Exhibit 10.20
Production Right - Execution version
PRODUCTION RIGHT
Granted in terms of Section 84(1) of the Mineral and Petroleum Resources Development Act, 2002
(Act No. 28 of 2002)
Production Right - Execution version
TABLE OF CONTENTS
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Clause |
Title |
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Preamble |
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1. |
Definitions and Interpretation |
7 |
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2. |
Granting of the Production Right |
12 |
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3. |
Production Area |
12 |
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4. |
Exclusive Right to Apply for Separate Production Rights in Respect of Discoveries |
12 |
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5. |
Rights and Obligations of the Holder |
13 |
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6. |
Commencement, Duration and Renewal |
14 |
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7. |
Royalties and Other Payments |
14 |
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8. |
Technical Advisory Committee |
14 |
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9. |
Cancellation or Suspension of the Production Right |
16 |
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10. |
Voluntary Abandonment and Voluntary Relinquishment of the Production Area |
16 |
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11. |
Rights to Minerals and Petroleum |
17 |
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12. |
Examination of the Production Area |
18 |
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13. |
Records and Samples |
18 |
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14. |
Reports |
19 |
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15. |
Production Work Programme and Annual Production Work Programme |
19 |
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Production Right - Execution version
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16. |
Discoveries and Testing |
20 |
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17. |
Manner of Conducting Production Operations |
22 |
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18. |
Existing Data |
23 |
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19. |
Environmental Protection and Financial Provision |
23 |
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20. |
Social and Labour Matters |
23 |
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21. |
Financial Records and Audits |
25 |
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22. |
Indemnity and Insurance |
25 |
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23. |
Health and Safety |
26 |
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24. |
Confidentiality and Public Announcements |
26 |
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25. |
Cession and Sub-contracting |
28 |
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26. |
Law and Interpretation |
28 |
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27. |
Obligations of the Grantor |
29 |
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28. |
State Option |
29 |
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29. |
Vis Major |
30 |
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30. |
Amendments |
31 |
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31. |
Unitisation |
31 |
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32. |
Special Provisions Relating to Discoveries of Gas |
32 |
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33. |
Waiver or Lenience |
33 |
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Production Right - Execution version
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34. |
Dispute Resolution |
33 |
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35. |
Costs and Value Added Tax |
35 |
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36. |
Entire Agreement |
35 |
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37. |
Severability |
35 |
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38. |
Domicilia Citandi et Executandi |
36 |
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39. |
Registration |
37 |
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40. |
Successors and Assigns |
37 |
ANNEXURE INDEX
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Annexure |
Annexure Title |
Page |
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A |
Diagram of the Production Area |
1 |
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B |
Production Work Programme |
2 |
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C |
Environmental Management Programme |
3 |
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D |
Social and Labour Plan |
4 |
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E |
Schedule of Contributions to the Upstream Training Trust |
5 |
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Production Right - Execution version
PRODUCTION RIGHT
GRANTED IN TERMS OF SECTION 84(1) OF THE MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT NO. 28 OF 2002, READ TOGETHER WITH REGULATION 35 PUBLISHED IN THE GOVERNMENT GAZETTE NO. 26275 ON 23 APRIL 2004, PROMULGATED IN TERMS OF SECTION 107 (1) OF THE ACT.
LET IT HEREBY BE KNOWN THAT:
THE REPUBLIC OF SOUTH AFRICA
is the custodian of the mineral and petroleum resources of the State (the ‘Grantor’).
Susan Shabangu
is the Minister of Mineral Resources of the State (together with her successors in title and, where relevant, her predecessors in such role, referred to as the ‘Minister’). The Minister is empowered by virtue of the provisions of Sections 3(2)(a) and 84(1) of the Act (as defined) to grant production rights.
The Minister has by virtue of the provisions of Section 103 of the Act (as defined) delegated, inter alia, the power to grant production rights to
Dr Thibedi Ramontja
the Director-General of the Department of Mineral Resources (the ‘Director-General’).
Production Right - Execution version
Molopo South Africa Exploration and Production Proprietary Limited
(Registration No 2005/012157/07)
(the ‘Holder’) has applied for a production right for petroleum in respect of the Production Area, an area as defined pursuant to Section 83 of the Act (as defined)
LET IT THEREFORE BE KNOWN THAT:
On this 20th day of September in the year TWO THOUSAND AND TWELVE (2012) before me,
RONEL STRAUGHAN
a Notary Public, duly sworn and admitted, residing and practicing at CAPE TOWN, (the ‘Notary’) and in the presence of the subscribing competent witnesses personally came and appeared,
MTHOZAMI RICHARDSON XIPHU
the Chief Executive Officer of the South African Agency for the Promotion of Petroleum Exploration and Exploitation (Proprietary) Limited (hereinafter referred to as "the Agency"), Registration No. 1999/015715/07, he or she being duly authorised thereto by virtue of the Power of Attorney granted by the Director General of the Department of Mineral Resources at Pretoria on the 29th day of May 2012, which Power of Attorney has this day been exhibited to me, the Notary, and now remains filed of record in my Protocol, and
PETER DEWDNEY PRICE
he being duly authorised thereto under and by virtue of a Resolution of the Board of Directors of the Holder passed on the 5th day of November 2007, a certified copy of which Resolution has this day been exhibited to me, the Notary, and now remains filed on record in my Protocol with the minutes of the meeting at which such Resolution was passed.
AND THE APPEARERS DECLARED THAT:
The Holder currently holds or has held the Exploration Rights and has applied for a production right for petroleum in respect of the Production Area; and
The Grantor has decided to grant to the Holder this production right for petroleum in respect of the Production Area (as defined) on the terms and conditions set out below.
Production Right - Execution version
NOW, THEREFORE, THE GRANTOR HEREBY GRANTS TO THE HOLDER, AND THE HOLDER HEREBY ACCEPTS, THIS PRODUCTION RIGHT SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
1.Definitions and Interpretation
1.1.Unless the context indicates otherwise, any expression to which a meaning has been assigned in the Act shall bear, when used in this Production Right, the same meaning given thereto at the date upon which the Exploration Right was granted and apply mutatis mutandis hereto. In this Production Right the following words and expressions shall have the corresponding meanings assigned to them:
‘Act’ shall mean the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002);
‘Acquired Data’ shall mean all technical information and data (digital or otherwise) and Samples, directly or indirectly, relating to the Production Area that are obtained or created by the Holder in the course of Production Operations (and previous Exploration Operations), including drilling, appraisal, production, completion, and abandonment reports; tests (including reservoir analysis); well logs; maps; production rates, records and statistics; and geological and geophysical information and interpretations; but excluding, for the avoidance of doubt, any Existing Data and/or data which has been obtained from third parties on terms which do not allow for the same to be shared with the Grantor;
‘Affiliate’ of a person shall mean another person which, directly or indirectly, owns, or is owned by, or is owned by a person which owns, that first-mentioned person; ‘owns’ and 'owned' in this definition means the beneficial ownership of 50 (fifty) percent or more of the voting shares or other voting securities of such person;
‘Agency’ shall mean the designated agency as defined in the Act, which, at the date upon which the Exploration Right was granted, was the South African Agency for Promotion of Petroleum Exploration and Exploitation (Soc) Limited, Registration No. 1999/015715/07, also known as Petroleum Agency SA;
‘Annual Production Work Programme’ shall mean the annual work programme for Production Operations, inclusive of the budget of estimated costs and expenses of carrying out the same, that the Holder prepares in accordance with Clause 15;
‘Applicable Laws’ shall mean the laws of the State;
‘Appraisal Operations’ shall mean any operation, study, activity, or matter, whether taking place within or outside of the State, to appraise and evaluate the extent and volume of petroleum within a Discovery made by the Holder in the Production Area and to determine whether such Discovery could be a Commercial Discovery, including, if and to the extent applicable, all production of petroleum necessary in connection with completion and testing of any appraisal well (including, if necessary, any long-term production test) and all plugging and abandonment of any appraisal well and the terms ‘to appraise’ or ‘appraisal’ shall be construed accordingly;
Production Right - Execution version
‘Appraisal Programme’ shall mean the appraisal programme for Appraisal Operations that the Holder prepares in accordance with Clause 16;
‘Appraisal Report’ shall have the meaning ascribed to it in Clause 16.4;
‘Chief Executive Officer’ shall have the meaning ascribed to it in the preamble;
‘Claims’ shall have the meaning ascribed to it in Clause 22.2;
‘Commercial Discovery’ shall mean a Discovery by the Holder of petroleum in such quantities as the Holder believes will permit the economic development thereof, on its own or in combination with other existing Discoveries or as part of a unitised development;
‘Confidential Information’ shall have the meaning ascribed to it in Clause 24.1;
‘Day’ shall have the same meaning ascribed to it in the Act.
‘Discovery’ shall mean the discovery by the Holder of a geological feature within the Production Area that is determined by the Holder to be capable of producing petroleum;
‘Discovery Report’ shall have the meaning ascribed to it in Clause 16.1.3;
‘Divestment Participating Interest’ shall have the meaning ascribed to it in Clause 20.1.1;
‘Environmental Management Programme’ shall have the meaning ascribed to it in the Act, being the environmental management programme for the Production Area prepared by the Holder and approved by the Grantor, a copy of which is attached hereto at Annexure C, as amended from time to time;
‘Exploration Operations’ shall have the meaning ascribed to it in the Act, which for the purposes of this Production Right shall include Appraisal Operations;
‘Exploration Right’ shall mean the exploration rights in respect of petroleum and its by-products granted by the Grantor to the Holder, with reference numbers
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30/5/2/3/2/86ER,; |
30/5/2/3/2/21ER; |
30/5/2/3/2/32ER; |
30/5/2/3/2/33ER; |
30/5/2/3/2/33ER; |
30/5/2/3/2/34ER; |
30/5/2/3/2/64ER; |
30/5/2/3/2/94E and |
30/5/2/3/2/20ER. |
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‘Gas Market Development Period’ shall have the meaning ascribed to it in Clause 6.2;
‘Final Reporting Period’ shall mean a period beginning on the day after the final complete Quarter of this Production Right and ending on the final day of the Initial Period or, where this Production Right has been renewed in terms of Section 85 of the Act, the final day of the final Renewal Period of this Production Right;
Production Right - Execution version
‘First Reporting Period’ shall mean a period beginning on the Effective Date and ending on the first to occur of 30th June, 30th September, 31st December or 31st March thereafter;
‘Gas’ shall mean any petroleum which at normal temperature and pressure is in a gaseous phase existing in a natural condition in the earth’s crust, regardless of the nature of the host rock, and includes any gas which has in any manner been returned to such natural condition, and includes condensate of such gas, but does not include gas obtained by destructive distillation or gas arising from a marsh or other surface deposit;
‘Gas Market Development Period’ shall have the meaning ascribed to it in Clause 32.1;
‘Good International Petroleum Industry Practices’ shall mean those good, sound and generally accepted prevailing standards, practices, considerations, and procedures that are applied by reasonable and prudent companies and operators in the international petroleum industry under conditions and circumstances similar to those experienced in the Production Area;
‘Government’ shall mean the government of the State;
‘Grantor’ shall have the meaning ascribed to it in the preamble;
‘Grantor Group’ shall mean, collectively, the Grantor, the Department of Mineral Resources (including the Minister) and the Agency (including the Chief Executive Officer), and the directors, officers, employees, agents, and representatives of each of the aforementioned;
‘HDP’ means historically disadvantaged person(s) as defined in the
‘Holder’ shall have the meaning ascribed to it in the preamble;
‘Holder Group’ shall mean, collectively, the Holder, the Holder’s Affiliates, contractors and sub-contractors of the Holder and the Holder’s Affiliates used in connection with Production Operations hereunder and the directors, officers, employees, agents and representatives of each of the aforementioned;
‘Initial Period’ shall mean a period 30 (thirty) years commencing from the Effective Date;
‘Legislative Changes’ shall have the meaning ascribed to it in Clause 27.1.3;
‘Minister’ shall have the meaning ascribed to it in the Act;‘Participating Interest’ shall mean the undivided share (expressed as a percentage) in all of the rights and obligations derived from this Production Right granted in respect of all or any part of the Production Area;
‘Party’ shall mean the Grantor or the Holder, as the case may be, and ‘Parties’ shall mean both of them;
‘Petroleum’ shall have the meaning ascribed to it in the Act;
Production Right - Execution version
‘Petroleum Bearing Area’ shall have the meaning ascribed to it in Clause 31.1;
‘Production Area’ shall mean the area within the State described in Clause 3, excluding those portions relinquished or abandoned from time to time or severed there from in accordance herewith;
‘Production Operations’ shall have the meaning ascribed to it in the Act;
‘Production Right’ shall mean this production right in respect of petroleum and its by-products, granted in terms of Section 84(1) of the Act read together with Regulation 35 published in the Government Gazette on 23 April 2004 and promulgated in terms of Section 107 (1) of the Act;
‘Production Work Programme’ shall mean the production work programme attached hereto as Annexure B, as amended from time to time;
‘Prospective Buyer’ shall have the meaning ascribed to it in Clause 20.1.1;
‘Quarter’ shall mean a three-month period beginning on 1st January, 1st April, 1st July or 1st October of each Year;
‘Regulations’ shall mean the regulations promulgated in terms of Section 107(1) of the Act;
‘Renewal Period’ shall mean that period of time for which this Production Right is renewed in terms of Section 85 of the Act read together with Regulation 38;
‘Respondent’ shall have the meaning ascribed to it in Clause 34.6;
‘Royalty Legislation’ shall mean the Mineral and Petroleum Resources Royalty Act, 2008 (Act No. 28 of 2008) and the Mineral and Petroleum Resources Royalty (Administration) Act, 2008 (Act No. 29 of 2008) and other such legislation which may be promulgated by the State governing the payment of royalties to the State;
‘Samples’ shall mean physical samples of rock, fluid and other materials acquired by the Holder in the course of conducting Production Operations for the purpose of preserving and analysing such samples;
‘State’ shall mean the Republic of South Africa;
‘State Option’ shall have the meaning ascribed to it in Clause 28.1;
‘Social and Labour Plan” shall mean the social and labour plan referred to in section 84(1)(i) of the Act read together with Regulation 46, that the holder prepares and which has been approved by the Grantor attached hereto as Annexure D
‘Technical Advisory Committee’ shall mean the committee established by the Parties in accordance with Clause 8.1;
Production Right - Execution version
‘Technical Member’ shall have the meaning ascribed to it in Clause 34.5;
‘Unitisation Proposal’ shall have the meaning ascribed to it in Clause 31.1;
‘Upstream Training Trust’ shall mean the independent Upstream Training Trust registered under registration number IT 1289/98;
‘Vis Major Period’ shall have the meaning ascribed to it in Clause 29.3; and
‘Year’ shall mean the period of 12 (twelve) calendar months from the Effective date and each subsequent 12 (twelve) month period thereafter and the terms ‘annual,’ or ‘annually’ shall be construed accordingly.
1.2.Interpretation in this Production Right
1.2.1.Where the context so requires, in this Production Right:
1.2.1.1.words importing the masculine gender shall include the feminine and vice versa;
1.2.1.2.the words ‘hereunder’, ‘herein’, ‘herewith’, ‘hereof’ and words of similar import are references to this Production Right as a whole and not to any particular provision of this Production Right, unless expressly provided to the contrary; and
1.2.1.3.the words ‘include’ and ‘including’ shall mean to be inclusive without limiting the generality of the description preceding such term and are used in an illustrative sense and not a limiting sense.
1.2.2.Headings and sub-headings to Clauses and sub-clauses in this Production Right are inserted for convenience only and are not to be taken into consideration in the interpretation or construction of this Production Right.
1.2.3.References to any Clause or Annexure are to a Clause or Annexure (as the case may be) of this Production Right, unless expressly stated to the contrary.
1.2.4.This Production Right has been written in English and shall be interpreted and construed in accordance with the English language. All correspondence, communication and documents exchanged between the Grantor and the Holder in connection herewith, whether oral or written, shall be in the English language.
1.2.5.Except as otherwise provided herein, reference to any statute, statutory provision or regulation shall include a reference to that statute, statutory provision or regulation as amended, extended or re-enacted from time to time.
1.2.6.Unless the context otherwise requires, words denoting the singular include the plural and vice versa.
Production Right - Execution version
1.2.7.Unless the context otherwise requires, references to persons shall include natural persons, bodies corporate, unincorporated associations and partnerships.
1.2.8.In the event of any conflict or inconsistency between the provision of this Production Right and the Act, the provisions of the Act shall govern. In the event of any conflict or inconsistency between the provisions of the Production Right and any Regulations, the Regulations shall govern.
1.2.9.In the event of any conflict between the provision of the main body of this Production Right and its Annexures the provisions of the main body and this Production Right shall govern.
2.Granting of the Production Right
2.1.Subject to the Act, the Regulations and the terms and conditions set forth herein, the Grantor hereby grants to the Holder and the Holder hereby accepts this Production Right.
2.2.As of the Effective Date, the Participating Interest of the Holder is 100 (one hundred) percent.
The Production Area shall comprise the farms/Area set out on Annexure “A” hereto situated in the district/s of Ventersburg, Welkom, Odendaalsrus in the Free State Province measuring 187427,2189 (one hundred and eighty seven thousand four hundred and twenty seven comma two one eight nine) hectares in extent.
4.Exclusive Right to Apply for Separate Production Rights in Respect of Discoveries
4.1.Subject to the provisions of Section 83 of the Act read together with Regulation 34, the Holder has the exclusive right to sever from this Production Right, apply for and be granted a separate production right in respect of each Commercial Discovery within the Production Area, provided that any such application for a separate production right has been applied for prior to the expiry date of this Production Right. Any production right granted to the Holder shall cover an area which is no less than the area fully covering each Commercial Discovery and in the event that a Commercial Discovery extends beyond the boundary of the Production Area into acreage over which no other person has an outstanding application for a production right, the Holder shall have the right to apply for a separate production right to include the full extent of the Commercial Discovery that falls outside the boundary of the Production Area.
4.2.Any area falling within the Production Area in respect of which a separate production right has been granted to the Holder shall, as from the date such separate production right comes into effect in accordance with the Act, be severed from and no longer form part of the Production Area in respect of this Production Right, whereupon this Production Right shall cease to apply in respect of such area.
Production Right - Execution version
4.3.In the case of the severance referred to in Clause 4.2, the Holder shall, as soon as practicable after the separate production right comes into effect, submit the necessary amended map reflecting the new size and extent of the Production Area, and the necessary endorsements shall be reflected on the Grantor’s records.
4.4.Where this Production Right provides for a separate production right to be granted to the Holder, such separate production right shall be granted in a form and on terms and conditions which are in all material respects, consistent with the Production Right,
5.Rights and Obligations of the Holder
5.1.Without derogating from the Holder’s rights and obligations in terms of this Production Right and Sections 5 and 86 of the Act, the Holder shall have the:
5.1.1.right by itself or via any other member of the Holder Group to enter the Production Area, bring on to the Production Area any plant, machinery and equipment and build, construct and lay down any surface, underground or under sea infrastructure, both inside and outside the Production Area, which may be required for the purpose of conducting Production Operations;
5.1.2.sole and exclusive right to carry out Production Operations, explore for Petroleum and, if applicable, conduct Appraisal Operations, on or under the Production Area for its own account;
5.1.3.exclusive right to own, use, produce, remove, take in kind, lift, transport (via pipelines, tank ships or otherwise), export and dispose of any Petroleum, including by-products, found in the Production Area, whether within or outside of the State, at prices obtained by the Holder;
5.1.4.right to own and dispose of any and all facilities, materials, equipment, supplies and consumables purchased and/or leased by the Holder for the conduct of Production Operations; and
5.1.5.right to carry out any other activity incidental to Production Operations, which activity does not contravene the Act.
5.2.Without derogating from the Holder’s other obligations in terms of this Production Right, the Holder shall:
5.2.1.conduct Production Operations in accordance with the Annual Production Work Programme and the Production Work Programme;
5.2.2.comply with the Social and Labour Plan;
5.2.3.comply with the Environmental Management Programme; and
5.2.4.pay all amounts due and payable to the Grantor in terms of the Act, the Regulations, this Production Right and Applicable Laws.
Production Right - Execution version
6.Commencement, Duration and Renewal
6.1.This Production Right will commence on the Effective Date and, unless abandoned, cancelled, relinquished, suspended, terminated, extended or renewed in accordance herewith, will continue to be in force and effect until the end of the Initial Period.
6.2.In accordance with Section 86(2) of the Act, the Holder shall, within 1 (one) year from the Effective Date, or such extended period as the Minister may authorise, commence Production Operations in accordance with the Annual Production Work Programme; provided that, if the Holder has exercised its option under Clause 32.1 of the Exploration Right (the ‘Gas Market Development Period’), then the Holder shall commence Production Operations within 1 (one) year of the expiry of the Exploration Right Gas Market Development Period.
6.3.Upon application by the Holder prior to the end of the Initial Period, or of any Renewal Period, this Production Right shall be renewed by the Minister in accordance with and subject to the provisions of Section 85 of the Act read together with Regulation 38.
7.Royalties and Other Payments
7.1.The Holder shall pay royalties to the State in accordance with the Royalty Legislation read with the Royalty Stability Agreement if entered into between Minister and the Holder.
7.2.All amounts due and payable by the Holder to the Grantor under this Production Right, which, for the avoidance of doubt, shall exclude the royalties payable in accordance with the Royalties Legislation, shall be paid into the Agency’s nominated bank account, namely:
Bank Name: ABSA
Branch: Parow
Branch Code: 502110
Account name: Petroleum Agency SA
Account number: 405 103 0832
Account type: Current Account
or such other bank account as the Grantor may from time to time notify the Holder in writing, but in no event will such notice be less than 30 (thirty) days before the beginning of the applicable payment date.
8.Technical Advisory Committee
8.1.The Parties shall by notice to each other, within 30 (thirty) days from the Effective Date, establish a committee (herein referred to as the ‘Technical Advisory Committee’) by appointing and identifying in the said notice representatives as follows:
8.1.1.a chairman and one other person appointed by the Grantor; and
Production Right - Execution version
8.1.2.two persons appointed by the Holder (one of which shall be a representative of the Operator).
8.2.The Grantor and the Holder may appoint by notice to each other a replacement representative or an alternate to act in place of their representative. When an alternate acts in the place of any representative he or she shall be deemed to have the powers and shall perform the duties of such representative.
8.3.Without prejudice to and without derogating from the rights and obligations of the Holder in terms of this Production Right, the Act and the Regulations, the functions of the Technical Advisory Committee are as follows:
8.3.1.to review the Annual Production Work Programme and the progress of all Production Operations, to monitor the implementation thereof and to provide the Holder with advice and recommendations with regard thereto;
8.3.2.to review any proposed amendments to the Annual Production Work Programme and/or the Production Work Programme and to provide the Holder with advice and recommendations with regard thereto;
8.3.3.to review any Appraisal Programme and to provide the Holder with advice and recommendations with regard thereto;
8.3.4.to review any proposed production work programme to be submitted in support of an application for a separate production right pursuant to Clause 4.1 and provide the Holder with advice and recommendations with regard thereto;
8.3.5.to review the accounting of expenditure and the maintenance of operating records and reports kept in connection with Production Operations and to provide the Holder with advice and recommendations with regard thereto; and
8.3.6.to offer advice to the Holder in order to promote the efficient carrying out of Production Operations.
8.4.The Technical Advisory Committee shall meet once annually within 15 (fifteen) days of the submission of the proposed Annual Production Work Programme pursuant to Clause 15.1. Otherwise, the Technical Advisory Committee shall meet as and when required by its members, in which case 30 (thirty) days’ notice must be given by the Party requesting such meeting.
8.5.All meetings shall be held in Cape Town, South Africa or such other place as is unanimously agreed to by the members of the Technical Advisory Committee.
8.6.The Grantor shall propose for the Holder’s consideration a meeting agenda. The aforesaid agenda and the copies of all the necessary documentation and presentation materials shall be exchanged between the Parties not less than 7 (seven) days prior to the meeting.
Production Right - Execution version
8.7.Three representatives of the Technical Advisory Committee shall form a quorum, provided that at least one representative of the Grantor and one representative of the Operator are present.
8.8.Any member of the Technical Advisory Committee shall on no less than 7 (seven) days’ notice to the other members of the Technical Advisory Committee prior to the meeting have the right to bring any expert or advisor to a meeting of the Technical Advisory Committee for the purpose of advising on any matter requiring the advice of an expert or advisor. The chairman of the meeting shall cause minutes of each meeting to be kept and circulated to the members of the Technical Advisory Committee within 30 (thirty) days of each meeting.
8.9.The proceedings and processes of the Technical Advisory Committee are without prejudice to the rights and obligations of the Grantor Group or the Holder Group.
8.10.Where a Party has assigned not less than 10% of its Participating Interest to a person other than the other Party, the membership of the Technical Advisory Committee shall, without reduction in the number of representatives of the Grantor and the Holder, be enlarged to include such assignee, who shall appoint and identify in writing to the Parties one representative who shall, subject to the provisions of this Clause 8, be entitled to participate in the proceedings and processes of the Technical Advisory Committee. The Grantor may in such circumstances enlarge its’ membership of the Technical Advisory Committee to equal that of the Holder and any such assignee.
9.Cancellation or Suspension of the Production Right
9.1It is recorded that in terms of section 90 of the Act the Minister is empowered to cancel or suspend this Production Right in the circumstances set out in and in accordance with the provisions of Section 47 of the Act.
9.2Should this Production Right be cancelled or suspended in accordance with Section 90 of the Act, the Holder shall not be absolved from those obligations and liabilities that have accrued up to the date of such cancellation or suspension.
9.3Any cancellation or suspension of this Production Right by the Grantor shall be without prejudice to the Grantor’s or the Holder’s other rights under this Production Right or Applicable Laws.
10.Voluntary Abandonment and Voluntary Relinquishment of the Production Area
10.1Subject to Clause 10.5, the Holder may, at any time, upon giving the Grantor not less than 180 (one hundred and eighty) days’ prior notice, abandon this Production Right by relinquishing the entire Production Area to the Grantor.
10.2If the Holder gives notice to abandon this Production Right in terms of Clause 10.1, the Holder shall following the date of such notice have the right to discontinue Production Operations and shall, subject to Section 43 of the Act, from such date have no further cost, liability or obligation in respect of Production
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Operations, including, for the avoidance of doubt, the Production Work Programme and the Annual Production Work Programme.
10.3Subject to Clause 10.5, the Holder may, at any time and from time to time, by giving the Grantor not less than 90 (ninety) days’ prior notice, relinquish any portion of the Production Area. Such notice shall be accompanied by a map depicting the Production Area still covered by this Production Right.
10.4If the Holder gives notice to relinquish any portion of the Production Area in terms of Clause 10.3, the Holder shall following the date of such notice have the right to discontinue Production Operations in respect of that portion of the Production Area relinquished and shall, subject to Section 43 of the Act, from such date have no further cost, liability or obligation in respect of Production Operations in respect of that portion of the Production Area relinquished, including, for the avoidance of doubt, the Production Work Programme and the Annual Production Work Programme, which shall be modified accordingly.
10.5Any abandonment in terms of Clause 10.1 or relinquishment in terms of Clause 10.3 shall not absolve the Holder of any cost, liability or obligation incurred by the Holder in respect of this Production Right prior to the date of such abandonment or relinquishment.
10.6From the date that the Holder has abandoned this Production Right in terms of Clause 10.1 or has relinquished a portion of the Production Area in terms of Clause 10.3, the Grantor shall be entitled to grant to any other person any of the rights and permits referred to in the Act in respect of the Production Area so abandoned or relinquished, subject to Section 43 of the Act.
10.7From the date that the Holder has abandoned this Production Right in terms of Clause 10.1, the Holder shall within 6 (six) months furnish the Grantor with a copy of all the Acquired Data that has not been previously furnished to the Grantor. The Holder shall thereafter be entitled to freely use, distribute or dispose of such Acquired Data in respect of the Production Area so abandoned.
10.8From the date that the Holder has relinquished any portion of the Production Area in terms of Clause 10.3, the Holder shall within 6 (six) months furnish the Grantor with a copy of all of the Acquired Data that has not been previously furnished to the Grantor in respect of that portion of the Production Area so relinquished. The Holder shall thereafter be entitled to freely use, distribute or dispose of such Acquired Data.
10.9The Holder shall apply for a closure certificate in terms of Section 43 of the Act in respect of any abandonment or relinquishment in terms of this Clause 10.
11.Rights to Minerals and Petroleum
11.1Except as provided for herein in respect of Petroleum and its by-products, this Production Right confers no rights on the Holder in respect of any mineral (as defined in the Act) discovered in the Production Area. Should the Holder discover any mineral of potential value during Production Operations, the Holder shall, as soon as reasonably practicable after discovery of the same, report such discovery to the Grantor.
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11.2The Holder may thereafter, subject to any prior third party rights, apply for a reconnaissance permission, prospecting right or mining right in respect of such mineral.
12.Examination of the Production Area
The Minister or any person duly authorised by the Minister in accordance with Section 91 of the Act may, in accordance with Sections 91 and 92 of the Act, enter upon the Production Area and conduct routine inspections and exercise such related powers as are set out in the Act at all reasonable times and at their own risk and expense.
13.1Without derogating from the Holder’s responsibilities in terms of Section 88(1) of the Act read together with Regulation 37, the Holder shall keep current and accurate records of all Acquired Data acquired during Production Operations and such Acquired Data shall be kept in such form as is agreed between the Parties, acting reasonably.
13.2Samples shall be taken by the Holder in accordance with Applicable Laws, Good International Petroleum Industry Practices and the Grantor’s reporting and sampling guidelines. The Holder shall, at its own cost, save, correctly label and, as soon as reasonably practicable after taking the same, deliver to the Grantor a representative portion of all Samples in such form as is agreed by the Parties, acting reasonably.
13.3Subject to Clause 13.5, the Grantor shall be entitled to inspect any Samples kept by the Holder at all reasonable times on reasonable notice.
13.4Prior to the Holder discarding any Samples, the Holder shall notify the Grantor. Should the Grantor require such Samples, the Holder shall, at its cost, deliver to the Grantor the Samples so requested in writing by the Grantor. Notwithstanding anything to the contrary in this Production Right or otherwise, if the Grantor does not respond within 30 (thirty) days of receipt of such notice from the Holder, the Holder is free to discard such Samples.
13.5The Holder may export Existing Data and Acquired Data (including Samples) for processing or laboratory examination or analysis by the Holder or by third parties or for storage outside of the State, provided that representative Samples (reasonably equivalent in quality) and copies of the Acquired Data (reasonably equivalent in quality) have first been delivered to the Grantor. In the case of Acquired Data or Samples which cannot be copied or sub-sampled prior to export (e.g. core), the Holder shall retain such Acquired Data or Samples, provided that the Grantor is informed that such Acquired Data or Samples cannot be copied or sub-sampled prior to the export thereof.
13.6Subject to Clause 13.5, the Holder shall deliver to the Grantor, at the Holder’s expense, digital and, where appropriate, paper copies of all Acquired Data (other than Samples) as soon as reasonably practicable after such Acquired Data is acquired or prepared.
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14.1.The Holder shall keep the Grantor advised of all material developments taking place during the course of Production Operations and, to the extent the same have not already been supplied by the Holder pursuant to this Production Right or the Exploration Right, shall furnish the Grantor with such other further reports and information as the Grantor may reasonably require.
14.2.Without derogating from the generality of Clause 14.1 or the Holder’s reporting obligations in terms of Section 88 of the Act, during the term of this Production Right the Holder shall within 21 (twenty one) days after the end of (a) the First Reporting Period, (b) each Quarter after the First Reporting Period and (c) the Final Reporting Period, and within 60 (sixty) days from the end of each completed Year, submit to the Grantor a written report reflecting, for the relevant period, the progress of Production Operations, including a summary of:
14.2.1.the numbers of local persons (classified by race and gender) and expatriate persons employed;
14.2.2.the work done and expenditure on Production Operations;
14.2.3.the site and depth of every well drilled or being drilled and the formations penetrated and particulars regarding any occurrence of Petroleum encountered;
14.2.4.a statement of compliance with the Environmental Management Programme; and
14.2.5.a statement of compliance with the Social and Labour Plan.
14.3.The Grantor and the Holder shall each own the Acquired Data in its possession and, after the termination, cancellation or abandonment of this Production Right or relinquishment of any portion of the Production Area, each Party may freely use, sell, distribute, trade, license or otherwise disclose or dispose of such data relating to the areas no longer included in the Production Area; provided, however, in the case of a separate production right granted pursuant to Clause 4.1, Acquired Data in respect of the area covered by such production right will be subject to the terms and conditions set forth in such production right.
14.4.None of the terms of this Production Right shall be construed as requiring the Holder to disclose any of its or its Affiliates’ proprietary technology or proprietary technology that is licensed or otherwise acquired by the Holder or its Affiliates from third parties.
14.5.Within 6 (six) months, from the termination and/or cancellation of this Production Right, the Holder shall furnish the Grantor with a copy of all the Acquired Data not already in the possession of the Grantor.
15.Production Work Programme and Annual Production Work Programme
15.1Not later than 60 (sixty) days from the Effective Date, the Holder shall submit to the Grantor an Annual Production Work Programme for the remainder of the current Year. Thereafter, at least 90 (ninety) days
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prior to the commencement of each succeeding Year, the Holder shall submit to the Grantor its Annual Production Work Programme for such succeeding Year or part thereof, as the case may be.
15.2Each Annual Production Work Programme shall set forth the Production Operations to be carried out during the subject Year or part thereof, as the case may be. The Production Operations to be carried out under the Annual Production Work Programme shall be consistent with the Production Work Programme.
15.3Should the Holder have exercised its option under Clause 32.1 of the Exploration Right in respect of this Production Right, then the provisions of Clauses 15.1 and 15.2 shall not apply until such time as the Holder has given notice to the Grantor pursuant to Clause 32.2.1 of the Exploration Right; provided, however, if such notice is given less than 90 (ninety) days prior to the commencement of a Year, then the 90 (ninety) day period required by Clause 15.1 for submission of the Annual Production Work Programme for the succeeding Year shall be deemed to have been satisfied in respect of such Annual Production Work Programme.
15.4If the Holder gives notice to the Grantor pursuant to Clause 32.2.2 of the Exploration Right, then the provisions of Clauses 15.1 and 15.2 shall be of no further force or effect from the date of such notice and the Holder shall have no liability or obligation in respect thereof.
15.5Any approval of the Minister required pursuant to Section 102 of the Act in connection with any amendment to the Production Work Programme proposed from time to time by the Holder shall not be unreasonably withheld, conditioned or delayed.
16.Discoveries and Testing
16.1If from time to time during the course of Production Operations under this Production Right a Discovery is made by the Holder in the Production Area, the Holder shall:
16.1.1promptly notify the Grantor of the fact that a Discovery has been made;
16.1.2cause tests to be made on the Discovery within a reasonable period of time consistent with Good International Petroleum Industry Practices, in order to determine whether the Discovery is or could be a Commercial Discovery and worthy of appraisal. Prior to testing the Discovery, the Holder shall give notice to the Grantor of the tests the Holder intends to conduct and the Grantor shall have the right to witness such tests.
16.1.3within 60 (sixty) days (or such longer period as may be agreed between the Parties in writing) after having completed and received the results of the tests under Clause 16.1.3, furnish the Grantor with a copy of the test results report containing a summary of the Holder’s interpretation of such tests (the ‘Discovery Report’)
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16.2All tests and measurements conducted by the Holder for the purpose of establishing the potential existence of a Commercial Discovery shall be carried out in accordance with Good International Petroleum Industry Practices.
16.3If the Holder considers, after providing the Grantor with the Discovery Report, that the Discovery could be a Commercial Discovery, then the Holder must take reasonable steps to appraise the Discovery and submit an Appraisal Programme to the Grantor for approval.
16.4Within 180 (one hundred and eighty) days from the date of completion of Appraisal Operations, or such further period as agreed between the Parties in writing, the Holder shall deliver to the Grantor (a) a full report containing particulars of the results of such Appraisal Operations, including particulars and preliminary estimates relating to the location and depth of Petroleum reservoirs, the composition of Petroleum, the estimated recoverable reserves of Petroleum, and the estimated daily production potential of Petroleum, and (b) a declaration by the Holder as to whether or not the Discovery is a Commercial Discovery (the ‘Appraisal Report’).
16.5If the Holder (a) considers, after providing the Grantor with the Discovery Report, that the Discovery is a Commercial Discovery, or (b) declares in the Appraisal Report that the Discovery is a Commercial Discovery, then the Holder may either (i) submit a proposal to amend the Production Work Programme to provide for the development of, production from and exploitation of, the Discovery; or (ii) apply for and be granted a separate production right in respect of the Discovery in accordance with Clause 4.
16.6If (i) the Holder submits a proposal to amend the Production Work Programme to provide for the development of, production from and exploitation of, the Discovery and (ii) Production Operations are significantly expanded (including by extension of the production area as contemplated in Clause 16.9) as a result of the Discovery, the holder shall make an application in terms of section 102 of the Act to amend the Production Work Programme, the Environmental Management Programme and Social and Labour Plan to take account of the Discovery and the Minister shall not unreasonably withhold, condition or delay approval of any such amended Production Work Programme, Environmental Management Programme and Social and Labour Plan.
16.7The Holder shall have the exclusive right to develop, produce and exploit any Discovery that is the subject of an amended Production Work Programme, which Discovery shall be deemed to be included in this Production Right, which shall apply mutatis mutandis thereto.
16.8Following any approval of the amended Production Work Programme, the next proposed Annual Production Work Programme shall be prepared according to the amended Production Work Programme.
16.9In the event that the Discovery extends beyond the Production Area into other area(s) which geologically form part of the same Petroleum reservoir within the State which are subject to permits or rights held entirely by the Holder or the Holder and any other party(ies) to this Production Right, then the Holder shall have the right to give notice to the Grantor of the same and shall include with such notice a map in similar format to Annexure A depicting the size and extent of the Production Area and the size and extent of the
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Discovery. Upon receipt by the Grantor of such notice and map, the Production Area shall be deemed to be enlarged to include the size and extent of the Discovery, the Holder shall present the original copy of this Production Right to the Grantor, complete with such map, for an endorsement reflecting such enlarged Production Area, the Grantor shall make such endorsement and shall make the same endorsement on its original copy of the Production Right and shall reflect the same on its records and the Production Area, as enlarged, shall for all purposes be deemed to be included in this Production Right, which shall apply mutatis mutandis thereto.
17.Manner of Conducting Production Operations
17.1Without derogating from the provisions of Applicable Laws and the Environmental Management Programme, the Holder shall:
17.1.1execute all Production Operations in a proper and workmanlike manner in accordance with Good International Petroleum Industry Practices and, without prejudice to the generality of the foregoing, the Holder shall take all reasonable and practical steps in order to prevent:
17.1.1.1the escape or waste of Petroleum discovered in the Production Area;
17.1.1.2damage to any Petroleum reservoir;
17.1.1.3the entrance of uncontrolled water through wells to any Petroleum reservoir;
17.1.1.4the escape of Petroleum into any waters or aquifer in the vicinity of the Production Area; and
17.1.1.5pollution of the terrestrial or marine environment;
17.1.2promptly inform the Grantor of the occurrence of any event described in Clauses 17.1.1.1 to 17.1.1.5 inclusive;
17.1.3take all actions required under the Environmental Management Programme and all Applicable Laws with respect to any of the incidents referred to Clauses 17.1.1.1 to 17.1.1.5 inclusive;
17.1.4upon the completion of any operation or activity within the Production Area, promptly notify the Grantor of any obstruction, including the location, nature and extent thereof, that remains in the Production Area;
17.1.5not flare any Petroleum, except in the case of flaring for safety reasons, without the Grantor’s prior written approval, which approval shall not be unreasonably refused, conditioned or delayed; and
17.1.6promptly give notice to the Grantor of all Production Operations which may be reasonably expected to interfere with the rights of other users of the Production Area and take all reasonable steps to minimise interference with the rights of other users.
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18.1It is recorded that no Existing Data has been available to the Holder. Any data or information relating to the Production Area that the Grantor has available at the Effective Date independent of the Holder, or which the Grantor subsequently acquires independent of the Holder, will be made available for inspection, copying and use by the Holder. The Holder shall pay the Grantor for the reasonable and customary costs incurred in copying and preparing such data or information. Should such further data or information be provided to the Holder, such data and information shall be deemed to form part of the Existing Data and Annexure F will be amended accordingly.
18.2Upon terms and conditions to be agreed, the Grantor may assist the Holder in resolving technical problems relating to the Existing Data. Such assistance shall not include interpretation of the Existing Data.
18.3Ownership in all Existing Data vests in the Grantor. On expiry, cancellation, termination or abandonment of this Production Right, all Existing Data in the Holder’s possession shall as soon as reasonably practicable, at the Holder’s cost, be returned to the Grantor. Alternatively, the Holder shall submit to the Grantor a certificate to the effect that all such copies have been destroyed.
18.4While every effort has been made to verify the quality and accuracy of the Existing Data, the Grantor Group shall not be liable for any error or inaccuracy contained within the Existing Data or any damages of whatsoever nature suffered by the Holder arising from any such error or inaccuracy in the Existing Data.
19.Environmental Protection and Financial Provision
19.1.The Holder shall conduct all Production Operations in accordance with the Environmental Management Programme.
19.2.The Holder must annually assess its environmental liability in accordance with Section 41(3) of the Act and, if appropriate, increase-such financial provision to the satisfaction of the Minister.
20.Social and Labour Matters
20.1.The Grantor and the Holder are desirous of encouraging black investment and employment in the upstream sector of the oil and gas industry in the State. To this end:
20.1.1.the Holder shall, within 90 days from the effective date, offer to sell, at a fair market value, on terms to be agreed and approved by the Agency, up to 10% (ten percent) of its Participating Interest or in its equity (the ‘Divestment Participating Interest’) to either:
20.1.1.1.a suitable historically disadvantaged person (‘HDP’); or
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20.1.1.2.where no HDP has been identified or the Agency has not approved the proposed offer because it does not advance the attainment of the object referred to in section 2(d) of the Act, any State Owned Company;
(with the HDP or State Owned Company, as the case may be, being referred to herein as the ‘Prospective Buyer’);
provided, however, that, notwithstanding the foregoing provisions of this Clause 20, if the Holder shall have divested part of its Participating Interest prior to offering to sell the Divestment Participating Interest to the Prospective Buyer pursuant to this Clause 20, then the Divestment Participating Interest shall be divided pro-rata among all of the holder(s) of a Participating Interest and the provisions of this Clause 20 shall apply pari passu with respect thereto; and further provided, always, that neither the Prospective Buyer nor any other person shall have any right pursuant to the provisions of this Clause 20 or Applicable Laws (irrespective of any change in Applicable Laws following the date of execution of the Exploration Right) to acquire more than a 10 (ten) percent Participating Interest;
20.1.2.the Holder shall require the Prospective Buyer to become a party to this Production Right upon execution of a written agreement in respect of the purchase by the Prospective Buyer of the Divestment Participating Interest;
20.1.3.the Holder shall employ South Africans having appropriate qualifications and experience (giving preference to historically disadvantaged persons), taking into account the Holder’s operational requirements under this Production Right and provided, always, that the Holder may employ a person who has necessary qualifications and experience and who is not a South African if the required skills are not available in the South African labour market. Wages and salaries of the Holder’s South African personnel will be determined in accordance with prevailing local labour market conditions;
20.1.4.in the normal course of the Holder’s operations, the Holder shall subject to the conditions set out in Clause 20.1.3 give preference, in procuring for purposes of use in Production Operations, to the equipment, machinery, materials, instruments, supplies and accessories manufactured or produced by or otherwise available in the State (and particularly from historically disadvantaged persons) and which are competitive with those available outside the State in terms of price, quality, reliability and availability;
20.1.5.the Holder shall subject to the conditions in Clause 20.1.3 use contractors and/or sub-contractors who are South Africans (giving preference to historically disadvantaged persons) whose services and standards are competitive with those available outside the State in terms of price, quality, reliability, expertise and availability; and
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20.1.6.the Holder shall pay the amounts set out and specified in the attached Annexure E to the Upstream Training Trust, to be used by the Upstream Training Trust for the training, education, and obtaining of practical experience for historically disadvantaged persons and other South Africans in the manner determined by the trustees.
20.2.The Holder must, in consultation with the Grantor, make revisions to the Social and Labour Plan attached hereto as Annexure D in accordance with Regulation 46 to ensure compliance with section 2(d) and(f) of the Act.
20.3.The Holder must submit the revised Social and Labour Plan, prepared in accordance with Clause 20.2, 18 months from the effective date and the revised Social and Labour Plan will become effective upon approval of the Minister, but not before 24 months from the effective date.
20.4.Failure by the Holder to submit the revised Social and Labour Plan in accordance with Clauses 20.2 and 20.3 and to obtain the approval of the Minister for the revised Social and Labour Plan after 24 months from the effective date shall constitute breach of the terms and conditions of the right as contemplated by section 47(1) (b) of the Act.
21.Financial Records and Audits
21.1.The Holder shall keep in the State financial records and accounts of all transactions pertaining to this Production Right in accordance with generally accepted accounting principles applicable in the State.
21.2.Upon at least 30 (thirty) days’ advance notice, the Grantor or its duly appointed representative may audit, at its own cost, any such financial records and accounts pertaining to this Production Right or copies thereof.
22.Indemnity and Insurance
22.1.The Holder shall for the duration of this Production Right conduct Production Operations in a manner that safeguards and protects persons from injury or death and prevents damage or destruction of property and the environment in accordance with Good International Petroleum Industry Practices.
22.2.The Holder hereby undertakes to defend, hold harmless and indemnify the Grantor Group from and against any and all claims, costs, charges, liabilities and expenses, including reasonable legal costs (hereinafter referred to as ‘Claims’), that may be instituted against or suffered by any member of the Grantor Group as a result of injury or death to any person or damage or destruction to any property and/or the environment arising from the negligent and/or unlawful acts and/or omissions of the Holder Group.
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22.3.The Holder shall as soon as reasonably practicable after the Effective Date obtain and maintain sufficient insurance during the term of this Production Right to insure those risks related to Production Operations and support the indemnities given by the Holder under this Production Right which are customary to insure against in the international petroleum industry or in accordance with Good International Petroleum Industry Practices. The Holder, with the prior written approval of the Grantor, not to be unreasonably refused, conditioned or delayed, may implement a policy of self insurance in respect of certain risks related to Production Operations. Without derogating from the generality of the foregoing such insurance shall specifically provide for:
22.3.1.all risks in respect of any property or equipment used in connection with Production Operations;
22.3.2.pollution liability;
22.3.3.third-party liability and public liability;
22.3.4.removal of wrecks and cleaning-up operations pursuant to an accident in the course of or as a result of Production Operations; and
22.3.5.the Holder’s liability to its contractors, employees, consultants and agents engaged in Production Operations.
If any emergency or incident arising from Production Operations causes or has the potential to cause death and/or injury to persons or damage to and/or destruction of property and/or the environment, the Holder shall to the extent practicable in the circumstances consult with the responsible Government departments and take such action as may be prescribed under Applicable Laws or where not prescribed take such prudent and necessary action in accordance with Good International Petroleum Industry Practices.
24.Confidentiality and Public Announcements
24.1Except as otherwise provided under this Production Right, the Acquired Data and the Existing Data together with all programmes, tests, analyses, results, books, statements, records, returns, plans, information and correspondence between the Parties (hereinafter collectively referred to as ‘Confidential Information’) shall, subject to Section 88(2) of the Act, be treated as confidential by the Parties during the term of this Production Right and shall not be disclosed by either of the Parties to any person without the prior written consent of the other Party, such consent not to be unreasonably refused, conditioned or delayed, except in the following circumstances:
24.1.1where the Holder is required by law, regulation, decree, rule or order applicable to the Holder or its Affiliates to disclose such Confidential Information;
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24.1.2where the Holder discloses Confidential Information to any member of the Holder Group; provided that the Holder informs that member of the Holder Group of the confidential nature of information so disclosed;
24.1.3to the extent that such Confidential Information has to be produced at legal proceedings or because an order from a court of competent jurisdiction has compelled the production of such Confidential Information;
24.1.4where the Holder discloses Confidential Information to prospective or actual contractors, consultants, advisors and attorneys employed by any member of the Holder Group where disclosure of such Confidential Information is necessary to such person’s services; provided that, prior to disclosure, the Holder informs such contractor, consultant, advisor and/or attorney of the confidential nature of the information so disclosed and takes reasonable steps to ensure the confidentiality thereof;
24.1.5where the Holder discloses Confidential Information to a bank or other financial institution to the extent appropriate to the Holder arranging for funding; provided that, prior to disclosure, such person provides the Holder with a written undertaking of confidentiality that is not less restrictive than the confidentiality restrictions set out in this Clause 24;
24.1.6to the extent that such Confidential Information must be disclosed pursuant to any rules or requirements of any recognised stock exchange on which the securities of any member of the Holder Group are or are to be traded;
24.1.7where the Holder discloses Confidential Information to a bona fide prospective purchaser or purchasers of all or part of the Holder or to whom the Holder’s rights and obligations under this Production Right are proposed to be assigned;
24.1.8to the extent that any Confidential Information, through no fault of the Holder, has become or becomes part of the public domain;
24.1.9where the Holder discloses Confidential Information as part of an exchange with third parties for the geological, geophysical, geochemical or any other technical or scientific data, reports and information (either raw, processed or interpreted) pertaining to their Petroleum operations in respect of other acreage within the State and subject to the execution of suitable confidentiality arrangements. In this event the Grantor shall be apprised of the extent of the proposed exchange; or
24.1.10where the Holder discloses Confidential Information to its co-venturers pursuant to the terms of the Joint Operating Agreement.
24.2Except as may be required by laws, rules, regulations or decrees (including that of a stock exchange) applicable to the Holder or its Affiliates, the Holder shall make no public announcement with regard to this Production Right or any matter related thereto, unless the Holder has furnished the Grantor with a copy of the intended public announcement and the Grantor has given its prior written approval, which approval shall not unreasonably be withheld or delayed. If the Grantor desires to issue any press release, media
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statement, or interview on any Petroleum Discovery, estimated Petroleum reserves, and/or any well drilling operations, tests, and/or results relating to the Production Operations hereunder, the Grantor shall give written notice thereof to the Holder at least 3 (three) Business Days in advance to enable the Holder to comply with disclosure rules and requirements imposed on any Holder Party or its Affiliates by the laws, regulations or rules of the relevant countries in which such Holder Party is. incorporated or doing business or in which the securities of such Holder Party or its Affiliates are or are to be listed or traded.
24.3When a public announcement or statement becomes necessary or desirable because of impending danger to, or loss of, life, damage to property or pollution as a result of Production Operations, either Party is authorised to issue and make such announcement or statement without prior notice or prior approval of the other Party where such prior notice and approval is impractical. In such a case the Party making the announcement or statement shall promptly furnish the other Party with a copy of such announcement or statement.
25.Cession and Sub-contracting
25.1This Production Right may not be ceded, transferred, let, sub-let, assigned, alienated or otherwise disposed of without the written consent of the Minister in terms of Section 11 of the Act
25.2The Holder may from time to time appoint one or more contractors and/or sub-contractors to carry out any portion of the Annual Production Work Programme and/or Production Work Programme; provided that the Holder shall always remain liable to the Grantor for the compliance with and observance of its obligations in terms of this Production Right.
26.Law and Interpretation
26.1The Holder shall comply with all Applicable Laws.
26.2Without derogating from the provisions of Section 4 of the Act, this Right shall be governed, construed and interpreted in accordance with the laws of the State.
26.3The Grantor and the Holder are not partners, nor is it the intention of the Parties to create a partnership, and Production Operations to be carried out in terms of this Production Right are at the sole cost, risk and expense of the Holder and any person who acquires a Participating Interest hereunder, including, for the avoidance of doubt, the Divestment Participating Interest and the State Option.
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27.Obligations of the Grantor
27.1The Grantor undertakes to do and perform all acts and things which are or may be required to be done or performed to give full effect to this Production Right in accordance with its provisions and:
27.1.1shall ensure that the rights and obligations of the Holder under this Production Right will not be altered without the prior written consent of the Holder;
27.1.2the Grantor guarantees that the stability of the legal terms and the provisions of this Production Right, and any and all separate production rights arising from it, shall be maintained as such terms and provisions exist as of the date of execution of the Exploration Right for the duration of this Production Right and any and all separate production rights arising from it;
27.1.3if, at any time or from time to time after the date of execution of the Exploration Right, there is any change or changes enacted or prescribed to any national or local legislation, regulations, policies, practices, directives or the like (‘Legislative Changes'), which in any way materially limit (directly or indirectly), or adversely affect (directly or indirectly) any rights granted to the Holder under this Production Right and/or any and all separate production rights arising from it, or obligations assumed by the Holder under this Production Right and/or any and all separate production rights arising from it and/or the contractual equilibrium of this Production Right and/or any and all separate production rights arising from it, then the Holder may notify the Grantor of the same, whereupon the Parties shall consult with each other and conduct negotiations in good faith and shall, for such purpose, attend at least one meeting with each other, with a view to agreeing upon and implementing an arrangement to take account of the Legislative Changes and to modify as appropriate this Production Right and/or any and all separate production rights arising from it to restore the contractual equilibrium thereof for the remaining duration of this Production Right and/or any and all separate production rights arising from it;
27.1.4if the Parties cannot reach agreement pursuant to the provisions of Clause 27.1.3 within 90 (ninety) days of the notice referred to in Clause 27.1.1, then either Party shall be entitled to refer the matter to arbitration, in relation to which arbitration the provisions of Clause 34, shall have effect; and
27.1.5terms relating to Income Tax and royalty stability will be established through contracts between the Holder and the Minister of Finance of the State as provided for in the Income Tax Act, 1962 (Act No. 58 of 1962) and Royalty Legislation.
28.1Subject always to the obligations of the Grantor contained in Clause 27, the State has an option, exercisable within 90 (ninety) days from the approval by the Agency of the offer by the holder to sell a participating interest to a suitable HDP or any State Owned Company pursuant to the provisions of Clause 20.1.1 or, if the Holder has exercised its option with respect to the Gas Market Development Period, within 90 (ninety) days from the expiry of the Gas Market Development Period , to acquire up to 10 (ten) percent
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of the Holder’s Participating Interest in this Production Right (‘State Option’). The Holder must furnish the Grantor with all relevant and material information to enable the State to decide whether to acquire 10 (ten) percent of the Holder’s Participating interest in this Production Right.
28.2Should the State elect to exercise the State Option it must notify the Holder, within 90 (ninety) days from the approval by the Agency of the offer by the holder to sell a participating interest to a suitable HDP or any State Owned Company pursuant to the provisions of Clause 20.1.1 or, if the Holder has exercised its option with respect to the Exploration Right Gas Market Development Period, within 90 (ninety) days from the expiry of the Exploration Right Gas Market Development Period:
28.2.1that it has elected to exercise the State Option; and
28.2.2the Participating Interest, up to 10 (ten) percent, that it elects to acquire.
28.3Upon the exercise of the State Option, the State will become a party to the joint operating agreement relating to the Production Area. The terms and conditions contained in the joint operating agreement shall not limit the State in the exercise of any of its rights and obligations as the Grantor hereunder. The rights and obligations of the State under the terms of the Joint Operating Agreement shall be separate from, and without prejudice to, its rights and obligations as the Grantor hereunder.
28.4The State shall pay its Participating Interest share of all costs and expenses related to any approved Production Work Programme and/or any approved Annual Production Work Programme; provided, however, that the State, or any assignee of all or part of the State’s Participating Interest, shall not be liable for any costs and expenses relating to any Exploration Operations conducted within the Production Area prior to the Effective Date.
28.5If the State does not exercise the State Option within the 90 (ninety) day periods provided for in Clause 28.1, the State Option shall lapse and be of no further effect.
28.6Notwithstanding the foregoing provisions of this Clause 28, if the Holder shall have divested part of its Participating Interest prior to the exercise by the Grantor of the State Option, then the percentage Participating Interest to be acquired by the Grantor under the State Option shall be divided pro-rata among all of the holder(s) of a Participating Interest and the foregoing provisions of this Clause 28 shall apply pari passu with respect thereto; provided, always, that the Grantor shall have no right pursuant to the State Option to acquire more than a 10% (ten percent) Participating Interest.
29.1.Any act, cause, thing or event outside the control of the Holder, including acts of God, war, insurrection, civil commotion, blockade, strikes, flood, storm, lightning, fire, earthquake or loss of electricity for a sustained period, which prevents the Holder from fulfilling its obligations or enjoying its rights under this Production Right, shall be regarded as vis major and any failure on the part of the Holder to fulfil its obligations as a consequence of vis major shall not constitute a breach hereof.
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29.2.Financial inability, ordinary hardship and inconvenience on the part of the Holder, howsoever caused or arising, shall not be regarded as vis major.
29.3.If the Holder by reason of vis major as contemplated in Clause 29.1 is prevented from fulfilling its obligations or enjoying its rights under this Production Right, the Holder shall promptly notify the Grantor thereof and the Holder shall take all reasonable steps to investigate and remove the cause thereof. During the period of time such vis major continues (the 'Vis Major Period’), the Holder’s obligation to perform Production Operations will be suspended. The Holder shall promptly notify the Grantor as soon as such Vis Major Period ends and the Holder shall as soon as is reasonably practicable thereafter resume Production Operations.
29.4.Upon the Holder notifying the Grantor of the end of the Vis Major Period, the period of suspension contemplated in Clause 29.3 shall come to an end. The Holder’s notice referred to in the third sentence of Clause 29.3 shall state the length of the Vis Major Period, which shall be calculated from the date that the Holder first notified the Grantor of such vis major until the date that such vis major has ended. The duration of this Production Right shall be extended, pari passu, by an amount equivalent to the Vis Major Period.
29.5.In the event of the amendment of the duration of this Production Right envisaged in Clause 29.4, the Holder shall present the original copy of this Production Right to the Grantor who shall make an endorsement reflecting such amendment of the duration of this Production Right and the Grantor shall make the same endorsement on its copy.
Any amendment or variation to this Production Right shall be agreed in writing between the Parties and submitted to the Minister for consent pursuant to Section 102 of the Act. Only once the Minister has consented to the amendment or variation will such amendment or variation be effective.
31.1.In the event that a Commercial Discovery within the Production Area forms part of a Petroleum reservoir to which third party exploration or production rights exist within the State (the ‘Petroleum Bearing Area’), then the Grantor may by notice require the Holder to prepare a proposal for the unitisation of the Petroleum Bearing Area (the ‘Unitisation Proposal’). The Grantor shall require the holder(s) of the adjacent exploration or production areas forming part of the Petroleum Bearing Area to provide the Holder with all such technical information and data as the Holder may reasonably require in order to assist in the preparation of the Unitisation Proposal. The Unitisation Proposal shall be submitted to the Grantor within the period specified in the said notice, which shall not be less than 180 (one hundred and eighty) days, or such longer period as the Parties, acting reasonably, may agree in writing.
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31.2.The Unitisation Proposal shall be prepared in accordance with Good International Petroleum Industry Practices and shall be objectively practical, fair and equitable to all holders of interests in the Petroleum Bearing Area.
31.3.If the Unitisation Proposal is not submitted within the period specified or agreed in Clause 31.1, or if the Unitisation Proposal submitted is not acceptable to the Grantor because it is not objectively practical, fair and equitable to all parties concerned, then the Grantor may appoint a committee of independent experts to prepare the Unitisation Proposal in accordance with Good International Petroleum Industry Practices.
31.4.The committee so appointed shall, after having given full consideration to any representations made by the Holder, submit a Unitisation Proposal to the Grantor, copied to the Holder, as soon as is practicable after being appointed.
31.5.The Grantor may, if satisfied that the Unitisation Proposal submitted by the Holder pursuant to Clause 31.11 or the independent committee pursuant to Clause 31.4 is objectively practical, fair and equitable to all parties concerned, confirm such proposal, and it shall be binding upon the Holder.
31.6.If the Holder fails to carry out any provision of the Unitisation Proposal the Minister may by notice giving reasons for the intention to suspend or cancel the PR and affording the Holder an opportunity to show why such action should not be considered require the Holder to do so within a reasonable period and if the Holder fails to comply with such notice the Minister may, in terms of Section 90 of the Act, suspend or cancel this Production Right in respect of that part of the Production Area which falls within the Petroleum Bearing Area.
32.Special Provisions Relating to Discoveries of Gas
32.1.If the Holder makes a Discovery, the economic development of which the Holder believes can only be accomplished if Gas produced as the primary or secondary product is sold commercially, then the Holder shall have the option, exercisable upon notice to the Grantor at the time that the Holder submits a proposal to amend the Production Work Programme or makes an application to the Grantor for a separate production right in respect of such Discovery pursuant to Clause 16.5, to have the Holder’s obligations under the amended Production Work Programme or the proposed production work programme submitted in support of the application for a separate production right suspended for a period of up to 5 (five) years (hereinafter referred to as the ‘Gas Market Development Period’) commencing from the date on which the proposal to amend the Production Work Programme is approved or the separate production right applied for pursuant to Clause 16.5 becomes effective, as the case may be, during which period the Holder shall conduct studies to determine whether the Gas can be commercially produced. In such circumstances, the Production Work Programme in respect of such Discovery shall be deemed to be provisional and the Holder shall not be required to submit an Annual Production Work Programme in respect of such Discovery during the Gas Market Development Period.
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32.2.Not less than 90 (ninety) days prior to the expiry of the Gas Market Development Period, the Holder shall notify the Grantor either that:
32.2.1.the Gas can be commercially developed and produced, in which case the Holder shall proceed with implementation of the amended Production Work Programme or the proposed production work programme, as the case may be, duly amended if necessary; or
32.2.2.the Gas can be commercially developed and produced, in which case the Holder shall proceed with implementation of the amended Production Work Programme or the proposed production work programme, as the case may be, duly amended if necessary; or the Gas cannot be commercially developed and produced, in which case the Holder shall be deemed to have abandoned any relevant separate production right with effect from the expiry date of the Gas Market Development Period, the amended Production Work Programme or the proposed production work programme, as the case may be, shall no longer be of any effect, the Holder shall have no liability or obligation in respect thereof and the Holder shall continue Production Operations in accordance with the Production Work Programme.
32.3.The grant of any extension to the Gas Market Development Period shall be at the sole discretion of the Grantor, which discretion shall be exercised reasonably.
Any failure by either the Grantor or the Holder to exercise any of the rights that they have, whether in terms of this Production Right, the Act or the Regulations, or any lenience granted by them in terms thereof shall not constitute a waiver of such rights or a variation to the terms and conditions of this Production Right.
34.1Should any difference or dispute arise between the Parties to this Production Right concerning;
34.1.1the conclusion, interpretation, application and execution of this Right;
34.1.2the authority of any signatory to the Right to conclude the Right on behalf of the party that he or she purports to represent;
34.1.3any alleged breach or repudiation of the Right;
34.1.4whether the Right is void or voidable at the instance of any party;
34.1.5any rectification of the Right, and/or;
34.1.6any other matter arising from this Right, (each, a “Dispute”), then either Party shall be entitled to deliver to the other a written notice recording the existence and, in brief, the nature of the Dispute (“the Dispute Notice”). The Dispute shall be deemed to have arisen on the date when a Dispute
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Notice is delivered to either Party. The Parties shall make every reasonable effort to resolve the Dispute on its merits by negotiation in good faith and shall, for that purpose, attend at least one meeting with each other. Such negotiations shall take place within 21 (twenty one) days of the Dispute arising, unless the Parties otherwise agree in writing, and shall endure for no longer than 7 (seven) days from the date of commencement thereof or such extended period as the Parties may agree in writing.
34.2If the Parties are unable to resolve the Dispute despite compliance with Clause 34.1, then the Dispute may at the instance of either Party be referred to and fully, finally and exclusively settled by arbitration, in terms of the provisions hereof.
34.3The proceedings, records and the award of the arbitration shall be in the English language. The venue for and seat of the arbitration shall be Cape Town, Republic of South Africa or such other place in the Republic of South Africa as may be agreed between the Parties. The Parties hereby waive irrevocably their right to institute any form of appeal, review or recourse to any court of competent jurisdiction insofar as such waiver may be validly made.
34.4Notwithstanding the referral of such Dispute to arbitration, the Parties shall, to the extent possible, proceed with the carrying out of their respective obligations under this Production Right, unless such obligations are directly in dispute: Provided that the foregoing undertaking shall be without prejudice to other rights and remedies available to either Party at law or in equity.
34.5The provisions of this Clause 34 shall survive the termination of this Production Right.
34.6.The arbitration shall commence by a written notice (“the Arbitration Notice”) to that effect delivered by the Party demanding the arbitration (“the Plaintiff’) to the other (“the Respondent”). No Arbitration Notice shall be delivered after the lapse of 90 (ninety) days after the terminations of any negotiations set out in Clause 34.1 above. Any Dispute, if not resolved and not thereafter made subject to arbitration, may at any time be raised again, commencing with the procedure set out in Clause 34.1 above. In the Arbitration Notice, the Plaintiff shall set out;
34.6.1.a short summary of the nature of the Dispute;
34.6.2.the relief claimed by the Plaintiff;
34.6.3.the identity and curriculum vitae of an independent arbitrator proposed by the Plaintiff.
34.7.Within 21 (twenty one) days after delivery of the Arbitration Notice, the Respondent shall deliver a written reply to the Plaintiff setting out the identity and particulars of an independent arbitrator proposed by it. If the Respondent shall not deliver such reply, the Plaintiff shall nevertheless be entitled to proceed with the arbitration as set out herein.
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34.8.There shall be 3 (three) arbitrators, appointed as set out herein, and all decisions, rulings and/or awards of the arbitrators shall be by majority decision amongst them. No person who has any pecuniary or any other interest, directly or indirectly, in either of the Parties, shall serve as arbitrator.
34.9.The third arbitrator (or the second and third arbitrators if the Respondent shall not have delivered a reply as provided for in Clause 34.7), shall be appointed by the Secretariat of the ICC International Court of Arbitration (or its successor in title).
34.10.The arbitrators shall determine the practical measures necessary to conduct the arbitration and shall issue directives in that regard to the Parties and/or their representatives, from time to time, as may be required. The arbitrators shall be entitled to award costs against any party on any scale as otherwise provided for in the Rules of the High Court of the Republic of South Africa and shall, in the case of any disagreement between the Parties about the amount of such costs, be entitled to retain the services of an independent legal costs consultant to determine the amount of any such costs. The costs, fees and charges of the arbitrators shall be borne by the Parties in equal proportion and shall be payable by them on presentation of invoices in that regard. Any order as to costs which may be made by the arbitrators shall operate as between the Parties only and shall not affect their obligation to the arbitrators as set out herein.
34.11.Save as set out above and as may be otherwise agreed between the parties, the proceedings shall be conducted subject to and in accordance with the rules of the Arbitration Foundation of Southern Africa (“AFSA”).
35.Costs and Value Added Tax
35.1.All taxes, levies, stamp duties, transfer costs, transfer duties and registration costs arising directly or indirectly out of or related to the Holder's Participating Interest shall be for the account of and promptly paid by the Holder.
35.2.All amounts due and payable by the Holder in terms of this Production Right, the Act and the Regulations are exclusive of statutory value added tax. Where applicable, statutory value added tax at the prevailing rate in accordance with the Value Added Tax Act 1991 (Act No. 89 of 1991) shall be added to all relevant amounts due and payable by the Holder.
Subject to the Act and the Regulations, this Production Right and the Annexures attached hereto (those Annexures being and forming an integral part of this Production Right) and the Fiscal Stability Agreement contain the entire and sole agreement between the Parties and supersedes all prior negotiations, representations, understandings, agreements and communications of whatsoever nature between the Parties with respect to such Production Area, whether oral or written, express or implied.
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Any provision within this Production Right which is not enforceable or which contravenes Applicable Laws shall be severed from this Production Right and be of no force or effect without prejudice to the other provisions of this Production Right which shall remain in force and effect.
38.Domicilia Citandi et Executandi
38.1.All notices, requests and reports provided for herein shall be in writing and shall be delivered either by hand to an authorised representative of the receiving Party, or sent by courier or telefax to the addresses below in the State; provided that if given by telefax a copy thereof shall then be sent immediately by prepaid registered mail:
If to the Grantor:
Minister of Mineral Resources
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Physical address: |
Postal address: |
Trevenna Campus |
Private Bag X59 |
Building 2C |
ARCADIA |
Cnr Meintje & Schoeman Street |
0007 |
SUNNYSIDE |
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Tel number: +27 (0)12 444 3000 |
Fax number: +27 (0)12 444 3145 |
And copy to the Agency:
South African Agency for the Promotion of Petroleum Exploration and Exploitation (Proprietary) Limited
Attention: Chief Executive Officer
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Physical address: |
Postal address: |
Tygerspoort Building |
PC Box 5111 |
7 Mispel Street |
TYGERVALLEY |
BELLVILLE 7530 |
7536 |
Western Cape |
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Tel number: +27 (0)21 938 3500 |
Fax number: +27 (0)21 938 3520 |
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If to the Holder:
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Physical address: |
Postal address: |
1st Floor, Block C, 65 Central Street |
PostNet SOUTH 126 |
Houghton |
Box 92418 |
2198 |
Norwood |
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Tel number: +27 11 483 0677 Fax number: +27 11 483 2686
38.2.Each Party and the Agency may change its address to a different address in the State on at least 15 (fifteen) days’ prior notice.
38.3.All notices, requests and reports sent by prepaid registered post shall be deemed received by addressee within 5 (five) days of dispatch and all notices, requests and reports sent by telefax during ordinary business hours shall be deemed to have been received within 12 (twelve) hours of transmission or if transmitted outside ordinary business hours, then on the next Business Day. Those delivered by hand or sent by courier shall be deemed to have been received at the time of actual delivery.
38.4.Each Party also chooses the physical address specified above as its domicilium citandi et executandi for all purposes arising under this Production Right, including service of process.
38.5.The Holder shall within 7 (seven) days of the Effective Date give notice to the Grantor of the authorised representative with whom the Grantor may deal concerning this Production Right. Such representative shall continue to represent the Holder until the Holder notifies the Grantor of a change of representative.
38.6.The Chief Executive Officer is hereby appointed as the authorised representative of the Grantor for all matters relating to this Production Right.
The Holder must lodge this Production Right for registration at the Mining and Petroleum Titles Registration Office within 30 (thirty) days from the Effective Date and, in the event of each renewal of this Production Right, within 30 (thirty) days of such renewal.
40.Successors and Assigns
This Production Right shall inure to the benefit of and be binding upon the permitted successors and assigns of the Parties.
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Thus done and signed at Bellville on the 20thday of September in the year 2012 in the presence of the undersigned witnesses:
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AS WITNESS: |
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For and on behalf of the Holder |
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Quod Attestor |
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Annexure A
Diagram of the Production Area
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Annexure B
Production Work Programme
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Annexure C
Environmental Management Programme
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Annexure D
Social and Labour Plan
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Annexure E
Schedule of Contributions to the Upstream Training Trust
SERIES SEED-1 PREFERRED STOCK PURCHASE AGREEMENT
This Series Seed-1 Preferred Stock Purchase Agreement (this “Agreement”) is made as of January 26, 2026, by and between Opeongo, Inc., a Delaware corporation (the “Company”), and ASP Isotopes Inc., a Delaware corporation (the “Purchaser”).
The parties hereby agree as follows:
1. Purchase and Sale of Preferred Stock.
1.1 Sale and Issuance of Preferred Stock.
(a) The Company shall have adopted and filed with the Secretary of State of the State of Delaware on or before the Closing (as defined below) the Amended and Restated Certificate of Incorporation in the form of Exhibit B attached to this Agreement (the “Restated Certificate”).
(b) Subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase, and the Company agrees to sell and issue to the Purchaser, at the Closing (as defined below) that number of shares of Series Seed-1 Preferred Stock, $0.0001 par value per share (the “Series Seed-1 Preferred Stock”), set forth opposite the Purchaser’s name on Exhibit A, at a purchase price of $2.2952 per share. The shares of Series Seed-1 Preferred Stock issued to the Purchaser pursuant to this Agreement shall be referred to in this Agreement as the “Shares.”
1.2 Closing; Delivery.
(a) The purchase and sale of the Shares shall take place remotely via the exchange of documents and signatures, on the date of this Agreement at such time as is mutually agreed upon, orally or in writing, by the Company and the Purchaser (which time and place are designated as the “Closing”).
(b) At the Closing, the Company shall deliver to the Purchaser a notice of issuance of uncertificated shares (and may, upon written request by such Purchaser, issue and deliver a certificate) representing the Shares being purchased by the Purchaser at the Closing against payment of the purchase price therefor by wire transfer to a bank account designated by the Company.
1.3 Defined Terms Used in this Agreement. In addition to the terms defined above, the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer, director or trustee of such Person, or any venture capital fund or investment fund now or hereafter existing that is controlled by one or more general partners, managing members or investment advisers of, or shares the same management company or investment adviser with, such Person.
(b) “Code” means the Internal Revenue Code of 1986, as amended.
(c) “Company Intellectual Property” means all Intellectual Property Rights that are owned, purported to be owned by, or in-licensed to the Company, or used by the Company in the conduct of the Company’s business as now conducted.
(d) “Company-Controlled Intellectual Property” means (i) Intellectual Property Rights owned or purported to be owned by the Company and (ii) Intellectual Property Rights exclusively in-licensed to the Company.
(e) “GAAP” means generally accepted accounting principles in the United States, applied on a consistent basis throughout the periods indicated.
(f) “Indemnification Agreement” means the agreement between the Company and each member of the Company’s Board of Directors in the form of Exhibit D attached to this Agreement.
(g) “Intellectual Property Rights” means all intellectual property rights, whether registered or unregistered, that are recognized in any jurisdiction of the world, including such rights in patents, utility models, trademarks and tradenames, copyrights, trade secrets, and domain names (and any registrations of or applications to register any of the foregoing).
(h) “Investors’ Rights Agreement” means the agreement between the Company and the Purchaser dated as of the date of the Closing, in the form of Exhibit E attached to this Agreement.
(i) “Knowledge” including the phrase “to the Company’s knowledge” means the Knowledge Parties’ actual knowledge after reasonable investigation and assuming such knowledge as the individual would have as a result of the reasonable performance of the individual’s duties in the ordinary course. Additionally, for purposes of Section 2, the Company shall be deemed to have “knowledge” of a patent right only if the Company has actual knowledge of the patent right.
(j) “Knowledge Parties” means David Baram, Todd Wider and Oran Mordechai.
(k) “Material Adverse Effect” means a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, or results of operations of the Company.
(l) “Officer” means the Chief Executive Officer, President, Chief Financial Officer, and any other person who reports directly to the Board of Directors or the Chief Executive Officer.
(m) “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.
(n) “Right of First Refusal and Co-Sale Agreement” means the agreement among the Company, the Purchaser, and certain other stockholders of the Company, dated as of the date of the Closing, in the form of Exhibit F attached to this Agreement.
(o) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(p) “Transaction Agreements” means this Agreement, the Investors’ Rights Agreement, the Right of First Refusal and Co-Sale Agreement and the Voting Agreement.
(q) “Voting Agreement” means the agreement among the Company, the Purchaser and certain other stockholders of the Company, dated as of the date of the Closing, in the form of Exhibit G attached to this Agreement.
2. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser that, except as set forth on the Disclosure Schedule attached as Exhibit C to this Agreement, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete as of the date of the Closing, except as otherwise indicated. The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections contained in this Section 2, and the disclosures in any section of the Disclosure Schedule shall qualify other sections in this Section 2 only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections.
For purposes of these representations and warranties (other than those in Section 2.2, Section 2.3, Section 2.4, Section 2.5, Section 2.6 and Section 2.23), the term the “Company” shall include any subsidiaries of the Company, unless otherwise noted herein.
2.1 Organization, Good Standing, Corporate Power and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as presently proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.
2.2 Capitalization.
(a) The authorized capital of the Company consists, immediately prior to the Closing, of:
(i) 30,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”), 13,070,820 shares of which are issued and outstanding immediately prior to the Closing.
(ii) 4,356,918 shares of preferred stock, $0.0001 par value per share (the “Preferred Stock”), all of which have been designated Series Seed-1 Preferred Stock, none of which are issued and outstanding immediately prior to the Closing. The rights, privileges and preferences of the Preferred Stock are as stated in the Restated Certificate and as provided by the General Corporation Law of the State of Delaware (the “DGCL”).
(iii) All of the outstanding shares of capital stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws.
(b) Except as described in Section 2.2(b) of the Disclosure Schedule and except for (A) the conversion privileges of the Shares to be issued under this Agreement, (B) the rights provided in Section 4 of the Investors’ Rights Agreement, and (C) the securities and rights described in Section 2.2(a)(ii) and Section 2.2(b) of this Agreement and Section 2.2(c) of the Disclosure Schedule, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from the Company any shares of Common Stock or Preferred Stock, or any securities convertible into or exchangeable for shares of Common Stock or Preferred Stock. All outstanding shares of Common Stock and all shares of Common Stock underlying outstanding options are subject to (i) a right of first refusal in favor of the Company upon any proposed transfer (other than transfers for estate planning purposes); and (ii) a lock-up or market standoff agreement of not less than 180 days following the Company’s initial public offering pursuant to a registration statement filed with the Securities and Exchange Commission under the Securities Act.
(c) Except as described in Section 2.2(c) of the Disclosure Schedule: (i) all outstanding Common Stock held by service providers are subject to a customary vesting schedule monthly over four years with a one-year cliff; and (ii) none of the Company’s stock purchase agreements or stock option documents contains a provision for acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions or other terms of such agreement or understanding upon the occurrence of any event or combination of events, including, without limitation, in the case where any stock incentive or similar equity plan of the Company is not assumed in an acquisition. The Company has never adjusted or amended the exercise price of any stock options previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means. Except as set forth in the Restated Certificate, the Company has no obligation (contingent or otherwise) to purchase or redeem any of its capital stock.
(d) The Company has obtained valid waivers of any rights by other parties to purchase any of the Shares covered by this Agreement.
2.3 Subsidiaries. The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity. The Company is not a participant in any joint venture, partnership or similar arrangement.
2.4 Authorization. All corporate action required to be taken by the Board of Directors and the Company’s stockholders in order to authorize the Company to enter into the Transaction Agreements, and to issue the Shares at the Closing and the Common Stock issuable upon conversion of the Shares, has been taken. All action on the part of the officers of the Company necessary for the execution and delivery of the Transaction Agreements, the performance of all obligations of the Company under the Transaction Agreements to be performed as of the Closing, and the issuance and delivery of the Shares has been taken. The Transaction Agreements, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except:
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally;
(b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; or
(c) to the extent the indemnification provisions contained in the Investors’ Rights Agreement or any of the Indemnification Agreements may be limited by applicable federal or state securities laws.
2.5 Valid Issuance of Shares. The Shares, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements, applicable state and federal securities laws and liens or encumbrances created by or imposed by the Purchaser. Assuming the accuracy of the representations of the Purchaser in Section 3 of this Agreement and subject to the filings described in Section 2.6 below, the Shares will be issued in compliance with all applicable federal and state securities laws. The Common Stock issuable upon conversion of the Shares has been duly reserved for issuance, and upon issuance in accordance with the terms of the Restated Certificate, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements, applicable federal and state securities laws
and liens or encumbrances created by or imposed by the Purchaser. Assuming the accuracy of the representations of the Purchaser in Section 3 of this Agreement and in the Voting Agreement, the Common Stock issuable upon conversion of the Shares will be issued in compliance with all applicable federal and state securities laws.
2.6 Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Section 3 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, except for:
(a) the filing of the Restated Certificate, which will have been filed as of the Closing; and
(b) filings pursuant to applicable securities laws, which have been made or will be made in a timely manner.
2.7 Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or, to the Company’s knowledge, investigation pending or to the Company’s knowledge, currently threatened: (a) against the Company or any Officer or director of the Company arising out of their employment or Board of Directors relationship with the Company; (b) to the Company’s knowledge, that questions the validity of the Transaction Agreements or the right of the Company to enter into them, or to consummate the transactions contemplated by the Transaction Agreements; or (c) that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Company nor, to the Company’s knowledge, any of its Officers or directors is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality (in the case of Officers or directors, such as would affect the Company). There is no action, suit, proceeding or investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their services provided in connection with the Company’s business, any information or techniques allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers.
2.8 Intellectual Property.
(a) The Company owns, possesses, has developed, or has acquired on commercially reasonable terms, legal rights to all Company Intellectual Property sufficient to carry out its business as now conducted; provided that the foregoing representation is made to the Company’s knowledge.
(b) No past or current product or service or activity of the Company has infringed or violated, or infringes or otherwise violates any Intellectual Property Rights of a third Person; provided that the foregoing representation is made to the Company’s knowledge.
(c) To the Company’s knowledge, by conducting the Company’s business as currently conducted or as presently proposed, the Company would not infringe or violate any of the Intellectual Property Rights of a third Person. The Company has not received any unsolicited offers to license any Intellectual Property Rights from any third Person.
(d) To the Company’s knowledge, no third Person is presently infringing any Company-Controlled Intellectual Property in a way that is expected to have a Material Adverse Effect.
(e) Other than pursuant to:
(i) standard end-user license or services agreements for the Company’s products and services on substantially the Company’s standard forms made available to the Purchaser;
(ii) customary nondisclosure agreements entered into by the Company in the ordinary course of business (that do not include any terms (w) granting the right to use residuals, (x) assigning Intellectual Property Rights, (y) granting express license rights, or (z) constituting a covenant not to assert Intellectual Property Rights);
(iii) nonexclusive feedback licenses and nonexclusive licenses to use trademarks, in each case that are incidental to the subject matter of the applicable agreement in which they are incorporated; and
(iv) licenses to a service provider solely for the purpose of allowing such service provider to provide services to the Company,
the Company has not granted to a third Person any options, licenses, covenants not to assert, agreements, claims, encumbrances or shared ownership interests of any kind relating to the Company-Controlled Intellectual Property that are material to the Company’s business as now conducted.
(f) Other than pursuant to:
(i) standard license or services agreements for commercially available software products and cloud services non-exclusively licensed to Company under standard terms;
(ii) backup licenses from employees and contractors granted in connection with providing services to the Company;
(iii) licenses to Open Source Software (as hereinafter defined);
(iv) customary nondisclosure agreements entered into by the Company in the ordinary course of business that do not include any terms (w) granting the right to use residuals, (x) assigning Intellectual Property Rights, (y) granting express license rights or (z) constituting a covenant not to assert Intellectual Property Rights;
(v) nonexclusive feedback licenses and nonexclusive licenses to use trademarks, in each case that are incidental to the subject matter of the applicable agreement in which they are incorporated; and
(vi) licenses to the Company solely for the purpose of enabling the Company to provide services to the licensor,
the Company is not bound by or a party to any options, licenses, covenants not to assert or other grants or agreements of any kind with respect to Intellectual Property Rights of any third Person that are material to the Company’s business as now conducted.
(g) The Company has taken commercially reasonable measures to maintain and protect all confidential information and trade secrets of the Company that the Company intended to maintain as confidential or a trade secret. To the Company’s knowledge, except as would not reasonably be expected to result in a Material Adverse Effect, there has been no unlawful, accidental or unauthorized access to or
use or disclosure of any confidential information and trade secrets of the Company that the Company intended to maintain as confidential or a trade secret.
(h) Each current and former employee of the Company has assigned to the Company all Intellectual Property Rights that such employee has solely or jointly conceived, reduced to practice, developed, or made during the period of employment with the Company that: (i) relate, at the time of conception, reduction to practice, development, or making of such Intellectual Property Right, to the Company’s business as then conducted or as then proposed to be conducted; (ii) were developed on any amount of the Company’s time or with the use of any of the Company’s equipment, supplies, facilities or information; or (iii) resulted from such individual’s performance of services for the Company. Each current and former consultant of the Company who was involved in the development of any material Intellectual Property Rights for the Company or that are otherwise owned or purported to be owned by the Company has assigned to the Company all Intellectual Property Rights that such consultant has solely or jointly conceived, reduced to practice, developed, or made during the period of its consulting relationship with the Company that resulted from such consultant’s performance of services for the Company. Each such employee and consultant has executed an agreement with the Company regarding confidentiality and proprietary information, and assignment of Intellectual Property Rights developed by or for the Company, substantially in the form or forms made available to the Purchaser or their respective counsel (the “Confidential Information Agreements”). No such employee or consultant has excluded Intellectual Property Rights from the assignment of Intellectual Property Rights pursuant to such Person’s Confidential Information Agreement, which excluded Intellectual Property Rights would be material to the Company in the conduct of the Company’s business as now conducted or currently proposed to be conducted. The Company is not aware that any current or former employee or consultant is in violation of any Confidential Information Agreement.
(i) The Company has not embedded, used, linked or distributed any open source, software, technologies or other materials that are licensed or distributed under any license arrangement or other distribution model qualifying for the “Open Source” definition promulgated by the Open Source Initiative at www.opensource.org/osd or any other public domain or “community” (or similar) materials (collectively “Open Source Software”) in connection with any of its products or services or proprietary materials in any manner that requires, or purports to require: (i) any material software code owned or authored by or on behalf of the Company (“Company Code”) to be disclosed or distributed in source code form or be licensed for the purpose of making derivative works; (ii) any restriction on the consideration to be charged for the distribution of any such Company Code; (iii) the grant to any third Person of any rights or immunities under material Company-Controlled Intellectual Property; or (iv) any other material limitation, restriction or condition on the right of the Company with respect to its use or distribution of any material Company-Controlled Intellectual Property (other than attribution, warranty and liability disclaimer, and notice delivery conditions). The Company is in material compliance with all licenses for Open Source Software that it embeds, links to, uses or distributes.
(j) Except as set forth on Section 2.8(j) of the Disclosure Schedule, no government funding, facilities of a university, college, hospital, foundation, other educational institution or research center, or other funding from third Persons provided specifically for research and development was used in the development of any Company‑Controlled Intellectual Property in a manner that has resulted in such entity retaining any claim of ownership or right to use any such Company-Controlled Intellectual Property. To the Company’s knowledge, no Person who was involved in, or who contributed to, the creation or development of any Company‑Controlled Intellectual Property, has performed services for the government, university, college, hospital, foundation, or other educational institution or research center in a manner that would affect Company’s rights in the Company‑Controlled Intellectual Property.
2.9 Compliance with Other Instruments.
(a) The Company is not in violation or default: (i) of any provisions of its Certificate of Incorporation or Bylaws; (ii) in any material respect of any instrument, judgment, order, writ or decree; (iii) in any material respect under any note, indenture or mortgage; (iv) in any material respect under any lease, agreement, contract or purchase order to which it is a party or by which it is bound that is required to be listed on the Disclosure Schedule; or (e) of any provision of any federal or state statute, rule or regulation applicable to the Company the violation of which would have a Material Adverse Effect.
(b) The execution, delivery and performance of the Transaction Agreements and the consummation of the transactions contemplated by the Transaction Agreements will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either: (i) a default under any such provision, instrument, judgment, order, writ, decree, contract or agreement; or (ii) an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or license applicable to the Company.
2.10 Agreements; Actions.
(a) Except for the Transaction Agreements, there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which it is bound that involve:
(i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $500,000.00 (other than employment agreements and offer letters);
(ii) other than pursuant to any university licenses listed in Section 2.8(f) of the Disclosure Schedule and/or Section 2.8(j) of the Disclosure Schedule, the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other Person that limit the Company’s exclusive right to develop, manufacture, assemble, distribute, market or sell its products; or
(iii) any “most favored” provisions, Board of Directors observer rights, or other side letter agreements not otherwise disclosed pursuant to any other representation.
(b) The Company has not:
(i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock;
(ii) incurred any indebtedness for money borrowed or incurred any other liabilities individually in excess of $150,000.00 or in excess of $500,000.00 in the aggregate;
(iii) made any loans or advances to any Person, other than ordinary advances for business expenses; or
(iv) sold, exchanged or otherwise disposed of any material portion of its assets or rights, other than in the ordinary course of business.
For the purposes of (a) and (b) of this Section 2.10, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same Person
(including Persons the Company has reason to believe are affiliated with each other) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such section.
(c) The Company is not a guarantor or indemnitor of any indebtedness of any other Person.
2.11 Certain Transactions.
(a) Other than:
(i) as described in Section 2.11(a)(i) of the Disclosure Schedule;
(ii) standard employee benefits generally made available to all employees, standard employee offer letters and Confidential Information Agreements;
(iii) standard director and officer indemnification agreements approved by the Board of Directors;
(iv) the purchase of shares of the Company’s capital stock and the issuance of options to purchase shares of the Company’s Common Stock, in each instance, approved in the written minutes of the Board of Directors (previously made available to the Purchaser or their respective counsel); and
(v) the Transaction Agreements,
there are no agreements, understandings or proposed transactions between the Company and any of its Officers or directors, or any Affiliate thereof.
(b) Except as described in Section 2.11(b) of the Disclosure Schedule, the Company is not indebted, directly or indirectly, to any of its directors, officers or employees or to their respective spouses or children or to any Affiliate of any of the foregoing, other than in connection with expenses or advances of expenses incurred in the ordinary course of business or employee relocation expenses and for other customary employee benefits made generally available to all employees. None of the Company’s directors, officers or employees or consultants, or any members of their immediate families, or any Affiliate of the foregoing are, directly or indirectly, indebted to the Company or, to the Company’s knowledge, have any:
(i) material commercial, industrial, banking, consulting, legal, accounting, charitable or familial relationship with the Company or any of the Company’s customers, suppliers, service providers, joint venture partners, licensees and competitors;
(ii) direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company except that directors, officers, employees or stockholders of the Company may own stock in (but not exceeding 2% of the outstanding capital stock of) publicly traded companies that may compete with the Company; or
(iii) financial interest in any material contract with the Company.
2.12 Rights of Registration and Voting Rights. Except as provided in the Investors’ Rights Agreement, the Company is not under any obligation to register under the Securities Act any of its currently
outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities. To the Company’s knowledge, except as contemplated in the Voting Agreement, no stockholder of the Company has entered into any agreements with respect to the voting of capital shares of the Company.
2.13 Tangible and Real Property. The tangible and real property and assets that the Company owns are free and clear of all mortgages, deeds of trust, liens, loans and encumbrances, except for statutory liens for the payment of current taxes that are not yet delinquent and encumbrances and liens that arise in the ordinary course of business and do not materially impair the Company’s ownership or use of such property or assets. With respect to the tangible and real property and assets it leases, the Company is in compliance with such leases and holds a valid leasehold interest free of any liens, claims or encumbrances other than those of the lessors of such property or assets. The Company does not own any real property.
2.14 Financial Statements. The Company commenced operations as a separate legal entity on July 3, 2024. As of the Closing, the Company has not, directly or indirectly, incurred any liabilities for indebtedness, nor any other liabilities, except:
(a) liabilities incurred in the ordinary course of business and less than $50,000 in the aggregate; or
(b) as set forth on Section 2.14 of the Disclosure Schedule.
2.15 Changes. Since the Company’s formation, there have been no events or circumstances of any kind that have had or could reasonably be expected to result in a Material Adverse Effect.
2.16 Employee Matters.
(a) To the Company’s knowledge, none of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with such employee’s ability to promote the interest of the Company or that would conflict with the Company’s business. Neither the execution or delivery of the Transaction Agreements, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as now conducted and as presently proposed to be conducted, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated.
(b) The Company is not delinquent in payments to any of its employees, consultants, or independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation for any service performed for it prior to the date hereof or amounts required to be reimbursed to such employees, consultants or independent contractors. The Company has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment, including those related to wages, hours, worker classification and collective bargaining. The Company has withheld and paid to the appropriate governmental entity or is holding for payment not yet due to such governmental entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties or other sums for failure to comply with any of the foregoing.
(c) To the Company’s knowledge, no Officer intends to terminate employment with the Company or is otherwise likely to become unavailable to continue as an employee. The Company does not have a present intention to terminate the employment of any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company. Except as set forth in Section 2.16(c)(i)
of the Disclosure Schedule or as required by law, upon termination of the employment of any such employees, no severance or other payments will become due. Except as set forth in Section 2.16(c)(ii) of the Disclosure Schedule, the Company has no policy, practice, plan or program of paying severance pay or any form of severance compensation in connection with the termination of employment services.
(d) The Company has not made any representations regarding equity incentives to any officer, employee, director or consultant that are inconsistent with the share amounts and terms set forth in the minutes of meetings of (or actions taken by unanimous written consent by) the Board of Directors.
(e) Each former officer or other employee who reported to the Chief Executive Officer, Chief Financial Officer, or Board of Directors has entered into an agreement with the Company providing for the full release of any claims against the Company or any related party arising out of such employment.
(f) Section 2.16(f) of the Disclosure Schedule sets forth each employee benefit plan maintained, established or sponsored by the Company, or which the Company participates in or contributes to, which is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Company has made all required contributions and has no liability to any such employee benefit plan, other than liability for health plan continuation coverage described in Part 6 of Title I(B) of ERISA, and has complied in all material respects with all applicable laws for any such employee benefit plan.
(g) To the Company’s knowledge, none of the Officers or directors of the Company has been:
(i) subject to voluntary or involuntary petition under the federal bankruptcy laws or any state insolvency law or the appointment of a receiver, fiscal agent or similar officer by a court for such person’s business or property;
(ii) convicted in a criminal proceeding or named as a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(iii) subject to any order, judgment or decree (not subsequently reversed, suspended, or vacated) of any court of competent jurisdiction permanently or temporarily enjoining such person from engaging, or otherwise imposing limits or conditions on such person’s engagement in any securities, investment advisory, banking, insurance, or other type of business or acting as an officer or director of a public company; or
(iv) found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated any federal or state securities, commodities, or unfair trade practices law, which such judgment or finding has not been subsequently reversed, suspended, or vacated.
2.17 Tax Returns and Payments. There are no material taxes due and payable by the Company that have not been timely paid and no material withholding taxes required to be withheld by the Company that have not been withheld and timely paid over to the appropriate governmental agency. There have been no examinations or audits with respect to any taxes or tax returns of the Company, by any applicable federal, state, county, local or foreign governmental agency, and the Company has not received written notice of an intent to commence any such examination or audit that remains outstanding. The Company has duly and timely filed all income or other material tax returns required to have been filed by it, and there are in effect no waivers of applicable statutes of limitations with respect to taxes for any year.
2.18 Insurance. The Company has the insurance policies set forth in Section 2.18 of the Disclosure Schedule and all such policies are in full force and effect.
2.19 Permits. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business, the lack of which could reasonably be expected to have a Material Adverse Effect. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority.
2.20 Corporate Documents. The Certificate of Incorporation and Bylaws of the Company as of the date of this Agreement are in the form made available to the Purchaser. The copy of the minute books of the Company made available to the Purchaser contains minutes of all meetings of directors and stockholders and all actions by written consent without a meeting by the directors and stockholders since the date of incorporation and accurately reflects in all material respects all actions by the directors (and any committee of directors) and stockholders.
2.21 Data Privacy.
(a) In connection with the collection, storage, use, access, disclosure and/or other processing of any information that constitutes “personal information,” “personal data,” “personally identifiable information” or analogous term as defined in applicable laws (collectively, “Personal Information”), by or on behalf of the Company, to the Company’s knowledge, the Company is and has been in compliance in all material respects with the following:
(i) all applicable laws governing privacy or data security in all relevant jurisdictions relating to data loss, data theft, and security breach notification obligations, telephone or text message communications, artificial intelligence and automated decision-making, or marketing by email or other channels;
(ii) the Company’s published privacy policies; and
(iii) the privacy or data security requirements of any contracts, codes of conduct, or industry standards by which the Company is legally bound.
(b) The Company maintains and has maintained reasonable physical, technical, and administrative security measures and policies designed to protect all Personal Information owned, stored, used, maintained or controlled by or on behalf of the Company from and against unlawful, accidental or unauthorized access, destruction, loss, use, modification, disclosure, and/or other processing.
2.22 Healthcare Laws. The Company is and has been in material compliance with all applicable Healthcare Laws. “Healthcare Laws” means all applicable federal, state, or local health care laws, each as amended, relating to the regulation of the Company, including but not limited to laws regarding fraud and abuse; kickbacks; self-referrals; fee-splitting; the operation of healthcare provider networks or risk bearing entities; beneficiary inducement, false claims, false billing, false coding, reimbursement, and reassignment; record retention; healthcare professional or entity licensure, qualifications, accreditations, or scope of practice requirements, including the practice of telehealth and healthcare professional supervision; the corporate practice of a learned or licensed healthcare profession; health information privacy laws, including those relating to mental health and substance abuse, including the Health Insurance Portability and Accountability Act of 1996; and all applicable implementing regulations, rules, ordinances, and orders related to any of the foregoing.
2.23 CFIUS Representations. The Company does not engage in (a) the design, fabrication, development, testing, production or manufacture of one or more “critical technologies” within the meaning of the Defense Production Act of 1950, as amended, including all implementing regulations thereof (the “DPA”), (b) the ownership, operation, maintenance, supply, manufacture, or servicing of “covered investment critical infrastructure” within the meaning of the DPA (where such activities are covered by column 2 of Appendix A to 31 C.F.R. Part 800) or (c) the maintenance or collection, directly or indirectly, of “sensitive personal data” of U.S. citizens within the meaning of the DPA.
2.24 Preclinical Development and Clinical Trials. The studies, tests, preclinical development and clinical trials, if any, conducted by or on behalf of the Company are being conducted in all material respects in accordance with experimental protocols, procedures and controls pursuant to accepted professional and scientific standards for products or product candidates comparable to those being developed by the Company and all applicable laws and regulations, including the Federal Food, Drug, and Cosmetic Act and 21 C.F.R. parts 50, 54, 56 and 58. The descriptions of, protocols for, and data and other results of, the studies, tests, development and trials conducted by or on behalf of the Company that have been made available to the Purchaser are accurate and complete in all material respects. The Company has not received any notices or correspondence from the U.S. Food and Drug Administration (“FDA”) or any other governmental entity or any institutional review board or comparable authority requiring the termination, suspension or material modification of any studies, tests, preclinical development or clinical trials conducted by or on behalf of the Company.
2.25 FDA Approvals.
(a) The Company possesses all required permits, licenses, registrations, certificates, authorizations, orders, exemptions, clearances and approvals from the appropriate federal, state or foreign regulatory authorities necessary to conduct its business as now conducted as required by the FDA or any other federal, state or foreign agencies or bodies engaged in the regulation of drugs, pharmaceuticals, medical devices or biohazardous materials.
(b) The Company has not received any notice of proceedings relating to the suspension, material modification, revocation or cancellation of any such permit, license, registration, certificate, authorization, order or approval. Neither the Company nor, to the Company’s knowledge, any officer, employee or agent of the Company has been convicted of any crime or engaged in any conduct that has previously caused or would reasonably be expected to result in (i) debarment by the FDA under 21 U.S.C. Sections 335a, or disqualification under any similar law, rule or regulation of any other governmental entities, (ii) debarment, suspension, or exclusion under any federal healthcare programs or by the General Services Administration, or (iii) exclusion under 42 U.S.C. Section 1320a-7 or any similar law, rule or regulation of any governmental entities.
(c) Neither the Company nor any of its officers, employees, or, to the Company’s knowledge, any of its contractors or agents is the subject of any pending or threatened investigation by FDA pursuant to its “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” policy as stated at 56 Fed. Reg. 46191 (October 10, 1991) (the “FDA Application Integrity Policy”) and any amendments thereto, or by any other similar governmental entity pursuant to any similar policy.
(d) Neither the Company nor any of its officers, employees, or to the Company’s knowledge, any of its contractors or agents has made any materially false statements on, or material omissions from, any notifications, applications, approvals, reports and other submissions to FDA or any similar governmental entity that would reasonably be expected to provide a basis for FDA to invoke the FDA Application Integrity Policy or for any similar governmental entity to invoke a similar policy.
2.26 Sanctions.
(a) Since the Company’s incorporation, the Company has complied in all material respects with applicable laws and regulations pertaining to trade and economic sanctions administered by the United States (collectively, “Sanctions”).
(b) None of the Company, its subsidiaries, or their respective directors, officers, employees, or, to the Company’s knowledge, the Company’s or subsidiaries’ agents is: (i) organized under the laws of, ordinarily resident in, or located in a country or territory that is the subject of comprehensive Sanctions (“Restricted Countries”); (ii) 50% or more owned or controlled by the government of a Restricted Country; or (iii) (A) designated on a sanctioned parties list administered by the United States, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, and Sectoral Sanctions Identification List (collectively, “Designated Parties”); or (B) 50% or more owned or, where relevant under applicable Sanctions, controlled, individually or in the aggregate, by one or more Designated Party, in each case only to the extent that dealings with such persons are prohibited pursuant to applicable Sanctions (collectively, “Sanctioned Parties”).
(c) Since the Company’s incorporation, neither the Company nor any of its officers, directors, or employees: (i) has been the subject or target of any investigation, prosecution, other enforcement action, or government inquiry related to Sanctions violations; or (ii) submitted a voluntary self-disclosure to any U.S. or, to the Company’s knowledge, other relevant government agency regarding actual or potential Sanctions violations.
(d) The Company maintains policies and procedures reasonably designed to promote compliance with applicable Sanctions.
2.27 Disclosure. The Company has made available to the Purchaser all the information that the Purchaser have requested for deciding whether to acquire the Shares, including certain of the Company’s projections describing its proposed business plan (the “Business Plan”). No representation or warranty of the Company contained in this Agreement, as qualified by the Disclosure Schedule, and no certificate furnished or to be furnished to Purchaser at the Closing contains any untrue statement of a material fact or, to the Company’s knowledge, omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. The Business Plan was prepared in good faith; however, the Company does not warrant that it will achieve any results projected in the Business Plan. It is understood that this representation is qualified by the fact that the Company has not delivered to the Purchaser, and has not been requested to deliver, a private placement or similar memorandum or any written disclosure of the types of information customarily furnished to purchasers of securities.
3. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows:
3.1 Authorization. The Purchaser has full power and authority to enter into the Transaction Agreements. The Transaction Agreements to which the Purchaser is a party, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable against such Purchaser in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, or (b) to the extent the indemnification
provisions contained in the Investors’ Rights Agreement may be limited by applicable federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of this Agreement, the Purchaser hereby confirms, that the Shares to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the Shares.
3.3 Disclosure of Information. The Purchaser has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the Shares with the Company’s management and has had an opportunity to review the Company’s facilities. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 of this Agreement or the right of the Purchaser to rely thereon.
3.4 Restricted Securities. The Purchaser understands that the Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein. The Purchaser understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Purchaser acknowledges that the Company has no obligation to register or qualify the Shares, or the Common Stock into which it may be converted, for resale except as set forth in the Investors’ Rights Agreement. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.
3.5 No Public Market. The Purchaser understands that no public market now exists for the Shares, and that the Company has made no assurances that a public market will ever exist for the Shares.
3.6 Legends. The Purchaser understands that the Shares and any securities issued in respect of or exchange for the Shares, may be notated with one or all of the following legends:
(a) “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”
(b) Any legend set forth in, or required by, the other Transaction Agreements.
(c) Any legend required by the securities laws of any state to the extent such laws are applicable to the Shares represented by the certificate, instrument, or book entry so legended.
3.7 Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
3.8 No Foreign Investors. The Purchaser is a United States person (as defined by Section 7701(a)(30) of the Code). The Purchaser’s subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of the Purchaser’s jurisdiction.
3.9 Sanctions. Neither the Purchaser, nor any of its officers, directors, employees, agents, stockholders or partners, is a Sanctioned Party.
3.10 No General Solicitation. Neither the Purchaser, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder, (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Shares.
3.11 Residence. The office or offices of the Purchaser in which it has its principal place of business is identified in the address or addresses of the Purchaser set forth on the Purchaser’s signature page or Exhibit A.
4. Conditions to the Purchaser’s Obligations at Closing. The obligations of the Purchaser to purchase Shares at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived by Purchaser, in their sole discretion:
4.1 Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct in all respects as of the Closing.
4.2 Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Company in all respects on or before the Closing.
4.3 Compliance Certificate. The Chief Executive Officer or President of the Company shall deliver to the Purchaser at the Closing a certificate certifying that the conditions specified in Sections 4.1 and 4.2 have been fulfilled.
4.4 Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be obtained and effective as of the applicable Closing.
4.5 Board of Directors. As of the Closing, the authorized size of the Board of Directors shall be five (5), and the Board of Directors shall be comprised of Paul Mann, David Baram, Oran Mordechai and Todd Wider (with one (1) vacancy).
4.6 Indemnification Agreements. The Company shall have executed and delivered each of the Indemnification Agreements.
4.7 Investors’ Rights Agreement. The Company shall have executed and delivered the Investors’ Rights Agreement.
4.8 Right of First Refusal and Co‑Sale Agreement. The Company and the other stockholders of the Company named as parties thereto (other than the Purchaser) shall have executed and delivered the Right of First Refusal and Co‑Sale Agreement.
4.9 Voting Agreement. The Company and the other stockholders of the Company named as parties thereto (other than the Purchaser) shall have executed and delivered the Voting Agreement.
4.10 Restated Certificate. The Company shall have filed the Restated Certificate with the Secretary of State of the State of Delaware on or prior to the Closing, which shall continue to be in full force and effect as of the Closing.
4.11 Secretary’s Certificate. The Secretary of the Company shall have delivered to the Purchaser at the Closing a certificate certifying: (a) the Certificate of Incorporation and Bylaws of the Company as in effect at the Closing; (b) resolutions of the Board of Directors approving the Restated Certificate, the Transaction Agreements and the transactions contemplated under the Transaction Agreements; and (c) resolutions of the stockholders of the Company approving the Restated Certificate.
4.12 Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incidental thereto shall be reasonably satisfactory in form and substance to the Purchaser, and the Purchaser (or its respective counsel) shall have received all such counterpart original and certified or other copies of such documents as reasonably requested. Such documents may include good standing certificates.
5. Conditions of the Company’s Obligations at Closing. The obligations of the Company to sell Shares to the Purchaser at the Closing are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived by the Company in its sole discretion:
5.1 Representations and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct in all respects as of the Closing.
5.2 Performance. The Purchaser shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by them on or before the Closing.
5.3 Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
5.4 Investors’ Rights Agreement. The Purchaser shall have executed and delivered the Investors’ Rights Agreement.
5.5 Right of First Refusal and Co‑Sale Agreement. The Purchaser and the other stockholders of the Company named as parties thereto shall have executed and delivered the Right of First Refusal and Co‑Sale Agreement.
5.6 Voting Agreement. The Purchaser and the other stockholders of the Company named as parties thereto shall have executed and delivered the Voting Agreement.
6. Miscellaneous.
6.1 Survival of Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Company and the Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Purchaser or the Company.
6.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
6.3 Governing Law. This Agreement shall be governed by the internal law of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.
6.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via email (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
6.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
6.6 Notices.
(a) General. All notices and other communications given or made pursuant to this Agreement shall be in writing (including electronic mail as permitted in this Agreement) and shall be deemed effectively given upon the earlier of actual receipt, or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by email during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the signature page or Exhibit A, or to such email address or address as subsequently modified by written notice given in accordance with this Section 6.6. If notice is given to the Company, a copy (which copy shall not constitute notice) shall also be sent to Morgan, Lewis & Bockius LLP, One Federal Street, Boston, Massachusetts 02110-1726, Attention: Michael K. Barron, Esq. Email: michael.barron@morganlewis.com. If notice is given to the Purchaser, a copy (which copy shall not constitute notice) shall also be sent to any “cc” address noted on Exhibit A for such Purchaser.
(b) Consent to Electronic Notice. The Purchaser consents to the delivery of any stockholder notice pursuant to the DGCL, as amended or superseded from time to time, by email pursuant to Section 232 of the DGCL (or any successor thereto) at the email address set forth below the Purchaser’s name on the signature page or Exhibit A, as updated from time to time by notice to the Company. To the extent that any notice given by means of email is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected email address has been provided,
and such attempted electronic notice shall be ineffective and deemed to not have been given. Each party agrees to promptly notify the other parties of any change in its email address, and that failure to do so shall not affect the foregoing.
6.7 No Finder’s Fees. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees or representatives is responsible. The Company agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.
6.8 Costs of Enforcement. If any action at law or in equity (including, arbitration) is necessary to enforce or interpret the terms of any of the Transaction Agreements, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
6.9 Amendments and Waivers. Except as otherwise specifically set forth in this Agreement, any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Purchaser; provided, however, that any provision of this Agreement may be waived by any waiving party on such party’s own behalf, without the consent of any other party. The Company shall give prompt written notice of any amendment, modification, termination, or waiver hereunder to any party that did not consent in writing thereto; provided that the failure to provide such notice shall not invalidate any amendment, termination or waiver hereunder. Any amendment or waiver effected in accordance with this Section 6.9 shall be binding upon the Purchaser and each transferee of the Shares (or the Common Stock issuable upon conversion thereof), each future holder of all such securities, and the Company.
6.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
6.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
6.12 Entire Agreement. This Agreement (including the Exhibits hereto), the Restated Certificate and the other Transaction Agreements constitute the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.
6.13 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
FINANCIAL PROTECTION AND INNOVATION OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
6.14 Termination of Closing Obligations. The Purchaser shall have the right to terminate its obligations to complete the Closing if prior to the occurrence thereof, any of the following occurs:
(a) the Company consummates a Deemed Liquidation Event (as defined in the Restated Certificate);
(b) the closing of an initial public offering of the Company, in which case the Purchaser may terminate their obligations hereunder immediately prior to, or contingent upon, such closing; or
(c) the Company (i) applies for or consents to the appointment of a receiver, trustee, custodian or liquidator of itself or substantially all of its property, (ii) becomes subject to the appointment of a receiver, trustee, custodian or liquidator of itself or substantially all of its property, (iii) makes an assignment for the benefit of creditors, (iv) institutes any proceedings under the United States Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership, insolvency or other similar law affecting the rights of creditors generally, or files a petition or answer seeking reorganization or an arrangement with creditors to take advantage of any insolvency law, or files an answer admitting the material allegations of a bankruptcy, reorganization or insolvency petition filed against it, or (v) becomes subject to any involuntary proceedings under the United States Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership, insolvency or other similar law affecting the rights of creditors generally, when proceeding is not dismissed within 30 days of filing, or have an order for relief entered against it in any proceedings under the United States Bankruptcy Code.
6.15 Dispute Resolution.
The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the District of Delaware or any court of the State of Delaware having subject matter jurisdiction.
Waiver of Jury Trial: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER
HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.16 Waiver of Conflicts. Each party to this Agreement acknowledges that Morgan, Lewis & Bockius, LLP, counsel for the Company, may have in the past performed, and may continue to or in the future perform, legal services for certain of the Purchaser in matters that are similar, but not substantially related, to the transactions described in this Agreement, including the representation of such Purchaser in venture capital financings and other matters. Accordingly, each party to this Agreement hereby acknowledges that (a) they have had an opportunity to ask for information relevant to this disclosure, and (b) Morgan, Lewis & Bockius, LLP represents only the Company with respect to the Agreement and the transactions contemplated hereby. The Company gives its informed consent to Morgan, Lewis & Bockius, LLP’s existing and/or future representation of such Purchaser in matters not substantially related to this Agreement, and such Purchaser give their informed consent to Morgan, Lewis & Bockius, LLP’s representation of the Company in connection with this Agreement and the transactions contemplated hereby.
6.17 Post-Closing Agreements. Within thirty (30) days after the Closing, the Purchaser and the Company shall, in good faith, negotiate and prepare drafts for each party to review of a supply agreement covering substantially the following terms:
(a) the Company shall provide the Purchaser with a right of first offer with respect to the supply of medical isotopes for use with any pharmaceutical product developed by the Company;
(b) the Purchaser shall provide the Company with competitive market pricing for such isotopes;
(c) the isotopes supplied shall have a product quality that meets or exceeds applicable regulatory standards and is at least equivalent to alternative suppliers; and
(d) the isotopes supplied shall be delivered on timelines that align with the Company’s development and commercialization plans.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Series Seed-1 Preferred Stock Purchase Agreement as of the date first written above.
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COMPANY: |
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OPEONGO, INC. |
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By: |
/s/ David Baram |
Name: |
David Baram |
Title: |
Chief Executive Officer |
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Address: |
Opeongo, Inc. 2332 Galiano Street Coral Gables, FL 33134 Attention: David Baram Email: david@opeongo.bio |
[Signature Page to Series Seed-1 Preferred Stock Purchase Agreement]
IN WITNESS WHEREOF, the parties have executed this Series Seed-1 Preferred Stock Purchase Agreement as of the date first written above.
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PURCHASER: |
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ASP ISOTOPES INC. |
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By: |
/s/ Paul Mann |
Name: |
Paul Mann |
Title: |
Executive Chairman |
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Address: |
ASP Isotopes Inc. 2200 Ross Avenue, Suite 4575E Dallas, Texas 75201 Attention: Paul Mann Email: pmann@aspisotopes.com |
[Signature Page to Series Seed-1 Preferred Stock Purchase Agreement]
Exhibit A
SCHEDULE OF PURCHASER
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Name and Address of Purchaser |
Total Cash
Purchase Price ($) |
Shares of Series Seed-1 Preferred Stock |
ASP Isotopes Inc. 2200 Ross Avenue, Suite 4575E Dallas, TX 75201 |
$9,999,998.19 |
4,356,918 |
[Signature Page to Series Seed-1 Preferred Stock Purchase Agreement]
INVESTORS’ RIGHTS AGREEMENT
This Investors’ Rights Agreement (this “Agreement”) is made as of January 26, 2026, by and among Opeongo, Inc., a Delaware corporation (the “Company”), ASP Isotopes Inc., a Delaware corporation (the “Initial Investor”), the Key Holders (as defined below), Yeda Research and Development Company Limited, a company duly registered under the laws of Israel (“Yeda”), and each Person (as defined below) to whom the rights of a party are assigned pursuant to Section 6.1, and each Person who hereafter becomes a party to this Agreement pursuant to Section 6.9 (collectively with the Initial Investor, Key Holders and Yeda, the “Investors” and, each, individually, an “Investor”).
RECITALS
WHEREAS, the Company and the Initial Investor are parties to that certain Series Seed-1 Preferred Stock Purchase Agreement of even date herewith by and between the Company and the Initial Investor (the “Purchase Agreement”), under which certain of the Company’s and the Initial Investor’s obligations are conditioned upon the execution and delivery of this Agreement by the undersigned parties; and
WHEREAS, in order to induce the Company to enter into the Purchase Agreement and to induce the Initial Investor to invest funds in the Company pursuant to the Purchase Agreement, the Initial Investor and the Company hereby agree that this Agreement shall govern the rights of the Investors to cause the Company to register shares of Common Stock issuable to the Investors, to receive certain information from the Company, and to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. For purposes of this Agreement:
1.1 “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer, director or trustee of such Person, or any venture capital fund or other investment fund now or hereafter existing that is controlled by one or more general partners, managing members or investment advisers of, or shares the same management company or investment adviser with, such Person.
1.2 “Board of Directors” means the board of directors of the Company.
1.3 “Certificate of Incorporation” means the Company’s Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time.
1.4 “Common Stock” means shares of the Company’s common stock, par value $0.0001 per share.
1.5 “Competitor” means a Person engaged, directly or indirectly (including through any partnership, limited liability company, corporation, joint venture or similar arrangement (whether now existing or formed hereafter)), in any biotechnology or pharmaceutical company researching, developing or commercializing monoclonal antibodies linked to radioactive isotopes for therapeutic use, but, notwithstanding any other provision in this Agreement shall not include (1) the Initial Investor and its Affiliates, (2) any financial investment firm or collective investment vehicle that, together with its Affiliates, holds less than twenty percent (20%) of the outstanding equity of any Competitor and does not, nor do any of its Affiliates, have a right to designate any members of the board of directors of any
Competitor and (3) any Person determined by the Board of Directors not to constitute a “Competitor” for the purpose of this Agreement.
1.6 “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.
1.7 “Deemed Liquidation Event” shall have the meaning ascribed to it in the Company’s Amended and Restated Certificate of Incorporation, as in effect on the date of this Agreement and regardless of the date on which such event occurs.
1.8 “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants.
1.9 “Direct Listing” means the initial listing of the Common Stock (or other equity securities of the Company) on the Nasdaq Stock Market, the New York Stock Exchange or another exchange or marketplace approved by the Board of Directors by means of an effective registration statement filed by the Company with the SEC, without a related underwritten offering of such Common Stock (or other equity securities).
1.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.11 “Excluded Registration” means (i) a registration relating to the sale or grant of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.
1.12 “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.
1.13 “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits forward incorporation of substantial information by reference to other documents filed by the Company with the SEC.
1.14 “GAAP” means generally accepted accounting principles in the United States as in effect from time to time.
1.15 “Holder” means any holder of Registrable Securities who is a party to this Agreement.
1.16 “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, life partner or similar statutorily-recognized domestic partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships of a natural person referred to herein.
1.17 “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.
1.18 “IPO” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.
1.19 “Key Holders” means the persons named on Schedule B hereto and each person to whom the rights of the Key Holder are assigned pursuant to Section 6.1.
1.20 “Key Holders Registrable Securities” means (i) the shares of Common Stock held by the Key Holders as of the date of this Agreement, and (ii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of such shares.
1.21 “Major Investor” means any Investor that, individually or together with such Investor’s Affiliates, holds at least 871,384 shares of Registrable Securities (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof).
1.22 “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.
1.23 “Person” means any individual, corporation, partnership, trust, limited liability company, association, or other entity.
1.24 “Preferred Stock” means, collectively, shares of the Company’s Series Seed-1 Preferred Stock.
1.25 “Registrable Securities” means:
(i) the Common Stock issuable or issued upon conversion of the Preferred Stock;
(ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, held by the Investors from time to time;
(iii) the Key Holder Registrable Securities, provided, however, that such Key Holder Registrable Securities shall not be deemed Registrable Securities and the Key Holder shall not be deemed a Holder for the purposes of Section 2.1 (and any other applicable Section with respect to registrations under Section 2.1), Section 2.10, Section 3.1, Section 3.2, Section 4.1 and Section 6.6;
(iv) the Yeda Registrable Securities, provided, however, that such Yeda Registrable Securities shall not be deemed Registrable Securities and Yeda shall not be deemed a for the purposes of Section 2.1 (and any other applicable Section with respect to registrations under Section 2.1), Section 2.10, Section 3.1, Section 3.2, Section 4.1 and Section 6.6; and
(v) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in Section 1.26(i), Section 1.26(ii), Section 1.26(iii) and Section 1.26(iv) above; excluding in all cases (other than the restrictions on transfer and legend requirements in Section 2.12), however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Section 6.1, and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Section 2.13.
1.26 “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.
1.27 “Requisite Holders” means (a) prior to the IPO, the Investors holding a majority of the then outstanding shares of Preferred Stock (calculated together as a single class on an as-converted basis), and (b) following the IPO, the Investors holding a majority of the then outstanding shares of Registrable Securities.
1.28 “Restricted Securities” means the securities of the Company required to be notated with the legend set forth in Section 2.12(b) hereof.
1.29 “Sanctioned Party” means any Person: (i) organized under the laws of, ordinarily resident in, or located in a country or territory that is the subject of comprehensive Sanctions (“Restricted Countries”); (ii) 50% or more owned or controlled by the government of a Restricted Country; or (iii) (A) designated on a sanctioned parties list administered by the United States, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, and Sectoral Sanctions Identification List (collectively, “Designated Parties”); or (B) 50% or more owned or, where relevant under applicable Sanctions, controlled, individually or in the aggregate, by one or more Designated Party, in each case only to the extent that dealings with such Person is are prohibited pursuant to applicable Sanctions.
1.30 “Sanctions” means applicable laws and regulations pertaining to trade and economic sanctions administered by the United States.
1.31 “SEC” means the Securities and Exchange Commission.
1.32 “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.
1.33 “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.
1.34 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.35 “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.6.
1.36 “Series Seed-1 Preferred Stock” means shares of the Company’s Series Seed-1 Preferred Stock, par value $0.0001 per share.
1.37 “Yeda Registrable Securities” means (i) the shares of Common Stock held by Yeda as of the date of this Agreement, and (ii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of such shares.
2. Registration Rights. The Company covenants and agrees as follows:
2.1 Demand Registration.
(a) Form S-1 Demand. If at any time after the earlier of (i) five (5) years after the date of this Agreement or (ii) 180 days after the effective date of the registration statement for the IPO or Direct Listing, as applicable, the Company receives a request from Holders of a majority of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to Registrable Securities then outstanding having an anticipated aggregate offering price, net of Selling Expenses, would exceed $10,000,000), then the Company shall: (x) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (y) as soon as practicable, and in any event within ninety (90) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within thirty (30) days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3.
(b) Form S-3 Demand. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $1,000,000, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within ninety (90) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within thirty (30) days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3.
(c) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Board of Directors it would be materially detrimental to the Company for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would: (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing for a period of not more than ninety (90) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period.
(d) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a): (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in
good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two registrations pursuant to Section 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b): (I) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (II) if the Company has effected two registrations pursuant to Section 2.1(b) within the twelve (12) month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Section 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Section 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 2.1(d); provided, that if such withdrawal is during a period the Company has deferred taking action pursuant to Section 2.1(c), then the Initiating Holders may withdraw their request for registration and such registration will not be counted as “effected” for purposes of this Section 2.1(d).
2.2 Company Registration. If the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration or a registration pursuant to Section 2.1), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.
2.3 Underwriting Requirements.
(a) If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Board of Directors and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Section 2.3, if the underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other
securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.
(b) In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced below thirty percent (30%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering, or (iii) notwithstanding (ii) above, any Registrable Securities which are not Key Holder Registrable Securities or Yeda Registrable Securities be excluded from such underwriting unless all Key Holder Registrable Securities are first excluded from such offering. For purposes of the provision in this Section 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.
(c) For purposes of Section 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Section 2.3(a), fewer than 50% of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.
2.4 Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to 120 days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such 120-day period shall be extended for a period of time equal to the period the Holder refrains, at the request
of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such 120-day period shall be extended for up to an additional 90 days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;
(b) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;
(c) furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;
(d) use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;
(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;
(f) use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;
(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;
(h) promptly make available for inspection by the selling Holders, any underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;
(i) notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and
(j) after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.
In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act.
2.5 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.
2.6 Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed $30,000, of one counsel for the selling Holders selected by Holders of a majority of the Registrable Securities to be registered (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 (other than fees and disbursements of counsel to any Holder, other than the Selling Holder Counsel, which shall be borne solely by the Holder engaging such counsel) shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.
2.7 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.
2.8 Indemnification. If any Registrable Securities are included in a registration statement under this Section 2 or in connection with a Direct Listing, as applicable:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information
furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration except to the extent such information has been corrected in a subsequent writing at least one business day prior to the sale of Registrable Securities to the Person asserting the claim.
(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration and that has not been corrected in a subsequent writing at least one business day prior to the sale of Registrable Securities to the Person asserting the claim; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Section 2.8(b) and Section 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action.
(d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control; provided, however, that any matter expressly provided for or addressed by the provisions of this Section 2.8 that is not expressly provided for or addressed by the underwriting agreement shall be controlled by the foregoing provisions.
(f) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement or any provision(s) of this Agreement.
2.9 Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:
(a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO or Direct Listing, as applicable;
(b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and
(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request: (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after 90 days after the effective date of the registration statement filed by the Company for the IPO or Direct Listing, as applicable), the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).
2.10 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Requisite Holders, enter into any agreement
with any holder or prospective holder of any securities of the Company that would: (i) provide to such holder or prospective holder the right to include securities in any registration on other than either a pro rata basis with respect to the Registrable Securities or on a subordinate basis after all Holders have had the opportunity to include in the registration and offering all shares of Registrable Securities that they wish to so include; or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities held by such holder or prospective holder; provided that this limitation shall not apply to Registrable Securities acquired by any additional Investor that becomes a party to this Agreement in accordance with Section 6.9.
2.11 “Market Stand-off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company for its own behalf of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement (other than an Excluded Registration) on Form S-1 or Form S-3, and ending on the date specified by the Company and the managing underwriter (such period not to exceed 180 days in the case of the IPO or with respect to any offering other than the IPO, the Holders would be subject to a lock-up if requested by the managing underwriter and approved by the Holders of a majority of Registrable Securities), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap, hedging, or other transaction or arrangement that transfers, or is designed to transfer, to another, in whole or in part, any of the economic consequences of ownership, directly or indirectly, of such securities, whether or not any such transaction or arrangement described in clause (i) or clause (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 2.11 shall apply only to the IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, or the transfer of any shares to any trust for the direct or indirect benefit of the Holder or one or more of the Holder’s Immediate Family Members, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders only if all officers and directors of the Company are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all stockholders individually owning more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to the conversion into Common Stock of all outstanding Preferred Stock). The underwriters in connection with such registration are intended third-party beneficiaries of this Section 2.11 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 2.11. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Company stockholders that are subject to such agreements, based on the number of shares subject to such agreements.
2.12 Restrictions on Transfer.
(a) The Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act and all other applicable U.S. laws and regulations. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.
Notwithstanding the foregoing, the Company shall not require any transferee of shares pursuant to an effective registration statement or, following the IPO or Direct Listing, as applicable, SEC Rule 144, in each case, to be bound by the terms of this Section 2.12.
(b) Each certificate, instrument, or book entry representing (i) the Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clause (i) or clause (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Section 2.12(c)) be notated with a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Section 2.12.
(c) The holder of such Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction or following the IPO or Direct Listing, as applicable, the transfer is made pursuant to SEC Rule 144, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer, provided that no such notice shall be required in connection if the intended sale, pledge or transfer complies with SEC Rule 144. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a notice, legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144; or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided that with respect to transfers under the foregoing clause (y), each transferee agrees in writing to be subject to the terms of this Section 2.12. Each certificate, instrument, or book entry representing the Restricted Securities transferred as above provided shall be notated with, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Section 2.12(b), except that such certificate, instrument, or book entry shall not be notated with such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish
compliance with any provisions of the Securities Act and the Company will use commercially reasonable efforts to cause any such legend to be removed.
2.13 Termination and Suspension of Registration Rights.
(a) The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.1 or Section 2.2 shall terminate, as to such Holder, upon the earliest to occur of:
(i) the closing of a Deemed Liquidation Event; and
(ii) such time after consummation of an IPO or Direct Listing, whichever is earlier, when the Holder (A) together with its “affiliates” (as determined under SEC Rule 144) holds less than 1% of the outstanding capital stock of the Company and (B) may immediately sell all of the Holder’s Registrable Securities under SEC Rule 144 without volume limitation, or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation, during a three-month period without registration; and
(iii) the third anniversary of the IPO or Direct Listing, as applicable, or such later date that is 180 days following the expiration of all deferrals of the Company’s obligations pursuant to Section 2 that remain in effect as of such anniversary.
(b) The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.1 or Section 2.2 shall be suspended during any time as such Holder is a Sanctioned Party.
3. Information and Observer Rights.
3.1 Delivery of Financial Statements.
(a) The Company shall deliver to each Major Investor, provided that such Major Investor is not a Competitor:
(i) as soon as practicable, but in any event within 180 days after the end of each fiscal year of the Company (A) a balance sheet as of the end of such year, (B) statements of income and of cash flows for such year, and (C) a statement of stockholders’ equity as of the end of such year, all such financial statements prepared in accordance with GAAP;
(ii) as soon as practicable, but in any event within 45 days after the end of each quarter of each fiscal year of the Company, unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance sheet as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (A) be subject to normal year-end audit adjustments; and (B) not contain all notes thereto that may be required in accordance with GAAP);
(iii) as soon as practicable, but in any event within 45 days after the end of each quarter of each fiscal year of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Major Investors to calculate their respective percentage equity ownership in the Company;
(iv) as soon as practicable, but in any event within 30 days after the end of each month, an unaudited income statement and statement of cash flows for such month, and an unaudited balance sheet as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP); and
(v) as soon as practicable, the Approved Annual Budget (as defined below).
(b) The Company shall prepare an annual budget and business plan for the next fiscal year, prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months (the “Budget”). The Company shall submit the Budget to the Board of Directors for approval and the Budget, as may be revised by the Board of Directors, shall be approved by the Board of Directors (“Approved Annual Budget”).
(c) If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.
(d) If reasonably requested by a Major Investor, the Company shall provide the information required by, or reasonably requested pursuant to, this Section 3.1 to such Major Investor by uploading the information to a portfolio management platform.
(e) Notwithstanding anything else in this Section 3.1 to the contrary, the Company may cease providing the information set forth in this Section 3.1 during the period starting with the date thirty (30) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Section 3.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.
3.2 Inspection. The Company shall permit each Major Investor (provided that the Board of Directors has not reasonably determined that such Major Investor is a Competitor), at such Major Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Major Investor in connection with monitoring or making decisions with respect to its investment in the Company; provided, however, that the Company shall not be obligated pursuant to this Section 3.2 to (a) create any new information or materials or (b) provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.
3.3 Termination of Information Rights. The covenants set forth in Sections 3.1 and 3.2 shall terminate and be of no further force or effect: (a) immediately before the consummation of the IPO or Direct Listing, as applicable; (b) with respect to any Investor that is or becomes a Sanctioned Party, for so long as such Investor is a Sanctioned Party; (c) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act: or (d) upon the closing of a Deemed Liquidation Event, whichever event occurs first; provided, that with respect to clause (d), the covenants set forth in Section 3.1 shall only terminate if the consideration received by the Investors in such Deemed Liquidation Event is in the form of cash and/or publicly traded securities or if the Investors receive financial information from the acquiring company or other successor to the Company comparable to those set forth in Section 3.1.
3.4 Confidentiality. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor or make decisions with respect to its investment in the Company) any confidential information obtained from the Company (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 3.4 by such Investor), (b) is or has been independently developed or conceived by such Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to such Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information: (i) to its attorneys, accountants, consultants, and other professionals to the extent reasonably necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser is not a Competitor and agrees to be bound by the provisions of this Section 3.4; (iii) to any existing or prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor, in each case, which is not a Competitor, in the ordinary course of business, provided that such Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, regulation, rule, court order or subpoena, provided that such Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.
4. Rights to Future Stock Issuances.
4.1 Right of First Offer. Subject to the terms and conditions of this Section 4.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Major Investor. A Major Investor shall be entitled to apportion the right of first offer hereby granted to it in such proportions as it deems appropriate, among (i) itself, (ii) its Affiliates and (iii) its beneficial interest holders, such as limited partners, members or any other Person having “beneficial ownership,” as such term is defined in Rule 13d-3 promulgated under the Exchange Act, of such Major Investor (“Investor Beneficial Owners”); provided that each such Affiliate or Investor Beneficial Owner (x) is not a Competitor, unless such party’s purchase of New Securities is otherwise expressly consented to by the Board of Directors in writing, and (y) enters into this Agreement and the Voting Agreement of even date herewith among the Company, the Investors and the other parties named therein, as amended and/or restated from time to time (the “Voting Agreement”), as an “Investor” under each such agreement (provided that any Competitor shall not be entitled to any rights as a Major Investor under Section 3.1, Section 3.2 and Section 4.1 hereof) and provided that the Company shall not be obligated to offer or sell any New Securities to any person or entity that is a Sanctioned Party.
(a) The Company shall give notice (the “Offer Notice”) to each Major Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.
(b) By notification to the Company within 20 days after the Offer Notice is given, each Major Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that (x) the Common Stock then held by such Major Investor (including all shares of Common Stock then issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held by such Major Investor) bears to (y) the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Preferred Stock and any other Derivative Securities then outstanding). At the expiration of such 20-day period, the Company shall promptly notify each Major Investor that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Investor”) of any other Major Investor’s failure to do likewise. During the ten-day
period commencing after the Company has given such notice, each Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Major Investors were entitled to subscribe but that were not subscribed for by the Major Investors which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Investor bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed shares. The closing of any sale pursuant to this Section 4.1(b) shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Section 4.1(c).
(c) If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section 4.1(b), the Company may, during the ninety (90) day period following the expiration of the periods provided in Section 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Major Investors in accordance with this Section 4.1.
(d) The right of first offer in this Section 4.1 shall not be applicable to (i) Exempted Securities (as defined in the Certificate of Incorporation); (ii) shares of Common Stock issued in the IPO; (iii) the issuance of shares of Preferred Stock pursuant to the Purchase Agreement; and (iv) any issuance or deemed issuance of New Securities which the Requisite Holders expressly agree in writing to exclude from the right of first offer.
(e) Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Section 4.1, the Company may elect to give notice to the Major Investors within 30 days after the issuance of New Securities. Such notice shall describe the type, price, and terms of the New Securities. Each Major Investor shall have 20 days from the date notice is given to elect to purchase up to the number of New Securities that would, if purchased by such Major Investor, maintain such Major Investor’s percentage ownership position, calculated as set forth in Section 4.1(b) before giving effect to the issuance of such New Securities.
4.2 Termination. The covenants set forth in Section 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO or Direct Listing, as applicable, or (ii) upon the closing of a Deemed Liquidation Event in which the consideration received by the Investors in such Deemed Liquidation Event is in the form of cash and/or publicly traded securities, or if the Investors receive participation rights from the acquiring company or other successor to the Company reasonably comparable to those set forth in this Section 4 whichever event occurs first.
5. Additional Covenants.
5.1 Employee Agreements. Unless otherwise approved by the Board of Directors, the Company: (a) will cause each Person now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure, proprietary rights assignment agreement and, to the extent legally permissible, non-competition and non-solicitation agreement; and (b) shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and any employee.
5.2 Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, the Certificate of Incorporation, or elsewhere, as the case may be.
5.3 Indemnification Matters. The Company hereby acknowledges that one or more of the directors affiliated with one or more Investors (“Investor Directors”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their Affiliates (collectively, the “Investor Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Investor Director are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Investor Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Investor Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Investor Director to the extent legally permitted and as required by the Certificate of Incorporation or Bylaws of the Company (or any agreement between the Company and such Investor Director), without regard to any rights such Investor Director may have against the Investor Indemnitors, and (c) that it irrevocably waives, relinquishes and releases the Investor Indemnitors from any and all claims against the Investor Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Investor Indemnitors on behalf of any such Investor Director with respect to any claim for which such Investor Director has sought indemnification from the Company shall affect the foregoing and the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Investor Director against the Company. The Investor Directors and the Investor Indemnitors are intended third-party beneficiaries of this Section 5.3 and shall have the right, power and authority to enforce the provisions of this Section 5.3 as though they were a party to this Agreement.
5.4 Right to Conduct Activities. The Company hereby agrees and acknowledges that each Investor that is a venture capital fund or other investment fund (together with its Affiliates) (each, a “Professional Investment Organization”) is a professional investment organization, and as such reviews the business plans and related proprietary information of many enterprises, some of which may compete directly or indirectly with the Company’s business (as currently conducted or as currently propose to be conducted). Nothing in this Agreement shall preclude or in any way restrict the Professional Investment Organization from evaluating or purchasing securities, including publicly traded securities, of a particular enterprise, or investing or participating in any particular enterprise whether or not such enterprise has products or services that compete with those of the Company; and the Company hereby agrees that, to the extent permitted under applicable law, no Professional Investment Organization shall be liable to the Company for any claim arising out of, or based upon, (i) the investment by such Professional Investment Organization in any entity competitive with the Company, or (ii) actions taken by any partner, officer, employee or other representative of such Professional Investment Organization to assist any such competitive company, whether or not such action was taken as a member of the board of directors of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company; provided, however, that the foregoing shall not contravene the confidentiality obligations in Section 3.4 or otherwise in this Agreement or relieve any director or officer of the Company from any liability associated with such person’s fiduciary duties to the Company.
5.5 Termination of Covenants. The covenants set forth in this Section 5, except for Section 5.2 and Section 5.3, shall terminate and be of no further force or effect: (i) immediately before the
consummation of the IPO or Direct Listing, as applicable; (ii) upon a Deemed Liquidation Event, whichever event occurs first; or (iii) with respect to any obligation to an Investor that is or becomes a Sanctioned Party, for so long as such Holder is a Sanctioned Party; provided, that, with respect to clause (ii), the covenants set forth in Section 5 shall only terminate if the consideration received by the Investors in such Deemed Liquidation Event is in the form of cash and/or publicly traded securities or if the acquiring company or other successor to the Company agrees to covenants comparable to those set forth in Section 5.
6. Miscellaneous.
6.1 Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that: (a) is an Affiliate of a Holder; (b) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (c) after such transfer, together with its Affiliates, would be a Major Investor; provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Section 2.11; and (z) such assignee is not a Sanctioned Party. For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee (1) that is an Affiliate or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder; provided further that all transferees who would not qualify individually for assignment of rights shall, as a condition to the applicable transfer, establish a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.
6.2 Governing Law. This Agreement and all claims, causes of action, actions, suits, and proceedings (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any claim, cause of action, action, suit, or proceeding based upon, arising out of, or related to any transaction contemplated by this Agreement, any representation or warranty made in or in connection with this Agreement, or as an inducement to enter into this Agreement) (a “Dispute”), shall be governed by, and enforced in accordance with, the internal laws of the State of Delaware, including its statutes of limitations, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.
6.3 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via email (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
6.4 Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.
6.5 Notices.
(a) General. All notices and other communications given or made pursuant to this Agreement shall be in writing (including email as permitted in this Agreement) and shall be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by email during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A hereto, or (as to the Company) to the address set forth on the signature page hereto, or in any case to such email address or address as subsequently modified by written notice given in accordance with this Section 6.5. If notice is given to the Company, a copy (which copy shall not constitute notice) shall also be sent to Morgan, Lewis & Bockius LLP, One Federal Street, Boston, Massachusetts 02110-1726, Attention: Michael K. Barron, Esq., email: michael.barron@morganlewis.com, and if notice is given to any Investor, a copy (which copy shall not constitute notice) shall also be given to any “cc” address noted on Schedule A for such Investor.
(b) Consent to Electronic Notice. Each party to this Agreement consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by email pursuant to Section 232 of the DGCL (or any successor thereto) at the email address set forth below such party’s name on the Schedules hereto, as updated from time to time by notice to the Company, or as on the books of the Company. To the extent that any notice given by means of email is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected email address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each party to this Agreement agrees to promptly notify the Company of any change in such stockholder’s email address, and that failure to do so shall not affect the foregoing.
6.6 Amendments and Waivers.
(a) Any term of this Agreement may be amended, modified or terminated and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the Requisite Holders; provided that the Company may in its sole discretion waive compliance with Section 2.12(c) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Section 2.12(c) shall be deemed to be a waiver); and provided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. For the avoidance of doubt, Registrable Securities do not include any shares held by a Person that is a Sanctioned Party.
(b) Notwithstanding in this Agreement to the contrary:
(i) this Agreement may not be amended, modified or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment, modification, termination, or waiver applies to all Investors in the same fashion (it being agreed that a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction; provided, however, if, after giving effect to any waiver of Section 4.1 or any provision pertaining to Section 4.1 with respect to a particular transaction, a waiving Major Investor in fact purchases New Securities in such transaction (such Major Investor, a “Participating Investor”), the
aforementioned waiver shall be deemed to apply to any Major Investor only if that Major Investor has been provided the opportunity to purchase a proportional number of the New Securities in such transaction based on the pro rata purchase right of each Major Investor set forth in Section 4.1, assuming a transaction size determined based upon the amount purchased by the Participating Investor that invested the largest percentage in such transaction);
(ii) the Company may in its sole discretion waive compliance with any provision of this Agreement if observance of the terms would cause the Company or any Investor to be in violation of applicable Sanctions;
(iii) Sections 3.1, 3.2, and 4 and any other section of this Agreement applicable to the Major Investors (including this Section 6.6(b)(iii)) may be amended, modified, terminated or waived with only (and only with) the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding and held by the Major Investors;
(iv) This Agreement may not be amended, modified or terminated, and no provision hereof may be waived, in each case, so as to adversely affect the rights and obligations set forth in this Agreement of the Key Holders in a manner that is disproportionately materially adverse to the Key Holders than the manner in which such amendment alters or changes the rights, preferences or privileges of all holders of Common Stock hereunder without the written consent of the Key Holders holding a majority of the shares of Common Stock held by all Key Holders;
(v) This Agreement may not be amended, modified or terminated, and no provision hereof may be waived, in each case, so as to adversely affect the rights and obligations set forth in this Agreement of Yeda in a manner that is disproportionately materially adverse to Yeda than the manner in which such amendment alters or changes the rights, preferences or privileges of all holders of Common Stock without the written consent of Yeda; and
(vi) Schedule A hereto may be amended by the Company from time to time to add transferees of any Registrable Securities in compliance with the terms of this Agreement without the consent of the other parties; and Schedule A hereto may also be amended by the Company after the date of this Agreement without the consent of the other parties to add information regarding any additional Investor who becomes a party to this Agreement in accordance with Section 6.9.
(c) The Company shall give prompt written notice of any amendment, modification or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, modification, termination, or waiver; provided that the failure to provide such notice shall not invalidate any amendment, modification, termination or waiver in accordance with this Section 6.6.
(d) Any amendment, modification, termination, or waiver effected in accordance with this Section 6.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto.
(e) No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.
6.7 Severability. In case any provision contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.
6.8 Aggregation of Stock; Apportionment. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliates may apportion such rights as among themselves in any manner they deem appropriate.
6.9 Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Preferred Stock after the date hereof, pursuant to the Purchase Agreement, any purchaser of such shares of Preferred Stock may become a party to this Agreement by executing and delivering a counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor” for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder.
6.10 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) together with the other Transaction Agreements (as defined in the Purchase Agreement) constitute the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between or among any of the parties are expressly canceled.
6.11 Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the District of Delaware or any court of the State of Delaware having subject matter jurisdiction.
Waiver of Jury Trial: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.12 Costs of Enforcement. Each party will bear its own costs in respect of any Disputes arising under this Agreement. The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.
6.13 Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or non-defaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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COMPANY: |
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OPEONGO, INC. |
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By: |
/s/ David Baram |
Name: |
David Baram |
Title: |
Chief Executive Officer |
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Address: |
Opeongo, Inc. 2332 Galiano Street Coral Gables, FL 33134 Attention: David Baram Email: david@opeongo.bio |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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INVESTOR: |
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ASP ISOTOPES INC. |
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By: |
/s/ Paul Mann |
Name: |
Paul Mann |
Title: |
Executive Chairman |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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KEY HOLDER: |
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DAVID BARAM |
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/s/ David Baram |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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KEY HOLDER: |
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TODD WIDER |
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/s/ Todd Wider |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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KEY HOLDER: |
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ORAN MORDECHAI |
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/s/ Oran Mordechai |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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KEY HOLDER: |
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YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED |
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By: |
David Baram |
Its: |
Proxyholder pursuant to that certain Irrevocable Proxy, dated as of May 7, 2025 |
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/s/ David Baram |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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KEY HOLDER: |
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DAVID BARAM (IN TRUST FOR IRIT SAGI) |
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/s/ David Baram |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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KEY HOLDER: |
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ASAEL HERMAN |
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By: |
David Baram |
Its: |
Proxyholder pursuant to that certain Proxy and Power of Attorney, dated as of July 8, 2024 |
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/s/ David Baram |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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KEY HOLDER: |
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SHAHAR AVNI |
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By: |
Dr. David Baram |
Its: |
Proxyholder pursuant to that certain Proxy and Power of Attorney, dated as of July 8, 2024 |
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/s/ David Baram |
[Signature Page to Investors’ Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first written above.
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KEY HOLDER: |
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PAUL MANN |
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/s/ Paul Mann |
[Signature Page to Investors’ Rights Agreement]
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
This Right of First Refusal and Co-Sale Agreement (this “Agreement”) is made as of January 26, 2026, by and among Opeongo, Inc., a Delaware corporation (the “Company”), the Investors (as defined below) and the Key Holders (as defined below).
RECITALS
WHEREAS, each Key Holder is the beneficial owner of shares of Capital Stock (as defined below), or of options to purchase Common Stock (as defined below);
WHEREAS, the Company and ASP Isotopes Inc., a Delaware corporation (the “Initial Investor”), are parties to that certain Series Seed-1 Preferred Stock Purchase Agreement, of even date herewith (the “Purchase Agreement”), pursuant to which the Initial Investor has agreed to purchase shares of Series Seed-1 Preferred Stock of the Company, par value $0.0001 per share (“Series Seed-1 Preferred Stock”); and
WHEREAS, the Key Holders and the Company desire to further induce the Initial Investor to purchase the Series Seed-1 Preferred Stock.
NOW, THEREFORE, the parties agree as follows:
1. Definitions.
1.1 “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer, director or trustee of such Person, or any venture capital fund or other investment fund now or hereafter existing that is controlled by one or more general partners, managing members or investment advisers of, or shares the same management company or investment adviser with, such Person.
1.2 “Board of Directors” means the board of directors of the Company.
1.3 “Capital Stock” means (a) shares of Common Stock and Preferred Stock (whether now outstanding or hereafter issued in any context), (b) shares of Common Stock issued or issuable upon conversion of Preferred Stock and (c) shares of Common Stock issued or issuable upon exercise or conversion, as applicable, of stock options, warrants or other convertible securities of the Company, in each case now owned or subsequently acquired by any Key Holder, any Investor, or their respective successors or permitted transferees or assigns. For purposes of the number of shares of Capital Stock held by an Investor or Key Holder (or any other calculation based thereon), all shares of Preferred Stock shall be deemed to have been converted into Common Stock at the then‑applicable conversion ratio.
1.4 “Change of Control” means a transaction or series of related transactions in which a person, or a group of related persons, acquires from stockholders of the Company shares representing more than 50% of the outstanding voting power of the Company.
1.5 “Common Stock” means shares of Common Stock of the Company, $0.0001 par value per share.
1.6 “Company Notice” means written notice from the Company notifying the selling Key Holders and each Investor that the Company intends to exercise its Secondary Refusal Right as to a portion of the Transfer Stock with respect to any Proposed Key Holder Transfer.
1.7 “Deemed Liquidation Event” has the meaning ascribed to it in the Restated Certificate.
1.8 “Investor Notice” means written notice from any Investor notifying the Company and the selling Key Holder(s) that such Investor intends to exercise its Right of First Refusal as to some or all of the Transfer Stock with respect to any Proposed Key Holder Transfer.
1.9 “Investors” means the Initial Investor, each Person to whom the rights of an Investor are assigned pursuant to Section 6.9, and each Person who hereafter becomes a party to this Agreement pursuant to Section 6.11.
1.10 “Key Holders” means the persons named on Schedule B hereto, each Person to whom the rights of a Key Holder are assigned pursuant to Section 3.1, each Person who hereafter becomes a party to this Agreement pursuant to Section 6.9 or 6.17 and any one of them, as the context may require.
1.11 “Person” means any individual, corporation, partnership, trust, limited liability company, association, or other entity.
1.12 “Preferred Stock” means, collectively, all shares of Series Seed-1 Preferred Stock.
1.13 “Proposed Key Holder Transfer” means any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of or any other like transfer or encumbering of any Transfer Stock (or any interest therein) proposed by any of the Key Holders.
1.14 “Proposed Transfer Notice” means written notice from a Key Holder setting forth the terms and conditions of a Proposed Key Holder Transfer.
1.15 “Prospective Transferee” means any Person to whom a Key Holder proposes to make a Proposed Key Holder Transfer.
1.16 “Qualified Direct Listing” has the meaning ascribed to it in the Restated Certificate.
1.17 “Restated Certificate” means the Company’s Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time.
1.18 “Right of Co-Sale” means the right, but not an obligation, of an Investor to participate in a Proposed Key Holder Transfer on the terms and conditions specified in the Proposed Transfer Notice.
1.19 “Right of First Refusal” means the right, but not an obligation, of each Investor, or its permitted transferees or assigns, to purchase some or all of the Transfer Stock with respect to a Proposed Key Holder Transfer on a pro rata basis (based upon the total number of shares of Capital Stock then held by all Investors), on the terms and conditions specified in the Proposed Transfer Notice.
1.20 “Sanctioned Party” means any Person: (i) organized under the laws of, ordinarily resident in, or located in a country or territory that is the subject of comprehensive Sanctions (“Restricted Countries”); (ii) 50% or more owned or controlled by the government of a Restricted Country; or (iii) (A) designated on a sanctioned parties list administered by the United States, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, and Sectoral Sanctions Identification List (collectively, “Designated Parties”); or (B) 50% or more owned or, where relevant under applicable Sanctions, controlled, individually or in the aggregate, by one or more Designated Party, in each case only to the extent that dealings with such Person is are prohibited pursuant to applicable Sanctions.
1.21 “Sanctions” means applicable laws and regulations pertaining to trade and economic sanctions administered by the United States.
1.22 “Secondary Notice” means written notice from the Investors notifying the Company and the selling Key Holder that such Investor does not intend to exercise its Right of First Refusal as to all shares of any Transfer Stock with respect to a Proposed Key Holder Transfer, on the terms and conditions specified in the Proposed Transfer Notice.
1.23 “Secondary Refusal Right” means the right, but not an obligation, of the Company to purchase a portion of any Transfer Stock not purchased pursuant to the Right of First Refusal, on the terms and conditions specified in the Proposed Transfer Notice.
1.24 “Transfer Stock” means shares of Capital Stock owned by a Key Holder, or issued to a Key Holder after the date hereof (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like), but does not include any shares of Preferred Stock or of Common Stock that are issued or issuable upon conversion of Preferred Stock.
1.25 “Undersubscription Notice” means written notice from an Investor notifying the Company and the selling Key Holder that such Investor intends to exercise its option to purchase all or any portion of the Transfer Stock not purchased pursuant to the Right of First Refusal or the Secondary Refusal Right.
2. Agreement Among the Company, the Investors and the Key Holders.
2.1 Right of First Refusal.
(a) Grant. Subject to the terms of Section 3 below, each Key Holder hereby unconditionally and irrevocably grants to the Investors a Right of First Refusal to purchase all or any portion of Transfer Stock that such Key Holder may propose to include in a Proposed Key Holder Transfer, at the same price and on the same terms and conditions as those offered to the Prospective Transferee.
(b) Notice. Each Key Holder proposing to make a Proposed Key Holder Transfer must deliver a Proposed Transfer Notice to the Company and each Investor not later than forty-five (45) days prior to the consummation of such Proposed Key Holder Transfer. Such Proposed Transfer Notice shall contain the material terms and conditions (including price and form of consideration) of the Proposed Key Holder Transfer, the identity of the Prospective Transferee and the intended date of the Proposed Key Holder Transfer. To exercise its Right of First Refusal under this Section 2, an Investor must deliver an Investor Notice to the selling Key Holder and the Company within 15 days after delivery of the Proposed Transfer Notice (the “Investor Notice Period”) specifying the number of shares of Transfer Stock to be purchased by each Investor. In the event of a conflict between this Agreement and any other agreement that may have been entered into by a Key Holder with the Investors that contains a preexisting right of first refusal, the Investors and the Key Holder acknowledge and agree that the terms of this Agreement shall control and the preexisting right of first refusal shall be deemed satisfied by compliance with Section 2.1(a) and this Section 2.1(b).
(c) Grant of Secondary Refusal Right to the Company. Subject to the terms of Section 3 below, each Key Holder hereby unconditionally and irrevocably grants to the Company a Secondary Refusal Right to purchase all or any portion of the Transfer Stock not purchased by the Investors pursuant to the Right of First Refusal, as provided in this Section 2.1(c). If the Investors do not provide the Investor Notice exercising its Right of First Refusal with respect to all Transfer Stock subject to a Proposed Key Holder Transfer, the Investors must deliver a Secondary Notice to the selling Key Holder and to the Company to that effect no later than 15 days after the selling Key Holder delivers the Proposed Transfer
Notice to the Investors. To exercise its Secondary Refusal Right, the Company must deliver a Company Notice to the selling Key Holder and the Investors within ten days after the Investors’ deadline for its delivery of the Secondary Notice as provided in the preceding sentence.
(d) Undersubscription of Transfer Stock. If options to purchase have been exercised by the Investors and the Company pursuant to Section 2.1(b) and Section 2.1(c) with respect to some but not all of the Transfer Stock by the end of the ten day period specified in the last sentence of Section 2.1(c) (the “Company Notice Period”), then the Company shall, within five days after the expiration of the Company Notice Period, send written notice (the “Company Undersubscription Notice”) to those Investors who fully exercised their Right of First Refusal within the Investor Notice Period (the “Exercising Investors”). Each Exercising Investor shall, subject to the provisions of this Section 2.1(d), have an additional option to purchase all or any part of the balance of any such remaining unsubscribed shares of Transfer Stock on the terms and conditions set forth in the Proposed Transfer Notice. To exercise such option, an Exercising Investor must deliver an Undersubscription Notice to the selling Key Holder and the Company within ten days after the expiration of the Investor Notice Period. In the event there are two or more such Exercising Investors that choose to exercise the last-mentioned option for a total number of remaining shares in excess of the number available, the remaining shares available for purchase under this Section 2.1(d) shall be allocated to such Exercising Investors pro rata based on the number of shares of Transfer Stock such Exercising Investors have elected to purchase pursuant to the Right of First Refusal (without giving effect to any shares of Transfer Stock that any such Exercising Investor has elected to purchase pursuant to the Company Undersubscription Notice). If the options to purchase the remaining shares are exercised in full by the Exercising Investors, the Company shall immediately notify all of the Exercising Investors and the selling Key Holder of that fact.
(e) Consideration; Closing. If the consideration proposed to be paid for the Transfer Stock is in property, services or other non-cash consideration, the fair market value of the consideration shall be as determined in good faith by the Board of Directors and as set forth in the Investor Notice. If the Company or any Investor for any reason cannot or does not wish to pay for the Transfer Stock in the same form of non-cash consideration, the Company or such Investor may pay the cash value equivalent thereof, as determined in good faith by the Board of Directors and as set forth in the Investor Notice. The closing of the purchase of Transfer Stock by the Company and the Investors shall take place, and all payments from the Company and the Investors shall have been delivered to the selling Key Holder, by the later of (i) the date specified in the Proposed Transfer Notice as the intended date of the Proposed Key Holder Transfer; and (ii) forty-five (45) days after delivery of the Proposed Transfer Notice.
2.2 Right of Co-Sale.
(a) Exercise of Right. If any Transfer Stock subject to a Proposed Key Holder Transfer is not purchased pursuant to Section 2.1 above and thereafter is to be sold to a Prospective Transferee, each respective Investor may elect to exercise its Right of Co-Sale and participate on a pro rata basis in the Proposed Key Holder Transfer as set forth in Section 2.2(b) below and, subject to Section 2.2(d), otherwise on the same terms and conditions specified in the Proposed Transfer Notice. Each Investor who desires to exercise its Right of Co-Sale (each, a “Participating Investor”) must give the selling Key Holder written notice to that effect within fifteen (15) days after the deadline for delivery of the Secondary Notice described above, and upon giving such notice such Participating Investor shall be deemed to have effectively exercised the Right of Co-Sale.
(b) Shares Includable. Each Participating Investor may include in the Proposed Key Holder Transfer all or any part of such Participating Investor’s Capital Stock equal to the product obtained by multiplying (i) the aggregate number of shares of Transfer Stock subject to the Proposed Key Holder Transfer (excluding shares purchased by the Company or the Participating Investors pursuant to the Right
of First Refusal or the Secondary Refusal Right) by (ii) a fraction, the numerator of which is the number of shares of Capital Stock owned by such Participating Investor immediately before consummation of the Proposed Key Holder Transfer and the denominator of which is the total number of shares of Capital Stock owned, in the aggregate, by all Participating Investors immediately prior to the consummation of the Proposed Key Holder Transfer , plus the number of shares of Transfer Stock held by the selling Key Holder. To the extent one or more of the Participating Investors exercise such right of participation in accordance with the terms and conditions set forth herein, the number of shares of Transfer Stock that the selling Key Holder may sell in the Proposed Key Holder Transfer shall be correspondingly reduced.
(c) Purchase and Sale Agreement. The Participating Investors and the selling Key Holder agree that the terms and conditions of any Proposed Key Holder Transfer in accordance with this Section 2.2 will be memorialized in, and governed by, a written purchase and sale agreement with the Prospective Transferee (the “Purchase and Sale Agreement”) with customary terms and provisions for such a transaction, and the Participating Investors and the selling Key Holder further covenant and agree to enter into such Purchase and Sale Agreement as a condition precedent to any sale or other transfer in accordance with this Section 2.2.
(d) Allocation of Consideration.
(i) Subject to Section 2.2(d)(ii), the aggregate consideration payable to the Participating Investors and the selling Key Holder shall be allocated based on the number of shares of Capital Stock sold to the Prospective Transferee by each Participating Investor and the selling Key Holder as provided in Section 2.2(b), provided that if a Participating Investor wishes to sell Preferred Stock, the price set forth in the Proposed Transfer Notice shall be appropriately adjusted based on the conversion ratio of the Preferred Stock into Common Stock.
(ii) In the event that the Proposed Key Holder Transfer constitutes a Change of Control, the terms of the Purchase and Sale Agreement shall provide that the aggregate consideration from such transfer shall be allocated to the Participating Investors and the selling Key Holder in accordance with Sections 2.1 and 2.2 of Article Fourth, Part B of the Restated Certificate and, if applicable, the next sentence as if (A) such transfer were a Deemed Liquidation Event, and (B) the Capital Stock sold in accordance with the Purchase and Sale Agreement were the only Capital Stock outstanding. In the event that a portion of the aggregate consideration payable to the Participating Investor(s) and selling Key Holder is placed into escrow and/or is payable only upon satisfaction of contingencies, the Purchase and Sale Agreement shall provide that (x) the portion of such consideration that is not placed in escrow and is not subject to contingencies (the “Initial Consideration”) shall be allocated in accordance with Sections 2.1 and 2.2 of Article Fourth, Part B of the Restated Certificate as if the Initial Consideration were the only consideration payable in connection with such transfer, and (y) any additional consideration which becomes payable to the Participating Investor(s) and selling Key Holder upon release from escrow or satisfaction of such contingencies shall be allocated in accordance with Sections 2.1 and 2.2 of Article Fourth, Part B of the Restated Certificate after taking into account the previous payment of the Initial Consideration as part of the same transfer.
(e) Purchase by Selling Key Holder; Deliveries. Notwithstanding Section 2.2(c) above, if any Prospective Transferee(s) refuse(s) to purchase securities subject to the Right of Co-Sale from any Participating Investor or Investors or upon the failure to negotiate in good faith a Purchase and Sale Agreement reasonably satisfactory to the Participating Investors, no Key Holder may sell any Transfer Stock to such Prospective Transferee(s) unless and until, simultaneously with such sale, such Key Holder purchases all securities subject to the Right of Co-Sale from such Participating Investor or Investors on the same terms and conditions (including the proposed purchase price) as set forth in the Proposed Transfer Notice and as provided in Section 2.2(d)(i); provided, however, if such sale constitutes a Change of Control,
the portion of the aggregate consideration paid by the selling Key Holder to such Participating Investor or Investors shall be made in accordance with the first sentence of Section 2.2(d)(ii). In connection with such purchase by the selling Key Holder, such Participating Investor or Investors shall deliver to the selling Key Holder any stock certificate or certificates, properly endorsed for transfer, representing the Capital Stock being purchased by the selling Key Holder (or request that the Company effect such transfer in the name of the selling Key Holder). Any such shares transferred to the selling Key Holder will be transferred to the Prospective Transferee against payment therefor in consummation of the sale of the Transfer Stock pursuant to the terms and conditions specified in the Proposed Transfer Notice, and the selling Key Holder shall concurrently therewith remit or direct payment to each such Participating Investor the portion of the aggregate consideration to which each such Participating Investor is entitled by reason of its participation in such sale as provided in this Section 2.2(e).
(f) Additional Compliance. If any Proposed Key Holder Transfer is not consummated within forty-five (45) days after receipt of the Proposed Transfer Notice by the Company, the Key Holders proposing the Proposed Key Holder Transfer may not sell any Transfer Stock unless they first comply in full with each provision of this Section 2. The exercise or election not to exercise any right by any Investor hereunder shall not adversely affect its right to participate in any other sales of Transfer Stock subject to this Section 2.2.
2.3 Effect of Failure to Comply.
(a) Transfer Void; Equitable Relief. Any Proposed Key Holder Transfer not made in compliance with the requirements of this Agreement shall be null and void ab initio, shall not be recorded on the books of the Company or its transfer agent and shall not be recognized by the Company. Each party hereto acknowledges and agrees that any breach of this Agreement would result in substantial harm to the other parties hereto for which monetary damages alone could not adequately compensate. Therefore, the parties hereto unconditionally and irrevocably agree that any non-breaching party hereto shall be entitled to seek protective orders, injunctive relief and other remedies available at law or in equity (including, without limitation, seeking specific performance or the rescission of purchases, sales and other transfers of Transfer Stock not made in strict compliance with this Agreement).
(b) Violation of First Refusal Right. If any Key Holder becomes obligated to sell any Transfer Stock to the Company or any Investor under this Agreement and fails to deliver such Transfer Stock in accordance with the terms of this Agreement, the Company and/or such Investor may, at its option, in addition to all other remedies it may have, send to such Key Holder the purchase price for such Transfer Stock as is herein specified and transfer to the name of the Company or such Investor (or request that the Company effect such transfer in the name of an Investor) on the Company’s books any certificates, instruments, or book entry representing the Transfer Stock to be sold.
(c) Violation of Co-Sale Right. If any Key Holder purports to sell any Transfer Stock in contravention of the Right of Co-Sale (a “Prohibited Transfer”), each Participating Investor who desires to exercise its Right of Co-Sale under Section 2.2 may, in addition to such remedies as may be available by law, in equity or hereunder, require such Key Holder to purchase from such Participating Investor the type and number of shares of Capital Stock that such Participating Investor would have been entitled to sell to the Prospective Transferee had the Prohibited Transfer been effected in compliance with the terms of Section 2.2. The sale will be made on the same terms, including, without limitation, as provided in Section 2.2(d)(i) and the first sentence of Section 2.2(d)(ii), as applicable, and subject to the same conditions as would have applied had the Key Holder not made the Prohibited Transfer, except that the sale (including, without limitation, the delivery of the purchase price) must be made within ninety (90) days after the Participating Investor learns of the Prohibited Transfer, as opposed to the timeframe proscribed in Section 2.2. Such Key Holder shall also reimburse each Participating Investor for any and all reasonable and
documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of the Participating Investor’s rights under Section 2.2.
3. Exempt Transfers.
3.1 Exempt Transfers. Notwithstanding the foregoing or anything to the contrary herein, the provisions of Sections 2.1 and 2.2 shall not apply:(a) in the case of a Key Holder that is an entity, upon a transfer by such Key Holder to its stockholders, members, partners or other equity holders;
(b) to a repurchase of Transfer Stock from a Key Holder by the Company at a price no greater than that originally paid by such Key Holder for such Transfer Stock and pursuant to an agreement containing vesting and/or repurchase provisions approved by a majority of the Board of Directors;
(c) in the case of a Key Holder that is a natural person, upon a transfer of Transfer Stock by such Key Holder made for bona fide estate planning purposes, either during such person’s lifetime or on death by will or intestacy to such person’s spouse, including any life partner or similar statutorily-recognized domestic partner, child (natural or adopted), or any other direct lineal descendant of such Key Holder (or such person’s spouse, including any life partner or similar statutorily-recognized domestic partner) (all of the foregoing collectively referred to as “family members”), or any other relative/person approved by a majority of the disinterested members of the Board of Directors, or any custodian or trustee of any trust, partnership, limited liability company or other corporate entity for the benefit of, or the ownership interests of which are owned wholly by such Key Holder or any such family members, including, without limitation, any trustee (whether individual or corporate) appointed pursuant to Israeli law (including the Israeli Income Tax Ordinance or Israeli Succession Law) for bona fide estate, inheritance or tax planning purposes;
(d) upon a transfer of Transfer Stock by such Key Holder made to a charitable organization for bona fide charitable purposes, either during such person’s lifetime or on death by will or intestacy; or
(e) in the case of a Key Holder that is a trust, upon a transfer of Transfer Stock to the beneficiaries of that trust and to any substitute trust.
provided that, the Key Holder shall deliver prior written notice to the Company and the Investors of such pledge, gift or transfer, such shares of Transfer Stock shall at all times remain subject to the terms and restrictions set forth in this Agreement, and such transferee shall, as a condition to such Transfer, deliver a counterpart signature page to this Agreement as confirmation that such transferee shall be bound by all the terms and conditions of this Agreement as a Key Holder (but only with respect to the securities so transferred to the transferee), including the obligations of a Key Holder with respect to Proposed Key Holder Transfers of such Transfer Stock pursuant to Section 2; and provided further in the case of any transfer pursuant to clause (a), (c), (d) or (e) above, that such transfer is made pursuant to a transaction in which there is no consideration actually paid for such transfer.
3.2 Exempted Offerings. Notwithstanding the foregoing or anything to the contrary herein, the provisions of Section 2 shall not apply to the sale of any Transfer Stock: (a) to the public in an offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (a “Public Offering”); or (b) pursuant to a Deemed Liquidation Event.
4. Legend. Each certificate, instrument, or book entry representing shares of Transfer Stock held by the Key Holders or issued to any permitted transferee in connection with a transfer permitted by Section 3.1 hereof shall be notated with the following legend:
THE SALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY, THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT BY AND AMONG THE STOCKHOLDER, THE CORPORATION AND CERTAIN OTHER HOLDERS OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.
Each Key Holder agrees that the Company may instruct its transfer agent to impose transfer restrictions on the shares notated with the legend referred to in this Section 4 to enforce the provisions of this Agreement, and the Company agrees to promptly do so. The legend shall be removed upon termination of this Agreement at the request of the holder.
5. Lock-Up.
5.1 Agreement to Lock-Up. Each Key Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to a Public Offering, the registration by the Company of shares of its Common Stock or any other equity securities on a registration statement (other than a Form S-8), and ending on the date specified by the managing underwriter or the Company, as applicable (such period not to exceed 180 days, or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in applicable FINRA rules, or any successor provisions or amendments thereto), (a) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock (or other equity securities of the Company) or any securities convertible into or exercisable or exchangeable (directly or indirectly) for such Common Stock (or other equity securities) held or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Capital Stock, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Capital Stock or other securities, in cash or otherwise. The foregoing provisions of this Section 5 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement or to the establishment of a trading plan pursuant to Rule 10b5-1, provided that such plan does not permit transfers during the restricted period. The Company’s underwriters are intended third‑party beneficiaries of this Section 5 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Key Holder further agrees to execute such agreements as may be reasonably requested by the underwriters that are consistent with this Section 5 or that are necessary to give further effect thereto. In the event a Key Holder is or becomes party to a lock-up or market standoff agreement with the Company or any third party beneficiary of this Section 5.1 that contains terms that are more restrictive to the Key Holder, the Key Holder agrees that the Key Holder shall be subject to the more restrictive terms and compliance therewith shall be deemed compliance herewith.
5.2 Stop Transfer Instructions. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the shares of Capital Stock of each Key Holder (and transferees and assignees thereof) until the end of such restricted period.
5.3 Survival. Unless and only to the extent otherwise superseded by an underwriting agreement entered into in connection with the underwritten Public Offering, the obligations of the Key
Holders under this Section 5 shall survive the termination of this Agreement or any provision(s) of this Agreement.6. Miscellaneous.
6.1 Term. This Agreement shall automatically terminate upon the earlier of (a) immediately prior to the consummation of the Company’s initial Public Offering or Qualified Direct Listing, as applicable, and (b) the consummation of a Deemed Liquidation Event in which the consideration received by the Investors in such Deemed Liquidation Event is in the form of cash and/or publicly traded securities, or if the Investors receive substantially similar rights.
6.2 Stock Split. All references to numbers of shares in this Agreement shall be appropriately adjusted to reflect any stock dividend, split, combination or other recapitalization affecting the Capital Stock occurring after the date of this Agreement.
6.3 Ownership. Each Key Holder represents and warrants that such Key Holder is the sole legal and beneficial owner of the shares of Transfer Stock subject to this Agreement and that no other person or entity has any interest in such shares (other than a community property interest as to which the holder thereof has acknowledged and agreed in writing to the restrictions and obligations hereunder).
6.4 Dispute Resolution.
(a) The parties (i) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (ii) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (iii) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
(b) Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the District of Delaware or any court of the State of Delaware having subject matter jurisdiction.
(c) Waiver of Jury Trial: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.5 Notices.
(a) All notices and other communications given or made pursuant to this Agreement shall be in writing (including email as permitted in this Agreement) and shall be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by email during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on Schedule A or Schedule B hereof, as the case may be, or (as to the Company) to the address set forth on the signature page hereto, or in any case to such email address or address as subsequently modified by written notice given in accordance with this Section 6.5. If notice is given to the Company, a copy (which copy shall not constitute notice) shall also be sent to Morgan, Lewis & Bockius LLP, One Federal Street, Boston, Massachusetts 02110-1726, Attention: Michael K. Barron, Esq., email: michael.barron@morganlewis.com, and if notice is given to any Investor, a copy (which copy shall not constitute notice) shall also be given to any “cc” addressed noted on Schedule A for such Investor.
(b) Consent to Electronic Notice. Each party to this Agreement consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by email pursuant to Section 232 of the DGCL (or any successor thereto) at the email address set forth below such party’s name on the Schedules hereto, as updated from time to time by notice to the Company, or as on the books of the Company. To the extent that any notice given by means of email is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected email address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each party to this Agreement agrees to promptly notify the Company of any change in its email address, and that failure to do so shall not affect the foregoing.
6.6 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) together with the other Transaction Agreements (as defined in the Purchase Agreement) constitute the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between or among any of the parties are expressly canceled.
6.7 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
6.8 Amendment; Waiver and Termination.
(a) This Agreement may be amended, modified or terminated (other than pursuant to Section 6.1 above) and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by (i) the
Company, (ii) the Key Holders holding a majority of the shares of Transfer Stock then held by all of the Key Holders, and (iii) the holders of at least a majority of the shares of Preferred Stock then held by the Investors (voting as a single separate class and on an as-converted basis); provided that the Company may in its sole discretion waive compliance with any provision of this Agreement if observance of the terms would cause the Company or any Investor to be in violation of applicable Sanctions.
(b) Any amendment, modification, termination or waiver effected in accordance with this Section 6.8 shall be binding upon the Company, the Investors, the Key Holders and all of their respective successors and permitted assigns whether or not such party, assignee or other shareholder entered into or approved such amendment, modification, termination or waiver.
(c) Notwithstanding Section 6.8(a) above:
(i) this Agreement may not be amended, modified or terminated and the observance of any term hereunder may not be waived with respect to any Investor or Key Holder without the written consent of such Investor or Key Holder unless such amendment, modification, termination or waiver applies to all Investors and Key Holders, respectively, in the same fashion; provided, however, if, after giving effect to any waiver of Section 2 with respect to a particular transaction, a waiving Investor in fact purchases or sells securities in such transaction (a “Participating Investor”), the aforementioned waiver shall be deemed to apply to any Investor only if that Investor has been provided the opportunity to purchase or sell a proportional number of the securities in such transaction based on relative participation of all Participating Investors);
(ii) no consent of any Key Holder shall be required for a waiver of the applicability of the rights provided in Section 2 of this Agreement as to any specific Proposed Key Holder Transfer; and
(iii) the consent of the Key Holders shall not be required for any amendment, modification, termination or waiver if such amendment, modification, termination or waiver does not affect the rights and obligations set forth in this Agreement of the Key Holders,
(d) Section 2.2, Section 2.3(c), Section 5 and this Section 6.8(d) may not be amended, modified or terminated and the observance of any term hereunder may not be waived without the written consent of Key Holders holding a majority of the shares of Transfer Stock then held by all of the Key Holders.
(e) The Company shall give prompt written notice of any amendment, modification or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, modification, termination or waiver; provided that the failure to provide such notice shall not invalidate any amendment, modification, termination or waiver hereunder; and provided further, for clarity, that no such notice shall be required to be given to any Key Holder for a waiver of the applicability of the rights provided in Section 2 of this Agreement as to any specific Proposed Key Holder Transfer that does not involve any Transfer Stock held by such Key Holder.
(f) No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.
(g) Any amendment, modification, termination, or waiver effected in accordance with this Section 6.8 shall be binding on all parties hereto, regardless of whether any such party has consented thereto or received notice thereof.
6.9 Assignment of Rights.
(a) The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
(b) Any successor or permitted assignee of any Key Holder, including any Prospective Transferee who purchases shares of Transfer Stock in accordance with the terms hereof, shall deliver to the Company and the Investors, as a condition to any transfer or assignment, a counterpart signature page hereto pursuant to which such successor or permitted assignee shall confirm their agreement to be subject to and bound by all of the provisions set forth in this Agreement that were applicable to the predecessor or assignor of such successor or permitted assignee.
(c) The rights of the Investors hereunder are not assignable without the Company’s written consent (which shall not be unreasonably withheld, delayed or conditioned), except (i) by an Investor to any Affiliate, or (ii) to an assignee or transferee who acquires at least 871,388 shares of Capital Stock (as adjusted for any stock combination, stock split, stock dividend, recapitalization or other similar transaction), it being acknowledged and agreed that any such assignment, including an assignment contemplated by the preceding clauses (i) or (ii) shall be subject to and conditioned upon any such assignee’s delivery to the Company and the other Investors of a counterpart signature page hereto pursuant to which such assignee shall confirm their agreement to be subject to and bound by all of the provisions set forth in this Agreement that were applicable to the assignor of such assignee.
(d) Except in connection with an assignment by the Company by operation of law to the acquirer of the Company, the rights and obligations of the Company hereunder may not be assigned under any circumstances.
6.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
6.11 Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of the Company’s Preferred Stock after the date hereof, any purchaser of such shares of Preferred Stock may become a party to this Agreement by executing and delivering a counterpart signature page to this Agreement and thereafter shall be deemed an “Investor” for all purposes hereunder.
6.12 Governing Law. This Agreement and all claims, causes of action, actions, suits, and proceedings (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any claim, cause of action, action, suit, or proceeding based upon, arising out of, or related to any transaction contemplated by this Agreement, any representation or warranty made in or in connection with this Agreement, or as an inducement to enter into this Agreement) (a “Dispute”), shall be governed by, and enforced in accordance with, the internal law of the State of Delaware, including its statutes of limitations, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.
6.13 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
6.14 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Counterparts may be delivered via email (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
6.15 Aggregation of Stock. All shares of Capital Stock held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliates may apportion such rights as among themselves in any manner they deem appropriate.
6.16 Specific Performance. In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, each Investor shall be entitled to specific performance of the agreements and obligations of the Company and the Key Holders hereunder and to such other injunction or other equitable relief as may be granted by a court of competent jurisdiction.
6.17 Additional Key Holders. In the event that after the date of this Agreement, the Company issues shares of Common Stock, or options to purchase Common Stock, to any employee or consultant, which shares or options would collectively constitute with respect to such employee or consultant (taking into account all shares of Common Stock, options and other purchase rights held by such employee or consultant) 1% or more of the Company’s then outstanding Common Stock (treating for this purpose all shares of Common Stock issuable upon exercise of or conversion of outstanding options, warrants or convertible securities, as if exercised or converted), the Company shall, as a condition to such issuance, cause such employee or consultant to execute a counterpart signature page hereto as a Key Holder, and such person shall thereby be bound by, and subject to, all the terms and provisions of this Agreement applicable to a Key Holder.
6.18 Sanctions. For the avoidance of doubt, at any time that a Person is or becomes a Sanctioned Party, all rights granted to the Person under this Agreement, including, without limitation, any right to purchase any Capital Stock, will be immediately suspended for so long as such Person is a Sanctioned Party or until authorization is issued by a relevant government authority as required by applicable Sanctions.
6.19 Costs of Enforcement. Each party will bear its own costs in respect of any disputes arising under this Agreement. The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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COMPANY: |
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OPEONGO, INC. |
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By: |
/s/ David Baram |
Name: |
David Baram |
Title: |
Chief Executive Officer |
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Address: |
Opeongo, Inc. 2332 Galiano Street Coral Gables, FL 33134 Attention: David Baram Email: david@opeongo.bio |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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KEY HOLDERS: |
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DAVID BARAM |
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/s/ David Baram |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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KEY HOLDERS: |
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TODD WIDER |
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/s/ Todd Wider |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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KEY HOLDERS: |
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ORAN MORDECHAI |
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/s/ Oran Mordechai |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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KEY HOLDERS: |
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DAVID BARAM (IN TRUST FOR IRIT SAGI) |
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/s/ David Baram |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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KEY HOLDERS: |
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YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED |
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By: |
David Baram |
Its: |
Proxyholder pursuant to that certain Irrevocable Proxy, dated as of May 7, 2025 |
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/s/ David Baram |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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KEY HOLDERS: |
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ASAEL HERMAN |
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By: |
David Baram |
Its: |
Proxyholder pursuant to that certain Proxy and Power of Attorney, dated as of July 8, 2024 |
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/s/ David Baram |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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KEY HOLDERS: |
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SHAHAR AVNI |
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By: |
Dr. David Baram |
Its: |
Proxyholder pursuant to that certain Proxy and Power of Attorney, dated as of July 8, 2024 |
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/s/ David Baram |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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KEY HOLDERS: |
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PAUL MANN |
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/s/ Paul Mann |
Signature Page to Right of First Refusal and Co-Sale Agreement
IN WITNESS WHEREOF, the parties have executed this Right of First Refusal and Co-Sale Agreement as of the date first written above.
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INVESTORS: |
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ASP ISOTOPES INC. |
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By: |
/s/ Paul Mann |
Name: |
Paul Mann |
Title: |
Executive Chairman |
Signature Page to Right of First Refusal and Co-Sale Agreement
VOTING AGREEMENT
This Voting Agreement (this “Agreement”) is made as of January 26, 2026, by and among Opeongo, Inc., a Delaware corporation (the “Company”), the Investors (as defined below), the Founders (as defined below) and other Stockholders (as defined below).
RECITALS
WHEREAS, the Company and ASP Isotopes Inc., a Delaware corporation (the “Initial Investor”), are parties to that certain Series Seed-1 Preferred Stock Purchase Agreement, of even date herewith (the “Purchase Agreement”), under which certain of the Company’s and the Initial Investors’ obligations are conditioned upon the execution and delivery of this Agreement by the undersigned parties;
WHEREAS, as of the date hereof, the Amended and Restated Certificate of Incorporation of the Company (the “Restated Certificate”) provides that, subject to certain share thresholds: (i) the holders of record of at least a majority of the shares of the Preferred Stock, $0.0001 par value per share, of the Company (“Preferred Stock”), exclusively and as a separate class, shall be entitled to elect one director of the Company (the “Series Seed-1 Director”); (ii) the holders of record of at least a majority of the shares of common stock, $0.0001 par value per share, of the Company (“Common Stock”), exclusively and as a separate class, shall be entitled to elect four directors of the Company (the “Common Directors”); and (iii) the holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Preferred Stock), exclusively and voting together as a single class on an as-converted to Common Stock basis, shall be entitled to elect the balance of the total number of directors of the Corporation (if any); and
WHEREAS, the parties desire to enter into this Agreement to set forth their agreements and understandings with respect to how shares of the capital stock of the Company held by them will be voted in respect of the Company’s Board of Directors (the “Board”) voted on in connection with an increase in the number of shares of Common Stock required to provide for the conversion of the Preferred Stock.
NOW, THEREFORE, the parties agree as follows:
1. Voting Provisions Regarding the Board.
1.1 Definitions. For purposes of this Agreement:
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer, director or trustee of such Person, or any venture capital fund or other investment fund now or hereafter existing that is controlled by one or more general partners, managing members or investment advisers of, or shares the same management company or investment adviser with, such Person.
(b) “Founders” means each of the persons named on Schedule B hereto, provided such individual continues to hold at least 80% of the number of shares of Common Stock held by him as of the date of this Agreement (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof).
(c) “Investors” means the persons named on Schedule A hereto, each person who hereafter becomes a party to this Agreement pursuant to Section 7.1(a) and each person to whom the rights of an Investor are assigned pursuant to Section 7.2.
(d) “Person” means any individual, corporation, partnership, trust, limited liability company, association, or other entity.
(e) “Requisite Holders” means the holders of at least a majority of the then‑outstanding shares of Preferred Stock, calculated together as a single class and on an as-converted basis.
(f) “Sale of the Company” means either: (i) a transaction or series of related transactions in which a Person, or a group of related Persons, acquires from stockholders of the Company shares representing more than 50% of the out standing voting power of the Company (a “Stock Sale”); or (ii) a transaction that qualifies as a “Deemed Liquidation Event,” as defined in the Restated Certificate.
(g) “Sanctioned Party” means any Person:
(i) organized under the laws of, ordinarily resident in, or located in a country or territory that is the subject of comprehensive Sanctions (“Restricted Countries”);
(ii) 50% or more owned or controlled by the government of a Restricted Country; or
(iii) designated on a sanctioned parties list administered by the United States, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, and Sectoral Sanctions Identification List (collectively, “Designated Parties”); or
(iv) 50% or more owned or, where relevant under applicable Sanctions, controlled, individually or in the aggregate, by one or more Designated Party, in each case only to the extent that dealings with such Person are prohibited pursuant to applicable Sanctions.
(h) “Sanctions” means applicable laws and regulations pertaining to trade and economic sanctions administered by the United States.
(i) “Series Seed-1 Preferred Stock” means shares of the Company’s Series Seed-1 Preferred Stock, par value $0.0001 per share.
(j) “Shares” shall mean and include any securities of the Company that the holders of which are entitled to vote for members of the Board, including, without limitation, all shares of Common Stock and Preferred Stock, by whatever name called, now owned or subsequently acquired by a Stockholder, however acquired, whether through stock splits, stock dividends, reclassifications, recapitalizations, similar events or otherwise.
(k) “Stockholders” means the Investors, the Founders, and each other holder of Common Stock of the Company that becomes party to this Agreement that is not an Investor or Founder (which other stockholders shall be set forth on Schedule C to this Agreement).
(l) Any reference in this Agreement to “vote” or “voting” or similar language shall include, without limitation, action by written consent of the stockholders.
1.2 Board Composition. Each Stockholder agrees to vote, or cause to be voted, all Shares owned by such Stockholder, or over which such Stockholder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that at each annual or special meeting of
stockholders at which an election of directors is held or pursuant to any written consent of the stockholders, subject to Section 5, the following persons shall be elected to the Board:
(a) as the Series Seed-1 Director, one individual designated by holders of at least a majority of the shares of Series Seed-1 Preferred Stock, which individual shall be Paul Mann; provided, however, that for so long as Todd Wider shall be (x) employed or otherwise engaged by the Company and (y) Affiliated with one or more holders of Series Seed-1 Preferred Stock, the Series Seed-1 Director shall not vote, and shall recuse himself or herself from voting, on any matter relating to the compensation of Todd Wider, including, without limitation, his salary, benefits, stock option grants and other compensatory equity awards;
(b) as the Common Directors, up to four individuals designated by the Founders holding at least a majority of the aggregate number of shares of Common Stock then held by all of the then-current Founders:
(i) one (1) of which shall be the Company’s Chief Executive Officer (the “CEO Director”), who as of the date of this Agreement is David Baram, provided that if for any reason the CEO Director shall cease to serve as the Chief Executive Officer of the Company, each of the Stockholders shall promptly vote their respective Shares (A) to remove the former Chief Executive Officer from the Board if such person has not resigned from the position of CEO Director and (B) to elect the then‑current Chief Executive Officer of the Company to serve as the new CEO Director; and
(ii) two (2) of which shall initially be Oran Mordechai and Todd Wider.
For clarity, to the extent that the election of a director pursuant to any of foregoing clause (a) and clause (b) above shall not be applicable, or shall cause the Company to violate applicable Sanctions, any member of the Board who would otherwise have been designated in accordance with the terms thereof shall instead be voted upon by all the stockholders of the Company entitled to vote thereon in accordance with, and pursuant to, the Restated Certificate.
1.3 Vacancies. Any vacancies in the Board shall be filled only pursuant to the provisions of Section 1.2.
1.4 Removal of Board Members. Each Stockholder also agrees to vote, or cause to be voted, all Shares owned by such Stockholder, or over which such Stockholder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that:
(a) a director elected or serving pursuant to Section 1.2, or reelected pursuant to Section 1.3, shall be promptly removed from office upon the occurrence of any of the following: (i) written request of any Person(s) who would be entitled to designate a replacement for such director pursuant to Section 1.2 to remove such director; (ii) written request of stockholders that hold the requisite votes to approve a replacement for such director pursuant to Section 1.2 to remove such director; (iii) if such director is no longer entitled or eligible to occupy such Board seat pursuant to the applicable conditions of Section 1.2; or (iv) either the Director or the Person or Entity entitled to designate the Director is a Sanctioned Party;
(b) no director elected or serving pursuant to Section 1.2, or reelected pursuant to Section 1.3, may be removed from office other than for cause unless (i) such removal is made in accordance with Section 1.4(a); or (ii) the applicable subsection of Section 1.2 is no longer in effect pursuant to its terms.
1.5 Stockholder Action. All Stockholders agree to execute any written consents required to perform the obligations of this Section 1, and the Company agrees to use commercially reasonable efforts to cause to be called a special meeting of stockholders for the purpose of electing, removing or replacing directors upon the written request of (i) any Person entitled to designate a director or (ii) the holders of the requisite number of shares of capital stock entitled to approve a director candidate pursuant to Section 1.2.
1.6 No Liability for Election of Designated or Approved Directors. No Stockholder, nor any Affiliate of any Stockholder, shall have any liability as a result of designating or approving a person for election as a director for any act or omission by such designated or approved person in such person’s capacity as a director of the Company, nor shall any Stockholder have any liability as a result of voting for any such designee in accordance with the provisions of this Agreement.
2. Vote to Increase Authorized Common Stock. Each Stockholder agrees to vote or cause to be voted all Shares owned by such Stockholder, or over which such Stockholder has voting control, from time to time and at all times, in whatever manner as shall be necessary to increase the number of authorized shares of Common Stock from time to time to ensure that there will be sufficient shares of Common Stock available for conversion of all of the shares of Preferred Stock outstanding at any given time.
3. Drag-Along Right.
3.1 Actions to be Taken. In the event that (i) the holders of at least a majority of the shares of Preferred Stock (the “Selling Investors”), (ii) the Board and (iii) the Founders holding a majority of the outstanding shares of Common Stock then held by all of the then-current Founders, approve a Sale of the Company, which approval specifies that this Section 3 shall apply to such transaction, then, subject to satisfaction of each of the conditions set forth in Section 3.2 below, each Stockholder and the Company hereby agree:
(a) if such transaction requires stockholder approval, with respect to all Shares that such Stockholder owns or over which such Stockholder otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all Shares in favor of, and approve, such Sale of the Company (together with any related amendment or restatement to the Restated Certificate required to implement such Sale of the Company)and the related definitive agreement(s) pursuant to which the Sale of the Company is to be consummated and to vote in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such Sale of the Company;
(b) if such transaction is a Stock Sale, to sell the same proportion of shares of capital stock of the Company beneficially held by such Stockholder as is being sold by the Selling Investors to the Person to whom the Selling Investors propose to sell their Shares, and, except as permitted in Section 3.2 below, on the same terms and conditions as the other stockholders of the Company;
(c) to execute and deliver all related documentation and take such other action in support of the Sale of the Company as shall reasonably be requested by the Company or the Selling Investors in order to carry out the terms and provision of this Section 3, including, without limitation, (i) executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, any associated indemnity agreement, any reasonably customary release agreement in the capacity of a securityholder, termination of investment related documents, accredited investor forms, documents evidencing the removal of board designees as power of attorneys or escrow agreement, any associated voting, support, or joinder agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances), and any similar or related documents and (ii) providing any information reasonably necessary for any public filings with the Securities and Exchange Commission in connection with the Sale of the Company;
(d) not to deposit, and to cause their Affiliates not to deposit, except as provided in this Agreement, any Shares of the Company owned by such party or Affiliate in a voting trust or subject any Shares to any arrangement or agreement with respect to the voting of such Shares, unless specifically requested to do so by the acquirer in connection with the Sale of the Company;
(e) to refrain from (i) exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Sale of the Company, or (ii) asserting any claim or commencing, joining or participating in any way (including, without limitation, as a member of a class) in any action, suit or proceeding challenging the Sale of the Company, this Agreement, consummation of the transactions contemplated in connection with the Sale of the Company or this Agreement, including, without limitation, (x) challenging the validity of, or seeking to enjoin the operation of, the definitive agreement(s) with respect to such Sale of the Company or (y) alleging a breach of any fiduciary duty (including, without limitation, aiding and abetting a breach of any fiduciary duty) by the Selling Investors or any Affiliate or associate thereof, the directors of the Company or the acquirer(s) in connection with the Sale of the Company or any action taken thereby with respect to such Sale of the Company;
(f) if the consideration to be paid in exchange for the Shares pursuant to this Section 3 includes any securities and due receipt thereof by any Stockholder would require under applicable law: (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities; or (y) the provision to any Stockholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), the Company may cause to be paid to any such Stockholder in lieu thereof, against surrender of the Shares which would have otherwise been sold by such Stockholder, an amount in cash equal to the fair value (as determined in good faith by the Board) of the securities which such Stockholder would otherwise receive as of the date of the issuance of such securities in exchange for the Shares; and
(g) in the event that the Selling Investors, in connection with such Sale of the Company, appoint a stockholder representative (the “Stockholder Representative”) with respect to matters affecting the Stockholders under the applicable definitive transaction agreements following consummation of such Sale of the Company:
(i) to consent to (A) the appointment of such Stockholder Representative, (B) the establishment of any applicable escrow, expense or similar fund in connection with any indemnification or similar obligations and (C) the payment of such Stockholder’s pro rata portion (from the applicable escrow or expense fund or otherwise) of any and all reasonable fees and expenses to such Stockholder Representative in connection with such Stockholder Representative’s services and duties in connection with such Sale of the Company and its related service as the representative of the Stockholders; and
(ii) not to assert any claim or commence any suit against the Stockholder Representative or any other Stockholder with respect to any action or inaction taken or failed to be taken by the Stockholder Representative, within the scope of the Stockholder Representative’s authority, in connection with its service as the Stockholder Representative, absent fraud, bad faith, or willful misconduct.
3.2 Conditions. Notwithstanding anything to the contrary set forth herein, a Stockholder will not be required to comply with Section 3.1 above in connection with any proposed Sale of the Company (the “Proposed Sale”), unless:
(a) any representations and warranties to be made by such Stockholder in connection with the Proposed Sale are limited to representations and warranties related to authority, ownership and the ability to convey title to such Shares, including, but not limited to, representations and warranties that:
(i) the Stockholder holds all right, title and interest in and to the Shares such Stockholder purports to hold, free and clear of all liens and encumbrances;
(ii) the obligations of the Stockholder in connection with the transaction have been duly authorized, if applicable;
(iii) the documents to be entered into by the Stockholder have been duly executed by the Stockholder and delivered to the acquirer and are enforceable (subject to customary limitations) against the Stockholder in accordance with their respective terms; and
(iv) neither the execution and delivery of documents to be entered into by the Stockholder in connection with the transaction, nor the performance of the Stockholder’s obligations thereunder, will cause a breach or violation of the terms of any agreement (including the Company’s or such Stockholder’s organizational documents) to which the Stockholder is a party, or any law or judgment, order or decree of any court or governmental agency that applies to the Stockholder;
(b) such Stockholder is not required to agree (unless such Stockholder is a Company officer, director, or employee) to any restrictive covenant in connection with the Proposed Sale (including, without limitation, any covenant not to compete or covenant not to solicit customers, employees or suppliers of any party to the Proposed Sale) or any release of claims other than a release in customary form of claims arising solely in such Stockholder’s capacity as a stockholder of the Company;
(c) such Stockholder and its Affiliates are not required to amend, extend or terminate any contractual or other relationship with the Company, the acquirer or their respective Affiliates, except that the Stockholder may be required to agree to terminate the investment-related documents between or among such Stockholder, the Company and/or other stockholders of the Company;
(d) the Stockholder is not liable for the breach of any representation, warranty or covenant made by any other Person in connection with the Proposed Sale, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of identical representations, warranties and covenants provided by all stockholders);
(e) liability shall be limited to such Stockholder’s applicable share (determined based on the respective proceeds payable to each Stockholder in connection with such Proposed Sale in accordance with the provisions of the Restated Certificate) of a negotiated aggregate indemnification amount that in no event exceeds the amount of consideration otherwise payable to such Stockholder in connection with such Proposed Sale in such person’s capacity as a stockholder of the Company, except with respect to claims related to fraud by such Stockholder, the liability for which need not be limited as to such Stockholder; and
(f) upon the consummation of the Proposed Sale:
(i) each holder of each class or series of the capital stock of the Company will receive the same form of consideration for their shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock;
(ii) each holder of a series of Preferred Stock will receive the same amount of consideration per share of such series of Preferred Stock as is received by other holders in respect of their shares of such same series;
(iii) each holder of Common Stock will receive the same amount of consideration per share of Common Stock as is received by other holders in respect of their shares of Common Stock; and
(iv) unless waived pursuant to the terms of the Restated Certificate or as may be required by law, the aggregate consideration receivable by all holders of the Preferred Stock and Common Stock shall be allocated among the holders of Preferred Stock and Common Stock on the basis of the relative liquidation preferences to which the holders of each respective series of Preferred Stock and the holders of Common Stock are entitled in a Deemed Liquidation Event (assuming for this purpose that the Proposed Sale is a Deemed Liquidation Event) in accordance with the Company’s Restated Certificate in effect immediately prior to the Proposed Sale;
provided, however, that, notwithstanding the foregoing provisions of this Section 3.2(f), if the consideration to be paid in exchange for the Shares held by the Stockholder pursuant to this Section 3.2(f) includes any securities and due receipt thereof by any Stockholder would require under applicable law (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (y) the provision to any Stockholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Stockholder in lieu thereof, against surrender of the Shares held by the Stockholder, which would have otherwise been sold by such Stockholder, an amount in cash equal to the fair value (as determined in good faith by the Board) of the securities which such Stockholder would otherwise receive as of the date of the issuance of such securities in exchange for the Shares held by the Stockholder; and
(g) subject to Section 3.2(f) above, requiring the same form of consideration to be available to the holders of any single class or series of capital stock, if any holders of any capital stock of the Company are given an option as to the form and amount of consideration to be received as a result of the Proposed Sale, all holders of such capital stock will be given the same option; provided, however, that nothing in this Section 3.2(g) shall entitle any holder to receive any form of consideration that such holder would be ineligible to receive as a result of such holder’s failure to satisfy any condition, requirement or limitation that is generally applicable to the Company’s stockholders.
3.3 Restrictions on Sales of Control of the Company. No Stockholder shall be a party to any Stock Sale unless (a) all holders of Preferred Stock are allowed to participate in such transaction(s) and (b) the consideration received pursuant to such transaction is allocated among the parties thereto in the manner specified in the Company’s Restated Certificate in effect immediately prior to the Stock Sale (as if such transaction(s) were a Deemed Liquidation Event), unless the holders of at least the requisite percentage required to waive treatment of the transaction(s) as a Deemed Liquidation Event pursuant to the terms of the Restated Certificate, elect to allocate the consideration differently by written notice given to the Company at least three (3) days prior to the effective date of any such transaction or series of related transactions.
3.4 Effect of Sanctioned Party Status. For clarity, if any Stockholder is a Sanctioned Party, such Stockholder will not be required to take any action described in Section 3.1, and will not be entitled to receive any benefit described in Section 3.2, if such action would cause the Company or any other party to violate applicable Sanctions. The Shares held by such Stockholders shall be disregarded for the purpose of calculating any voting threshold set forth in this Agreement.
4. Additional Agreements; Remedies.
4.1 Covenants of the Company. In addition to its obligations pursuant to Section 1.5 above, the Company covenants and agrees to call a special meeting of stockholders for the purposes of (a) increasing the number of authorized shares of Common Stock as contemplated by Section 2, upon the written request of any holder of Preferred Stock, and (b) approving a Sale of the Company, upon the written request of the Selling Investors in accordance with Section 3.1.
4.2 Irrevocable Proxy and Power of Attorney. Each party to this Agreement hereby constitutes and appoints as the proxies of the party and hereby grants a power of attorney to the President of the Company and the Chairperson of the Board and a designee of the Requisite Holders (each, a “Proxyholder”), and each of them, with full power of substitution, with respect to the matters set forth herein, including, without limitation, votes regarding the composition of the Board, and votes to increase authorized shares and votes, waivers, and other actions required to be taken pursuant to Section 3 of this Agreement in connection with a Sale of the Company, and hereby authorizes each of them to represent and vote and take such other actions, if and only if the party (i) fails to vote and take such other actions within five business days after request by the Company, (ii) is prohibited from voting due to Sanctions or other applicable laws, or (iii) attempts to vote (whether by proxy, in person or by written consent) or take actions in a manner which is inconsistent with the terms of this Agreement, all of such party’s Shares in favor of the election or removal of persons as members of the Board determined pursuant to and in accordance with the terms and provisions of this Agreement or the increase of authorized shares or approval of any Sale of the Company pursuant to and in accordance with the terms and provisions of this Agreement or to take any action reasonably necessary to effect this Agreement. The power of attorney granted hereunder shall authorize each Proxyholder to execute and deliver any documentation required by this Agreement on behalf of any party failing to do so within five business days after request by the Company. Each of the proxy and power of attorney granted pursuant to this Section 4.2 is given in consideration of the agreements and covenants of the Company and the parties in connection with the transactions contemplated by this Agreement and, as such, each is coupled with an interest and shall be irrevocable unless and until this Agreement terminates or expires pursuant to Section 6 hereof. Each party hereto hereby revokes any and all previous proxies or powers of attorney with respect to the Shares and shall not hereafter, unless and until this Agreement terminates or expires pursuant to Section 6 hereof, purport to grant any other proxy or power of attorney with respect to any of the Shares, deposit any of the Shares into a voting trust or enter into any agreement (other than this Agreement), arrangement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of the Shares, in each case, with respect to any of the matters set forth herein.
4.3 Specific Enforcement. Each party acknowledges and agrees that each party hereto will be irreparably damaged in the event any of the provisions of this Agreement are not performed by the parties in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that each of the Company and the Stockholders shall be entitled to an injunction to prevent breaches of this Agreement, and to specific enforcement of this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction; provided that no party that is regulated as a bank holding company under the Bank Holding Company Act of 1956, as amended, shall have the right to enforce against any Stockholder any provisions of this Agreement that (a) requires a Stockholder to vote for or against any matter or (b) restricts or conditions the ability of a Stockholder to transfer its
Shares. Each party to this Agreement agrees to use commercially reasonable efforts to cooperate in seeking and agreeing to an expedited schedule in any litigation seeking an injunction or order of specific performance.
4.4 Remedies Cumulative. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
5. “Bad Actor” and Sanctioned Party Matters.
5.1 Additional Definitions. For purposes of this Agreement:
(a) “Company Covered Person” means, with respect to the Company as an “issuer” for purposes of Rule 506 promulgated under the Securities Act, any Person listed in the first paragraph of Rule 506(d)(1).
(b) “Disqualified Designee” means any director designee to whom any Disqualification Event is applicable, except for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable.
(c) “Disqualification Event” means a “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) promulgated under the Securities Act or any event which results in a director designee becoming a Sanctioned Party.
(d) “Rule 506(d) Related Party” means, with respect to any Person, any other Person that is a beneficial owner of such first Person’s securities for purposes of Rule 506(d) under the Securities Act.
5.2 Representations.
(a) Each Person with the right to designate or participate in the designation of a director pursuant to this Agreement hereby represents that (i) such Person has exercised reasonable care to determine whether any Disqualification Event is applicable to such Person, any director designee designated by such Person pursuant to this Agreement or any of such Person’s Rule 506(d) Related Parties and (ii) no Disqualification Event is applicable to such Person, any Board member designated by such Person pursuant to this Agreement or, to such Person’s knowledge, any of such Person’s Rule 506(d) Related Parties, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. Notwithstanding anything to the contrary in this Agreement, each Investor makes no representation regarding any Person that may be deemed to be a beneficial owner of the Company’s voting equity securities held by such Investor solely by virtue of that Person being or becoming a party to (x) this Agreement, as may be subsequently amended, or (y) any other contract or written agreement to which the Company and such Investor are parties regarding (1) the voting power, which includes the power to vote or to direct the voting of, such security; and/or (2) the investment power, which includes the power to dispose, or to direct the disposition of, such security.
(b) The Company hereby represents and warrants to the Investors that no Disqualification Event is applicable to the Company or, to the Company’s knowledge, any Company Covered Person, except for a Disqualification Event as to which Rule 506(d)(2)(ii)-(iv) or (d)(3) is applicable.
5.3 Covenants. Each Person with the right to designate or participate in the designation of a director pursuant to this Agreement covenants and agrees (i) not to designate or participate in the designation of any director designee who, to such Person’s knowledge, is a Disqualified Designee, (ii) to
exercise reasonable care to determine whether any director designee designated by such person is a Disqualified Designee, (iii) that in the event such Person becomes aware that any individual previously designated by any such Person is or has become a Disqualified Designee, such Person shall as promptly as practicable take such actions as are necessary to remove such Disqualified Designee from the Board and designate a replacement designee who is not a Disqualified Designee, and (iv) to notify the Company promptly in writing in the event a Disqualification Event becomes applicable to such Person or any of its Rule 506(d) Related Parties, or, to such Person’s knowledge, to such Person’s initial designee named in Section 1.2, except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable.
6. Term. This Agreement shall be effective as of the date hereof and shall continue in effect until and shall terminate upon the earliest to occur of:
(a) the consummation of the Company’s first underwritten public offering of its Common Stock (other than a registration statement relating either to the sale of securities to employees of the Company pursuant to its stock option, stock purchase or similar plan or an SEC Rule 145 transaction), or Qualified Direct Listing (as defined in the Restated Certificate);
(b) the consummation of a Sale of the Company and, if applicable, distribution of proceeds to or escrow for the benefit of the Stockholders in accordance with the Restated Certificate, provided that the provisions of Section 3 hereof will continue after the closing of any Sale of the Company to the extent necessary to enforce the provisions of Section 3 with respect to such Sale of the Company; and
(c) termination of this Agreement in accordance with Section 7.8 below.
7. Miscellaneous.
7.1 Additional Parties.
(a) Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Preferred Stock after the date hereof, the Person acquiring such shares of Preferred Stock, as a condition to the issuance of such shares the Company, shall become a party to this Agreement by executing and delivering a counterpart signature page to this Agreement agreeing to be bound by and subject to the terms of this Agreement as an Investor and Stockholder hereunder. Each such Person shall thereafter be deemed an Investor and Stockholder for all purposes under this Agreement. The Company shall amend Schedule A to include such purchaser as an Investor and Stockholder, but failure to update Schedule A shall not negate such Investor’s rights and obligations pursuant to this Agreement.
(b) In the event that after the date of this Agreement, the Company enters into an agreement with any Person to issue shares of capital stock or options or warrants to purchase shares of capital stock to such Person (other than to a purchaser of Preferred Stock described in Section 7.1(a) above), following which such Person shall hold Shares constituting 1% or more of the then outstanding capital stock of the Company (treating for this purpose all shares of Common Stock issuable upon exercise or conversion of outstanding options, warrants or convertible securities, as if exercised and/or converted or exchanged), then such Person, as a condition precedent to entering into such agreement or acquiring such shares, options, or warrants shall become a party to this Agreement by executing and delivering a counterpart signature page to this Agreement agreeing to be bound by and subject to the terms of this Agreement as a Stockholder. Each such Person shall thereafter be deemed a Stockholder for all purposes under this Agreement. The Company shall amend Schedule C to include such purchaser as Stockholder, but failure to update Schedule C shall not negate such Stockholder’s rights and obligations pursuant to this
Agreement. A Person who becomes party to this Agreement pursuant to this Section 7.1(b) shall solely be a “Stockholder”.
7.2 Transfers. Each transferee or assignee of any Shares subject to this Agreement shall continue to be subject to the terms hereof, and, as a condition precedent to the Company’s recognition of such transfer, each transferee or assignee shall agree in writing to be subject to each of the terms of this Agreement by executing and delivering a counterpart signature page in this Agreement, agreeing to be bound by and subject to the terms of this Agreement in the same capacity as the transferor. Upon the execution and delivery of a counterpart signature page to this Agreement by any transferee, such transferee shall be deemed to be a party hereto as if such transferee were the transferor and such transferee’s signature appeared on the signature pages of this Agreement and shall be deemed to be an Investor and/ or Stockholder, as applicable. The Company shall not permit the transfer of the Shares subject to this Agreement on its books or issue a new certificate representing any such Shares unless and until such transferee shall have complied with the terms of this Section 7.2. Each certificate instrument, or book entry representing the Shares subject to this Agreement if issued on or after the date of this Agreement shall be notated by the Company with the legend set forth in Section 7.12. The Company shall amend the applicable Schedules to include such transferee as an Investor and/or Stockholder, as applicable, but the Company’s failure to update the Schedules to this Agreement shall not negate such Stockholder’s rights and obligations pursuant to this Agreement.
7.3 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties; provided, however, that the rights to designate members of the Board in Sections 1.2(a)-(b) are nontransferable (and shall not be binding upon or inure to the benefit of successors and assigns) other than pursuant to an amendment effected in accordance with Section 7.8 below. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
7.4 Governing Law. This Agreement and all claims, causes of action, actions, suits, and proceedings (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement (including any claim, cause of action, action, suit, or proceeding based upon, arising out of, or related to any transaction contemplated by this Agreement, any representation or warranty made in or in connection with this Agreement, or as an inducement to enter into this Agreement) (a “Dispute”), shall be governed by, and enforced in accordance with, the internal laws of the State of Delaware, including its statutes of limitations, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.
7.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via email (including pdf or any electronic signature complying with the U.S. ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
7.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
7.7 Notices.
(a) General. All notices and other communications given or made pursuant to this Agreement shall be in writing (including email as permitted in this Agreement) and shall be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by email during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on the Schedules to this Agreement, or (as to the Company) to the address set forth on the signature page hereto, or, in any case, to such email address or address as subsequently modified by written notice given in accordance with this Section 7.7. If notice is given to the Company, a copy (which copy shall not constitute notice) shall also be sent to Morgan, Lewis & Bockius LLP, One Federal Street, Boston, Massachusetts 02110-1726, Attention: Michael K. Barron, Esq., email: michael.barron@morganlewis.com, and if notice is given to any Investor, a copy (which copy shall not constitute notice) shall also be given to any “cc” address noted on Schedule A for such Investor.
(b) Consent to Electronic Notice. Each Stockholder consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by email pursuant to Section 232 of the DGCL (or any successor thereto) at the email address set forth below such Stockholder’s name on the Schedules hereto, as updated from time to time by notice to the Company, or as on the books of the Company. To the extent that any notice given by means of email is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected email address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each Stockholder agrees to promptly notify the Company of any change in its email address, and that failure to do so shall not affect the foregoing.
7.8 Consent Required to Amend, Modify, Terminate or Waive.
(a) This Agreement may be amended, modified or terminated (other than pursuant to Section 6) and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by: (i) the Company; (ii) the Founders holding a majority of the Shares then held by all of the then-current Founders; and (iii) the Requisite Holders; provided that Shares held by a Sanctioned Party shall be disregarded for the purpose of the calculating the percentages set forth in this section.
(b) Notwithstanding the foregoing:
(i) this Agreement may not be amended, modified or terminated and the obser vance of any term of this Agreement may not be waived with respect to any Investor or Founder without the written consent of such Investor or Founder unless such amendment, modification, termination or waiver applies to all Investors or Founders, as the case may be, in the same fashion;
(ii) the provisions of Section 1.2(a) and this Section 7.8(b)(ii) may not be amended, modified, terminated or waived without the written consent of the Requisite Holders for so long as holders of Series Seed-1 Preferred Stock continue to have rights pursuant to Section 1.2(a);
(iii) the provisions of Section 1.2(b) and this Section 7.8(b)(iii) may not be amended, modified, terminated or waived without the written consent of the Founders holding at least a majority of the aggregate number of shares of Common Stock then held by all of the then-current Founders;
(iv) subject to Section 7.8(b)(iii), the consent of the Founders shall not be required for any amendment, modification, termination or waiver if such amendment, modification, termination, or waiver does not adversely affect the rights or obligations of the Founders hereunder;
(v) the Schedules to this Agreement may be amended by the Company from time to time in accordance with Sections 7.1 and 7.2 without the consent of the other parties hereto; and
(vi) any provision hereof may be waived by the waiving party on such party’s own behalf, without the consent of any other party.
(c) The Company shall give prompt written notice of any amendment, modification, termination, or waiver hereunder to any party that did not consent in writing thereto.
(d) Any amendment, modification, termination, or waiver effected in accordance with this Section 7.8 shall be binding on each party and all of such party’s successors and permitted assigns, whether or not any such party, successor or assignee entered into or approved such amendment, modification, termination or waiver.
(e) For purposes of this Section 7.8, the requirement of a written instrument may be satisfied in the form of an action by written consent of the Stockholders circulated by the Company and executed by the Stockholder parties specified, whether or not such action by written consent makes explicit reference to the terms of this Agreement.
7.9 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
7.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
7.11 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) together with the Restated Certificate and other Transaction Agreements (as defined in the Purchase Agreement) constitute the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between or among any of the parties are expressly canceled.
7.12 Share Certificate Legend. Each certificate, instrument, or book entry representing any Shares issued after the date hereof shall be notated by the Company with a legend reading substantially as follows:
“The Shares REPRESENTED hereby are subject to a Voting Agreement, AS MAY BE AMENDED FROM TIME TO TIME (a copy of which may be obtained upon written request from the Company), and by accepting any interest in such Shares the person accepting
such interest shall be deemed to agree to and shall become bound by all the provisions of that Voting Agreement, including certain restrictions on transfer and ownership set forth therein.”
The Company, by its execution of this Agreement, agrees that it will cause the certificates, instruments, or book entry evidencing the Shares issued after the date hereof to be notated with the legend required by this Section 7.12 of this Agreement, and it shall supply, free of charge, a copy of this Agreement to any holder of such Shares upon written request from such holder to the Company at its principal office. The parties to this Agreement do hereby agree that the failure to cause the certificates, instruments, or book entry evidencing the Shares to be notated with the legend required by this Section 7.12 herein and/or the failure of the Company to supply, free of charge, a copy of this Agreement as provided hereunder shall not affect the validity or enforcement of this Agreement.
7.13 Stock Splits, Dividends and Recapitalizations. In the event of any issuance of Shares or the voting securities of the Company hereafter to any of the Stockholders (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like), such Shares shall become subject to this Agreement and shall be notated with the legend set forth in Section 7.12.
7.14 Manner of Voting. The voting of Shares pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applica ble law. For the avoidance of doubt, voting of the Shares pursuant to the Agreement need not make explicit reference to the terms of this Agreement.
7.15 Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to carry out the intent of the parties hereunder.
7.16 Dispute Resolution.
(a) The parties (i) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (ii) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (iii) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
(b) Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the District of Delaware or any court of the State of Delaware having subject matter jurisdiction.
(c) Waiver of Jury Trial: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
7.17 Costs of Enforcement. Each party will bear its own costs in respect of any disputes arising under this Agreement. The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.
7.18 Aggregation of Stock. All Shares held or acquired by a Stockholder and/or its Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement, and such Affiliates may apportion such rights as among themselves in any manner they deem appropriate.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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COMPANY: |
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OPEONGO, INC. |
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By: |
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/s/ David Baram |
Name: |
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David Baram |
Title: |
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Chief Executive Officer |
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Address: |
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Opeongo, Inc. 2332 Galiano Street Coral Gables, FL 33134 Attention: David Baram Email: david@opeongo.bio |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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INVESTORS: |
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ASP ISOTOPES INC. |
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By: |
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/s/ Paul Mann |
Name: |
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Paul Mann |
Title: |
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Executive Chairman |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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FOUNDERS: |
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DAVID BARAM |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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FOUNDERS: |
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TODD WIDER |
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/s/ Todd Wider |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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FOUNDERS: |
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ORAN MORDECHAI |
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/s/ Oran Mordechai |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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FOUNDERS: |
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DAVID BARAM (IN TRUST FOR IRIT SAGI) |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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FOUNDERS: |
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ASAEL HERMAN |
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By: |
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David Baram |
Its: |
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Proxyholder pursuant to that certain Proxy and Power of Attorney, dated as of July 8, 2024 |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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DAVID BARAM |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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TODD WIDER |
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/s/ Todd Wider |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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ORAN MORDECHAI |
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/s/ Oran Modechai |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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DAVID BARAM (IN TRUST FOR IRIT SAGI) |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED |
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By: |
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David Baram |
Its: |
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Proxyholder pursuant to that certain Irrevocable Proxy, dated as of May 7, 2025 |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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ASAEL HERMAN |
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By: |
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David Baram |
Its: |
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Proxyholder pursuant to that certain Proxy and Power of Attorney, dated as of July 8, 2024 |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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SHAHAR AVNI |
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By: |
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Dr. David Baram |
Its: |
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Proxyholder pursuant to that certain Proxy and Power of Attorney, dated as of July 8, 2024 |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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KEREN FARIN |
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By: |
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David Baram |
Its: |
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Proxyholder pursuant to that certain Proxy and Power of Attorney, dated as of July 8, 2024 |
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/s/ David Baram |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties have executed this Voting Agreement as of the date first written above.
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STOCKHOLDERS: |
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PAUL MANN |
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/s/ Paul Mann |
[Signature Page to Voting Agreement]
