represents a 20% premium to the value of the Consideration payable under the Arrangement and, concurrently therewith, the termination of the Arrangement Agreement for a Greenbrook Superior Proposal upon payment of a termination fee.
The Voting Support Agreements with Greenbrook Noteholders terminate upon the occurrence of certain events, including the termination of the Madryn Voting Agreements in accordance with its terms.
The Voting Support Agreements with directors and executive officers of Greenbrook terminate upon the occurrence of certain events, including the termination of the Arrangement Agreement in accordance with its terms.
The foregoing description of the Greenbrook Voting Support Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Greenbrook Voting Support Agreements, which are attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Also simultaneously with the execution of the Arrangement Agreement, Greenbrook and each of the directors and named executive officers of Neuronetics (the “Neuronetics Locked-Up Parties”) have entered into voting and support agreements (the “Neuronetics Voting Support Agreements”), pursuant to which the Neuronetics Locked-Up Parties have agreed, among other things, to vote their Neuronetics shares in favor of the approval of the Arrangement and against any alternative proposal. The Neuronetics Voting Support Agreements terminate upon the occurrence of certain events, including the termination of the Arrangement Agreement in accordance with its terms.
The foregoing description of the Neuronetics Voting Support Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Neuronetics Voting Support Agreements, which are attached as Exhibits 10.1, 10.2, and 10.3 to this Current Report on Form 8-K and are incorporated herein by reference.
Registration Rights Agreement
Simultaneously with the execution of the Arrangement Agreement, Neuronetics and Madryn and its affiliates (the “Madryn Parties”) entered into Registration Rights Agreements (the “Registration Rights Agreements”), pursuant to which the Madryn Parties are entitled to registration rights in respect of the Consideration Shares that the Madryn Parties receive upon consummation of the Arrangement Agreement. Pursuant to the Registration Right Agreements, one hundred eighty (180) days following consummation of the Arrangement Agreement, the Madryn Parties will have the right to demand registration of their Consideration Shares, subject to certain limitations. In addition, the Madryn Parties will have certain “piggyback” rights if Neuronetics or other holders of Neuronetics’ common stock undertake a registration, subject to customary cutbacks. In addition, the Madryn Parties agreed for a period of two years to vote in favor of certain Board proposals regarding Neuronetics’ equity plan and agreed to not acquire any additional equity securities or debt securities convertible into equity of Neuronetics.
The foregoing description of the Registration Rights Agreements does not purport to be complete and is qualified in its entirety by the full text of the Form of Registration Rights Agreement, which is included as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 of this Current Report on Form 8-K is hereby incorporated into this Item 3.02.
Neuronetics securities issued in connection with the Arrangement are expected to be issued in reliance upon an exemption from registration under federal securities laws provided by Section 3(a)(10) of the Securities Act for the issuance and exchange of securities approved after a public hearing on the fairness of the terms and conditions of the exchange by a court of competent jurisdiction at which all persons to whom the securities will be issued have the right to appear. The Arrangement will be subject to approval by the Court. Neuronetics anticipates that, if the Arrangement becomes effective under the terms and conditions set forth in the Arrangement Agreement (including receipt of the final order from the approval by the Court), the Consideration Shares to be issued pursuant to the Arrangement will be exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(10) thereof.
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:
This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created by those laws and other applicable laws and “forward-looking information” within the meaning of applicable Canadian securities laws. Statements in the press release that are not historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as “outlook,” “potential,” “believe,” “expect,” “plan,” “anticipate,” “predict,” “may,” “will,” “could,” “would” and “should” as well as the negative of these terms and similar expressions. These statements include those relating to the proposed combination of Greenbrook and Neuronetics, potential benefits of the transaction and the timing thereof. These statements are subject to significant risks and uncertainties and actual results could differ materially from those projected. Investors are cautioned not to place undue reliance on the forward-looking statements contained in this release. These risks and uncertainties include, without limitation, risks and uncertainties related to: (i) the parties’ ability to meet expectations regarding the timing and completion of the Arrangement; (ii) the occurrence of any event, change or other circumstance that would give rise to the termination of the Arrangement Agreement; (iii) the fact that Greenbrook’s and Neuronetics’ respective stockholders may not approve the Arrangement Agreement and the Arrangement; (iv) the fact that certain terminations of the Arrangement Agreement