| Item 1.01 | Entry into a Material Definitive Agreement. |
Securities Purchase, Assignment and Assumption Agreement
On December 19, 2018, Intrexon Corporation (the “Company”) entered into a Securities Purchase, Assignment and Assumption Agreement (the “Purchase Agreement”) with ARES TRADING S.A. (“ARES”) and Precigen, Inc., a wholly-owned subsidiary of the Company (“Precigen”), pursuant to which the Company will, at closing, assume all of ARES’ rights and obligations under that certain License and Collaboration Agreement, dated March 27, 2015, by and between ARES, Precigen and ZIOPHARM Oncology, Inc. (the “Collaboration Agreement”).
As consideration for the assignment of ARES’s rights and obligations under the Collaboration Agreement, the Company will issue and sell a number of shares (the “Shares”) of its common stock, no par value per share (the “Common Stock”), with a value equal to $150,000,000, calculated based on the volume weighted-average price of the Common Stock on the Nasdaq Stock Market for the consecutive ten trading day period ending on the trading day prior to the closing date as reported by Bloomberg, L.P. In connection with the Purchase Agreement, at the closing, the Company and Precigen will also issue and sell to ARES a convertible note (the “Convertible Note”), which is convertible into Common Stock or, in the event of certain qualified financings by Precigen, common stock or other equity securities of Precigen (the “Convertible Note Shares”). In the event that the Shares and the Convertible Note Shares, in the aggregate, exceeds 19.99% of the outstanding shares of Common Stock as of the date of the Purchase Agreement, the Company has agreed to seek shareholder approval for the issuance of the Shares and the Convertible Note Shares in excess of such thresholds. If the Company is unable to obtain such shareholder consent, the Company has agreed to pay to ARES an amount in cash equal to the value of the shares of Common Stock that would have been issuable to ARES, but for the limitations described above, as calculated pursuant to the terms of the Purchase Agreement.
Pursuant to the Purchase Agreement, ARES agreed to alock-up period of 180 days, commencing on the date of issuance of the Shares or Convertible Note Shares, if any (the “Lock-Up Period”). During theLock-Up Period, ARES must refrain from selling, offering for sale or otherwise transferring any of the Shares or the Convertible Note Shares, if any, subject to customary restrictions.
The Purchase Agreement includes certain customary representations and warranties and both the Company and Precigen have agreed to customary covenants and obligations, including obligations to prepare and file a resale registration statement to enable the resale by ARES of the Shares and the Convertible Note Shares, if any.
The Company has agreed to pay ARES a royalty of 10% of the net sales derived from two specifiedCAR-T products by the Company, Precigen or any of their respective Affiliates. In addition, the Company has agreed to pay ARES a royalty of 10% of any fees received by the Company, Precigen or any of their respective affiliates as consideration for the sublicensing of any intellectual property rights relating to those twoCAR-T products. The Company and Precigen have agreed to commit at least $25,000,000, the amount of the Convertible Note, to the advancement of Precigen therapeutic programs.
The transactions contemplated by the Purchase Agreement are expected to close as soon as December 28, 2018 and are subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. Each party may terminate the Purchase Agreement upon the material breach of the other party prior to the closing or if the transactions contemplated by the Purchase Agreement have not closed by March 31, 2019.
The material terms of the Collaboration Agreement are disclosed on Company’s Current Report on Form8-K filed with the Securities and Exchange Commission on April 2, 2015, which descriptions are incorporated by herein by reference.
