UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
ARCUS BIOSCIENCES, INC.
(Name of Issuer)
Common Stock,
par value $0.0001
(Title of Class of Securities)
03969F109
(CUSIP Number)
Gilead Sciences, Inc.
333 Lakeside Drive
Foster City, California 94404
650-574-3000
(Name, Address and Telephone
Number of Person
Authorized to Receive Notices and Communications)
January 29,
2024
(Date of Event Which Requires Filing of this Statement)
If the filing person has
previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule
because of § 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.
Note: Schedules filed in
paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover
page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required
on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities
Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D
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| 1 |
NAME OF REPORTING PERSONS
Gilead Sciences, Inc. |
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) ¨
(b) ¨ |
| 3 |
SEC USE ONLY
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| 4 |
SOURCE OF FUNDS (See Instructions)
OO |
| 5 |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
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| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware |
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH |
7 |
SOLE VOTING POWER
31,532,781 (1) |
| 8 |
SHARED VOTING POWER
0 |
| 9 |
SOLE DISPOSITIVE POWER
31,532,781 (1) |
| 10 |
SHARED DISPOSITIVE POWER
0 |
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,532,781 (1) |
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions)
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| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35% (2) |
| 14 |
TYPE OF REPORTING PERSON (See Instructions)
CO |
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| (1) | Consists of (i) 2,200,000 shares of common stock of Arcus Biosciences, Inc.
(the “Issuer”) purchased in the Issuer’s public offering that closed
on June 2, 2020, (ii) the initial purchase of 5,963,029 shares of common stock
of the Issuer pursuant to a Common Stock Purchase Agreement, dated May 27, 2020, between
Gilead Sciences, Inc. and the Issuer (the “Purchase Agreement”),
(iii) the subsequent purchase of 5,650,000 shares of common stock of the Issuer pursuant
to an Amended and Restated Common Stock Purchase Agreement, dated January 31, 2021,
between Gilead Sciences, Inc. and the Issuer (the “Amended and Restated Purchase
Agreement”), (iv) the subsequent purchase of 1,010,000 shares of common stock
of the Issuer pursuant to a Second Amended and Restated Common Stock Purchase Agreement (the
“Second Amended and Restated Purchase Agreement”), (v) the subsequent
purchase of 15,238,095 shares of common stock of the Issuer pursuant to a Third Amended and
Restated Common Stock Purchase Agreement (the “Third Amended and Restated Purchase
Agreement”) and (vi) the number of shares of common stock that would result
in Gilead Sciences, Inc. holding 35% of the Issuer’s then-outstanding common stock
pursuant to a five-year option to purchase additional shares of common stock contained in
the Third Amended and Restated Purchase Agreement (the “Option Shares”).
Based upon 74,855,565 shares of common stock of the Issuer issued and outstanding on November 1,
2023, as reported in the Issuer’s Quarterly Report on Form 10-Q (the “Form 10-Q”)
filed with the Securities and Exchange Commission (the “SEC”) on November 7,
2023, and after giving effect to the offering of 15,238,095 shares of common stock of the
Issuer, as reported in the Form 8-K filed with the SEC on January 30, 2024, the
number of Option Shares is currently equal to 1,471,657. |
| (2) | Calculated based upon 90,093,660 shares of common stock of the Issuer
issued and outstanding, based on 74,855,565 shares of common stock of the Issuer issued and
outstanding on November 1, 2023, as reported in the Form 10-Q filed with the SEC
on November 7, 2023, and after giving effect to the offering of 15,238,095 shares of
common stock of the Issuer, as reported in the Form 8-K filed with the SEC on January 30,
2024, assuming the immediate exercise in full by Gilead of its option to purchase the Option
Shares. |
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| Item 1. | Security and Issuer |
This Amendment No. 3
to Schedule 13D (the “Schedule 13D”) relates to the common stock, par value $0.0001 per share (the “Common
Stock”), of Arcus Biosciences, Inc., a Delaware corporation (the “Issuer”). The Issuer’s principal
executive offices are located at 3928 Point Eden Way, Hayward, California 94545.
| Item 2. | Identity and Background |
(a) This
Schedule 13D is being filed by Gilead Sciences, Inc., a Delaware corporation (“Gilead” or the “Reporting
Person”).
(b) The
principal business address of the Reporting Person is 333 Lakeside Drive, Foster City, California 94404.
(c) The
principal business of the Reporting Person is to develop and commercialize innovative medicines in areas of unmet medical need and engage
in any other activity or business lawfully carried on by a corporation organized under the laws of the State of Delaware.
The directors and executive
officers of the Reporting Person are set forth on Schedule I, attached hereto. Schedule I sets forth the following information with respect
to each such person:
(i) name;
(ii) business
address;
(iii) position
with the Reporting Person and present principal occupation or employment and, for persons not employed by the Reporting Person, the name,
principal business and address of any corporation or other organization in which such employment is conducted; and
(iv) citizenship.
(d) – (e) During
the last five years, neither the Reporting Person nor any person named in Schedule I has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect
to such laws.
(f) The
jurisdiction of organization of the Reporting Person is set forth in subsection (a) above. The citizenship of each of the individuals
referred to in Schedule I is set forth on Schedule I.
| Item 3. | Source and Amount of Funds or Other Consideration |
Gilead acquired from the
Issuer 2,200,000 shares of Common Stock in the Issuer’s public offering (the “Public Offering”) at the public
offering price of $27.50 per share. The Public Offering was completed on June 2, 2020. The total consideration paid by Gilead for
these shares of Common Stock was $60,500,000, and such consideration was obtained from the available cash resources of Gilead.
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On May 27, 2020, Gilead
entered into the Purchase Agreement (as defined below) pursuant to which Gilead agreed to purchase an initial 5,963,029 shares of the
Issuer’s Common Stock (the “Initial Purchase”) at a purchase price of $33.54 per share (the “Initial
Purchase Price”), which purchase occurred on July 13, 2020. The total consideration for the Initial Purchase was $199,999,992.66,
and such consideration was obtained from the available cash resources of Gilead.
On January 31, 2021,
Gilead entered into the Amended and Restated Purchase Agreement (as defined below) pursuant to which Gilead agreed to purchase an additional
5,650,000 shares of the Issuer’s Common Stock (the “Second Purchase”) at a purchase price of $39.00 per share
(the “Second Purchase Price”), which purchase occurred on February 1, 2021. The total consideration for the Second
Purchase was $230,350,000.00, and such consideration was obtained from the available cash resources of Gilead.
On June 27, 2023, Gilead
entered into the Second Amended and Restated Purchase Agreement (as defined below) pursuant to which Gilead agreed to purchase an additional
1,010,000 shares of the Issuer’s Common Stock (the “Third Purchase”) at a purchase price of $19.26 per share
(the “Third Purchase Price”), which purchase occurred on June 28, 2023. The total consideration for the Third
Purchase was $19,452,600, and such consideration was obtained from the available cash resources of Gilead.
On January 29, 2024,
Gilead entered into the Third Amended and Restated Purchase Agreement (as defined below) pursuant to which Gilead agreed to purchase
an additional 15,238,095 shares of the Issuer’s Common Stock (the “Fourth Purchase”) at a purchase price of
$21.00 per share (the “Fourth Purchase Price”), which purchase occurred on January 29, 2024. The total consideration
for the Fourth Purchase was $320,000,000, and such consideration was obtained from the available cash resources of Gilead. Under the
Third Amended and Restated Purchase Agreement, Gilead also has the right, at its option, to purchase additional shares from the Issuer,
up to a maximum of 35% of the Issuer’s then-outstanding Common Stock, from time to time for a period of five years from the closing
of the Initial Purchase, at a purchase price equal to the greater of a 20% premium to market (based on a trailing five-day average closing
price) at the time Gilead exercises such option and the Initial Purchase Price. It is expected that the total consideration paid in connection
with any exercise of such option will be obtained from the available cash resources of Gilead. In addition, pursuant to the Amended and
Restated Investor Rights Agreement (as defined below), Gilead has the right to designate three individuals to be appointed to the Issuer’s
board of directors.
| Item 4. | Purpose of Transaction |
On May 27, 2020, Gilead
and the Issuer entered into an Option, License and Collaboration Agreement (the “Collaboration Agreement”) pursuant
to with Gilead obtained an exclusive option to acquire an exclusive license to all of the Issuer’s current and future clinical
programs during the 10-year collaboration term and, for those programs that enter clinical development prior to the end of the collaboration
term, for up to an additional three years thereafter.
In addition to the Collaboration
Agreement, Gilead and the Issuer entered into a Common Stock Purchase Agreement (the “Purchase Agreement”), which
was amended and restated on January 31, 2021 to account for the Second Purchase (the “Amended and Restated Purchase Agreement”),
on June 27, 2023 to account for the Third Purchase (the “Second Amended and Restated Purchase Agreement”), and
on January 29, 2024 to account for the Fourth Purchase (the “Third Amended and Restated Purchase Agreement”)
and an Investor Rights Agreement (as amended by Amendment No. 1 thereto, which was subsequently amended and restated on January 29,
2024, the “Amended and Restated Investor Rights Agreement” and, together with the Third Amended and Restated Purchase
Agreement, the “Equity Agreements”) pursuant to which Gilead made the Initial Purchase at the Initial Purchase Price,
the Second Purchase at the Second Purchase Price, the Third Purchase at the Third Purchase Price and the Fourth Purchase at the Fourth
Purchase Price. Gilead also has the right, at its option, to purchase additional shares from the Issuer, up to a maximum of 35% of the
Issuer’s then-outstanding Common Stock, from time to time for a period of five years from the closing of the Initial Purchase,
at a purchase price equal to the greater of a 20% premium to market (based on a trailing five-day average closing price) at the time
Gilead exercises such option and the Initial Purchase Price. The Equity Agreements also include standstill and lock-up provisions and
provide Gilead with certain other stock purchase and registration rights, as well as the right to designate three individuals to be appointed
to the Issuer’s board of directors.
The acquisitions by the Reporting
Person of the Issuer’s securities as described herein were effected in connection with entry into the Collaboration Agreement and
the Equity Agreements, and because of the belief that the securities of the Issuer represent an attractive investment. The foregoing
description of the Equity Agreements is not complete and is subject to and qualified in its entirety by reference to the full text of
such agreements. The Third Amended and Restated Purchase Agreement is attached hereto as Exhibit 99.1 and is incorporated herein
by reference. The Amended and Restated Investor Rights Agreement is attached hereto as Exhibit 99.2, and is incorporated herein
by reference.
Except as otherwise described
herein, the Reporting Person currently has no plan(s) or proposal(s) that relate to, or would result in, any of the events
or transactions described in Item 4(a) through (j) of Schedule 13D, although the Reporting Person reserves the right, at any
time and from time to time, to review or reconsider such position and/or change such purpose and/or formulate plans or proposals with
respect thereto.
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The Reporting Person intends
to review from time to time its investment in the Issuer and the Issuer’s business affairs, financial position, performance and
other investments considerations. The Reporting Person may from time to time engage in discussions with the Issuer, its directors and
officers, other stockholders of the Issuer and other persons on matters that relate to the management, operations, business, assets,
capitalization, financial condition, strategic plans, governance and the future of the Issuer and/or its subsidiaries. Based upon such
review and discussions, as well as general economic, market and industry conditions and prospectus and the Reporting Person’s liquidity
requirements and investment considerations, and subject to the limitations in the agreements described above, the Reporting Person may
consider additional courses of action, which may include, in the future, formulating plans or proposals regarding the Issuer and/or its
subsidiaries, including possible future plans or proposals concerning events or transactions of the kind described in Item 4(a) through
(j) of Schedule 13D.
| Item 5. | Interest in Securities of the Issuer |
(a)-(b)
Number of shares of Common Stock beneficially
owned:
Percent of class:
The number of shares of Common Stock beneficially
owned consists of (i) 2,200,000 shares of common stock of the Issuer purchased in the Issuer’s public offering that closed
on June 2, 2020, (ii) the initial purchase of 5,963,029 shares of Common Stock of the Issuer pursuant to the Purchase Agreement,
(iii) the subsequent purchase of 5,650,000 shares of Common Stock of the Issuer pursuant to the Amended and Restated Purchase Agreement,
(iv) the subsequent purchase of 1,010,000 shares of Common Stock of the Issuer pursuant to the Second Amended and Restated Purchase
Agreement, (v) the subsequent purchase of 15,238,095 shares of Common Stock of the Issuer pursuant to the Third Amended and Restated
Purchase Agreement and (vi) 1,471,657 Option Shares.
The percentage ownership was calculated based
upon 74,855,565 shares of Common Stock of the Issuer issued and outstanding on November 1, 2023, as reported in the Form 10-Q
filed with the SEC on November 7, 2023, and after giving effect to the offering of 15,238,095 shares of Common Stock of the Issuer,
as reported in the Form 8-K filed with the SEC on January 30, 2024, assuming the immediate exercise in full by Gilead of its
option to purchase the Option Shares.
Number of shares as to which such person has:
| (i) |
Sole power to vote or to direct the vote: |
| (ii) |
Shared power to vote or to direct the vote: |
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| (iii) |
Sole power to dispose or to direct the disposition
of: |
| (iv) |
Shared power to dispose or to direct the disposition
of: |
To the best knowledge of the Reporting Person, none of the individuals listed on Schedule I beneficially owns any of the Issuer’s
Common Stock.
(c) Except
as reported in this Schedule 13D, neither the Reporting Person nor, to the best knowledge of the Reporting Person, any of the individuals
listed on Schedule I have effected any transactions in the Common Stock during the past sixty (60) days.
(d) Not
applicable.
(e) Not
applicable.
| Item 6. | Contracts, Arrangements, Understandings or Relationship
with Respect to Securities of the Issuer |
Except as disclosed in Items
3 and 4 of this Schedule 13D, there are no contracts, arrangements, understandings or relationships (legal or otherwise) to which the
Reporting Person is a party with respect to the securities of the Issuer.
| Item 7. | Materials to Be Filed as Exhibits |
| Exhibit 99.1 |
Third
Amended and Restated Common Stock Purchase Agreement, dated January 29, 2024, between Arcus Biosciences, Inc. and Gilead
Sciences, Inc. |
| Exhibit 99.2 |
Amended
and Restated Investor Rights Agreement, dated January 29, 2024, between Arcus Biosciences, Inc. and Gilead Sciences, Inc. |
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SIGNATURE
After reasonable inquiry
and to the best of the undersigned’s knowledge and belief, the undersigned certifies that the information set forth in this statement
is true, complete and correct.
| Date: January 31, 2024 |
GILEAD SCIENCES, INC. |
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By: |
/s/ Andrew D. Dickinson |
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Name: Andrew D. Dickinson |
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Title: Executive Vice President and Chief Financial Officer |
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Schedule I
The name and present principal occupation of each
of the executive officers and directors of Gilead Sciences, Inc. are set forth below. Unless otherwise noted, each of these persons
have as their business address c/o Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, California 94404.
| Name |
Title |
Citizenship |
Principal
Occupation and, if
not employed by Gilead
Sciences, Inc., Name,
Principal Business and
Address of Employer |
| Daniel P.
O’Day |
Chief Executive Officer, Chairman and Director |
United States |
* |
| Jacqueline
K. Barton, Ph.D. |
Director |
United States |
Professor Emerita,
California Institute of Technology |
| Jeffrey A.
Bluestone, Ph.D. |
Director |
United States |
President and
Chief Executive Officer, Sonoma Biotherapeutics; Professor, University of California San Francisco |
| Sandra J.
Horning, M.D. |
Director |
United States |
Retired Chief
Medical Officer of Roche, Inc. |
| Kelly A.
Kramer |
Director |
United States |
Retired Executive
Vice President and Chief Financial Officer, Cisco Systems, Inc. |
| Kevin E.
Lofton, FACHE |
Director |
United States |
Retired Chief
Executive Officer, CommonSpirit Health |
| Harish Manwani |
Director |
Singapore |
Senior Operating
Partner, Blackstone |
| Javier J.
Rodriguez |
Director |
Mexico |
Chief Executive
Officer, DaVita, Inc. |
| Anthony Welters |
Director |
United States |
Chairman and
Chief Executive Officer, CINQ Care Inc. |
| Andrew D.
Dickinson |
Chief Financial Officer |
United States |
* |
| Johanna Mercier |
Chief Commercial Officer |
United States |
* |
| Merdad V.
Parsey, M.D., Ph.D. |
Chief Medical Officer |
United States |
* |
| Deborah H.
Telman |
Executive Vice President, Corporate Affairs
and General Counsel |
United States |
* |
* The present principal occupation for each of these individuals is
officer of Gilead Sciences, Inc. and officer, trustee and/or director of other affiliated entities.
Exhibit 99.1
[***] = CERTAIN INFORMATION HAS BEEN OMITTED
BECAUSE IT IS BOTH NOT MATERIAL AND IS OF THE TYPE THAT THE REPORTING PERSON CUSTOMARILY AND ACTUALLY TREATS AS PRIVATE OR CONFIDENTIAL
ARCUS BIOSCIENCES, INC.
THIRD AMENDED AND RESTATED COMMON STOCK PURCHASE
AGREEMENT
This Third Amended and Restated
Common Stock Purchase Agreement (this “Agreement”) is dated as of January 29, 2024, by and between Arcus Biosciences, Inc.,
a Delaware corporation (the “Company”), and Gilead Sciences, Inc., a Delaware corporation (“Gilead”).
This Agreement amends and restates in its entirety the Second Amended and Restated Common Stock Purchase Agreement entered into between
the Company and Gilead on June 27, 2023 (the “Existing Purchase Agreement”), which amended the Common Stock Purchase
Agreement, dated May 27, 2020, by and between the Company and Gilead (the “Original Agreement”), as previously
amended and restated on January 31, 2021.
WHEREAS, subject to
the terms and conditions set forth in this Agreement, the Company desires to issue and sell to Gilead, and Gilead desires to purchase
from the Company, shares of common stock of the Company as more fully described in this Agreement; and
WHEREAS, concurrently
with the initial execution of the Original Agreement, the Company and Gilead entered into an Option, License and Collaboration Agreement,
which was subsequently amended (as so amended, the “Collaboration Agreement”) and an Investor Rights Agreement (the
“Original Investor Rights Agreement”), which was subsequently amended; and
WHEREAS, concurrently
with the execution of this Agreement, the Company and Gilead are entering into an Amended and Restated Investor Rights Agreement, which
amends and restates the Original Investor Rights Agreement, as subsequently amended.
NOW, THEREFORE, in
consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the Company and Gilead agree as follows:
ARTICLE 1
DEFINITIONS
1.1. Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
1.1.1 “5-Day
Closing Price” means, for any date, (a) the sum of the “official closing price” (as defined by NYSE) of the
Common Stock for the period of five (5) consecutive Trading Days through and including such date, (b) divided by five (5),
and (c) rounded to two decimal places.
1.1.2 “Additional
Closing” has the meaning set forth in Section 2.3.5 hereof.
1.1.3 “Additional
Closing Date” has the meaning set forth in Section 2.3.5 hereof.
1.1.4 “Additional
Shares” means the shares of Common Stock subject to an Additional Shares Purchase Notice.
1.1.5 “Additional
Shares Purchase Notice” has the meaning set forth in Section 2.3.5 hereof.
1.1.6 “Additional
Shares Purchase Notice Date” means the date on which Gilead delivers an Additional Shares Purchase Notice to the Company.
1.1.7 “Additional
Shares Purchase Price” means, with respect to an Additional Closing, a price per share equal to the greater of (a) 120%
of the 5-Day Closing Price calculated on the Additional Shares Purchase Notice Date with respect to such Additional Closing and (b) the
Initial Shares Purchase Price.
1.1.8 “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control
with a Person.
1.1.9 “Aggregate
Additional Purchase Price” means, with respect to an Additional Closing, the dollar amount obtained by multiplying the number
of Additional Shares to be purchased at such Additional Closing by the applicable Additional Shares Purchase Price.
1.1.10 “Aggregate
Fourth Closing Purchase Price” means the dollar amount obtained by multiplying the number of shares of Common Stock constituting
the Fourth Closing Shares by the Fourth Closing Purchase Price.
1.1.11 “Aggregate
Initial Purchase Price” means the dollar amount obtained by multiplying the number of shares of Common Stock constituting the
Initial Shares by the Initial Shares Purchase Price.
1.1.12 “Aggregate
Second Closing Purchase Price” means the dollar amount obtained by multiplying the number of shares of Common Stock constituting
the Second Closing Shares by the Second Closing Purchase Price.
1.1.13 “Aggregate
Third Closing Purchase Price” means the dollar amount obtained by multiplying the number of shares of Common Stock constituting
the Third Closing Shares by the Third Closing Purchase Price.
1.1.14 “Anti-Corruption
Laws” has the meaning set forth in Section 3.1.17 hereof.
1.1.15 “Antitrust
Approval” means, as the context requires, any consent, approval, expiration or termination of any waiting period, or any other
authorization required under the applicable Antitrust Laws from any applicable Antitrust Authority to effect any of (a) Gilead’s
purchase of the Initial Shares, (b) Gilead’s purchase of the Second Closing Shares, (c) Gilead’s purchase of the
Third Closing Shares, (d) Gilead’s purchase of the Fourth Closing Shares, (e) Gilead’s purchase of Additional Shares
or (f) the transactions contemplated by the Collaboration Agreement or the Investor Rights Agreement.
1.1.16 “Antitrust
Authority” means any applicable Governmental Authority exercising authority with respect to any Antitrust Laws.
1.1.17 “Antitrust
Laws” means any applicable laws, rules and regulations, including any rules, regulations, guidelines or other requirements
of Governmental Authorities, governing merger control, competition, monopolies or restrictive trade practices, including the HSR Act
and the rules and regulations promulgated thereunder.
1.1.18 “Beneficial
Ownership” or “Beneficially Owns” shall have the meaning set forth in Rule 13d-3 under the Securities
Exchange Act.
1.1.19 “Business
Day” means a day other than (a) a Saturday or a Sunday, (b) a bank or other public holiday in California, United
States, (c) the Sunday through Saturday containing July 4th or (d) the period commencing on December 25th and ending
on January 1st (inclusive).
1.1.20 “Closing”
means, as applicable, the Initial Closing, the Second Closing, the Third Closing, the Fourth Closing or an Additional Closing.
1.1.21 “Closing
Date” means, as applicable, the Initial Closing Date, the Second Closing Date, the Third Closing Date, the Fourth Closing Date
or an applicable Additional Closing Date.
1.1.22 “Collaboration
Agreement” has the meaning set forth in the recitals.
1.1.23 “Commission”
means the United States Securities and Exchange Commission.
1.1.24 “Commission
Rule 144” means Rule 144 promulgated by the Commission under the Securities Act.
1.1.25 “Common
Stock” means the Company’s common stock, par value $0.0001 per share.
1.1.26 “Company
Capitalization” means, as of any date of measurement, the total number of outstanding shares of voting capital stock of the
Company.
1.1.27 “Control,”
including the terms “Controlling,” “Controlled by” and “under common Control with,”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting shares, by contract or otherwise.
1.1.28 “Cross-Receipt”
means a cross-receipt substantially in the form of Exhibit A hereto.
1.1.29 “Designated
Event” has the meaning set forth in Section 4.7.
1.1.30 “Designated
Event Notice” has the meaning set forth in Section 4.7.
1.1.31 “Disqualification
Event” has the meaning set forth in Section 3.1.20 hereof.
1.1.32 “DOJ”
has the meaning set forth in Section 2.4 hereof.
1.1.33 “Entity”
has the meaning set forth in Section 3.1.18(a) hereof.
1.1.34 “Evaluation
Date” has the meaning set forth in Section 3.1.9 hereof.
1.1.35 “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.1.36 “Exercise
Period” shall mean the period beginning on the Initial Closing Date and continuing until the fifth anniversary thereof.
1.1.37 “FDA”
has the meaning set forth in Section 3.1.12 hereof.
1.1.38 “Fourth
Closing” means the closing of the sale of the Fourth Closing Shares pursuant to Section 2.3.4 hereof.
1.1.39 “Fourth
Closing Date” has the meaning set forth in Section 2.3.4 hereof.
1.1.40 “Fourth
Closing Purchase Price” means $21.00 per share, subject to appropriate adjustments in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect to the Common Stock.
1.1.41 “Fourth
Closing Shares” means 15,238,095 shares of Common Stock, subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization with respect to the Common Stock prior to the Fourth Closing.
1.1.42 “FTC”
has the meaning set forth in Section 2.4 hereof.
1.1.43 “GAAP”
has the meaning set forth in Section 3.1.8(b) hereof.
1.1.44 “Governmental
Authority” means any multi-national, federal, state, local, municipal or other government authority of any nature (including
any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal, as
well as any securities exchange or securities exchange authority, including NYSE).
1.1.45 “HSR
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
1.1.46 “Individual”
has the meaning set forth in Section 3.1.18(a) hereof.
1.1.47 “Initial
Closing” means the closing of the sale of the Initial Shares pursuant to Section 2.3.1 hereof.
1.1.48 “Initial
Closing Date” has the meaning set forth in Section 2.3.1 hereof.
1.1.49 “Initial
Shares” means 5,963,029 shares of Common Stock, subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect to the Common Stock.
1.1.50 “Initial
Shares Purchase Price” means $33.54 per share, subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect to the Common Stock.
1.1.51 “Intellectual
Property” has the meaning set forth in Section 3.1.14 hereof.
1.1.52 “Issuer
Covered Person” has the meaning set forth in Section 3.1.20 hereof.
1.1.53 “Investor
Rights Agreement” means the Original Investor Rights Agreement, which has the meaning set forth in the recitals, as subsequently
amended.
1.1.54 “Law”
or “law” means any supranational, national, federal, state, regional, provincial, local or municipal constitution,
treaty, law, statute, ordinance, code, determination, principle of common law or any other requirement having the effect of law of any
Governmental Authority (including any rule, regulation, plan, injunction, judgment, order, award, decree, ruling, requirement, guidance,
policy or charge thereunder or related thereto), in each case as amended as of the date hereof, whether in the United States or a foreign
jurisdiction.
1.1.55 “Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, mortgage, claim, easement, right-of-way, option,
title retention agreement, preemptive right or other restriction.
1.1.56 “NYSE”
means the New York Stock Exchange.
1.1.57 “OFAC”
has the meaning set forth in Section 3.1.18(a) hereof.
1.1.58 “Permits”
has the meaning set forth in Section 3.1.12 hereof.
1.1.59 “Person”
means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization,
including a government or political subdivision, department or agency of a government.
1.1.60 “Required
Approvals” has the meaning set forth in Section 3.1.3 hereof.
1.1.61 “Sanctioned
Countries” has the meaning set forth in Section 3.1.18(a) hereof.
1.1.62 “Sanctions”
has the meaning set forth in Section 3.1.18(a) hereof.
1.1.63 “Second
Closing” means the closing of the sale of the Second Closing Shares pursuant to Section 2.3.2 hereof.
1.1.64 “Second
Closing Date” has the meaning set forth in Section 2.3.2 hereof.
1.1.65 “Second
Closing Purchase Price” means $39.00 per share, subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect to the Common Stock.
1.1.66 “Second
Closing Shares” means 5,650,000 shares of Common Stock, subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization with respect to the Common Stock.
1.1.67 “SEC
Report” means any report filed by the Company with the Commission under the Exchange Act.
1.1.68 “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.1.69 “Shares”
means the Initial Shares, the Second Closing Shares, the Third Closing Shares, Fourth Closing Shares and all Additional Shares.
1.1.70 “Third
Closing” means the closing of the sale of the Third Closing Shares pursuant to Section 2.3.3 hereof.
1.1.71 “Third
Closing Date” has the meaning set forth in Section 2.3.3 hereof.
1.1.72 “Third
Closing Purchase Price” means $19.26 per share, subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization with respect to the Common Stock.
1.1.73 “Third
Closing Shares” means 1,010,000 shares of Common Stock, subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization with respect to the Common Stock.
1.1.74 “Trading
Day” means a day on which NYSE is open for trading.
1.1.75 “Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market (or
any successors to any of the foregoing).
1.1.76 “Transfer
Agent” means Computershare Trust Company, N.A., with a mailing address of 150 Royall Street, Canton, Massachusetts 02021, or
any successor transfer agent of the Common Stock.
1.1.77 “Valid
Account Details” means, with respect to any bank account, the valid (a) name of bank, (b) bank address, (c) account
number and (d) ABA routing number.
ARTICLE 2
PURCHASE AND SALE OF SHARES
2.1. Purchase
of Shares. Subject to the terms and conditions of this Agreement, at the Initial Closing, the
Company will issue and sell to Gilead, and Gilead will purchase from the Company, the Initial Shares, at a price per share equal to the
Initial Shares Purchase Price, for an aggregate purchase price equal to the Aggregate Initial Purchase Price. Subject to the terms and
conditions of this Agreement, at the Second Closing, the Company will issue and sell to Gilead, and Gilead will purchase from the Company,
the Second Closing Shares, at a price per share equal to the Second Closing Purchase Price, for an aggregate purchase price equal to
the Aggregate Second Closing Purchase Price. Subject to the terms and conditions of this Agreement, at the Third Closing, the Company
will issue and sell to Gilead, and Gilead will purchase from the Company, the Third Closing Shares, at a price per share equal to the
Third Closing Purchase Price, for an aggregate purchase price equal to the Aggregate Third Closing Purchase Price. Subject to the terms
and conditions of this Agreement, at the Fourth Closing, the Company will issue and sell to Gilead, and Gilead will purchase from the
Company, the Fourth Closing Shares, at a price per share equal to the Fourth Closing Purchase Price, for an aggregate purchase price
equal to the Aggregate Fourth Closing Purchase Price. Subject to the terms and conditions of this Agreement, at each Additional Closing,
the Company will issue and sell to Gilead, and Gilead will purchase from the Company, the applicable Additional Shares, at a price per
share equal to the Additional Shares Purchase Price, for an aggregate purchase price equal to the Aggregate Additional Purchase Price
for such Additional Closing.
2.2. Payment.
At (a) the Initial Closing, Gilead will pay the Aggregate Initial Purchase Price, (b) the Second Closing, Gilead will pay the
Aggregate Second Closing Purchase Price, (c) the Third Closing, Gilead will pay the Aggregate Third Closing Purchase Price, (d) the
Fourth Closing, Gilead will pay the Aggregate Fourth Closing Purchase Price and (e) each Additional Closing, Gilead will pay the
applicable Aggregate Additional Purchase Price, in each case by wire transfer of immediately available funds in accordance with the Valid
Account Details, which Valid Account Details together with a Form W-9 will have been provided by the Company to Gilead at least
five (5) Business Days prior to the applicable Closing Date. The Company shall cause delivery of the applicable Shares at each Closing
to be made in book-entry form to an account of Gilead specified in writing by Gilead at the Transfer Agent.
2.3. Closings.
2.3.1 The
Initial Closing shall occur at 10:00 am (New York City time) on such date as the parties may select, not later than the third Business
Day after satisfaction or (to the extent permitted by law) waiver of the conditions set forth in Section 2.7 (Conditions
to the Initial Closing) (other than those conditions that by their terms are to be satisfied at the Initial Closing, but subject to the
satisfaction or (to the extent permitted by law) waiver of those conditions), unless such other place, time and date shall be agreed
in writing between the Company and Gilead (such date, the “Initial Closing Date”).
2.3.2 The
Second Closing shall occur at 10:00 am (New York City time) on such date as the parties may select, not later than the third Business
Day after satisfaction or (to the extent permitted by law) waiver of the conditions set forth in Section 2.8 (Conditions
to the Second Closing, Third Closing, Fourth Closing and each Additional Closing) (other than those conditions that by their terms are
to be satisfied at the Second Closing, but subject to the satisfaction or (to the extent permitted by law) waiver of those conditions),
unless such other place, time and date shall be agreed in writing between the Company and Gilead (such date, the “Second Closing
Date”).
2.3.3 The
Third Closing shall occur at 10:00 am (New York City time) on such date as the parties may select, not later than the third Business
Day after satisfaction or (to the extent permitted by law) waiver of the conditions set forth in Section 2.8 (Conditions
to the Second Closing, Third Closing, Fourth Closing and each Additional Closing) (other than those conditions that by their terms are
to be satisfied at the Third Closing, but subject to the satisfaction or (to the extent permitted by law) waiver of those conditions),
unless such other place, time and date shall be agreed in writing between the Company and Gilead (such date, the “Third Closing
Date”).
2.3.4 The
Fourth Closing shall occur at 10:00 am (New York City time) on such date as the parties may select, not later than the third Business
Day after satisfaction or (to the extent permitted by law) waiver of the conditions set forth in Section 2.8 (Conditions
to the Second Closing, Third Closing, Fourth Closing and each Additional Closing) (other than those conditions that by their terms are
to be satisfied at the Fourth Closing, but subject to the satisfaction or (to the extent permitted by law) waiver of those conditions),
unless such other place, time and date shall be agreed in writing between the Company and Gilead (such date, the “Fourth Closing
Date”).
2.3.5 At
any time and from time to time during the Exercise Period, Gilead shall have a right (but not the obligation) to purchase from the Company,
and the Company shall issue and sell to Gilead, Additional Shares, at the applicable Additional Shares Purchase Price. Gilead may exercise
this right (but not more than once in any period of 90 days; provided that, following the delivery of a Designated Event Notice,
Gilead may exercise this right at any time, without regard to such 90 day limitation) by giving written notice to the Company (each,
an “Additional Shares Purchase Notice”). Each Additional Shares Purchase Notice shall (a) set forth the applicable
Additional Closing Date and (b) specify the number of Additional Shares to be purchased on such Additional Closing Date; provided
that such number of Additional Shares, if purchased, would not cause, collectively, Gilead and its Controlled Affiliates to Beneficially
Own a number of shares of Common Stock greater than 35% of the Company Capitalization as of the applicable Additional Closing Date. The
Closing of each such sale of Additional Shares shall occur at 10:00 am (New York City time) as promptly as practicable following the
date of the Additional Shares Purchase Notice and not later than the third Business Day after satisfaction or (to the extent permitted
by law) waiver of the conditions set forth in Section 2.8 (Conditions to the Second Closing, Third Closing, Fourth Closing
and each Additional Closing) (other than those conditions that by their terms are to be satisfied at the Additional Closing, but subject
to the satisfaction or (to the extent permitted by law) waiver of those conditions), unless such other place, time and date shall be
agreed in writing between the Company and Gilead (each such date, an “Additional Closing Date,” and each such closing,
an “Additional Closing”). For clarity, Gilead may rescind or revoke an Additional Shares Purchase Notice at any time
in its sole discretion prior to the applicable Additional Closing Date.
2.4. Antitrust
Approvals. With respect to each proposed purchase of Second Closing Shares, Third Closing Shares,
Fourth Closing Shares or Additional Shares, Gilead shall determine, in its sole discretion, whether any Antitrust Approvals will or may
be required in connection with the proposed purchase of Shares, and shall hold the Company harmless from any claim that any purchase
was made without a required Antitrust Approval. Upon Gilead’s request, including any such request made prior to delivery of an
Additional Shares Purchase Notice, the Company shall promptly provide Gilead with information and assistance as may be reasonably necessary
for Gilead to make such determination. If Gilead determines that Antitrust Approvals are or may be required (or if additional information
is necessary for Gilead to make such a determination), Gilead shall so notify the Company in writing (together with the delivery of an
Additional Shares Purchase Notice, if applicable) and the parties shall provide each other promptly with information and assistance as
may be reasonably necessary and use reasonable efforts, in each case, promptly to obtain all required Antitrust Approvals for the consummation
of the applicable Closing and the transactions contemplated thereby and shall keep each other apprised of the status of any communications
with, and any inquiries or requests for information from, the Federal Trade Commission (“FTC”), Department of Justice
(“DOJ”) and any other applicable Antitrust Authority and shall respond promptly to any such inquiry or request; provided
that neither party shall be required to consent to the divestiture or other disposition of any of its or its Affiliates’ assets,
consent to any other structural or conduct remedy or otherwise restrict or limit its or its Affiliates’ freedom of action. Each
party shall cooperate with the other and use reasonable efforts to facilitate and expedite the identification and resolution of any such
issues and, consequently, the expiration of any applicable waiting period under Antitrust Laws. Such reasonable efforts and cooperation
shall include: (a) keeping each other promptly informed of all communications with and providing copies of all written communications,
from and to any Antitrust Authority, and sharing drafts of written submissions to any Antitrust Authority in advance of submission and
taking comments of the other into account in good faith; however, the parties may redact submissions for privilege and the parties also
may request that distribution of submissions be limited to outside counsel only and (b) conferring with each other regarding contacts
with and responses to, and permitting the other to participate in all meetings and video conferences or substantive telephone conversations
with, to the extent not prohibited by, the FTC, DOJ or other any other Antitrust Authority; provided that subject to its undertakings
and obligations under this Section 2.4 to take into consideration in good faith the Company’s views, suggestions and
comments regarding the strategy to be pursued for obtaining all required Antitrust Approvals, Gilead shall lead the strategy to obtain
all such approvals, and if there is a dispute between Gilead and the Company, the final determination as to the appropriate course of
action shall be made by Gilead. Each Party shall be responsible for its own costs and expenses associated with obtaining any required
Antitrust Approvals, but (i) Gilead shall be responsible for payment of all fees to any Antitrust Authority with respect to antitrust
filings made pursuant to the HSR Act or foreign antitrust law, and (ii) [***].
2.5. Initial
Closing Deliverables.
2.5.1 At
the Initial Closing, the Company will deliver to Gilead:
| (a) | a duly executed Cross-Receipt with respect
to the Initial Shares; |
| (b) | a duly executed Investor Rights Agreement; |
| (c) | a certificate in form and substance reasonably
satisfactory to Gilead and duly executed on behalf of the Company by an authorized officer
of the Company, certifying that the conditions to the Initial Closing set forth in Sections
2.7.1(a) and (b) of this Agreement have been fulfilled; and |
| (d) | a certificate of the secretary of the Company
dated as of the Initial Closing Date certifying that attached thereto is a true and complete
copy of all resolutions adopted by the Company’s board of directors authorizing the
execution, delivery and performance of this Agreement and the transactions contemplated herein
and that all such resolutions are in full force and effect and are all the resolutions adopted
in connection with the transactions contemplated hereby as of the Initial Closing Date. |
2.5.2 At
the Initial Closing, Gilead will deliver to the Company:
| (a) | a duly executed Cross-Receipt with respect
to the Initial Shares; |
| (b) | a duly executed Investor Rights Agreement;
and |
| (c) | a certificate in form and substance reasonably
satisfactory to the Company and duly executed on behalf of Gilead by an authorized officer
of Gilead, certifying that the conditions to the Closing set forth in Sections 2.7.2(a) and
(b) of this Agreement have been fulfilled. |
2.6. Second
Closing, Third Closing, Fourth Closing and Additional Closing Deliverables.
2.6.1 At
the Second Closing, Third Closing, Fourth Closing and each Additional Closing, the Company will deliver to Gilead:
| (a) | a duly executed Cross-Receipt with respect
to the applicable Shares; |
| (b) | a certificate in form and substance reasonably
satisfactory to Gilead and duly executed on behalf of the Company by an authorized officer
of the Company, certifying that the conditions to such Closing set forth in Sections 2.8.1(a) and
(b) of this Agreement have been fulfilled; |
| (c) | evidence that the Company has delivered
to the Transfer Agent irrevocable written instructions to issue the applicable Shares to
Gilead in a form and substance acceptable to the Transfer Agent; and |
| (d) | a certificate of the secretary of the Company
dated as of such Closing certifying that attached thereto is a true and complete copy of
all resolutions adopted by the Company’s board of directors authorizing the execution,
delivery and performance of this Agreement and the transactions contemplated herein and that
all such resolutions are in full force and effect and are all the resolutions adopted in
connection with the transactions contemplated hereby as of the such Closing Date. |
2.6.2 At
the Second Closing, Third Closing, Fourth Closing and each Additional Closing, Gilead will deliver to the Company:
| (a) | a duly-executed Cross-Receipt with respect
to the applicable Shares; and |
| (b) | a certificate in form and substance reasonably
satisfactory to the Company and duly executed on behalf of Gilead by an authorized officer
of Gilead, certifying that the conditions to such Closing set forth in Sections 2.8.2(a) and
(b) of this Agreement have been fulfilled. |
2.7. Conditions
to the Initial Closing.
2.7.1 The
obligations of Gilead hereunder in connection with the Initial Closing are subject to the following conditions being satisfied or waived:
| (a) | The representations and warranties of the
Company set forth in Section 3.1 hereof shall be true and correct as of the Initial
Closing Date in all material respects. |
| (b) | The Company shall have complied in all material
respects with its covenants hereunder as of the Initial Closing Date. |
| (c) | The Company shall have duly executed and
delivered the Collaboration Agreement, such agreement shall continue to be in full force
and effect and the Effective Date (under and as defined therein) shall have occurred (or
shall occur simultaneously with the Initial Closing). |
| (d) | The Company shall have duly executed and
delivered the Investor Rights Agreement. |
| (e) | All required Antitrust Approvals under the
HSR Act for Gilead’s purchase of the Initial Shares and the transactions contemplated
by the Collaboration Agreement and the Investor Rights Agreement shall have been obtained. |
| (f) | The issuance and sale of the Initial Shares
shall not result in a breach of Law. |
| (g) | All closing deliverables as required under
Section 2.5.1 shall have been delivered by the Company to Gilead. |
| (h) | No proceeding challenging this Agreement
or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially
delay the Initial Closing, shall have been instituted or be pending before any Governmental
Authority. |
| (i) | The Company shall have delivered to the
Transfer Agent irrevocable written instructions to issue the Initial Shares to Gilead in
a form and substance acceptable to the Transfer Agent. |
| (j) | NYSE shall have raised no objection to the
consummation of the transactions contemplated by this Agreement (including the issuance of
Additional Shares hereunder), the Investor Rights Agreement and the Collaboration Agreement
in the absence of stockholder approval of such transactions. |
2.7.2 The
obligations of the Company hereunder in connection with the Initial Closing are subject to the following conditions being satisfied or
waived:
| (a) | The representations and warranties of Gilead
set forth in Section 3.2 hereof shall be true and correct as of the Initial Closing
Date in all material respects. |
| (b) | Gilead shall have duly executed and delivered
the Collaboration Agreement, such agreement shall continue to be in full force and effect
and the Effective Date (under and as defined therein) shall have occurred (or shall occur
simultaneously with the Initial Closing). |
| (c) | Gilead shall have duly executed and delivered
the Investor Rights Agreement. |
| (d) | All required Antitrust Approvals under the
HSR Act for Gilead’s purchase of the Initial Shares and the transactions contemplated
by the Collaboration Agreement and the Investor Rights Agreement shall have been obtained. |
| (e) | The issuance and sale of the Initial Shares
shall not result in a breach of Law. |
| (f) | All closing deliverables required under
Section 2.5.2 shall have been delivered by Gilead to the Company. |
| (g) | No proceeding challenging this Agreement
or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially
delay the applicable Closing, shall have been instituted or be pending before any Governmental
Authority. |
2.8. Conditions
to the Second Closing, Third Closing, Fourth Closing and each Additional Closing.
2.8.1 The
obligations of Gilead hereunder in connection with the Second Closing, Third Closing, Fourth Closing and each Additional Closing are
subject to the following conditions being satisfied or waived:
| (a) | The representations and warranties of the
Company set forth in Sections 3.1.1(Organization and Qualification), 3.1.2
(Authorization; Enforcement), 3.1.3 (No Conflicts; Filings, Consents and Approvals),
3.1.4 (Issuance of Shares), 3.1.5 (Material Changes; Undisclosed Events, Liabilities
or Developments), 3.1.6 (No General Solicitation), 3.1.7 (Private Placement)
and 3.1.21 (No Integration) hereof, and, with respect to the Fourth Closing, 3.1.10(e) (Capitalization)
shall be true and correct as of such Closing Date in all material respects. |
| (b) | The Company shall have complied in all material
respects with its covenants hereunder as of such Closing Date. |
| (c) | Each of the Collaboration Agreement (without
regard to any partial termination thereunder) and the Investor Rights Agreement shall continue
to be in full force and effect. |
| (d) | All required Antitrust Approvals for Gilead’s
purchase of the applicable Shares and the transactions contemplated by the Collaboration
Agreement and the Investor Rights Agreement shall have been obtained. |
| (e) | The issuance and sale of the applicable
Shares shall not result in a breach of Law. |
| (f) | All closing deliverables as required under
Section 2.6.1 shall have been delivered by the Company to Gilead. |
| (g) | No proceeding challenging this Agreement
or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially
delay the applicable Closing, shall have been instituted or be pending before any Governmental
Authority. |
| (h) | With respect to the Fourth Closing and any
Additional Closing, NYSE shall have raised no objection to the consummation of the transactions
contemplated by this Agreement (including the issuance of Additional Shares hereunder), the
Investor Rights Agreement and the Collaboration Agreement in the absence of stockholder approval
of such transactions. |
2.8.2 The
obligations of the Company hereunder in connection with the Second Closing, Third Closing, Fourth Closing and each Additional Closing
are subject to the following conditions being satisfied or waived:
| (a) | The representations and warranties of Gilead
set forth in Section 3.2 hereof shall be true and correct as of such Closing
Date in all material respects. |
| (b) | Gilead shall have complied in all material
respects with its covenants hereunder as of such Closing Date. |
| (c) | Each of the Collaboration Agreement (without
regard to any partial termination thereunder) and the Investor Rights Agreement shall continue
to be in full force and effect. |
| (d) | All required Antitrust Approvals for Gilead’s
purchase of the applicable Shares and the transactions contemplated by the Collaboration
Agreement and the Investor Rights Agreement shall have been obtained. |
| (e) | The issuance and sale of the applicable
Shares shall not result in a breach of Law. |
| (f) | All closing deliverables required under
Section 2.6.2 shall have been delivered by Gilead to the Company. |
| (g) | No proceeding challenging this Agreement
or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially
delay the applicable Closing, shall have been instituted or be pending before any Governmental
Authority. |
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1. Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties
to Gilead as of the date hereof, as of the Initial Closing Date and, with respect to the representations and warranties set forth in
Sections 3.1.1, 3.1.2, 3.1.3, 3.1.4, 3.1.5, 3.1.6, 3.1.7 and 3.1.21 also as of
the Second Closing Date, Third Closing Date, Fourth Closing Date and any Additional Closing Date, and, with respect to the representations
and warranties set forth in Section 3.10(e) also as of the Fourth Closing Date (except, in each case, for the representations
and warranties that speak as of a specific date, which shall be made as of such date).
3.1.1 Organization
and Qualification. The Company and each of its subsidiaries are duly organized, validly existing as a corporation and in good standing
under the laws of their respective jurisdictions of organization. The Company and each of its subsidiaries are duly licensed or qualified
as a foreign corporation for transaction of business and in good standing under the laws of each other jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses requires such license or qualification, and have all corporate
power and authority necessary to own or hold their respective properties and to conduct their respective businesses as described in the
SEC Reports (defined below), except where the failure to be so qualified or in good standing or have such power or authority would not,
individually or in the aggregate, reasonably be expected to have a material adverse effect.
3.1.2 Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and
the consummation by it of the transactions contemplated hereby (including the issuance and sale of the Shares by the Company) have been
duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Company’s
Board of Directors or the Company’s stockholders in connection herewith other than the Required Approvals (as defined below). This
Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance with its terms, except (a) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally and (b) insofar as indemnification and contribution provisions may be limited by
applicable law.
3.1.3 No
Conflicts; Filings, Consents and Approvals. The execution, delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby (including the issuance of the Shares) will not (i) conflict with or result
in a violation of any provision of the Company’s Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws,
each as in effect on the date hereof, (ii) violate or conflict with, or result in a breach of any provision of, or constitute a
default under, any agreement, indenture, or instrument to which the Company is a party, or (iii) result in a violation of any Law
applicable to the Company, except in the case of clauses (ii) and (iii) only, for such conflicts, breaches, defaults,
and violations as would not reasonably be expected to have, a material adverse effect on the Company or result in a liability for Gilead.
The Company is not required to obtain any consent, waiver, approval, authorization or order of, give any notice to, or make any filing
or registration with, any court or other federal, state, local or other Governmental Authority or other Person in the United States in
connection with the execution, delivery and performance by the Company of this Agreement (including the offer, sale or issuance of the
Shares by the Company), other than the obtaining of the Antitrust Approvals and the listing of the Shares on the NYSE, or as may be required
under applicable state securities laws or the by-laws and rules of the Financial Industry Regulatory Authority (collectively, the
“Required Approvals”).
3.1.4 Issuance
of Shares. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be validly issued,
fully paid and nonassessable, free and clear of all Liens, other than restrictions on transferability under the Investor Rights Agreement
and applicable federal securities laws. The Shares are not and will not be subject to any preemptive rights held by any holders of any
security of the Company or any similar contractual rights granted by the Company to any Person.
3.1.5 Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the audited financial statements included within the
Company’s Annual Report on Form 10-K, filed with the Commission on March 5, 2020, except as specifically disclosed in
a subsequent SEC Report, there has been no event, occurrence or development that has had or that could reasonably be expected to, either
individually or in the aggregate, have a material adverse effect on the business, condition (financial or other), assets, liabilities
or results of operations of the Company, taken as a whole.
3.1.6 No
General Solicitation. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the Shares.
3.1.7 Private
Placement. Neither the Company nor any Person acting on its behalf, has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under any circumstances that would require registration of the Shares under the
Securities Act. Subject to the accuracy of the representations made by Gilead in Section 3.2, the Shares will be issued and
sold to Gilead in compliance with applicable exemptions from the registration and prospectus delivery requirements of the Securities
Act and the registration and qualification requirements of all applicable securities Laws of the states of the United States. The Company
has not engaged any brokers, finders or agents, or incurred, or will incur, directly or indirectly, any liability for brokerage or finder’s
fees or agents’ commissions or any similar charges in connection with this Agreement and the transactions contemplated hereby,
other than brokerage or finder’s fees or agent’s commissions or similar charges for which the Company is wholly responsible.
3.1.8 SEC
Reports, Financial Statements.
| (a) | The Common Stock is registered pursuant
to Section 12(b) or 12(g) of the Exchange Act. The Company has delivered or
made available (by filing on the Commission’s electronic data gathering and retrieval
system (EDGAR)) to Gilead complete copies of its SEC Reports since March 14, 2018. As
of its date, each SEC Report complied in all material respects with the requirements of the
Exchange Act, and other Laws applicable to it, and, as of its date, such SEC Report did not
contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No inquiries or any other investigation
conducted by or on behalf of Gilead or its representatives or counsel will modify, amend
or affect Gilead’s right to rely on the truth, accuracy and completeness of the SEC
Reports and the Company’s representations and warranties contained in this Agreement. |
| (b) | The financial statements, together with
the related notes and schedules, of the Company included in the SEC Reports comply as to
form in all material respects with all applicable accounting requirements and the published
rules and regulations of the Commission and all other applicable rules and regulations
with respect thereto. Such financial statements, together with the related notes and schedules,
have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”)
applied on a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be condensed or summary
statements), and fairly present in all material respects the financial condition of the Company
and its consolidated subsidiaries as of the dates thereof and the results of operations and
cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). |
| (c) | The Common Stock is listed on NYSE, and
the Company has taken no action designed to, or that to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange Act or delisting
the Common Stock from NYSE. As of the date of this Agreement, the Company has not received
any notification that, and has no knowledge that, the Commission or NYSE is contemplating
terminating such registration or listing. |
3.1.9 Disclosure
Controls. The Company and each of its subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable
assurance that (a) transactions are executed in accordance with management’s general or specific authorizations; (b) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability;
(c) access to assets is permitted only in accordance with management’s general or specific authorization; and (d) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company’s internal control over financial reporting is effective and the Company is not aware of
any material weaknesses in its internal control over financial reporting. Since the date of the latest audited financial statements of
the Company, there has been no change in the Company’s internal control over financial reporting that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure
controls and procedures to ensure that material information relating to the Company and each of its subsidiaries is made known to the
certifying officers by others within those entities, particularly during the period in which the Company’s Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated
the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing date of the
Form 10-K for the fiscal year most recently ended (such date, the “Evaluation Date”). The Company presented in
its Form 10-K for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the Evaluation Date and the disclosure controls and procedures are
effective. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Securities Act) or, to the Company’s knowledge, in other factors that could
significantly affect the Company’s internal controls.
3.1.10 Capitalization
and Voting Rights.
| (a) | The authorized capital of the Company as
of the date hereof consists of: (i) 400,000,000 shares of Common Stock of which, as
of May 22, 2020, (A) 46,055,395 shares were issued and outstanding, (B) 13,156,900
shares were reserved for issuance pursuant to the Company’s equity incentive plans
(including its stock purchase plan) described in the SEC Reports, and (C) 7,087,512
shares were issuable upon the exercise of stock options outstanding, and (ii) 10,000,000
shares of designated preferred stock, of which no shares are issued and outstanding as of
the date of this Agreement. All of the issued and outstanding shares of Common Stock (1) have
been duly authorized and validly issued, (2) are fully paid and non-assessable and (3) were
issued in compliance with all applicable federal and state securities Laws and not in violation
of any preemptive rights. |
| (b) | All of the authorized shares of Common Stock
are entitled to one (1) vote per share. |
| (c) | Except as described or referred to in the
SEC Reports, as of the date hereof, there were not: (i) any outstanding equity securities,
options, warrants, rights (including conversion or preemptive rights) or other agreements
pursuant to which the Company is or may become obligated to issue, sell or repurchase any
shares of its capital stock or any other securities of the Company other than equity securities
that may have been granted pursuant to its equity incentive plans, which plans are described
in the SEC Reports; or (ii) any restrictions on the transfer of capital stock of the
Company other than pursuant to federal or state securities Laws or as set forth in this Agreement. |
| (d) | The Company is not a party to or subject
to any agreement or understanding relating to the voting of shares of capital stock of the
Company or the giving of written consents by a stockholder or director of the Company. |
| (e) | The authorized capital of the Company as
of the date hereof consists of (i) 400,000,000 shares of Common Stock of which, as of
January 18, 2024, (A) 75,519,859 shares were issued and outstanding, (B) 9,368,303
shares were reserved for issuance pursuant to the Company’s equity incentive plans
(including its stock purchase plan) described in the SEC Reports, and (C) 13,461,424
shares were issuable upon the exercise of stock options outstanding (D) 1,546,921 shares
were issuable upon the vesting of outstanding restricted stock units and (ii) 10,000,000
shares of designated preferred stock, of which no shares are issued and outstanding as of
the date of this Agreement. All of the issued and outstanding shares of Common Stock (1) have
been duly authorized and validly issued, (2) are fully paid and non-assessable and (3) were
issued in compliance with all applicable federal and state securities Laws and not in violation
of any preemptive rights. |
3.1.11 Litigation.
There are no actions, suits or proceedings by or before any Governmental Authority pending, nor, to the Company’s knowledge, any
audits or investigations by or before any Governmental Authority to which the Company or any of its subsidiaries is a party or to which
any property of the Company or any of its subsidiaries is the subject that, individually or in the aggregate, would reasonably be expected
to have a material adverse effect and, to the Company’s knowledge, no such actions, suits, proceedings, audits or investigations
are threatened or contemplated by any Governmental Authority or threatened by others; and (a) there are no current or pending audits
or investigations, actions, suits or proceedings by or before any Governmental Authority that are required under the Securities Act to
be described in the SEC Reports that are not so described; and (b) there are no contracts or other documents that are required under
the Securities Act to be filed as exhibits to the SEC Reports that are not so filed.
3.1.12 Consents
and Permits. The Company and its subsidiaries have made all filings, applications and submissions required by, possesses and is operating
in compliance with, all approvals, licenses, certificates, certifications, clearances, consents, grants, exemptions, marks, notifications,
orders, permits and other authorizations issued by, the appropriate federal, state or foreign Governmental Authority (including, without
limitation, the United States Food and Drug Administration (the “FDA”), the United States Drug Enforcement Administration
or any other foreign, federal, state, provincial, court or local government or regulatory authorities including self-regulatory organizations
engaged in the regulation of clinical trials, pharmaceuticals, biologics or biohazardous substances or materials) necessary for the ownership
or lease of their respective properties or to conduct its businesses as described in the SEC Reports (collectively, “Permits”),
except for such Permits the failure of which to possess, obtain or make the same would not reasonably be expected to have a material
adverse effect; the Company and its subsidiaries are in compliance with the terms and conditions of all such Permits, except where the
failure to be in compliance would not reasonably be expected to have a material adverse effect; all of the Permits are valid and in full
force and effect, except where any invalidity, individually or in the aggregate, would not be reasonably expected to have a material
adverse effect; and neither the Company nor any of its subsidiaries has received any written notice relating to the limitation, revocation,
cancellation, suspension, modification or non-renewal of any such Permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to have a material adverse effect, or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the ordinary course. To the extent required by applicable laws and
regulations of the FDA, the Company or the applicable subsidiary has submitted to the FDA an Investigational New Drug Application or
amendment or supplement thereto for each clinical trial it has conducted or sponsored or is conducting or sponsoring; all such submissions
were in material compliance with applicable laws and rules and regulations when submitted and no material deficiencies have been
asserted by the FDA with respect to any such submissions.
3.1.13 Regulatory
Filings. Neither the Company nor any of its subsidiaries has failed to file with the applicable Governmental Authorities (including,
without limitation, the FDA, or any foreign, federal, state, provincial or local Governmental Authority performing functions similar
to those performed by the FDA) any required filing, declaration, listing, registration, report or submission, except for such failures
that, individually or in the aggregate, would not have a material adverse effect; all such filings, declarations, listings, registrations,
reports or submissions were in compliance with applicable laws when filed and no deficiencies have been asserted by any applicable regulatory
authority with respect to any such filings, declarations, listings, registrations, reports or submissions, except for any deficiencies
that, individually or in the aggregate, would not reasonably be expected to have a material adverse effect. The Company has operated
and currently is, in all material respects, in compliance with the United States Federal Food, Drug, and Cosmetic Act, all applicable
rules and regulations of the FDA and other federal, state, local and foreign Governmental Authority exercising comparable authority.
The Company has no knowledge of any studies, tests or trials not described in the SEC Reports the results of which reasonably call into
question in any material respect the results of the studies, tests and trials described in the SEC Reports.
3.1.14 Intellectual
Property. The Company and its subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent
applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, Internet domain names, know-how and other intellectual property (collectively, the “Intellectual Property”),
necessary for the conduct of their respective businesses as now conducted except to the extent that the failure to own, possess, license
or otherwise hold adequate rights to use such Intellectual Property would not, individually or in the aggregate, have a material adverse
effect. (a) There are no rights of third parties to any such Intellectual Property owned by the Company and its subsidiaries; (b) to
the Company’s knowledge, there is no infringement by third parties of any such Intellectual Property; (c) there is no pending
or, to the Company’s knowledge, threatened, action, suit, proceeding or claim by others challenging the Company’s and its
subsidiaries’ rights in or to any such Intellectual Property, and the Company is unaware of any facts which could form a reasonable
basis for any such action, suit, proceeding or claim; (d) there is no pending or, to the Company’s knowledge, threatened,
action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property; (e) there is no
pending or, to the Company’s knowledge, threatened, action, suit, proceeding or claim by others that the Company and its subsidiaries
infringe or otherwise violate any patent, trademark, copyright, trade secret or other proprietary rights of others; (f) to the Company’s
knowledge, there is no third-party U.S. patent or published U.S. patent application which contains claims for which an Interference Proceeding
(as defined in 35 U.S.C. § 135) has been commenced against any patent or patent application described in the SEC Reports as being
owned by or licensed to the Company; and (g) the Company and its subsidiaries have complied with the terms of each agreement pursuant
to which Intellectual Property has been licensed to the Company or such subsidiary, and all such agreements are in full force and effect,
except, in the case of any of clauses (a)-(g) above, for any such infringement by third parties or any such pending or threatened
suit, action, proceeding or claim as would not, individually or in the aggregate, result in a material adverse effect.
3.1.15 Clinical
Studies. The preclinical studies and tests and clinical trials described in the SEC Reports were, and, if still pending, are being
conducted in all material respects in accordance with the experimental protocols, procedures and controls pursuant to, where applicable,
accepted professional and scientific standards for products or product candidates comparable to those being developed by the Company;
the descriptions of such studies, tests and trials, and the results thereof, contained in the SEC Reports are accurate and complete in
all material respects; the Company is not aware of any tests, studies or trials not described in the SEC Reports, the results of which
reasonably call into question the results of the tests, studies and trials described in the SEC Reports; and the Company has not received
any written notice or correspondence from the FDA or any foreign, state or local Governmental Authority exercising comparable authority
or any institutional review board or comparable authority requiring the termination, suspension, clinical hold or material modification
of any tests, studies or trials.
3.1.16 Sarbanes-Oxley.
There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities
as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley Act and the rules and regulations
promulgated thereunder. Each of the principal executive officer and the principal financial officer of the Company (or each former principal
executive officer of the Company and each former principal financial officer of the Company as applicable) has made all certifications
required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements and other documents
required to be filed by it or furnished by it to the Commission. For purposes of the preceding sentence, “principal executive officer”
and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.
3.1.17 No
Improper Practices. (a) Neither the Company nor and of its subsidiaries, nor any director, officer, or employee of the Company
or any subsidiary nor, to the Company’s knowledge, any agent, Affiliate or other Person acting on behalf of the Company or any
subsidiary has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to
disclose any contribution in violation of applicable law) or made any contribution or other payment to any official of, or candidate
for, any federal, state, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of
any applicable law or of the character required to be disclosed in the SEC Reports; (b) no relationship, direct or indirect, exists
between or among the Company or any subsidiary or any affiliate of any of them, on the one hand, and the directors, officers and stockholders
of the Company or any subsidiary, on the other hand, that is required by the Securities Act to be described in the SEC Reports that is
not so described; (c) no relationship, direct or indirect, exists between or among the Company or any Subsidiary or any affiliate
of them, on the one hand, and the directors, officers, or stockholders of the Company or any subsidiary, on the other hand, that is required
by the rules of the Financial Industry Regulatory Authority to be described in the SEC Reports that is not so described; (d) there
are no material outstanding loans or advances or material guarantees of indebtedness by the Company or any subsidiary to or for the benefit
of any of their respective officers or directors or any of the members of the families of any of them; and (e) the Company has not
offered, or caused any placement agent to offer, Common Stock to any person with the intent to influence unlawfully (i) a customer
or supplier of the Company or any subsidiary to alter the customer’s or supplier’s level or type of business with the Company
or any subsidiary or (ii) a trade journalist or publication to write or publish favorable information about the Company or any subsidiary
or any of their respective products or services, and, (f) neither the Company nor any subsidiary nor any director, officer or employee
of the Company or any subsidiary nor, to the Company’s knowledge, any agent, affiliate or other person acting on behalf of the
Company or any subsidiary has (i) violated or is in violation of any applicable provision of the U.S. Foreign Corrupt Practices
Act of 1977, as amended, or any other applicable anti-bribery or anti-corruption law (collectively, “Anti-Corruption Laws”),
(ii) illegally promised, offered, provided, attempted to provide or authorized the provision of anything of value, directly or indirectly,
to any person for the purpose of obtaining or retaining business, influencing any act or decision of the recipient, or securing any improper
advantage; or (iii) made any payment of funds of the Company or any subsidiary or received or retained any funds in violation of
any Anti-Corruption Laws.
3.1.18 Sanctions.
| (a) | The Company represents that, neither the
Company nor any of its subsidiaries (collectively, the “Entity”) or any
director, officer, employee, agent, affiliate or representative of the Entity, is a government,
individual, or entity (an “Individual”) that is, or is owned or controlled
by an Individual that is: |
| a. | the subject of any sanctions administered
or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”),
the United Nations Security Council, the European Union, Her Majesty’s Treasury, or
other relevant sanctions authorities, including, without limitation, designation on OFAC’s
Specially Designated Nationals and Blocked Persons List or OFAC’s Foreign Sanctions
Evaders List (as amended, collectively, “Sanctions”), nor |
| b. | located, organized or resident in a country
or territory that is the subject of Sanctions that broadly prohibit dealings with that country
or territory (including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and
the Crimea Region of the Ukraine) (the “Sanctioned Countries”)). |
| (b) | The Entity represents and covenants that
it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture partner or other
Individual: |
| a. | to fund or facilitate any activities
or business of or with any Individual or in any country or territory that, at the time of
such funding or facilitation, is the subject of Sanctions or is a Sanctioned Country; or |
| b. | in any other manner that will result in a violation of Sanctions
by any Individual (including any Individual participating in the offer and sale of the Shares,
whether as underwriter, advisor, investor or otherwise). |
| (c) | The Entity represents and covenants that
for the past five (5) years, it has not engaged in, is not now engaging in, and will
not engage in, any dealings or transactions with any Individual, or in any country or territory,
that at the time of the dealing or transaction is or was the subject of Sanctions or is or
was a Sanctioned Country. |
3.1.19 Not
an Investment Company. Neither the Company nor any of its subsidiaries is or, after giving effect to the offering and sale of the
Shares, will be, an “investment company” or an entity “controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as amended.
3.1.20 No
Disqualification Events. None of the Company, any of its predecessors, any Affiliated issuer, any director, executive officer, other
officer of the Company participating in the offering of the Shares contemplated by this Agreement, or to the Company’s knowledge,
any Beneficial Owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power,
nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the
time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject
to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities
Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
3.1.21 No
Integration. The Company has not, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any security (as defined in the Securities Act) that is or will be integrated with the Shares sold pursuant to this Agreement
in a manner that would require the registration of the Shares under the Securities Act.
3.1.22 Tax
Matters. Since January 1, 2019, the Company and each of its subsidiaries have timely prepared and filed all material tax returns
required to have been filed by them with all appropriate Governmental Authorities and timely paid all taxes shown thereon, except as
currently being contested in good faith and for which adequate reserves have been created in the financial statements of the Company,
if such reserves are determined to be necessary or advisable by the Company. Since January 1, 2019, the charges, accruals and reserves
on the books of the Company in respect of taxes for all fiscal periods have been and are adequate, and there are no unpaid assessments
against the Company or any of its subsidiaries nor any basis for the assessment of any additional taxes, penalties or interest for any
fiscal period or audits by any federal, state or local taxing authority, except as would not, individually or in the aggregate, have
a material adverse effect. All taxes and other assessments and levies that the Company or any of its subsidiaries is required to withhold
or to collect for payment have been duly withheld and collected and paid to the proper Governmental Authority or third party when due,
except as would not, individually or in the aggregate, have a material adverse effect. There are no tax liens or claims pending or, to
the Company’s knowledge, threatened, against the Company or its of its subsidiaries or any of their assets or properties, except
as would not, individually or in the aggregate, have a material adverse effect.
3.2. Representations
and Warranties of Gilead. Gilead hereby represents and warrants as of the date hereof and as
of each Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such
date):
3.2.1 Organization;
Authority. Gilead is duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with all requisite
power and authority to own, lease, operate and use its properties and assets and to carry on its business as currently conducted and
as it is presently proposed to be conducted.
3.2.2 Authorization;
Enforcement. Gilead has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by Gilead and the
consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Gilead and
no further action is required by Gilead, Gilead’s Board of Directors or Gilead’s stockholders in connection herewith other
than the Required Approvals. This Agreement has been duly executed by Gilead and, when delivered in accordance with the terms hereof
and thereof, will constitute the valid and binding obligation of Gilead enforceable against Gilead in accordance with its terms, except
(a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally and (b) insofar as indemnification and contribution
provisions may be limited by applicable law.
3.2.3 No
Conflicts; Filings, Consents and Approvals. The execution, delivery and performance of this Agreement by Gilead and the consummation
by Gilead of the transactions contemplated hereby will not (i) conflict with or result in a violation of any provision of the Gilead’s
Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, each as in effect on the date hereof, (ii) violate
or conflict with, or result in a breach of any provision of, or constitute a default under, any agreement, indenture, or instrument to
which the Gilead is a party, or (iii) result in a violation of any Law applicable to Gilead, except in the case of clauses (ii) and
(iii) only, for such conflicts, breaches, defaults, and violations as would not reasonably be expected to result in a liability
for the Company. Gilead is not required to obtain any consent, waiver, approval, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other Governmental Authority or other Person in
the United States in connection with the execution, delivery and performance by Gilead of this Agreement, other than the obtaining of
the required Antitrust Approvals.
3.2.4 Gilead
Status. At the time Gilead was offered the Shares, it was, and as of the date hereof it is either: (a) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (b) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Gilead is acting alone in
its determination as to whether to invest in the Shares.
3.2.5 Experience
of Gilead. Gilead, either alone or together with its representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment. Gilead is able to bear the economic risk of an investment in the Shares and, at the
present time, is able to afford a complete loss of such investment.
3.2.6 Access
to Information. Gilead acknowledges that it has had the opportunity to review the SEC Reports and has been afforded, (a) the
opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning
the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (b) access to information
(other than material non-public information) about the Company and its financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and (c) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision
with respect to the investment.
3.2.7 Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, Gilead has not, nor has any Person
acting on behalf of or pursuant to any understanding with Gilead, directly or indirectly executed any purchases or sales, including any
“short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating
and/or borrowing shares of Common Stock) (“Short Sales”), of the securities of the Company during the period
commencing as of the time that Gilead first received any materials setting forth the material pricing terms of the transactions contemplated
hereunder and ending immediately prior to the execution hereof.
3.2.8 Legends.
Gilead understands and agrees that the Shares (or uncertificated interests in the Shares) will bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of the Shares):
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT SUCH OPINION IS REQUIRED PURSUANT TO THAT CERTAIN COMMON STOCK
PURCHASE AGREEMENT UNDER WHICH THE SECURITIES WERE ISSUED.
3.2.9 Reliance
on Exemptions. Gilead understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy
of, and Gilead’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Gilead set
forth herein in order to determine the availability of such exemptions and the eligibility of Gilead to acquire the Shares.
ARTICLE 4
OTHER AGREEMENTS OF THE PARTIES
4.1. Confidentiality.
Gilead covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, Gilead
will maintain the confidentiality of the existence and terms of this transaction.
4.2. Reservation
of Shares. As of the date hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times during the Exercise Period, free of preemptive rights, a sufficient number of Shares for the
purpose of enabling the Company to issue Shares (including the Second Closing Shares, Third Closing Shares, Fourth Closing Shares and
Additional Shares) pursuant to this Agreement.
4.3. Survival.
The representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated
by this Agreement for the applicable statute of limitations.
4.4. Legend
Removal. The Company shall direct its transfer agent to remove the transfer restriction set
forth in Section 3.2.8 (Legends) applicable to any portion of the Shares upon the written request of Gilead, within two (2) Business
Days of the Company’s receipt of such request, at such time as such portion of Shares (a) are being sold by Gilead pursuant
to Commission Rule 144 or (b) may be transferred without the requirement that the Company be in compliance with the public
information requirements and without volume or manner-of-sale restrictions under Commission Rule 144. Gilead, or if the Company’s
transfer agent requires, the Company, shall provide such opinions of counsel reasonably requested by the Company’s transfer agent
in connection with the removal of legends pursuant to this Section 4.4.
4.5. Book
Entry Statement. The Company hereby agrees to deliver to Gilead a book entry statement from
the Company’s transfer agent showing the applicable Shares registered in the name of Gilead within three (3) Business Days
following each Closing.
4.6. Capitalization
Table. During the Exercise Period, as promptly as practicable following Gilead’s written
request and in any event within five (5) Business Days, the Company shall provide Gilead with a summary capitalization table setting
forth the then-current Company Capitalization.
4.7. Notice
of Designated Events. If, during the Exercise Period, (a) the Company enters into a definitive
agreement with any third party with respect to a merger, sale of assets or securities or other business combination as a result of which
such third party would succeed to more than 50% of the voting securities or assets of the Company, (b) a third party, other than
Gilead, any of its Affiliates or any other party acting in concert with Gilead or any of its Affiliates, has made a proposal with respect
to a merger, sale of assets or securities or other business combination as a result of which such third party would succeed to more than
50% of the voting securities or assets of the Company, and such proposal has been publicly supported or recommended by the Board, (c) the
Board determines to commence a process to seek a potential sale of the Company or all or substantially all of its assets, or (d) any
bona fide Person (other than Gilead or any Affiliates of Gilead, or any other party acting in concert with Gilead or any Affiliates of
Gilead) publicly discloses any plans, determined as serious by the Board to further pursue it, to make such a bid (each ((a) through
(d)), a “Designated Event”), the Company shall provide written notice of such Designated Event (a “Designated
Event Notice”) to Gilead’s [***], in lieu of the parties specified in Section 5.3 (Notices), at least [***].
For the avoidance of doubt, Gilead may deliver an Additional Shares Purchase Notice at any time following the public announcement of
a Designated Event, and the Additional Shares Purchase Price with respect to the Additional Shares specified in any such Additional Shares
Purchase Notice shall be determined based on the date Gilead delivers such Additional Shares Purchase Notice to the Company.
4.8. Due
Diligence. With respect to each proposed purchase of Additional Shares, upon Gilead’s
request, including any such request made prior to delivery of an Additional Shares Purchase Notice, the Company shall cooperate with
any due diligence review conducted by Gilead or its representatives in connection with such proposed purchase of Additional Shares, including,
without limitation, providing information and making available documents and senior corporate officers, during regular business hours
and at the Company’s principal offices, as Gilead may request.
ARTICLE 5
MISCELLANEOUS
5.1. Fees
and Expenses. Each party shall pay all fees and expenses that it incurs (including on account
of any of their respective advisers, counsel, accountants and other experts) in connection with the negotiation, preparation, execution
and delivery of this Agreement, including all Transfer Agent fees (including, without limitation, any fees required for same-day processing
of any instruction letter delivered by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of
any Shares to Gilead (collectively, the “Transaction Expenses”).
5.2. Entire
Agreement. This Agreement, the Collaboration Agreement and the Investor Rights Agreement contain
the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits
and schedules.
5.3. Notices.
Any notice or other communication required or permitted to be given under this Agreement shall be in writing (whether or not specifically
stated), shall specifically refer to this Agreement, and shall be addressed to the appropriate party at the address specified below or
such other address as may be specified by such party in writing in accordance with this Section 5.3, and shall be deemed
to have been given for all purposes (a) when received, if hand-delivered, sent by a reputable international expedited delivery service
(with receipt confirmed), or (b) five (5) Business Days after mailing, if mailed by first class certified or registered mail,
postage prepaid, return receipt requested. This Section 5.3 is not intended to govern the day-to-day business communications
necessary between the Parties in performing their obligations under the terms of this Agreement (for which e-mail or other methods of
communications shall suffice).
| If to the Company: |
Arcus Biosciences, Inc. |
| |
Attention: General Counsel
3928 Point Eden Way
Hayward, CA 94545 |
| |
|
| With a copy to (which shall not constitute notice): |
Cooley LLP |
| |
Attention: Kenneth Guernsey
3 Embarcadero Ctr, 20th Floor
San Francisco, CA 94111 |
|
|
| If to Gilead: |
Gilead Sciences, Inc.
Attention: Alliance Management
333 Lakeside Drive
Foster City, CA 94404 |
| |
|
| With a copy to (which shall not constitute notice): |
Gilead Sciences, Inc.
Attention: General Counsel
333 Lakeside Drive
Foster City, CA 94404
Covington & Burling LLP
Attention: Amy L. Toro, Esq.
Salesforce Tower
415 Mission Street, Suite 5400
San Francisco, CA 94105-2533 |
5.4. Amendments;
Waivers. No subsequent alteration, amendment, change or addition to this Agreement shall be
binding upon the parties hereto unless reduced to writing and signed by an authorized officer of each party. Any delay in enforcing a
party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such
party’s rights to the future enforcement of its rights under this Agreement, except with respect to an express written and signed
waiver relating to a particular matter for a particular period of time.
5.5. Termination.
This Agreement shall simultaneously and automatically terminate in the event that (a) the Collaboration Agreement terminates in
its entirety for any reason or (b) the Company consummates any merger, consolidation or similar transaction, unless immediately
following the consummation of such transaction, the stockholders of the Company immediately prior to the consummation of such transaction
continue to hold, as a result of their holding of outstanding Common Stock and other securities entitled to vote for the election of
directors of the Company immediately prior to the consummation of such transaction, in aggregate more than 50% of the outstanding Common
Stock and other securities entitled to vote for the election of directors of the surviving or resulting entity in such transaction. In
addition, after the Fourth Closing, Gilead may terminate this Agreement upon [***] days’ prior written notice to the Company. If
not earlier terminated, this Agreement shall automatically terminate upon the later of (a) the expiration of the Exercise Period
and (b) the occurrence of all Additional Closings with respect to sales of Additional Shares under any Additional Shares Purchase
Notice(s) made and duly given on or prior to the expiration of the Exercise Period.
5.6. Construction;
Headings. The terms “includes,” “including,” “include” and
derivative forms of them shall be deemed followed by the phrase “without limitation” (regardless of whether it is actually
written (and drawing no implication from the actual inclusion of such phrase in some instances after such terms but not others)) and
the term “or” has the inclusive meaning represented by the phrase “and/or” (regardless of whether it is actually
written (and drawing no implication from the actual use of the phrase “and/or” in some instances but not in others)). Unless
specified to the contrary, references to Articles or Sections shall refer to the particular Articles or Sections of or to this Agreement.
The word “day,” “quarter” or “year” (and derivatives thereof, e.g., “quarterly”)
shall mean a calendar day, calendar quarter or calendar year unless otherwise specified. The word “hereof,” “herein,”
“hereby” and derivative or similar word refers to this Agreement. The words “will” and “shall” shall
have the same obligatory meaning. Provisions that require that a party or parties hereunder “agree,” “consent”
or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written
agreement, letter or otherwise. Words of any gender include the other gender. Words using the singular or plural number also include
the plural or singular number, respectively. References to any specific law or article, section or other division thereof, shall be deemed
to include the then-current amendments or any replacement law thereto, and any rules and regulations promulgated thereunder. All
dollar-denominated amounts herein are in United States dollars. This Agreement has been prepared jointly and shall not be strictly construed
against either party. Ambiguities, if any, in this Agreement shall not be construed against either party, irrespective of which party
may be deemed to have authored the ambiguous provision. The headings of each Article and Section in this Agreement have been
inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular
Article or Section.
5.7. Further
Assurances. Each party agrees to execute, acknowledge and deliver such further instruments,
and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
5.8. Successors
and Assigns. This Agreement may not be assigned by a party hereto without the prior written
consent of the Company or Gilead, as applicable, provided, however, that Gilead may assign its rights and delegate its
duties hereunder in whole or in part to an Affiliate without the prior written consent of the Company, provided such assignee
agrees in writing to be bound by the provisions hereof that apply to Gilead. The provisions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted 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 permitted successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
5.9. Third
Party Beneficiaries. This Agreement is not intended to and shall not be construed to give any
third party any interest or rights (including any third party beneficiary rights) with respect to or in connection with any agreement
or provision contained herein or contemplated hereby.
5.10. Governing
Law. This Agreement shall be governed by and construed under the substantive laws of the State
of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation
of this Agreement to the substantive law of another jurisdiction.
5.11. Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of Gilead
and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not
to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
5.12. WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST
ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
5.13. Attorneys’
Fees. In the event that any action is instituted under or in relation to this Agreement, including
without limitation to enforce any provision in this Agreement, each party shall bear its own fees, costs and expenses of enforcing any
right of such party under or with respect to this Agreement.
5.14. Survival.
The representations and warranties contained herein shall survive the Closings and the delivery of the Shares and any termination of
this Agreement.
5.15. Counterparts.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were
an original thereof.
5.16. Severability.
If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by an arbitrator or by any court of competent
jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve
to invalidate any remaining provisions hereof. The parties shall make a good faith effort to replace any invalid or unenforceable provision
with a valid and enforceable one such that the objectives contemplated by the parties when entering into this Agreement may be realized.
5.17. Investor
Rights Agreement. For clarity, the parties agree and acknowledge that (a) this Third Amended
and Restated Common Stock Purchase Agreement is the “Purchase Agreement” under and as defined in the Investor Rights Agreement
and (b) the Second Closing Shares, Third Closing Shares and Fourth Closing Shares constitute Registrable Securities thereunder (subject
to the limitations set forth in Section 1.1.46(a) through (c) thereof).
[Remainder of Page Intentionally Left
Blank]
IN WITNESS WHEREOF,
the parties hereto have caused this Third Amended and Restated Common Stock Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.
| |
Arcus Biosciences, Inc. |
| |
|
| |
By: |
/s/ Terry Rosen |
| |
|
Name: |
Terry Rosen, Ph.D. |
| |
|
Title: |
Chief Executive Officer |
| |
Gilead Sciences, Inc. |
| |
|
| |
By: |
/s/ Andrew D. Dickinson |
| |
|
Name: |
Andrew D. Dickinson |
| |
|
Title: |
Chief Financial Officer |
Signature Page to Third Amended and Restated
Common Stock Purchase Agreement
EXHIBIT A
Form of Cross-Receipt
Arcus Biosciences, Inc. (the “Company”)
hereby acknowledges receipt from Gilead Sciences, Inc. on [ ],
20[__] of $[●], representing the full purchase price for [ ] shares of Common Stock,
par value $0.0001 per share, of the Company, pursuant to that certain Third Amended and Restated Common Stock Purchase Agreement, dated
as of [ ], 2024, by and between Gilead Sciences, Inc. and the Company.
| |
ARCUS BIOSCIENCES, INC. |
| |
|
| |
By: |
|
| |
|
Name: |
| |
|
Title: |
Gilead Sciences, Inc. hereby acknowledges
receipt from the Company on [ ], 20[__] of [ ]
shares of Common Stock, par value $0.0001 per share, of the Company, delivered pursuant to that certain Third Amended and Restated Common
Stock Purchase Agreement, dated as of [ ], 2024, by and between Gilead Sciences, Inc. and the Company.
| |
GILEAD SCIENCES, INC. |
| |
|
| |
By: |
|
| |
|
Name: |
| |
|
Title: |
Exhibit 99.2
[***] = CERTAIN INFORMATION HAS BEEN OMITTED
BECAUSE IT IS BOTH NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED
ARCUS BIOSCIENCES, INC.
AMENDED & RESTATED INVESTOR RIGHTS
AGREEMENT
This Amended and Restated
Investor Rights Agreement (this “Agreement”) is made as of January 29, 2024 (the “Effective Date”),
by and between Arcus Biosciences, Inc., a Delaware corporation (the “Company”) and Gilead Sciences, Inc.,
a Delaware corporation (“Gilead”). This Agreement amends and restates in its entirety the Investor Rights Agreement
entered into between the Company and Gilead on May 27, 2020 (the “Original Agreement”), as previously amended
on October 11, 2022.
WHEREAS, concurrent
with the execution of the Original Agreement, the Company and Gilead entered into an Option, License and Collaboration Agreement, which
was subsequently amended (as so amended, the “Collaboration Agreement”), pursuant to which they have established a
broad collaboration with respect to the Company’s product development programs;
WHEREAS, concurrent
with the execution of the Original Agreement, the Company and Gilead entered in to a Common Stock Purchase Agreement, which has been
subsequently amended and restated (as so amended and restated, the “Purchase Agreement”) pursuant to which Gilead
has agreed to purchase from the Company shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”),
and will have the right to purchase additional shares of Common Stock in the future; and
WHEREAS, the Company
and Gilead wish to set forth in this Agreement certain terms and conditions regarding the rights of Gilead with respect to Gilead’s
ownership of Common Stock, the composition of the Board of Directors of the Company (the “Board”) and certain other
matters as set forth in this Agreement.
NOW, THEREFORE, in
consideration of the mutual covenants and promises contained in this Agreement and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions.
For purposes of this Agreement:
1.1.1 “Additional
Closing Date” means each Additional Closing Date as defined in the Purchase Agreement.
1.1.2 “Additional
Filing Date” has the meaning set forth in Section 6.1.2.
1.1.3 “Additional
Purchase Shares” means shares of Common Stock issuable to Gilead pursuant to Article 2.3.2 of the Purchase Agreement.
1.1.4 “Additional
Registration Statement” has the meaning set forth in Section 6.1.2.
1.1.5 “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with a Person.
1.1.6 “Beneficially
Owned” and “Beneficially Owns” have the meanings specified in Rule 13d-3 promulgated under the Exchange
Act.
1.1.7 “Board”
has the meaning set forth in the recitals.
1.1.8 “Board
Qualifications” has the meaning set forth in Section 2.1.
1.1.9 “Business
Day” means a day other than (a) a Saturday or a Sunday, (b) a bank or other public holiday in California, United
States, (c) the Sunday through Saturday containing July 4th or (d) the period commencing on December 25th
and ending on January 1st (inclusive).
1.1.10 “Closing
Date” means the Initial Closing Date as defined in the Purchase Agreement.
1.1.11 “Collaboration
Agreement” has the meaning set forth in the recitals.
1.1.12 “Commission”
means the United States Securities and Exchange Commission.
1.1.13 “Commission
Rule 144” means Rule 144 promulgated by the Commission under the Securities Act.
1.1.14 “Commission
Rule 415” means Rule 415 promulgated by the Commission under the Securities Act.
1.1.15 “Common
Stock” has the meaning set forth in the recitals.
1.1.16 “Company
Capitalization” means, as of any date of measurement, the total number of outstanding shares of voting capital stock of the
Company.
1.1.17 “Control,”
including the terms “Controlling,” “Controlled by” and “under common Control with,”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting shares, by contract or otherwise.
1.1.18 “Effective
Date” has the meaning set forth in the recitals.
1.1.19 “Entity”
means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any limited liability company or joint stock company), branch office, firm or other
enterprise, association, organization or entity.
1.1.20 “Equity
Securities” means (a) any shares of Common Stock or preferred stock of the Company, and (b) any other security, financial
instrument, certificate and other right (including options, futures, swaps and other derivatives) issued or, with respect to options,
futures, swaps and other derivatives, contracted by the Company and representing, being exercisable, convertible or exchangeable into
or for, or otherwise providing a right to acquire, directly or indirectly, any of the Equity Securities referred to in clause (a).
1.1.21 “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.1.22 “Exercise
Period” means the Exercise Period as defined in the Purchase Agreement.
1.1.23 “Existing
Investors’ Rights Agreement” means the Amended and Restated Investors’ Rights Agreement dated as of November 3,
2017 among the Company and certain of its security holders.
1.1.24 “Existing
Investors’ Rights Agreement Termination Date” means March 19, 2021.
1.1.25 “Filing
Date” has the meaning set forth in Section 6.1.1.
1.1.26 “Final
Designee Termination Date” means the earliest date on which: (a) (i) Gilead or any of its Affiliates has effected
a transfer, sale or divestment of Equity Securities, other than a Permitted Transfer, after the date of this Agreement and (ii) Gilead,
together with its Affiliates, collectively, do not hold outstanding shares of Common Stock representing at least [***]% of the Company
Capitalization; (b) any Person or “group” (as such term is used in Section 13 of the Exchange Act) other than Gilead
and its Affiliates, directly or indirectly, Beneficially Owns more than 50% of the outstanding Common Stock and other securities of the
Company having the power to vote in the election of members of the Board; (c) the Company consummates any merger, consolidation
or similar transaction, unless immediately following the consummation of such transaction, the stockholders of the Company immediately
prior to the consummation of such transaction continue to hold, as a result of their holding of outstanding Common Stock and other securities
entitled to vote for the election of directors of the Company immediately prior to the consummation of such transaction, in aggregate
more than 50% of the outstanding Common Stock and other securities entitled to vote for the election of directors of the surviving or
resulting entity in such transaction; (d) [***]; or (e) Gilead, in its sole discretion, irrevocably waives and terminates all
of its rights under Article 2 (Board Matters).
1.1.27 “Final
Prospectus” has the meaning set forth in Section 6.5.1.
1.1.28 “First
Designee Termination Date” means the first date on which both: (a) Gilead or any of its Affiliates has effected a transfer,
sale or divestment of Equity Securities, other than a Permitted Transfer, after the date of this Agreement; and (b) Gilead, together
with its Affiliates, collectively, do not, directly or indirectly, hold outstanding shares of Common Stock representing at least [***]%
of the Company Capitalization.
1.1.29 “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 Commission that permits incorporation of substantial information by reference to other documents filed by the Company
with the Commission.
1.1.30 “Gilead
Designee” has the meaning set forth in Section 2.1.
1.1.31 “Holder”
means Gilead or its valid transferees that are holders of Restricted Securities under this Agreement and have agreed to the provisions
of Article 5 (Additional Covenants).
1.1.32 “Indemnified
Party” has the meaning set forth in Section 6.5.3. 1.1.33 “Indemnifying Party” has the meaning
set forth in Section 6.5.3.
1.1.34 “Independent
Director” means any Director of the Company who the Board reasonably determines qualifies as an independent director of the
Company under Rule 303A(2) of the NYSE Listed Company Manual.
1.1.35 “Initial
Registration Statement” has the meaning set forth in Section 6.1.1.
1.1.36 “Lock-up
Period” has the meaning set forth in Section 4.1.
1.1.37 “New
Additional Registration Statement” has the meaning set forth in Section 6.1.2.
1.1.38 “New
Registration Statement” has the meaning set forth in Section 6.1.1.
1.1.39 “NYSE”
means the New York Stock Exchange.
1.1.40 “Permitted
Transfer” means any transfer, sale or divestment of Equity Securities permitted by Section 4.3.
1.1.41 “Person”
means any individual, Entity or governmental authority. 1.1.42 “Piggyback Registration” has the meaning set forth
in Section 6.7.1.
1.1.43 “Piggyback
Registration Statement” has the meaning set forth in Section 6.7.1.
1.1.44 “Proposed
Gilead Designees” has the meaning set forth in Section 2.1.
1.1.45 “Purchase
Agreement” has the meaning set forth in the recitals.
1.1.46 “Registrable
Securities” means the shares of Common Stock purchased by Gilead under the Purchase Agreement; provided, however, that
securities shall only be treated as Registrable Securities if and only for so long as they (a) have not been disposed of pursuant
to a registration statement declared effective by the Commission, (b) have not been sold in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act so that all transfer restrictions and restrictive legends with respect thereto
are removed upon the consummation of such sale and (c) are held by a Holder pursuant to Article 5 (Additional Covenants).
1.1.47 “Registration
Expenses” means all expenses incurred by the Company in complying with Section 6.1 (Registration Statements) and/or
Section 6.7 (Piggyback Registrations) hereof, including, without limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and expenses of counsel for the Company, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the fees of legal counsel for any Holder).
1.1.48 “Registration
Period” has the meaning set forth in Section 6.3.1(a).
1.1.49 “Remainder
Additional Registration Statements” has the meaning set forth in Section 6.1.2.
1.1.50 “Remainder
Registration Statements” has the meaning set forth in Section 6.1.1.
1.1.51 “Restricted
Securities” means shares of Common Stock held by Gilead or any of its Affiliates, or by any person to whom such shares are
transferred by Gilead or any of its transferees, that are “restricted securities” as defined in Commission Rule 144.
1.1.52 “Second
Designee Termination Date” means the first date on which both: (a) Gilead or any of its Affiliates has effected a transfer,
sale or divestment of Equity Securities, other than a Permitted Transfer, after the date of this Agreement; and (b) Gilead, together
with its Affiliates, collectively, do not, directly or indirectly, hold outstanding shares of Common Stock representing at least [***]%
of the Company Capitalization.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.1.53 “Selling
Expenses” means all selling commissions applicable to the sale of Registrable Securities and all fees and expenses of legal
counsel for any Holder.
1.1.54 “Shares”
means the shares of Common Stock Beneficially Owned by Gilead.
1.1.55 “Standstill”
has the meaning set forth in Section 3.2.
1.1.56 “Standstill
Fall-Away” has the meaning set forth in Section 3.3.
1.1.57 “Standstill
Fall-Away Notice” has the meaning set forth in Section 3.3.
1.1.58 “Standstill
Period” has the meaning set forth in Section 3.1.
ARTICLE 2
BOARD MATTERS
2.1 Board
Designation Rights. Subject to the terms and conditions of this Article 2, including
the termination provisions of Section 2.4, Gilead shall have the right to designate three (3) individuals to be appointed
to the Board (“Proposed Gilead Designees”). Such individuals shall be (a) qualified and suitable to serve as
a member of the Board under all applicable corporate governance policies and guidelines of the Company and the Board and applicable legal,
regulatory and stock market requirements, as determined in good faith by the Board, and (b) reasonably acceptable to a majority
of the other members of the Board and the Company’s independent auditors (such qualifications in clauses (a) and (b), the
“Board Qualifications”). Gilead will take all necessary action to cause the Proposed Gilead Designees to make themselves
reasonably available for interviews, to consent to the Company’s standard reference and background checks and other investigations
and to provide such information (including information necessary to determine the individual’s independence status under applicable
requirements and institutional investor guidelines as well as information necessary to determine any disclosure obligations of the Company)
as the Board may reasonably request, provided that such interviews, investigations and information requested of the Proposed Gilead
Designees is materially consistent with such similar requests made of all current members of the Board or other candidates for nomination
to the Board. If, following such process, the Board in good faith determines that any Proposed Gilead Designee does not meet the Board
Qualifications, such Proposed Gilead Designee shall cease to be a Proposed Gilead Designee, and Gilead shall have the right to designate
another individual as a Proposed Gilead Designee (which process may be repeated until such time as the Board in good faith determines
that a Gilead Designee meets the Board Qualifications). Once the Board in good faith determines that a Proposed Gilead Designee meets
the Board Qualifications, such Proposed Gilead Designee shall be a “Gilead Designee.” Any individual who becomes a
Gilead Designee shall retain such status for so long as they are a member of the Board. Notwithstanding any other policy or practice
of the Company applicable to the Board, no Gilead Designee is entitled to any additional compensation for services on the Board as a
Gilead Designee.
2.2 Appointment
of Directors. Merdad Parsey and Michael Quigley are the initial Gilead Designees, and the Board
has determined that each of them meets the Board Qualifications. The Board shall appoint each of the initial Gilead Designees to be a
member of the Board effective on the Closing Date or as soon thereafter as such appointment can be made without causing less than a majority
of the members of the Board to be Independent Directors. Johanna Mercier is the third Gilead Designee, and the Board has determined that
she meets the Board Qualifications. The Board shall appoint such third Gilead Designee to be a member of the Board effective on the Fourth
Closing Date (as defined in the Purchase Agreement), or as soon thereafter as such appointment can be made without causing less than
a majority of the members of the Board to be Independent Directors. If the appointment of a Gilead Designee must be deferred as described
above, the Company shall use all commercially reasonable efforts, including the recruitment of additional Independent Directors, to enable
such appointment to be made at the earliest practicable date, and in any event, not later than the six-month anniversary of the Effective
Date. The Board shall assign each of the Gilead Designees to one of the three Board classes at the time of their appointment in accordance
with the Company’s Amended and Restated Certificate of Incorporation and will endeavor to assign the Gilead Designees to different
classes. Subject to Section 2.4, at the end of the term of each Gilead Designee, such Gilead Designee shall be nominated
for re-election as a director, provided that such Gilead Designee continues to meet the Board Qualifications, as part of the slate
proposed by the Board that is included in the proxy statement (or consent solicitation or similar document) of the Company relating to
the election of the Board, and the Company will use all commercially reasonable efforts to cause the election of such Gilead Designee
to the Board (including providing the same level of support as is provided for other nominees of the Company to the Board). Until the
First Designee Termination Date, Second Designee Termination Date or Final Designee Termination Date, as applicable, for so long as each
such Gilead Designee satisfies the Board Qualifications, the Company shall not take any action that precludes the submission of each
such Gilead Designee to the stockholders of the Company for election to the Board. In the event that a Gilead Designee ceases to be a
member of the Board (whether due to death, resignation or otherwise), Gilead may, subject to Section 2.4, select another
person (who the Company may require to be an Independent Director, if appointed, if the Gilead Designee who ceased to be a member of
the Board was an Independent Director and the selection of a director who is not independent would cause the Company to not be in compliance
with the independence rules of the Exchange Act or NYSE) as a Proposed Gilead Designee to fill the vacancy created thereby, and,
following the application of the provisions of Section 2.1 above, the Company shall act to appoint such resulting Gilead
Designee to fill such vacancy.
2.3 Policies
and Requirements. The Gilead Designees shall be subject to the policies and requirements of
the Company and the Board, including the corporate governance guidelines of the Board and the Company’s Code of Conduct and Ethics,
in a manner consistent with the application of such policies and requirements to other members of the Board. The Company shall reimburse
the expenses of the Gilead Designees consistent with the Company’s policies on business expense reimbursement and shall indemnify
them and provide the Gilead Designees with director and officer liability insurance to the same extent it indemnifies and provides insurance
for the other non-employee members of the Board pursuant to its organizational documents, applicable law or otherwise.
2.4 Termination
of Board Designation Rights. From and after the First Designee Termination Date, (a) Gilead
shall no longer be entitled to designate more than two Gilead Designees, and (b) the Company will no longer be obligated to nominate
for re-election as a director a Gilead Designee, if, following the appointment of such Gilead Designee to the Board there would be more
than two Gilead Designee serving on the Board. At any time thereafter when there are three Gilead Designees serving on the Board, the
Company may request in writing that one of such Gilead Designees resign from the Board, and Gilead shall cause a Gilead Designee of its
choosing to resign from the Board within five (5) Business Days following such written request. From and after the Second Designee
Termination Date, (a) Gilead shall no longer be entitled to designate more than one Gilead Designee, and (b) the Company will
no longer be obligated to nominate for re-election as a director a Gilead Designee, if, following the appointment of such Gilead Designee
to the Board there would be more than one Gilead Designee serving on the Board. At any time thereafter when there are two Gilead Designees
serving on the Board, the Company may request in writing that one of such Gilead Designees resign from the Board, and Gilead shall cause
a Gilead Designee of its choosing to resign from the Board within five (5) Business Days following such written request. From and
after the Final Designee Termination Date (i) Gilead shall no longer be entitled to designate any Gilead Designees and (ii) at
any time when there is any Gilead Designee serving on the Board, the Company may request in writing that such Gilead Designee resign
from the Board, and Gilead shall cause such Gilead Designee to resign from the Board within five (5) Business Days following such
written request. After the later to occur of the Final Designee Termination Date and the date all Gilead Designees have resigned from
the Board in accordance with this Section 2.4, all rights of Gilead and obligations of the Company under this Article 2 shall
terminate, provided that, for clarity, the Company shall continue to indemnify and provide any former Gilead Designees with director
and officer liability insurance to the same extent it indemnifies and provides insurance for the other non-employee past members of the
Board pursuant to its organizational documents, applicable law or otherwise.
2.5 Board
Size; Compensation; Scientific Committee; Scientific Advisory Board. Within 30 days following
the date hereof, the Company shall:
2.5.1 Take
all such actions necessary to reduce the size of the Board from 12 directors to 11 directors and accept the resignations from the Board
of Jennifer Jarrett and Juan Jaen in connection therewith; and
2.5.2 Establish
a Science Committee of the Board to oversee, on behalf of the Board, activities related to the Company’s products and product candidates
(both commercial and clinical) (the “Science Committee”).
From and following establishment of the Science
Committee, the Company shall cause each Gilead Designee with an advanced science degree (each, a “Gilead Scientific Designee”)
to be a member of the Science Committee. In addition, from and following the Fourth Closing Date, Gilead shall be entitled to appoint
up to two members of Gilead’s senior leadership team with an advanced science degree or scientific qualifications (each, a “Gilead
SAB Designee”) to serve on the Company’s Scientific Advisory Board (the “SAB”), with Linda Higgins
serving as the initial designee of Gilead to the SAB. For the avoidance of doubt, no Gilead Scientific Designee or Gilead SAB Designee
is entitled to additional compensation for service on the Science Committee or the SAB.
ARTICLE 3
STANDSTILL
3.1 Standstill
Obligation. The standstill obligation, as set out in this Article 3, will be in
effect for the period (the “Standstill Period”) beginning on the date of the Original Agreement and ending three (3) years
from the date of the Original Agreement.
3.2 Standstill
Limitations. During the Standstill Period, neither Gilead nor any of its Affiliates shall, without
the prior express written consent of the Company, directly or indirectly:
3.2.1 acquire
any Equity Securities of the Company during the Exercise Period, other than (a) pursuant to the Purchase Agreement, (b) pursuant
to Section 5.3 (Anti-Dilution), and (c) pursuant to Section 5.4 (Open Market Purchases).
3.2.2 encourage
or support a tender, exchange or other offer or proposal by a third party;
3.2.3 propose
any (a) merger, consolidation, business combination, tender or exchange offer, purchase of the Company’s assets or businesses,
or similar transaction involving the Company or (b) recapitalization, restructuring, liquidation or other extraordinary transaction
with respect to the Company (it being understood that Gilead’s Chief Executive Officer, Chief Financial Officer or Head of Corporate
Development may contact the Company’s Chief Executive Officer and/or the Board on a non-public and non-committal basis in such
a way that would not be reasonably likely to require the Company to disclose publicly any such matter described in clause (a) or
(b));
3.2.4 (a) submit
matters to, request that matters be submitted to, or request the convening of, a meeting of the stockholders of the Company, or (b) solicit
proxies or consents, or become a participant in a solicitation in relation to matters submitted to a meeting of the stockholders of the
Company, in each case of (a) and (b) without or against the recommendation or support by the Board, except that (i) Gilead
may propose Proposed Gilead Designees pursuant to Article 2 (Board Matters) and (ii) Gilead may solicit proxies or consents
and may become a participant in a solicitation in connection with any proposal that would adversely affect its rights under this Agreement,
the Purchase Agreement or the Collaboration Agreement or adversely affect its rights as a stockholder of the Company; or
3.2.5 (a) make
public statements with respect to (unless legally obliged to do so) or, (b) with the actual knowledge of Gilead’s executive
officers, provide assistance to, commit to, or discuss or enter into any agreement or arrangement with any party to do, any of the foregoing
prohibited actions, provided that in relation to prohibited actions in Section 3.2.2 that have been committed without
the actual knowledge of Gilead’s executive officers, Gilead shall promptly terminate and unwind such actions upon written request
of the Company.
(this Section 3.2, the “Standstill”).
3.3 Standstill
Fall-Away. In the event that (a) the Company enters into a definitive agreement with any
third party with respect to a merger, sale of assets or securities or other business combination as a result of which such third party
would succeed to more than 50% of the voting securities or assets of the Company, (b) a third party, other than Gilead, any of its
Affiliates or any other party acting in concert with Gilead or any of its Affiliates, has made a proposal with respect to a merger, sale
of assets or securities or other business combination as a result of which such third party would succeed to more than 50% of the voting
securities or assets of the Company, and such proposal has been publicly supported or recommended by the Board, or (c) the Board
publicly announces its intention to commence, prior to the end of the Standstill Period, a process to seek a potential sale of the Company
or all or substantially all of its assets, then the Standstill obligations shall automatically cease to apply effective upon the occurrence
of such agreement, public disclosure or announcement (the “Standstill Fall-Away”) and the Company shall notify Gilead
of such agreement, public disclosure or announcement as promptly as practicable and in any event no later than one (1) Business
Day after such agreement, public disclosure or announcement (the “Standstill Fall-Away Notice”). Upon the Standstill
Fall-Away, the Standstill obligation of Gilead shall be lifted in order to level the playing field and grant it equal opportunities to
prepare a takeover bid or take other permitted actions, such that Gilead shall not in any respect be disadvantaged or limited relative
to any other bidder for the Company. The Company shall not be required to specify in the Standstill Fall-Away Notice any information
regarding any proposed transaction that has not been publicly disclosed.
3.4 Material
Non-Public Information. Gilead explicitly acknowledges that the information contained in the
Standstill Fall-Away Notice may, prior to the public announcement of such information, constitute material, non-public information of
the Company. When receiving the Standstill Fall-Away Notice, Gilead shall take all appropriate measures to ensure the confidentiality
of such information.
3.5 Director
Fiduciary Duties. Notwithstanding anything to the contrary, nothing in this Agreement shall
prohibit or restrict any of the Gilead Designees from acting in good faith in such director’s capacity as a director of the Company
or from complying with such director’s fiduciary duties as a director of the Company (including voting on any matter submitted
for consideration by the Board, participating in deliberations or discussions of the Board, and making suggestions or raising any issues
or recommendations to the Board).
ARTICLE 4
LOCK-UP
4.1 Lock-Up
Obligation. During the period beginning on the date of the Original Agreement and ending on
the earliest of (a) the third anniversary of the Closing Date, (b) the date on which the Company gives a Standstill Fall-Away
Notice, (c) the termination of the Collaboration Agreement in its entirety and (d) the termination of this Agreement pursuant
to Section 7.5 (the “Lock-up Period”), Gilead shall not, and shall cause its Affiliates not to, without
the prior consent of the Company, transfer, sell or otherwise dispose of any Equity Securities held by Gilead or any of its Affiliates,
other than transfers, sales or dispositions permitted pursuant to Section 4.3.
4.2 Limitation
on Dispositions. During the period beginning with the expiration of the Lock-up Period and ending
on the date [***] from the expiration date of the Lock-up Period, Gilead and any of its Affiliates may, after notifying the Company of
their intent to do so, transfer, sell or otherwise dispose of the Equity Securities held by Gilead or any of its Affiliates, provided
that:
4.2.1 when
instructing a broker to sell shares of Common Stock, the broker shall be instructed to use reasonable efforts to effect such sale of
shares in a manner reasonably intended to minimize disturbances of the share price of the Common Stock as quoted on the NYSE;
4.2.2 when
selling the shares of Common Stock on the open market or in a block trade, Gilead and its Affiliates collectively shall be permitted
to sell a [***] volume of shares not to exceed [***]% of the average [***] volume of the Common Stock as traded on the market on which
the sale is effected for the previous thirty (30) trading days; and
4.2.3 when
selling the shares of Common Stock through a privately negotiated transaction, the transaction shall not be subject to the limitations
in this Section 4.2 if it is not and will not be required to be reported on the NYSE consolidated tape.
4.3 Permitted
Transfers. A transfer, sale or other divestment of Equity Securities by Gilead to any of its
Affiliates shall be permitted and not be subject to the restrictions set out in Section 4.1, provided that (a) the
obligations of Gilead or any of its Affiliates pursuant to this Agreement and the Collaboration Agreement remain unaffected by the proposed
transfer, sale or divestment, (b) the transferee agrees in writing to the Company to be bound by the restrictions set out in Section 4.1
and Section 4.2 in relation to the Equity Securities it received and the other obligations of Gilead in relation to the
Equity Securities under this Agreement, and (c) the relevant Equity Securities will be re-transferred to Gilead immediately prior
to the transferee ceasing to be an Affiliate of Gilead.
ARTICLE 5
ADDITIONAL COVENANTS
5.1 “Market
Stand-off” Agreement. Gilead hereby agrees that it and its Controlled Affiliates will not, without the prior written consent
of any managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company
of shares of its Common Stock or any other Equity Securities under the Securities Act on a registration statement on Form S-3 in
an underwritten public offering of Common Stock, and ending on the date specified by the Company and the managing underwriter, provided
that such date shall not be later than 90 days following the date of such final prospectus, (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 any securities convertible into or exercisable
or exchangeable (directly or indirectly) for Common Stock (whether such shares or any such securities are then owned by Gilead or its
Affiliates or are thereafter acquired) 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 such securities, whether any such transaction described in clause or (b) above
is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 5.1
shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall be applicable to Gilead
and its Affiliates only if all executive officers and directors of the Company are subject to the same restrictions. The underwriters
in connection with such registration are intended third party beneficiaries of this Section 5.1 and shall have the right,
power and authority to enforce the provisions hereof as though they were a party hereto. Gilead further agrees to execute and cause its
Controlled Affiliates to execute such agreements as may be reasonably requested by the underwriters in connection with such registration
that are consistent with this Section 5.1 or that are necessary to give further effect thereto. The provisions of this Section 5.1
shall automatically terminate upon the date upon which both (a) there is no Gilead Designee serving on the Board and Gilead,
together with its Affiliates, collectively, do not, directly or indirectly, own outstanding shares of Common Stock representing at least
[***]% of the Company Capitalization.
5.2 Restrictions
on Transfer.
5.2.1 Subject
to Article 6, the Shares will not be sold, pledged, or otherwise transferred, and the Company will not recognize and will
issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions
specified in this Section 5.2.1, which conditions are intended to ensure compliance with the provisions of the Securities
Act. Each Holder, if effecting a transfer of Shares other than a sale pursuant to Commission Rule 144 or sale pursuant to a registration
statement under the Securities Act, will cause any proposed purchaser, pledgee, or transferee of the Shares to agree to take and hold
such securities subject to the provisions and upon the conditions specified in this Section 5.2.1.
5.2.2 Gilead
understands and agrees that the Shares (or uncertificated interests in the Shares) will bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of the Shares):
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED, SOLD, PLEDGED, HYPOTHECATED OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS. THE COMPANY SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED TO THE EXTENT THAT SUCH OPINION IS REQUIRED PURSUANT TO THAT CERTAIN COMMON STOCK
PURCHASE AGREEMENT UNDER WHICH THE SECURITIES WERE ISSUED.
5.2.3 Each
Holder consents to the Company making a notation in its records and giving instructions to any transfer agent of the Common Stock in
order to implement the restrictions on transfer set forth in this Section 5.2.
5.2.4 Each
Holder agrees to comply in all respects with the provisions of this Section 5.2. Before any proposed sale, pledge, or transfer
of any Restricted Securities that is not effected pursuant to Commission Rule 144, unless there is in effect a registration statement
under the Securities Act covering the proposed transaction, the Holder will give notice to the Company of its intention to effect such
sale, pledge, or transfer. Each such notice will describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient
detail and, if reasonably requested by the Company, will be accompanied at such Holder’s expense by either: (i) a written
opinion of legal counsel who will, and whose legal opinion will, 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 Commission 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 Commission 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 will 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 and such securities will no longer constitute Restricted Securities for purposes of this Agreement. The Company will not require
such a legal opinion or “no action” letter in any transaction in which such Holder distributes Restricted Securities to an
Affiliate of such Holder for no consideration; provided that each such transferee agrees in writing to be subject to the terms
of this Section 5.2. Each certificate or instrument evidencing the Restricted Securities transferred as above provided will
bear, except if such transfer is made pursuant to Commission Rule 144, the appropriate restrictive legend set forth in Section 5.2.2,
except that such certificate will not bear 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.
5.3 Anti-Dilution.
If, at any time during the Exercise Period, the Company offers new shares of Common Stock (or any new securities convertible into or
exercisable or exchangeable for new shares of Common Stock) to any person or entity other than Gilead or its Affiliates (other than (a) to
current or future employees, consultants, directors and/or officers of the Company or its Affiliates in the form of equity-based incentive
or compensation or the exercise or vesting of such incentive or compensation or (b) in an “at-the-market” offering)
in a public offering for cash, the Company shall permit Gilead, but Gilead shall not be required, to invest either (at the Company’s
election) in such offering or in a concurrent private placement in accordance with applicable securities laws and stock exchange rules,
or both (in each case, on the same terms as the other investors in such public offering and at a price per share or security equal to
the price paid by the other investors in the public offering), in either case (or in combination) in an aggregate amount pro rata
to its then percentage ownership based on the Company Capitalization immediately prior to the consummation of such offering(s). For
purposes of determining Gilead’s pro rata share of the Company Capitalization in this Section 5.3, shares of Common
Stock issuable upon conversion, exercise or exchange of any securities convertible into or exercisable or exchangeable for new shares
of Common Stock (other than securities issued to employees, consultants, directors and/or officers of the Company or its Affiliates in
the form of equity-based incentive or compensation) held by Gilead and all other holders shall be deemed to be outstanding. Notwithstanding
the foregoing, in no event shall Gilead be permitted to purchase any securities pursuant to this Section 5.3 if, after giving
effect to such purchase, Gilead and its Controlled Affiliates, and any other party acting in concert with Gilead or any of its Controlled
Affiliates, would, together in the aggregate, directly or indirectly Beneficially Own a number of shares of Common Stock greater than
35% of the Company Capitalization on such date, rounded down to the nearest whole share.
5.4 Open
Market Purchases. At any time during the Exercise Period, Gilead shall be permitted to acquire
shares of Common Stock through open market purchases so long as, after giving effect to such acquisition, Gilead and its Controlled Affiliates,
and any other party acting in concert with Gilead or any of its Controlled Affiliates, would, together in the aggregate, not directly
or indirectly Beneficially Own a number of shares of Common Stock greater than 35% of the Company Capitalization on such date, rounded
down to the nearest whole share.
ARTICLE 6
REGISTRATION RIGHTS
6.1 Registration
Statements.
6.1.1 On
or before October 31, 2022 (the “Filing Date”), the Company shall file a registration statement covering the
resale of the Registrable Securities with the Commission for an offering to be made on a continuous basis pursuant to Commission Rule 415,
or if Commission Rule 415 is not available for offers and sales of the Registrable Securities, by such other means of distribution
of Registrable Securities as Gilead may reasonably specify (the “Initial Registration Statement”). The Initial Registration
Statement shall be on Form S-3 (except if the Company is ineligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form) and the Company shall effect the registration, qualifications or
compliances (including, without limitation, the execution of any required undertaking to file post-effective amendments, appropriate
qualifications or exemptions under applicable blue sky or other state securities laws and appropriate compliance with applicable securities
laws, requirements or regulations) as promptly as possible after the filing thereof, but in any event prior to the date which is 75 days
in the event of no review by the Commission, or 120 days in the event of a review by the Commission, after the expiration of the Lock-Up
Period. For purposes of clarification, any failure by the Company to file the Initial Registration Statement by the Filing Date or to
effect such Registration Statement within such 75 or 120 days, as applicable, after the expiration of the Lock-Up Period shall not otherwise
relieve the Company of its obligations to file or effect the Initial Registration Statement as set forth above in this Section 6.1.1.
In the event the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Commission
Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (a) inform
each Holder thereof, (b) use its reasonable efforts to file amendments to the Initial Registration Statement as required by the
Commission and/or (c) withdraw the Initial Registration Statement and file a new registration statement (a “New Registration
Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission,
on Form S-3 or, if the Company is ineligible to register for resale the Registrable Securities on Form S-3, such other form
available to register for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such
amendment or New Registration Statement, the Company shall be obligated to use its reasonable efforts to advocate with the Commission
for the registration of all of the Registrable Securities. In the event the Company amends the Initial Registration Statement or files
a New Registration Statement, as the case may be, under clauses (b) or (c) above, the Company will use its reasonable efforts
to file with the Commission, as promptly as allowed by the Commission, one or more registration statements on Form S-3 or, if the
Company is ineligible to register for resale the Registrable Securities on Form S-3, such other form available to register for resale
those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration
Statement (the “Remainder Registration Statements”).
6.1.2 As
soon as reasonably practicable, but in no event later than 30 days after each Additional Closing Date that follows the expiration of
the Lock-Up Period (each, an “Additional Filing Date”), the Company shall file a registration statement covering the
resale of the additional Registrable Securities purchased on each such Additional Closing Date with the Commission for an offering to
be made on a continuous basis pursuant to Commission Rule 415, or if Commission Rule 415 is not available for offers and sales
of the Registrable Securities, by such other means of distribution of Registrable Securities as Gilead may reasonably specify (each,
an “Additional Registration Statement”). For purposes of this Agreement, the term Additional Closing Date shall include
the Fourth Closing Date, as defined in the Purchase Agreement. Each Additional Registration Statement shall be on Form S-3 (except
if the Company is ineligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall
be on another appropriate form) and the Company shall effect the registration, qualifications or compliances (including, without limitation,
the execution of any required undertaking to file post-effective amendments, appropriate qualifications or exemptions under applicable
blue sky or other state securities laws and appropriate compliance with applicable securities laws, requirements or regulations) as promptly
as possible after the filing thereof, but in any event prior to the date which is 75 days in the event of no review by the Commission,
or 120 days in the event of a review by the Commission, after the applicable Additional Closing Date. For purposes of clarification,
any failure by the Company to file an Additional Registration Statement by the applicable Additional Filing Date or to effect such Registration
Statement within such 75 or 120 days, as applicable, after the applicable Additional Closing Date shall not otherwise relieve the Company
of its obligations to file or effect the applicable Additional Registration Statement as set forth above in this Section 6.1.2.
In the event the Commission informs the Company that all of the additional Registrable Securities cannot, as a result of the application
of Commission Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees
to promptly (a) inform each Holder thereof, (b) use its reasonable efforts to file amendments to the Additional Registration
Statement as required by the Commission and/or (c) withdraw the Additional Registration Statement and file a new registration statement
(a “New Additional Registration Statement”), in either case covering the maximum number of additional Registrable
Securities permitted to be registered by the Commission, on Form S-3 or, if the Company is ineligible to register for resale the
additional Registrable Securities on Form S-3, such other form available to register for resale the additional Registrable Securities
as a secondary offering; provided, however, that prior to filing such amendment or New Additional Registration Statement, the
Company shall be obligated to use its reasonable efforts to advocate with the Commission for the registration of all of the additional
Registrable Securities. In the event the Company amends the Additional Registration Statement or files a New Additional Registration
Statement, as the case may be, under clauses (b) or (c) above, the Company will use its reasonable efforts to file with the
Commission, as promptly as allowed by the Commission, one or more registration statements on Form S-3 or, if the Company is ineligible
to register for resale the additional Registrable Securities on Form S-3, such other form available to register for resale those
additional Registrable Securities that were not registered for resale on the Additional Registration Statement, as amended, or the New
Additional Registration Statement (the “Remainder Additional Registration Statements”).
6.1.3 Any
provision hereof to the contrary notwithstanding, until the Existing Investors’ Rights Agreement Termination Date, the Company
shall not be obligated to cause any registration statement hereunder to become effective within 120-days of the effective date of any
registration effected pursuant to Section 1.2 of the Existing Investors’ Rights Agreement.
6.2 Registration
Expenses. All Registration Expenses incurred in connection with any registration, qualification,
exemption or compliance pursuant to Section 6.1 shall be borne by the Company. All Selling Expenses relating to the sale
of securities registered by or on behalf of each Holder shall be borne by such Holder on the basis of the number of securities so registered.
6.3 Company
Obligations. In the case of the registration, qualification, exemption or compliance effected
by the Company pursuant to this Agreement, the Company shall, upon reasonable request, inform each Holder as to the status of such registration,
qualification, exemption and compliance.
6.3.1 At
its expense the Company shall:
| (a) | except for such times as the Company is
permitted hereunder to suspend the use of the prospectus forming part of a Registration Statement,
use its commercially reasonable efforts to keep such registration, and any qualification,
exemption or compliance under state securities laws which the Company determines to obtain,
continuously effective with respect to a Holder, and to keep the applicable Registration
Statement free of any material misstatements or omissions, until the earlier of the following:
(i) the date on which all Registrable Securities have been sold pursuant to a Registration
Statement or (ii) the date all Shares held by such Holder may be sold under Commission
Rule 144 without being subject to any volume, manner of sale or publicly available information
requirements. The period of time during which the Company is required hereunder to keep a
Registration Statement effective is referred to herein as the “Registration Period.” |
| (b) | advise the Holders within five (5) Business
Days: |
(A) when
a Registration Statement or any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective
amendment thereto has become effective;
(B) of
any request by the Commission for amendments or supplements to any Registration Statement or the prospectus included therein or for additional
information;
(C) of
the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any
proceedings for such purpose;
(D) of
the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities included
therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
(E) of
the occurrence of any event that requires the making of any changes in any Registration Statement or prospectus so that, as of such date,
the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make
the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading;
| (c) | use its commercially reasonable efforts
to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement
as soon as reasonably practicable; |
| (d) | if a Holder so requests in writing, promptly
furnish to each such Holder, without charge, at least one (1) copy of each Registration
Statement and each post-effective amendment thereto, including financial statements and schedules,
and, if explicitly requested, all exhibits in the form filed with the Commission; |
| (e) | during the Registration Period, promptly
deliver to each such Holder, without charge, as many copies of each prospectus included in
a Registration Statement and any amendment or supplement thereto as such Holder may reasonably
request in writing; and the Company consents to the use, consistent with the provisions hereof,
of the prospectus or any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the Registrable Securities
covered by a prospectus or any amendment or supplement thereto; |
| (f) | during the Registration Period, if a Holder
so requests in writing, deliver to each Holder, without charge, (i) one (1) copy
of the following documents, other than those documents available via EDGAR: (A) its
annual report to its stockholders, if any (which annual report shall contain financial statements
audited in accordance with generally accepted accounting principles in the United States
of America by a firm of certified public accountants of recognized standing), (B) if
not included in substance in its annual report to stockholders, its annual report on Form 10-K
(or similar form), (C) its definitive proxy statement with respect to its annual meeting
of stockholders, (D) each of its quarterly reports to its stockholders, and, if not
included in substance in its quarterly reports to stockholders, its quarterly report on Form 10-Q
(or similar form), and (E) a copy of each full Registration Statement (the foregoing,
in each case, excluding exhibits); and (ii) if explicitly requested, all exhibits excluded
by the parenthetical to the immediately preceding clause (E); |
| (g) | prior to any public offering of Registrable
Securities pursuant to any Registration Statement, promptly take such actions as may be necessary
to register or qualify or obtain an exemption for offer and sale under the securities or
blue sky laws of such United States jurisdictions as any such Holders reasonably request
in writing, provided that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such jurisdiction, and do
any and all other acts or things reasonably necessary or advisable to enable the offer and
sale in such jurisdictions of the Registrable Securities covered by any such Registration
Statement; |
| (h) | upon the occurrence of any event contemplated
by Section 6.3.1(b)(E) above, except for such times as the Company is permitted
hereunder to suspend the use of a prospectus forming part of a Registration Statement, the
Company shall use its commercially reasonable efforts to as soon as reasonably practicable
prepare a post-effective amendment to such Registration Statement or a supplement to the
related prospectus, or file any other required document so that, as thereafter delivered
to purchasers of the Registrable Securities included therein, such prospectus will not include
any untrue statement of a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; |
| (i) | otherwise use its commercially reasonable
efforts to comply in all material respects with all applicable rules and regulations
of the Commission which could affect the sale of the Registrable Securities; |
| (j) | use its commercially reasonable efforts
to cause all Registrable Securities to be listed on each securities exchange or market, if
any, on which Equity Securities issued by the Company have been listed; |
| (k) | use its commercially reasonable efforts
to take all other steps necessary to effect the registration of the Registrable Securities
contemplated hereby and to enable the Holders to sell Registrable Securities under Commission
Rule 144; |
| (l) | provide to Gilead and its representatives,
if requested, the opportunity to conduct a reasonable inquiry of the Company’s financial
and other records during normal business hours and make available its officers, directors
and employees for questions regarding information which such Purchaser may reasonably request
in order to fulfill any due diligence obligation on its part; and |
| (m) | permit counsel for Gilead to review any
Registration Statement and all amendments and supplements thereto (other than supplements
to a Registration Statement on Form S-1 solely for the purpose of incorporating other
filings with the Commission into such Registration Statement and other than an amendment
to a Registration Statement on Form S-1 on Form S-3 for the purpose of converting
such Registration Statement into a Registration Statement on Form S-3), within two (2) Business
Days prior to the filing thereof with the Commission; |
provided that, in the case of clauses
(l) and (m) above, the Company shall not be required (a) to delay the filing of any Registration Statement or any amendment
or supplement thereto as a result of any ongoing diligence inquiry by or on behalf of a Holder or to incorporate any comments to any
Registration Statement or any amendment or supplement thereto by or on behalf of a Holder if such inquiry or comments would require a
delay in the filing of such Registration Statement, amendment or supplement, as the case may be, or (b) to provide, and shall not
provide, Gilead or its representatives with material, non-public information unless Gilead agrees in writing to receive such information
and enters into a written confidentiality agreement with the Company in a form reasonably acceptable to the Company.
6.4 No
Right to Enjoin. The Holders shall have no right to take any action to restrain, enjoin or otherwise
delay any registration pursuant to Section 6.1 hereof as a result of any controversy that may arise with respect to the interpretation
or implementation of this Agreement.
6.5 Indemnification.
6.5.1 To
the extent permitted by law, the Company shall indemnify each Holder and each Person controlling such Holder within the meaning of Section 15
of the Securities Act, with respect to which any registration that has been effected pursuant to this Agreement, against all claims,
losses, damages and liabilities (or action in respect thereof), including any of the foregoing incurred in settlement of any litigation,
commenced or threatened (subject to Section 6.5.3 below), arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any Registration Statement, prospectus, any amendment or supplement thereof, or other document
incident to any such registration, qualification or compliance or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, in light of the circumstances in which
they were made, or any violation by the Company of any rule or regulation promulgated by the Securities Act applicable to the Company
and relating to any action or inaction required of the Company in connection with any such registration, qualification or compliance,
and will reimburse each Holder and each Person controlling such Holder, for reasonable legal and other out-of-pocket expenses reasonably
incurred in connection with investigating or defending any such claim, loss, damage, liability or action as incurred; provided that
the Company will not be liable in any such case to the extent that any untrue statement or omission or allegation thereof is made in
reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder for use in preparation
of any Registration Statement, prospectus, amendment or supplement; provided further, that the Company will not be liable in any
such case where the claim, loss, damage or liability arises out of or is related to the failure of such Holder to comply with the covenants
and agreements contained in this Agreement respecting sales of Registrable Securities, and except that the foregoing indemnity agreement
is subject to the condition that, insofar as it relates to any such untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus but eliminated or remedied in the amended prospectus on file with the Commission at the time
any Registration Statement becomes effective or in an amended prospectus filed with the Commission pursuant to Rule 424(b) which
meets the requirements of Section 10(a) of the Securities Act (each, a “Final Prospectus”), such indemnity
shall not inure to the benefit of any such Holder or any such controlling Person, if a copy of a Final Prospectus furnished by the Company
to the Holder for delivery was not furnished to the Person asserting the loss, liability, claim or damage at or prior to the time such
furnishing is required by the Securities Act and a Final Prospectus would have cured the defect giving rise to such loss, liability,
claim or damage.
6.5.2 Each
Holder will severally, and not jointly, indemnify the Company, each of its directors and officers, and each Person who controls the Company
within the meaning of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened (subject to Section 6.5.3
below), arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any Registration
Statement, prospectus, or any amendment or supplement thereof, incident to any such registration, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading,
in light of the circumstances in which they were made, and will reimburse the Company, such directors and officers, and each Person controlling
the Company for reasonable legal and any other expenses reasonably incurred in connection with investigating or defending any such claim,
loss, damage, liability or action as incurred, in each case to the extent, but only to the extent, that such untrue statement or omission
or allegation thereof is made in reliance upon and in conformity with written information furnished to the Company by or on behalf of
the Holder expressly for use in preparation of any Registration Statement, prospectus, amendment or supplement; provided that
the indemnity shall not apply to the extent that such claim, loss, damage or liability results from the fact that a current copy of a
prospectus was not made available to the Person asserting the loss, liability, claim or damage at or prior to the time such furnishing
is required by the Securities Act and a Final Prospectus would have cured the defect giving rise to such loss, claim, damage or liability.
Notwithstanding the foregoing, a Holder’s aggregate liability pursuant to this Section 6.5.2 and Section 6.5.4
shall be limited to the net amount received by the Holder from the sale of the Registrable Securities.
6.5.3 Each
party entitled to indemnification under this Section 6.5 (the “Indemnified Party”) shall give notice to
the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has
actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party (at its expense) to assume
the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such Indemnified Party’s expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement, unless such failure is materially prejudicial to the Indemnifying Party in defending such claim or litigation.
An Indemnifying Party shall not be liable for any settlement of an action or claim effected without its written consent (which consent
will not be unreasonably withheld). No Indemnifying Party, in its defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or
litigation.
6.5.4 If
the indemnification provided for in this Section 6.5 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or expense referred to therein, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such
loss, liability, claim, damage or expense as well as 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 alleged untrue statement
of a material fact or the omission to state 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.
6.6 Holder
Obligations.
6.6.1 Each
Holder agrees that, upon receipt of any notice from the Company of the happening of any event requiring the preparation of a supplement
or amendment to a prospectus relating to Registrable Securities so that, as thereafter delivered to the Holders, such prospectus shall
not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, each Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration
Statement and prospectus contemplated by Section 6.1 until its receipt of copies of the supplemented or amended prospectus
from the Company and, if so directed by the Company, each Holder shall deliver to the Company all copies, other than permanent file copies
then in such Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such
notice.
6.6.2 Each
Holder shall suspend, upon request of the Company, any disposition of Registrable Securities pursuant to any Registration Statement and
prospectus contemplated by Section 6.1 during no more than two periods of no more than 30 calendar days each during any 12-month
period to the extent that the Board determines in good faith that the sale of Registrable Securities under any such Registration Statement
would be reasonably likely to cause a violation of the Securities Act or Exchange Act.
6.6.3 As
a condition to the inclusion of its Registrable Securities, each Holder shall furnish to the Company such information regarding such
Holder and the distribution proposed by such Holder as the Company may reasonably request in writing, including completing a Registration
Statement Questionnaire in the form provided by the Company, or as shall be required in connection with any registration referred to
in this Article 6.
6.6.4 Each
Holder hereby covenants with the Company (a) not to make any sale of the Registrable Securities without effectively causing the
prospectus delivery requirements under the Securities Act to be satisfied, and (b) if such Registrable Securities are to be sold
by any method or in any transaction other than on a national securities exchange or in the over-the-counter market, in privately negotiated
transactions, or in a combination of such methods, to notify the Company at least five (5) Business Days prior to the date on which
the Holder first offers to sell any such Registrable Securities.
6.6.5 At
the end of the Registration Period the Holders shall discontinue sales of shares pursuant to any Registration Statement upon receipt
of notice from the Company of its intention to remove from registration the shares covered by any such Registration Statement which remain
unsold, and such Holders shall notify the Company of the number of shares registered which remain unsold immediately upon receipt of
such notice from the Company.
6.7 Piggyback
Registrations.
6.7.1 Right
to Piggyback. For a period of five (5) years following the expiration of the Lock-Up Period, whenever the Company proposes to
register the issuance or sale of any of its Common Stock under the Securities Act for its own account or otherwise, and the registration
form to be used may be used for the registration of the resale of Registrable Securities (each, a “Piggyback Registration”)
(except for the registrations on Form S-8 or Form S-4 or any successor form thereto) (a “Piggyback Registration Statement”),
the Company will give written notice of the filing of such registration statement to the Holders and will use reasonable efforts to include
in such registration all Registrable Securities that are no longer subject to the lock-up restrictions under Section 4.1
of this Agreement (in accordance with the priorities set forth in Sections 6.7.2 and 6.7.3 below) with respect to which
the Company has received written requests for inclusion, which request shall specify the number of such Registrable Securities desired
to be registered and be delivered within fifteen (15) days after the delivery of the Company’s notice. The Company may postpone
or withdraw the filing or the effectiveness of a Piggyback Registration Statement at any time in its sole discretion.
6.7.2 Priority
on Primary Registrations. If a Piggyback Registration is an underwritten primary offering on behalf of the Company and the managing
underwriters advise the Company in writing that in their opinion the number of Registrable Securities requested to be included in the
registration creates a substantial risk that the price per share of the primary securities will be reduced or that the amount of the
primary securities intended to be included on behalf of the Company will be reduced, then the managing underwriter and the Company may
exclude securities (including Registrable Securities) from the registration and the underwriting, and the number of securities that may
be included in such registration and underwriting shall include: (i) first, any securities that the Company proposes to sell, (ii) until
the Existing Investors’ Rights Agreement Termination Date, (A) second, any securities proposed to be sold by the security
holders then having registration rights under the Existing Investors’ Rights Agreement, and (B) third, on a pro rata basis
based on the total number of Registrable Securities held by such Holders, any Registrable Securities proposed to be sold by the Holders,
and (iii) thereafter, second, pari passu among the holders then having registration rights under the Existing Investors’
Rights Agreement and the Holders on a pro rata basis based on the total number of registrable securities held by such holders
under the Existing Investors’ Rights Agreement and the total number of Registrable Securities held by the Holders.
6.7.3 Priority
on Secondary Registrations. If a Piggyback Registration is an underwritten secondary offering on behalf of holders of the Company’s
securities and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be
included in the registration creates a substantial risk that the price per share of securities offered thereby will be reduced, the Company
will include in such registration: (i) until the Existing Investors’ Rights Agreement Termination Date (A) first any
securities proposed to be sold by the security holders then having registration rights under the Existing Investors’ Rights Agreement
and (B) second, on a pro rata basis based on the total number of Registrable Securities held by such Holders, any Registrable
Securities proposed to be sold by the Holders, and (ii) thereafter, second, pari passu among the holders then having registration
rights under the Existing Investors’ Rights Agreement and the Holders on a pro rata basis based on the total number of registrable
securities held by such holders under the Existing Investors’ Rights Agreement and the total number of Registrable Securities held
by the Holders.
6.7.4 Selection
of Underwriters. In connection with any underwritten Piggyback Registration initiated by the Company, the Company shall have the
right to (i) determine the plan of distribution and (ii) select the investment banker or bankers and managers to administer
the offering, including the lead managing underwriter.
6.7.5 Payment
of Expenses for Piggyback Registrations. All Registration Expenses incurred in connection with any registration, qualification, exemption
or compliance pursuant to Section 6.7.1 shall be borne by the Company. All Selling Expenses relating to the sale of securities
registered by or on behalf of each Holder pursuant to Section 6.7.1 shall be borne by such Holder on the basis of the number
of securities so registered.
6.8 Commission
Rule 144.
6.8.1 With
a view to making available to the Holders the benefits of certain rules and regulations of the Commission which at any time permit
the sale of the Registrable Securities to the public without registration, so long as the Holders still own Registrable Securities, the
Company shall use its reasonable efforts to:
| (a) | make and keep public information available,
as those terms are understood and defined in Commission Rule 144, at all times; |
| (b) | file with the Commission in a timely manner
all reports and other documents required of the Company under the Exchange Act; and |
| (c) | furnish to such Holder, upon any reasonable
request, a written statement by the Company as to its compliance with Commission Rule 144,
and of the Exchange Act, a copy of the most recent annual or quarterly report of the Company,
and such other reports and documents of the Company as such Holder may reasonably request
in availing itself of any rule or regulation of the Commission allowing a Holder to
sell any such securities without registration. |
6.9 Waiver.
The rights of the Holders under any provision of this Article 6 may be waived (either generally or in a particular instance,
either retroactively or prospectively and either for a specified period of time or indefinitely) or amended by an instrument in writing
signed by Holders holding a majority of the Registrable Securities outstanding at such time.
ARTICLE 7
MISCELLANEOUS
7.1 Fees
and Expenses. Each party shall pay all fees and expenses that it incurs (including on account
of any of their respective advisers, counsel, accountants and other experts) in connection with the negotiation, preparation, execution
and delivery of this Agreement and its performance under or compliance with the terms of this Agreement.
7.2 Entire
Agreement. This Agreement, the Collaboration Agreement and the Purchase Agreement contain the
entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
7.3 Notices.
Any notice or other communication required or permitted to be given under this Agreement shall be in writing (whether or not specifically
stated), shall specifically refer to this Agreement, and shall be addressed to the appropriate party at the address specified below or
such other address as may be specified by such party in writing in accordance with this Section 7.3, and shall be deemed
to have been given for all purposes (a) when received, if hand-delivered, sent by a reputable international expedited delivery service
(with receipt confirmed), or (b) five (5) Business Days after mailing, if mailed by first class certified or registered mail,
postage prepaid, return receipt requested. This Section 7.3 is not intended to govern the day-to-day business communications
necessary between the parties in performing their obligations under the terms of this Agreement (for which e-mail or other methods of
communications shall suffice).
| If to the Company: |
Arcus Biosciences, Inc. |
| |
Attention: General Counsel |
| |
3928 Point Eden Way |
| |
Hayward, CA 94545 |
| |
|
| With a copy to (which shall not constitute notice): |
Cooley LLP |
| |
Attention: Kenneth Guernsey |
| |
3 Embarcadero Center, 20th Floor |
| |
San Francisco, CA 94111 |
| |
|
| If to Gilead: |
Gilead Sciences, Inc. |
| |
Attention: Alliance Management |
| |
333 Lakeside Drive |
| |
Foster City, CA 94404 |
| |
|
| With a copy to (which shall not constitute notice): |
Gilead Sciences, Inc. |
| |
Attention: General Counsel |
| |
333 Lakeside Drive |
| |
Foster City, CA 94404 |
| |
|
| |
Covington & Burling LLP |
| |
Attention: Amy L. Toro, Esq. |
| |
Salesforce Tower |
| |
415 Mission Street, Suite 5400 |
| |
San Francisco, CA 94105-2533 |
7.4 Amendments
and Waivers. No subsequent alteration, amendment, change or addition to this Agreement shall
be binding upon the parties hereto unless reduced to writing and signed by an authorized officer of each party. Any delay in enforcing
a party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of
such party’s rights to the future enforcement of its rights under this Agreement, except with respect to an express written and
signed waiver relating to a particular matter for a particular period of time.
7.5 Termination.
This Agreement shall simultaneously and automatically terminate in the event that (a) the Collaboration Agreement terminates in
its entirety for any reason, (b) the Purchase Agreement is terminated if such termination occurs before the Closing Date, or (c) the
Company consummates any merger, consolidation or similar transaction unless immediately following the consummation of such transaction
the stockholders of the Company immediately prior to the consummation of such transaction continue to hold, as a result of their holding
of outstanding Common Stock and other securities entitled to vote for the election of directors of the Company immediately prior to the
consummation of such transaction, in aggregate more than 50% of the outstanding Common Stock and other securities entitled to vote for
the election of directors of the surviving or resulting entity in such transaction. If not earlier terminated, this Agreement shall automatically
terminate upon the tenth anniversary of the date of this Agreement. Notwithstanding anything to the contrary set forth herein: (A) the
Company’s obligations under Article 6 (Registration Rights) of this Agreement shall survive until the earlier to occur
of (i) an event set forth in (c) above, or until fully performed and discharged; and (B) if this Agreement has terminated
as a result of Gilead having terminated the Collaboration Agreement for convenience or the Company having terminated the Collaboration
Agreement as a result of Gilead’s material breach of the Collaboration Agreement, and an event set forth in (c) above has
not occurred, Gilead’s obligations in Section 4.2 (Limitation on Dispositions) shall survive until terminated as set
forth in Section 4.2, and Gilead’s obligations in Section 5.1 (“Market Stand-off” Agreement)
shall survive until terminated as set forth in Section 5.1.
7.6 Construction;
Headings. The terms “includes,” “including,” “include” and
derivative forms of them shall be deemed followed by the phrase “without limitation” (regardless of whether it is actually
written (and drawing no implication from the actual inclusion of such phrase in some instances after such terms but not others)) and
the term “or” has the inclusive meaning represented by the phrase “and/or” (regardless of whether it is actually
written (and drawing no implication from the actual use of the phrase “and/or” in some instances but not in others)). Unless
specified to the contrary, references to Articles or Sections shall refer to the particular Articles or Sections of or to this Agreement.
The word “day,” “quarter” or “year” (and derivatives thereof, e.g., “quarterly”) shall
mean a calendar day, calendar quarter or calendar year unless otherwise specified. The word “hereof,” “herein,”
“hereby” and derivative or similar word refers to this Agreement. The words “will” and “shall” shall
have the same obligatory meaning. Provisions that require that a party or parties hereunder “agree,” “consent”
or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written
agreement, letter or otherwise. Words of any gender include the other gender. Words using the singular or plural number also include
the plural or singular number, respectively. References to any specific law or article, section or other division thereof, shall be deemed
to include the then-current amendments or any replacement law thereto, and any rules and regulations promulgated thereunder. All
dollar-denominated amounts herein are in United States dollars. This Agreement has been prepared jointly and shall not be strictly construed
against either party. Ambiguities, if any, in this Agreement shall not be construed against either party, irrespective of which party
may be deemed to have authored the ambiguous provision. The headings of each Article and Section in this Agreement have been
inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular
Article or Section.
7.7 Further
Assurances. Each party agrees to execute, acknowledge and deliver such further instruments,
and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
7.8 Successors
and Assigns. This Agreement may not be assigned by a party hereto without the prior written
consent of the Company or Gilead, as applicable, provided, however, that Gilead may assign its rights and delegate its duties hereunder
in whole or in part to an Affiliate without the prior written consent of the Company, provided such assignee agrees in writing to be
bound by the provisions hereof that apply to Gilead. The provisions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted 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 permitted successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
7.9 Governing
Law. This Agreement shall be governed by and construed under the substantive laws of the State
of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation
of this Agreement to the substantive law of another jurisdiction.
7.10 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of Gilead
and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not
to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
7.11 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST
ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
7.12 Attorneys’
Fees. In the event that any action is instituted under or in relation to this Agreement, including
without limitation to enforce any provision in this Agreement, each party shall bear its own fees, costs and expenses of enforcing any
right of such party under or with respect to this Agreement.
7.13 Counterparts.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were
an original thereof.
7.14 Severability.
If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by an arbitrator or by any court of competent
jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve
to invalidate any remaining provisions hereof. The parties shall make a good faith effort to replace any invalid or unenforceable provision
with a valid and enforceable one such that the objectives contemplated by the parties when entering into this Agreement may be realized.
[Remainder of Page Intentionally Left
Blank]
IN WITNESS WHEREOF,
the parties hereto have caused this Amended and Restated Investor Rights Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
| |
Arcus Biosciences, Inc. |
| |
|
|
|
| |
By: |
/s/ Terry Rosen |
| |
|
Name: |
Terry Rosen |
| |
|
Title: |
CEO |
| |
|
|
|
| |
Gilead Sciences, Inc. |
| |
|
|
|
| |
By: |
/s/ Andrew D. Dickinson |
| |
|
Name: |
Andrew D. Dickinson |
| |
|
Title: |
Chief Financial Officer |
Signature Page to A&R Investor Rights
Agreement
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Gilead Sciences (NASDAQ:GILD)
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From May 2023 to May 2024
