 2023, expiring August 29, 2023, and that the registration rights granted under this Agreement are not exercisable during the Lock-Up Period.
(b) Any Demand Registration Request or request for inclusion in a Piggyback Registration submitted by any Holder during the Lock-Up Period shall be deemed void and of no force or effect. The first date on which a Demand Registration Request may be validly submitted by any Holder hereunder is August 30, 2023.
(c) Nothing in this Agreement shall be construed to amend, modify, supersede, or otherwise affect the terms and conditions of any Lock-Up Agreement. In the event of any conflict between the terms of a Lock-Up Agreement and this Agreement during the Lock-Up Period, the terms of the Lock-Up Agreement shall prevail.
Section 6.3 — ADS Mechanics
The Company shall cooperate with the Depositary, Meridian Trust Company, N.A., and take all actions reasonably necessary to permit the Holders to deposit Ordinary Shares with the Depositary and receive ADSs in connection with any sale of Registrable Securities, at the ratio of one (1) ADS for each one (1) Ordinary Share so deposited. Without limiting the generality of the foregoing, the Company shall (a) maintain the Deposit Agreement in full force and effect, (b) execute and deliver any additional agreements, certificates, instructions, or other documents required by the Depositary in connection with the deposit of Ordinary Shares and issuance of ADSs, (c) pay all fees of the Depositary attributable to the initial deposit of Ordinary Shares by the Holders and the corresponding issuance of ADSs (other than fees attributable to the subsequent transfer or sale of ADSs by the Holders, which shall be borne by the Holders), and (d) take all steps necessary to ensure that the ADSs issued in connection with such deposits are freely tradeable on the Nasdaq without restriction (other than any restrictions imposed by applicable securities laws on the Holders).
ARTICLE VII — MISCELLANEOUS
Section 7.1 — Term
This Agreement shall become effective upon execution and delivery by all Parties hereto on March 2, 2023, and shall continue in full force and effect until the earliest of:
(a) the date on which no Holder (including any permitted transferee) holds any Registrable Securities;
(b) the fifth (5th) anniversary of the date of this Agreement (i.e., March 2, 2028); or
(c) the date on which all Parties hereto execute a written agreement to terminate this Agreement.
Upon termination of this Agreement, all rights and obligations of the Parties hereunder shall cease and be of no further force or effect; provided, however, that (i) the provisions of Article V (Indemnification and Contribution) shall survive any termination of this Agreement and shall remain in full force and effect, and (ii) any rights or obligations arising under this Agreement prior to its termination shall survive until fully performed or satisfied.
Section 7.2 — Permitted Transferees; Assignment
(a) A Holder may assign its rights and obligations under this Agreement, in whole or in part, in connection with a transfer of Registrable Securities to a permitted transferee (a "Permitted Transferee"), which shall include any Affiliate of such Holder, any partner (general or limited), member, or shareholder of such Holder, and any fund or entity managed by the same management company or general partner as such Holder or an Affiliate thereof; provided, that:
(i) such Permitted Transferee agrees in writing, in form and substance reasonably satisfactory to the Company, to be bound by all of the terms, conditions, and obligations of this Agreement applicable to such Holder (including the holdback obligations set forth in Section 3.3);
(ii) such transfer is effected in compliance with all applicable federal and state securities laws and the terms and conditions of the Lock-Up Agreements (to the extent then in effect); and
(iii) the Company is given prior written notice of such assignment, together with the name and address of the Permitted Transferee and a copy of the agreement described in clause (i) above, not later than ten (10) Business Days following the consummation of such transfer.
(b) No Holder may assign its rights under this Agreement to any Person who, after giving effect to the transfer, would hold fewer than 500,000 Registrable Securities; provided, however, that this minimum threshold shall not apply if the assigning Holder is transferring all of its remaining Registrable Securities to such Person.
(c) Any purported assignment in violation of this Section 7.2 shall be null and void.