Item 1.01 Entry into a Material Definitive Agreement.
On December 5, 2019, Athenex, Inc. (the “Company”) entered into a share purchase agreement (the “Share Purchase Agreement”) with M. Kingdon Offshore Master Fund, LP, Schonfeld Strategic 460 Fund LLC, Point72 Associates, LLC, J. Goldman Master Fund, L.P., and Avoro Life Sciences Fund LLC (the “Investors”), pursuant to which the Company agreed to sell an aggregate of 3,945,750 shares of its common stock to the Investors at a purchase price of $15.30 per share for aggregate gross proceeds of approximately $60 million (the “Private Placement”). The Private Placement is expected to close on or about December 9, 2019, subject to customary closing conditions. The Share Purchase Agreement contains customary representations, warranties, covenants and indemnification obligations of the Company and the Investors.
Pursuant to the Share Purchase Agreement, the Company agreed to enter into a registration rights agreement (the “Registration Rights Agreement”) with the Investors at the closing of the Private Placement. Under the Registration Rights Agreement, the Company will agree to register for resale the shares of common stock the Investors purchased in the offering under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the Registration Rights Agreement, the Company will prepare and file a registration statement with the Securities and Exchange Commission within 60 days of the closing date of the Private Placement and has agreed to use its best efforts to have the registration statement declared effective as soon as practicable, but in any event, no later than 90 days after the closing date of the Private Placement, or 120 days if the registration statement is reviewed by the Securities and Exchange Commission. If the Company is unable to meet its obligations to have the registration statement declared effective, the Company will be obligated to pay each Investor an amount in cash equal to one percent of the aggregate purchase price paid by that Investor pursuant to the Share Purchase Agreement, provided that in no event will this payment exceed 25% of that amount. In addition, subject to certain limitations, following the signing of the Registration Rights Agreement, the Investors will have piggy-back registration rights if no registration statement registering the shares sold in the Private Placement is effective and the Company is otherwise filing a registration statement under the Securities Act for the sale of the Company’s securities for its own account or for the account of any of its stockholders.
The Company engaged SunTrust Robinson Humphrey, Inc. (the “Placement Agent”) to serve as placement agent in the Private Placement on a best efforts basis. The Placement Agent will receive a cash placement fee of $1 million from the gross proceeds raised in the Private Placement. Pursuant to the engagement letter between the Company and the Placement Agent, the Company agreed to indemnify the Placement Agent against certain liabilities, including liabilities under the Securities Act.
A copy of the Share Purchase Agreement and a form of the Registration Rights Agreement are filed with this Current Report on Form8-K as Exhibit 10.1 and 10.2, respectively.
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