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$HRTX
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8-K
Aug 12, 4:45 PM ET
HERON THERAPEUTICS, INC. /DE/ 8-K
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Contents
64
Section 1. Definitions.
Section 2. Rules of Construction. For purposes of this Agreement:
Section 3. The Exchange.
(a) Generally. The Exchange is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act. Subject to the other terms of this Agreement and pursuant to Section 3(a)(9) of the Securities Act, the parties hereto agree that, at the Closing, each Holder will exchange, with the Company, the Existing Note that it beneficially owns for Exchange Consideration in the amounts set forth in Exhibit A of this Agreement. All obligations of the Holders under this Agreement are several and not joint.
(b) The Closing.
Section 4. Representations, Warranties and Covenants of the Company. As a material inducement to the Holders to enter into this Agreement and consummate the Exchange, the Company hereby represents and warrants with and to the Holders, effective as of the date hereof and as of the Closing Date, and covenants that:
(a) Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under, and by virtue of, the laws of the State of Delaware and has all requisite corporate power and authority to own its properties and assets and to carry on its business as now conducted and as presently proposed to be conducted. The Company is qualified to do business as a foreign corporation in each jurisdiction where failure to be so qualified would have a material adverse effect on the financial condition, business, or operations of the Company taken as a whole.
(b) Corporate Power and Authority; Valid Issuance of Common Stock.
(c) Consents. Neither the execution, delivery or performance of the Transaction Documents by the Company, nor the consummation by it of the Transactions requires any consent of, authorization by, exemption from, filing with or notice to any Governmental Entity or any other Person, other than filings required under applicable U.S. federal and state securities laws.
(d) No Conflicts.
(e) Capitalization.
(f) Subsidiaries. Except for Heron Therapeutics B.V., organized in the Netherlands, the Company does not have any Subsidiaries, and such Subsidiary is wholly owned by the Company.
(g) Material Contracts. Each Material Contract is the legal, valid and binding obligation of the Company or a Subsidiary, as the case may be, enforceable against the Company
or such Subsidiary, as the case may be, in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. The Company and each Subsidiary, as the case may be, is in compliance with all material terms of the Material Contracts to which it is party, and there has not occurred any breach, violation or default or any event that, with the lapse of time, the giving of notice or the election of any Person, or any combination thereof, would constitute a breach, violation or default by the Company or any Subsidiary under any such Material Contract or, to the knowledge of the Company and each Subsidiary, by any other Person to any such contract except where such breach, violation or default would not have a Material Adverse Effect. Neither the Company nor any Subsidiary has been notified that any party to any Material Contract intends to cancel, terminate, not renew or exercise an option under any Material Contract, whether in connection with the transactions contemplated hereby or otherwise.
(h) The Nasdaq Stock Market. The Common Stock is listed on Nasdaq. To the Company’s knowledge, there are no proceedings to revoke or suspend such listing or the listing of the Common Stock. The Company is in compliance with the requirements of Nasdaq for continued listing of the Common Stock thereon and any other Nasdaq listing and maintenance requirements, and the execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the Transactions will not result in any noncompliance by the Company with any such requirements.
(i) Disclosure Controls and Procedures; Internal Controls Over Financial Reporting.
(j) Absence of Litigation. There is no claim, action, suit, arbitration, investigation or other proceeding pending against, or to the knowledge of the Company and each Subsidiary, threatened against or affecting, the Company, any Subsidiary or any of the Company’s or any Subsidiary’s properties or, to the knowledge of the Company and each Subsidiary, any of its respective officers or directors before any Governmental Entity, in each case other than legal proceedings that are not reasonably expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty relating to the Company or any Subsidiary. There has not been, and to the knowledge of the Company and each Subsidiary, there is not pending or contemplated, any investigation by the SEC of the Company or any Subsidiary or any current or former director or officer of the Company or any Subsidiary. The Company has not received any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the Exchange Act or the Securities Act and, to the Company’s knowledge, the SEC has not issued any such order.
(k) Valid Issuance of Stock. The outstanding shares of the capital stock of the Company have been duly and validly issued and are fully paid and non-assessable. Such shares of capital stock, and all outstanding options and other securities of the Company have been issued in compliance with the registration and prospectus delivery requirements of the Securities Act, and the registration and qualification requirements of applicable state securities laws, or in compliance with applicable exemptions therefrom, and all other provisions of applicable federal and state securities laws, including, without limitation, anti-fraud provisions.
(l) Compliance with Laws.
(m) Intellectual Property Matters. The Company owns, possesses, licenses or has other rights to use, on reasonable terms, all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of the Company’s business as now conducted or as proposed in the SEC Reports to be conducted (the “Company Intellectual Property”), except for such Intellectual Property the failure of which to own or have a license or other right to use would not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse Effect. To the knowledge of the Company, there are no rights of third parties to any Company Intellectual Property, other than as licensed by the Company. To the knowledge of the Company, there is no infringement by third parties of any Company Intellectual Property. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any Company Intellectual Property that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. 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 Company Intellectual Property that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. The Company is not aware of any facts required to be disclosed to the United States Patent and Trademark Office (“USPTO”) which have not been disclosed to the USPTO and which would preclude the grant of a patent in connection with any patent application of the Company Intellectual Property or could form the basis of a finding of invalidity with respect to any issued patents of the Company Intellectual Property.
(n) Absence of Changes. Since the Evaluation Date: (a) there has not been any Material Adverse Effect or any event or events that individually or in the aggregate would reasonably be expected to have a Material Adverse Effect; (b) there has not been any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, (c) neither the Company nor any Subsidiary has sustained any material loss or interference with the Company’s or any Subsidiary’s business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, and (d) neither the Company nor any Subsidiary has incurred any material liabilities except in the ordinary course of business.
(o) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Charter Documents or the laws of its state of incorporation (including Section 203 of the Delaware General Corporation Law) that is or could become applicable to each Holder and the other investors participating in the Transactions as a result of such investor and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Common Stock in the Exchange and such Holder’s ownership of the Common Stock.
(p) Investment Company Act. Neither the Company nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” or a “subsidiary” of an “investment company”, within the meaning of the Investment Company Act.
(q) Ownership of Properties.
(r) Solvency. Both immediately before and immediately after giving effect to the Transactions, the Company (i) is Solvent and (ii) has not taken action, and no action has been taken by a third party, for the winding up, dissolution or liquidation or similar executory or judicial proceeding in respect of the Company, or for the appointment of a liquidator, custodian, receiver, trustee, administrator or other similar officer for the Company or all of its assets or revenues.
(s) SEC Reports; Financial Statements; Securities Act Matters.
(t) Expenses. On or prior to the Closing Date, the Company shall pay the reasonable and documented out-of-pocket costs and expenses incurred by the Holders in an aggregate amount not to exceed $175,000 in connection with the entrance into and performance of the obligations contemplated by this Agreement.
(u) No Disclosure of Material Non-Public Information. The Company has not disclosed to the Holders any material non-public information with respect to the Company other than any such information that the Company shall publicly disclose via press release or Current Report on Form 8-K as soon as reasonably practicable, but in no event later than (i) 9:30 a.m. New York City time on the first Business Day following the date of this Agreement if this Agreement is entered into at or after 9:01 a.m. New York City time or (ii) 9:30 a.m. New York City time on the date of this Agreement if this Agreement is entered into at or before 9:00 a.m. New York City time (such time and date, the “Release Time”).
Section 5. Representations, Warranties and Covenants of the Holders. As a material inducement to the Company to enter into this Agreement and consummate the Exchange, the Holders each hereby represents and warrants with and to the Company, effective as of the date hereof and as of the Closing, and covenants that:
(a) Organization and Authority. Each Holder has the requisite power and authority to enter into and perform its obligations under this Agreement. The execution and delivery of this Agreement by each Holder and the consummation by such Holder of the transactions contemplated hereby has been duly authorized by such Holder’s board of directors or other governing body. This Agreement has been duly executed and delivered by each Holder and constitutes the legal, valid and binding obligation of such Holder, enforceable against such Holder in accordance with its terms.
(b) Ownership of Existing Notes. Each Holder owns the Existing Notes free and clear of any from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof.
(c) Reliance on Exemptions. Each Holder understands that the Exchange and transactions contemplated hereby are entered into in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Holder set
forth in this Agreement in order to determine the availability of such exemptions and the eligibility of such Holder in connection with the Exchange.
(d) Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of each Holder and shall constitute the legal, valid and binding obligations of such Holder enforceable against such Holder in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(e) No Conflicts. The execution, delivery and performance by each Holder of this Agreement, and the consummation by the Holder of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Holder or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Holder is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws).
(f) No Consideration Paid. No commission or other remuneration has been paid by any of the Holders for soliciting the Exchange as contemplated hereby.
Section 6. Conditions to Obligations of the Parties.
(a) Conditions to the Company’s Obligations. The obligation of the Company to deliver the Exchange Consideration is subject to the satisfaction at or prior to the Closing of each of the following conditions precedent: (i) the representations, warranties and covenants of the Holders in Section 5 hereof are true and correct as of the Closing in all respects with the same effect as though such representations and warranties had been made as of the Closing; (ii) all covenants and agreements of the Holders in Section 5 to be performed at or before the Closing have been performed; and (iii) the receipt of the Existing Notes pursuant to Section 3(b)(iii)(1) of this Agreement.
(b) Conditions to the Holders’ Obligations. The obligation of the Holders to deliver (or cause to be delivered) the Existing Notes is subject to the satisfaction at or prior to the Closing of each of the following conditions precedent: (i) the representations, warranties and covenants of the Company in Section 4 are true and correct as of the Closing in all respects with the same effect as though such representations and warranties had been made as of the Closing; (ii) all covenants and agreements of the Company in Section 4 to be performed at or before the Closing have been performed; (iii) the Company shall have paid in full the fees and expenses payable pursuant to Section 4(t); (iv) no statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by this Agreement; (v) since the date hereof, no event or series of events shall have occurred that has had or would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (vi) the Common Stock shall not have been suspended, as of the Closing Date, by the SEC or Nasdaq from trading on Nasdaq nor shall suspension by the SEC or Nasdaq have been
threatened, as of the Closing Date, either (A) in writing by the SEC or Nasdaq or (B) by falling below Nasdaq’s minimum listing maintenance requirements; (vii) concurrently with the Closing of the Exchange, the Company shall have entered into and consummated the transactions contemplated by the Hercules Loan Agreement, the PIPE Securities Purchase Agreement and the Senior Convertible Note Purchase Agreement, in each case in the form previously delivered to the Holders; and (viii) the Company shall have delivered to the Holders (A) a customary secretary’s certificate in respect of the Company, dated as of the Closing Date, (B) a customary legal opinion from DLA Piper LLP (US), as counsel to the Company and (C) such other certificates and documents as the Holders may reasonably request.
Section 7. The Release Time. The Company agrees to publicly disclose no later than as soon as reasonably practicable, but in no event later than the Release Time, the exchange of the Existing Notes contemplated by this Agreement in a press release or Current Report on Form 8-K. If this Agreement is terminated pursuant to Section 8, the Company agrees to publicly disclose as soon as reasonably practicable, but in no event later than 9:30 a.m. New York City time on the first Business Day after the termination of this Agreement, such termination in a press release or Current Report on Form 8-K. The Company acknowledges and agrees that, as of the time of any public disclosure required by this Section 7, none of the information provided by or on behalf of the Company to the Holders in connection with the Exchange will constitute material non-public information.
Section 8. Termination.
(a) Termination. This Agreement and the obligations of the parties to this Agreement will terminate:
(b) Survival. Notwithstanding anything herein to the contrary, no termination of this Agreement shall relieve or otherwise limit the liability of any Party for any breach of this Agreement occurring prior to such termination. Section 9 shall survive termination of this Agreement.
Section 9. Indemnity.
(a) Indemnity and Hold Harmless. The Company hereby agrees to indemnify and hold harmless the Holders and their affiliates and their officers, directors, employees, advisors, agents, other representatives and controlling persons (the Holders and each such other person being an “Indemnified Person”) from and against any and all actual losses, claims, damages, liabilities and reasonable and documented costs or expenses, joint or several, that may be imposed on, incurred by, or asserted against such Indemnified Person or as a result of any actual or threatened actions, litigations, investigations or proceedings by a party other than an Indemnified Person arising out of or in connection with this Agreement or any related agreements, instruments or other documents (any of the foregoing, a “Proceeding”), and to reimburse each such Indemnified Person upon written demand for any reasonable, documented legal or other out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing by one counsel to the Indemnified Persons taken as a whole and, in the case of a conflict of interest, one additional counsel to the affected Indemnified Persons taken as a whole. The foregoing indemnity and the Company’s reimbursement obligations hereunder will be in addition to any liability which the Company may otherwise have and will be binding upon and inure to the benefit of any of the Company’s successors and assigns and the Indemnified Persons. Promptly after receipt by an Indemnified Person under this Section 9 of notice of the commencement of or the threat (to the extent such threat is in writing) of any action, claim, litigation or proceeding, such Indemnified Person will, if a claim in respect thereof is to be made against the Company under this Section 9, notify the Company in writing of the commencement or threat (to the extent such threat is in writing) thereof, but failure to so notify the Company will not relieve the Company from any liability it may have to such Indemnified Person hereunder except to the extent that the Company is actually prejudiced by such failure.
Limitation on Liability. The indemnity described in Section 9(a) shall not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses (i) to the extent they have resulted from fraud, bad faith, willful misconduct or gross negligence of such Indemnified Person (as determined by a court of competent jurisdiction in a final and non-appealable decision), (ii) arising from a material breach of the obligations of such Indemnified Person under this Agreement or (iii) arising from a Proceeding that does not involve an act or omission by the Company or any of its Affiliates and that is brought by an Indemnified Person
against any other Indemnified Person. Furthermore, no party hereto shall be liable to any other party on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings); provided that nothing contained in this sentence shall limit the Company’s indemnification and reimbursement obligations set forth herein. The Company shall not be liable for any settlement of any action, claim, litigation or proceeding effected without its written consent (which consent shall not be unreasonably withheld or delayed).
Section 10. Miscellaneous.
(a) Waiver; Amendment. Neither this Agreement nor any provisions hereof may be amended, waived, modified, changed, discharged or terminated except by an instrument in writing, signed by all the parties hereto.
(b) Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof will be assignable by either the Company, on the one hand, or any Holder, on the other hand, without the prior written consent of the other parties. Any assignment in violation of the foregoing shall be null and void.
(c) Further Instruments and Acts. Each of the parties to this Agreement agrees to execute and deliver such further agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby, and do such further acts as may be reasonably necessary or proper to more effectively carry out the purposes of this Agreement.
(d) Waiver of Jury Trial. EACH OF THE COMPANY AND THE HOLDERS IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
(e) Governing Law; Jurisdiction. This Agreement will be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the state of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the state of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the city of New York, borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action, or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action, or proceeding is brought in an inconvenient forum or that the venue of such suit, action, or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action, or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
(f) Section and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and will not affect the meaning or interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed to be an original and all of which together will be deemed to be one and the same agreement. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission (including pdf format) will be effective as delivery of a manually executed counterpart hereof.
(h) Notices. All notices and other communications to the Company provided for herein will be in writing and will be deemed to have been duly given if delivered personally or sent by nationally recognized overnight courier service or by registered or certified mail, return receipt requested, postage prepaid to the following addresses (or such other address as either party may have hereafter specified by notice in writing to the other): (i) if to the Company, the address provided on the signature page hereto of the Company, with a copy to DLA Piper LLP (US), 51 John F. Kennedy Parkway, Suite 120, Short Hills, NJ 07078, Attention: Andrew P. Gilbert and Emilio Ragosa; and (ii) if to the Holders, the address provided on the signature page hereto of the Holders, with a copy to Sullivan & Cromwell LLP, 125 Broad Street, New York, NY 10004, Attention: Ari B. Blaut and Alan Fishman.
(i) Binding Effect. The provisions of this Agreement will be binding upon and accrue to the benefit of the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.
(j) Notification of Changes. Each party covenants and agrees to notify the other party upon the occurrence of any event prior to the Closing that would cause any representation, warranty, or covenant contained in this Agreement to be false or incorrect.
(k) Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
(l) Entire Agreement. This Agreement, including all Exhibits hereto and the New Notes Indenture constitute the entire agreement of the parties hereto with respect to the specific subject matter covered hereby, and supersede in their entirety all other agreements or understandings between or among the parties with respect to such specific subject matter.
(m) Additional Documentation. Each of the parties shall, upon request, use commercially reasonable efforts to execute and deliver, for itself, any additional documents that the Company or the Holders may reasonably request to complete the Exchange.