The Collaboration Agreement also contains representations and warranties, covenants, indemnification and other negotiated provisions, including confidentiality obligations, customary for transactions of this nature. Other than with respect to Licensed Products for which the Company has exercised an Income Share Option, the Collaboration Agreement continues on a country-by-country and Licensed Product-by-Licensed Product basis until the expiration of all payment obligations under the agreement, at which time the agreement expires with respect to such Licensed Product in such country and Ultragenyx shall have a fully-paid up, royalty-free, perpetual and irrevocable license to the intellectual property rights licensed by the Company to Ultragenyx respect to such Licensed Product in such country. With respect to any Licensed Product for which the Company has exercised an Income Share Option, the Collaboration Agreement continues until there are no longer sales of such Licensed Product in the United States or Europe. Either party has the right to terminate the agreement if the other party has materially breached in the performance of its obligations under the agreement and such breach has not been cured within the applicable cure period. Ultragenyx may also terminate the Collaboration Agreement in its sole discretion upon 90 days’ prior written notice to the Company.
The foregoing description of the terms of the Collaboration Agreement is qualified in its entirety by reference to the full text of the Collaboration Agreement, a copy of which the Company intends to file with the Securities and Exchange Commission (the “SEC”) as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2020.
Stock Purchase Agreement
In connection with the execution of the Collaboration Agreement, Ultragenyx and the Company also entered into a stock purchase agreement (the “Stock Purchase Agreement”) on October 22, 2020 (the “Closing Date”), pursuant to which the Company issued and sold 7,825,797 shares of its common stock (the “Shares”) to Ultragenyx at a price of $5.1113 per share, which represented a 33% premium to the volume weighted average price of the Company’s common stock for the 10 trading days prior to the Closing Date, for an aggregate purchase price of approximately $40 million. The Stock Purchase Agreement contains customary representations, warranties and covenants of each of the parties thereto.
Following the sale of the Shares, Ultragenyx beneficially owns approximately 14.45% of the Company’s outstanding common stock.
The foregoing description of the terms of the Stock Purchase Agreement is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, a copy of which the Company intends to file with the SEC as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2020.
Investor Agreement
In connection with the consummation of the transactions contemplated by the Stock Purchase Agreement, the Company and Ultragenyx entered into an Investor Agreement (the “Investor Agreement”) on October 22, 2020. Pursuant to the terms of the Investor Agreement, Ultragenyx agreed that the Shares will be subject to a lock-up restriction, such that Ultragenyx will not, and will also cause its affiliates not to, without the prior approval of the Company and with certain exceptions, sell, transfer or otherwise dispose of the Shares until the earliest to occur of (i) 18 months after the Closing Date, (ii) the termination of the Collaboration Agreement or (iii) other specified events. In addition, following the expiration of the lock-up period and for the ten year period after the Closing Date, subject to specified conditions, the Company will agree to file a registration statement in order to register all or a portion of the Shares. In addition to other exceptions, the Company will not be required to effect more than two such demand registrations for Ultragenyx in the aggregate and is not required to effect more than one such demand registration in any 12 month period. The Company also provided Ultragenyx with certain “piggyback” registration rights such that following the expiration of the lock-up period and for the ten year period after the Closing Date, subject to specified conditions and so long as Ultragenyx holds at least 1% of the Company’s outstanding common stock, whenever the Company proposes to register shares of its common stock for its account, Ultragenyx will have the right to include some or all of its Shares in such registration. The Investor Agreement also contains other customary terms and conditions of the parties with respect to the registration of the Shares.
Pursuant to the terms of the Investor Agreement, Ultragenyx agreed that, so long as it holds at least 10% of the Company’s outstanding common stock, the Shares will be subject to a voting agreement, such that until the earliest to occur of certain specified events, and subject to specified conditions, Ultragenyx will, and will cause its permitted transferees to, vote in accordance with the recommendation of the Company’s Board of Directors with respect to specified matters, and Ultragenyx granted the Company an irrevocable proxy with respect to the foregoing.
In addition, pursuant to the terms of the Investor Agreement, Ultragenyx agreed that the Shares will be subject to a standstill agreement, such that until the earlier to occur of (i) 24 months after the Closing Date or (ii) other specified events, Ultragenyx and its affiliates will be subject to customary standstill restrictions.
The foregoing description of the terms of the Investor Agreement is qualified in its entirety by reference to the full text of the Investor Agreement, a copy of which the Company intends to file with the SEC as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2020.
