SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13E-3

RULE 13E-3 TRANSACTION STATEMENT UNDER SECTION 13(e)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

Paratek Pharmaceuticals, Inc.

(Name of the Issuer)

 

 

Paratek Pharmaceuticals, Inc.

GPC WH Fund LP

Novo Holdings A/S

Resistance GP LLC

Resistance TopCo L.P.

Resistance Holdings, Inc.

Resistance Intermediate, Inc.

Resistance Acquisition, Inc.

Resistance Merger Sub, Inc.

Evan Loh, M.D.

(Names of Persons Filing Statement)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

699374302

(CUSIP Number of Class of Securities)

 

 

 

William M. Haskel

Chief Legal Officer, General Counsel

and Corporate Secretary

Paratek Pharmaceuticals, Inc.

75 Park Plaza

Boston, MA 02116

(617) 807-6600

 

Adam Dilluvio

Resistance Acquisition, Inc.

c/o Gurnet Point Capital, LLC

55 Cambridge Parkway, Suite 401

Cambridge, MA 02142

(617) 588-4900

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Persons Filing Statement)

 

 

With copies to

 

Tara Fisher

Christopher Comeau

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199

(617) 951-7000

 

Peter N. Handrinos

Leah R. Sauter

Elisabeth M. Martin

Latham & Watkins LLP

200 Clarendon Street

Boston, MA 02116

(617) 948-6000

 

 

This statement is filed in connection with (check the appropriate box):

 

a.       The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.
b.       The filing of a registration statement under the Securities Act of 1933.
c.       A tender offer.
d.       None of the above.

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies:  ☒

Check the following box if the filing is a final amendment reporting the results of the transaction:  ☐

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of this transaction, passed upon the merits or fairness of this transaction, or passed upon the adequacy or accuracy of the disclosure in this Transaction Statement on Schedule 13E-3. Any representation to the contrary is a criminal offense.

 

 

 


INTRODUCTION

This Rule 13E-3 Transaction Statement on Schedule 13E-3, together with the exhibits hereto (this “Schedule 13E-3” or “Transaction Statement”), is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”), jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”): (i) Paratek Pharmaceuticals, Inc. (the “Company”), a Delaware corporation and the issuer of the common stock, par value $0.001 per share (the “Company Common Stock”), that is subject to the Rule 13e-3 transaction, (ii) GPC WH Fund LP, a Delaware limited partnership (the “Guarantor”); (iii) Resistance GP LLC, a Delaware limited liability company (“Resistance GP”); (iv) Novo Holdings A/S, a Danish limited liability company (“Novo Holdings”); (v) Resistance TopCo L.P. a Delaware limited partnership (“TopCo”); (vi) Resistance Holdings, Inc., a Delaware corporation (“Resistance Holdings”); (vii) Resistance Intermediate, Inc., a Delaware corporation (“Resistance Intermediate”); (viii) Resistance Acquisition, Inc., a Delaware corporation (“Parent”); (ix) Resistance Merger Sub, Inc., a Delaware corporation (“Merger Sub” and, together with the Guarantor, Resistance GP, Novo Holdings, TopCo, Resistance Holdings, Resistance Intermediate and Parent, the “Parent Entities”); and (x) Evan Loh. The Parent Entities are Filing Persons of this Transaction Statement because they may be deemed to be affiliates of the Company under a possible interpretation of the SEC rules governing “going-private” transactions.

On June 6, 2023, Parent, Merger Sub and the Company entered into an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), which provides for, among other things, the merger of Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as a direct wholly-owned subsidiary of Parent. Concurrently with the filing of this Schedule 13E-3, the Company is filing with the SEC a preliminary proxy statement (the “Proxy Statement”) under Regulation 14A of the Exchange Act, relating to a special meeting of the stockholders of the Company (the “Special Meeting”) at which the stockholders of the Company will consider and vote upon a proposal to approve and adopt the Merger Agreement and cast a non-binding, advisory vote to approve certain items of compensation that are based on or otherwise related to the Merger and may become payable to certain named executive officers of the Company under existing agreements with the Company. The adoption of the Merger Agreement will require the affirmative vote of the holders of a majority of the outstanding Company Common Stock entitled to vote on such matters at a stockholders’ meeting duly called and held for such purpose. A copy of the Proxy Statement is attached hereto as Exhibit (a)(2)(i). A copy of the Merger Agreement is attached as Annex A to the Proxy Statement and incorporated herein by reference.

Under the terms of the Merger Agreement, if the Merger is completed, each Share, other than as provided below, will be converted into the right to receive (x) $2.15, payable to the holder thereof in cash, without interest (the “Cash Consideration”) but subject to reduction for any applicable withholding taxes payable in respect thereof and (y) one contractual contingent value right (a “CVR”) that shall represent the right to receive $0.85 upon the satisfaction of certain conditions, pursuant to a Contingent Value Rights Agreement (the “CVR Agreement”) to be entered into between Parent and a rights agent selected by Parent and reasonably acceptable to the Company (the “Rights Agent”) (the Cash Consideration and one CVR, collectively, the “Merger Consideration”). The following company Common Stock will not be converted into the right to receive the per Share Merger Consideration in connection with the Merger: (i) each Share held in the treasury of the Company or owned by the Company or any direct or indirect wholly-owned subsidiary of the Company and each Share owned by Parent, Merger Sub or any direct or indirect wholly-owned subsidiary of Parent or Merger Sub immediately prior to the effective time of the Merger (the “Effective Time”) or (ii) Company Common Stock outstanding immediately prior to the Effective Time and held by stockholders who are entitled to demand, and properly demand, appraisal for such Company Common Stock in accordance with Section 262 of the Delaware General Corporation Law.

On June 6, 2023, concurrently with the execution and delivery of the Merger Agreement, certain management employees and former management employees of the Company (the “Subscribers”) entered into a subscription agreement (the “Subscription Agreement”) with TopCo and the Company, pursuant to which, immediately after the Effective Time, each Subscriber subscribes for a number of non-voting common units of TopCo based on the Subscriber’s gross, pre-tax payments under the Company’s Revenue Performance Incentive Plan that become due in connection with the closing. For certain Subscribers, the Subscription Agreement further provides that the equity award consideration that becomes payable after the closing pursuant to the terms of the Merger Agreement may be settled in the form of cash or vested non-voting common units of TopCo with a fair market value, as of the payment date, equal to the amount of equity award consideration that has become payable; provided, that the Company will retain a number of TopCo units sufficient to satisfy all withholding taxes that become due with respect to the equity award consideration.

 

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The Merger remains subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, including the approval and adoption of the Merger Agreement by the Company’s stockholders.

The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Proxy Statement, including all appendices thereto, is incorporated in its entirety herein by reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement and the appendices thereto.

As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion and/or amendment. This Schedule 13E-3 will be amended to reflect such completion or amendment of the Proxy Statement. Capitalized terms used but not expressly defined in this Schedule 13E-3 shall have the respective meanings given to them in the Proxy Statement.

The information concerning the Company contained in, or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied by the Company. Similarly, all information concerning each other Filing Person contained in, or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied by such Filing Person. No Filing Person, including the Company, is responsible for the accuracy of any information supplied by any other Filing Person.

While each of the Filing Persons acknowledges that the Merger is a “going private” transaction for purposes of Rule 13E-3 under the Exchange Act, the filing of this Transaction Statement shall not be construed as an admission by any Filing Person, or by any affiliate of a Filing Person, that the Company is “controlled” by any Filing Person.

 

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Item 1.

Summary Term Sheet

The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

 

Item 2.

Subject Company Information

(a) Name and Address. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

PARTIES TO THE MERGER—The Company

(b) Securities. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

INFORMATION ABOUT THE SPECIAL MEETING – Record Date and Quorum

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Market Price of Shares and Dividends

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Beneficial Ownership of Common Stock by Management and Directors

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Beneficial Ownership of Common Stock by Principal Stockholders

(c) Trading Market and Price. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Market Price of Shares and Dividends

(d) Dividends. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Market Price of Shares and Dividends

(e) Prior Public Offerings. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Prior Public Offerings

(f) Prior Stock Purchases. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Certain Transactions in the Shares

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Past Contracts, Transactions, Negotiations and Agreements

 

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Item 3.

Identity and Background of Filing Person

(a) – (c) Name and Address; Business and Background of Entities; Business and Background of Natural Persons. Paratek Pharmaceuticals, Inc. is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

PARTIES TO THE MERGER

OTHER INTERESTED PARTIES IN THE MERGER

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY

 

Item 4.

Terms of the Transaction

(a)(1) Tender Offers. Not Applicable.

(a)(2) Mergers or Similar Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of Dr. Loh for the Merger

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

SPECIAL FACTORS – Material U.S. Federal Income Tax Consequences of the Merger

SPECIAL FACTORS – Financing of the Merger

THE MERGER AGREEMENT

SPECIAL FACTORS – Accounting Treatment

INFORMATION ABOUT THE SPECIAL MEETING – Vote Required

 

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Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

(c) Different Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

SPECIAL FACTORS – Voting Agreement

SPECIAL FACTORS – Subscription Agreement

THE MERGER AGREEMENT – Treatment of Equity Awards and Company Warrants

THE MERGER AGREEMENT – Employment and Employee Benefits Matters

MERGER RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE MANAGEMENT COMPENSATION PROPOSAL – PROPOSAL 2)

Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

Annex C – Voting Agreement

(d) Appraisal Rights. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Appraisal Rights

THE MERGER AGREEMENT – Dissenters’ Rights

INFORMATION ABOUT THE SPECIAL MEETING – Appraisal Rights

THE MERGER (THE MERGER AGREEMENT PROPOSAL – PROPOSAL 1) – Appraisal Rights

Annex A – The Merger Agreement

Annex E – Section 262 of the General Corporation Law of the State of Delaware

(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Provisions for the Company’s Stockholders

 

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(f) Eligibility for Listing or Trading. Not Applicable.

 

Item 5.

Past Contracts, Transactions, Negotiations and Agreements

(a) Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

THE MERGER AGREEMENT

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Certain Transactions in the Shares

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Past Contracts, Transactions, Negotiations and Agreements

WHERE YOU CAN FIND MORE INFORMATION

Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

(b) Significant Corporate Events. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

SPECIAL FACTORS – Financing of the Merger

SPECIAL FACTORS – Limited Guarantee

SPECIAL FACTORS – Voting Agreement

SPECIAL FACTORS – Subscription Agreement

THE MERGER AGREEMENT

MERGER RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE MANAGEMENT COMPENSATION PROPOSAL – PROPOSAL 2)

 

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Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

Annex C – Voting Agreement

(c) Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

MERGER RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE MANAGEMENT COMPENSATION PROPOSAL – PROPOSAL 2)

(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

SPECIAL FACTORS – Intent of the Directors and Executive Officers to Vote in Favor of the Merger

SPECIAL FACTORS – Commitment of Dr. Loh to Vote in Favor of the Merger

SPECIAL FACTORS – Financing of the Merger

SPECIAL FACTORS – Limited Guarantee

SPECIAL FACTORS – Voting Agreement

SPECIAL FACTORS – Subscription Agreement

THE MERGER AGREEMENT

MERGER RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE MANAGEMENT COMPENSATION PROPOSAL – PROPOSAL 2)

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Certain Transactions in the Shares

WHERE YOU CAN FIND MORE INFORMATION

Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

Annex C – Voting Agreement

 

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Item 6.

Purposes of the Transaction and Plans or Proposals

(b) Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

SPECIAL FACTORS – Payment of Merger Consideration

THE MERGER AGREEMENT

DELISTING AND DEREGISTRATION OF COMMON STOCK

Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

(c)(1) – (8) Plans. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of Dr. Loh for the Merger

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

SPECIAL FACTORS – Intent of the Directors and Executive Officers to Vote in Favor of the Merger

SPECIAL FACTORS – Commitment of Dr. Loh to Vote in Favor of the Merger

SPECIAL FACTORS – Financing of the Merger

SPECIAL FACTORS – Limited Guarantee

SPECIAL FACTORS – Voting Agreement

SPECIAL FACTORS – Subscription Agreement

 

8


THE MERGER AGREEMENT

INFORMATION ABOUT THE SPECIAL MEETING

MERGER RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE MANAGEMENT COMPENSATION PROPOSAL – PROPOSAL 2)

DELISTING AND DEREGISTRATION OF COMMON STOCK

Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

Annex C – Voting Agreement

Item 7. Purposes, Alternatives, Reasons and Effects

(a) Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of Dr. Loh for the Merger

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

(b) Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

 

9


SPECIAL FACTORS – Purpose and Reasons of Dr. Loh for the Merger

SPECIAL FACTORS – Certain Effects on the Company if the Merger is Not Completed

(c) Reasons. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Opinion of the Company’s Financial Advisor

SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of Dr. Loh for the Merger

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

Annex D – Opinion of the Company’s Financial Advisor

(d) Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of Dr. Loh for the Merger

SPECIAL FACTORS – Plans for the Company After the Merger

SPECIAL FACTORS – Certain Effects of the Merger

SPECIAL FACTORS – Certain Effects on the Company if the Merger is Not Completed

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

 

10


SPECIAL FACTORS – Material U.S. Federal Income Tax Consequences of the Merger

SPECIAL FACTORS – Fees and Expenses

SPECIAL FACTORS – Accounting Treatment

SPECIAL FACTORS – Payment of Merger Consideration

THE MERGER AGREEMENT – The Merger

THE MERGER AGREEMENT – The Merger Consideration

THE MERGER AGREEMENT – Impact of Stock Splits, Etc.

THE MERGER AGREEMENT – Treatment of Equity Awards and Company Warrants

THE MERGER AGREEMENT – Exchange Procedures and Payment Procedures

THE MERGER AGREEMENT – Withholding

THE MERGER AGREEMENT – Dissenters’ Rights

THE MERGER AGREEMENT – Organizational Documents, Directors and Officers of the Surviving Corporation

THE MERGER AGREEMENT – Delisting and Deregistration

THE MERGER AGREEMENT – Employment and Employee Benefits Matters

THE MERGER AGREEMENT – Indemnification; Directors’ and Officers’ Insurance

MERGER RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE MANAGEMENT COMPENSATION PROPOSAL – PROPOSAL 2)

DELISTING AND DEREGISTRATION OF COMMON STOCK

Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

Item 8. Fairness of the Transaction

(a), (b) Fairness; Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Opinion of the Company’s Financial Advisor

 

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SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

THE MERGER AGREEMENT – Indemnification; Directors’ and Officers’ Insurance

Annex D – Opinion of the Company’s Financial Advisor

(c) Approval of Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

THE MERGER AGREEMENT – Company Stockholder Approval

THE MERGER AGREEMENT – Conditions to the Completion of the Merger”

INFORMATION ABOUT THE SPECIAL MEETING – Record Date and Quorum

INFORMATION ABOUT THE SPECIAL MEETING – Vote Required

INFORMATION ABOUT THE SPECIAL MEETING – Voting

INFORMATION ABOUT THE SPECIAL MEETING – How to Vote

INFORMATION ABOUT THE SPECIAL MEETING – Proxies and Revocation

THE MERGER (THE MERGER AGREEMENT PROPOSAL – PROPOSAL 1)

Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

(d) Unaffiliated Representative. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Opinion of the Company’s Financial Advisor

SPECIAL FACTORS – Provisions for the Company’s Stockholders

(e) Approval of Directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Intent of the Directors and Executive Officers to Vote in Favor of the Merger

INFORMATION ABOUT THE SPECIAL MEETING – Recommendation of the Company Board

INFORMATION ABOUT THE SPECIAL MEETING – Voting Intentions of the Company’s Directors and Executive Officers

THE MERGER (THE MERGER AGREEMENT PROPOSAL – PROPOSAL 1) – Vote Recommendation

(f) Other Offers. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

THE MERGER AGREEMENT – Acquisition Proposals

Annex A – The Merger Agreement

 

Item 9.

Reports, Opinions, Appraisals and Negotiations

(a) – (c) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal; Availability of Documents. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference.

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Opinion of the Company’s Financial Advisor

SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

WHERE YOU CAN FIND MORE INFORMATION

Annex D – Opinion of the Company’s Financial Advisor

 

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The Presentation Materials dated December 21, 2022, prepared by Moelis & Company LLC and reviewed by the Company Board (as defined in the Proxy Statement), are attached hereto as Exhibit (c)(ii)

The Presentation Materials dated May 26, 2023, prepared by Moelis & Company LLC and reviewed by the Company Board (as defined in the Proxy Statement), are attached hereto as Exhibit (c)(iii)

The Presentation Materials dated June 6, 2023, prepared by Moelis & Company LLC and reviewed by the Company Board (as defined in the Proxy Statement), are attached hereto as Exhibit (c)(iv)

Item 10. Source and Amount of Funds or Other Consideration

(a), (b) Source of Funds; Conditions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

SPECIAL FACTORS – Financing of the Merger

SPECIAL FACTORS – Limited Guarantee

THE MERGER AGREEMENT – Closing and Effective Time of the Merger

THE MERGER AGREEMENT – Closing of the Merger

THE MERGER AGREEMENT – Covenants Related to the Company’s Conduct of Business

THE MERGER AGREEMENT – Parent Financing and Company Cooperation

THE MERGER AGREEMENT – Conditions to the Completion of the Merger

Annex A – The Merger Agreement

(c) Expenses. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Fees and Expenses

THE MERGER AGREEMENT – Termination

THE MERGER AGREEMENT – Termination Fees

THE MERGER AGREEMENT – Expenses

INFORMATION ABOUT THE SPECIAL MEETING – Solicitation of Proxies; Payment of Solicitation Expenses

Annex A – The Merger Agreement

(d) Borrowed Funds.

SPECIAL FACTORS – Financing of the Merger

THE MERGER AGREEMENT – Parent Financing and Company Cooperation

 

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Item 11.

Interest in Securities of the Subject Company

(a) Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

SPECIAL FACTORS – Voting Agreement

INFORMATION ABOUT THE SPECIAL MEETING – Record Date and Quorum

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Beneficial Ownership of Common Stock by Management and Directors

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Beneficial Ownership of Common Stock by Principal Stockholders

Annex C – Voting Agreement

(b) Securities Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

SPECIAL FACTORS – Voting Agreement

SPECIAL FACTORS – Subscription Agreement

THE MERGER AGREEMENT

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Certain Transactions in the Shares

Annex A – The Merger Agreement

Annex B – Form of CVR Agreement

Annex C – Voting Agreement

Item 12. The Solicitation or Recommendation

(d) Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

 

15


SPECIAL FACTORS – Intent of the Directors and Executive Officers to Vote in Favor of the Merger

SPECIAL FACTORS – Commitment of Dr. Loh to Vote in Favor of the Merger

SPECIAL FACTORS – Voting Agreement

INFORMATION ABOUT THE SPECIAL MEETING – Recommendation of the Company Board

INFORMATION ABOUT THE SPECIAL MEETING – Voting Intentions of the Company’s Directors and Executive Officers

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Beneficial Ownership of Common Stock by Management and Directors

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Beneficial Ownership of Common Stock by Principal Stockholders

Annex C – Voting Agreement

(e) Recommendation of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Position of Parent Entities as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of the Parent Entities for the Merger

SPECIAL FACTORS – Position of Dr. Loh as to the Fairness of the Merger

SPECIAL FACTORS – Purpose and Reasons of Dr. Loh for the Merger

INFORMATION ABOUT THE SPECIAL MEETING – Recommendation of the Company Board

 

Item 13.

Financial Statements

(a) Financial Information. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Selected Historical Consolidated Financial Data

OTHER IMPORTANT INFORMATION REGARDING THE COMPANY – Book Value per Share

WHERE YOU CAN FIND MORE INFORMATION

 

16


(b) Pro Forma Information. Not Applicable.

Item 14. Persons/Assets, Retained, Employed, Compensated or Used

(a) Solicitations or Recommendations. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

SPECIAL FACTORS – Fees and Expenses

INFORMATION ABOUT THE SPECIAL MEETING – Solicitation of Proxies; Payment of Solicitation Expenses

(b) Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING

SPECIAL FACTORS – Background of the Merger

SPECIAL FACTORS – Considerations of the Company Board and Procedural Safeguards with respect to the Contemplated Transactions

INFORMATION ABOUT THE SPECIAL MEETING

INFORMATION ABOUT THE SPECIAL MEETING – Solicitation of Proxies; Payment of Solicitation Expenses

 

Item 15.

Additional Information

(b) The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

SPECIAL FACTORS – Interests of Executive Officers and Directors of the Company in the Merger

SPECIAL FACTORS – Certain Effects of the Merger

THE MERGER AGREEMENT

MERGER RELATED EXECUTIVE COMPENSATION ARRANGEMENTS (THE MANAGEMENT COMPENSATION PROPOSAL – PROPOSAL 2)

Annex A – The Merger Agreement

 

17


(c) Other Material Information. The entirety of the Proxy Statement, including all appendices thereto, is incorporated herein by reference.

 

18


Item 16.

Exhibits

The following exhibits are filed herewith:

 

Exhibit No.  

Description

(a)(2)(i)   Preliminary Proxy Statement of Paratek Pharmaceuticals, Inc. (included in the Schedule 14A filed on June  30, 2023 and incorporated herein by reference) (the “Preliminary Proxy Statement”).
(a)(2)(ii)   Form of Proxy Card (included in the Preliminary Proxy Statement and incorporated herein by reference).
(a)(2)(iii)   Notice of Special Meeting of Stockholders (included in the Preliminary Proxy Statement and incorporated herein by reference).
(a)(5)(i)   Press Release, dated as of June 6, 2023 (incorporated by reference to Exhibit 99.1 to Paratek Pharmaceuticals, Inc.’s Form 8-K filed June 7, 2023).
(a)(5)(ii)   Employee FAQ, dated as of June 6, 2023 (included in the Schedule 14A filed on June  6, 2023 and incorporated herein by reference).
(a)(5)(iii)   Email to Employees from the Chief Executive Officer of Paratek Pharmaceuticals, Inc., dated as of June  6, 2023 (included in the Schedule 14A filed on June 6, 2023 and incorporated herein by reference).
(a)(5)(iv)   Letter to Strategic Partners and Vendors, dated as of June 6, 2023 (included in the Schedule 14A filed on June  6, 2023 and incorporated herein by reference).
(a)(5)(v)   Press Release, dated as of June 27, 2023 (included in the Schedule 14A filed on June  27, 2023 and incorporated herein by reference).
(b)(i)   Debt Commitment Letter, dated as of June  6, 2023, executed by Oaktree Capital Management, L.P. (solely in its capacity as an investment manager to certain funds and accounts managed by it) and accepted by Resistance Acquisition, Inc.
(c)(i)   Opinion of Moelis & Company LLC, dated as of June  6, 2023 (included as Annex D to the Preliminary Proxy Statement, and incorporated herein by reference).
(c)(ii)#   Presentation Materials, dated as of December 21, 2022, of Moelis & Company LLC prepared for the Company Board.
(c)(iii)#   Presentation Materials, dated as of May 26, 2023, of Moelis & Company LLC prepared for the Company Board.
(c)(iv)#   Presentation Materials, dated as of June 6, 2023, of Moelis & Company LLC prepared for the Company Board.
(d)(i)   Agreement and Plan of Merger, dated as of June  6, 2023, by and among Paratek Pharmaceuticals, Inc., Resistance Acquisition, Inc. and Resistance Merger Sub, Inc. (included as Annex A to the Preliminary Proxy Statement, and incorporated herein by reference).
(d)(ii)   Form of Contingent Value Rights Agreement (included as Annex B to the Preliminary Proxy Statement, and incorporated herein by reference).
(d)(iii)   Voting Agreement, dated as of June  6, 2023, by and among Resistance Acquisition, Inc. and certain members of Paratek Pharmaceuticals, Inc.’s management team (included as Annex C to the Preliminary Proxy Statement, and incorporated herein by reference).
(d)(iv)(a)   Form of Subscription Agreement for Former Employees.

 

#

Confidential treatment has been requested for certain information contained in this exhibit. Such information has been omitted and filed separately with the Securities and Exchange Commission.

 

19



SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

PARATEK PHARMACEUTICALS, INC.
By:  

/s/ William M. Haskel

Name:   William M. Haskel
Title:   Chief Legal Officer, General Counsel and Corporate Secretary

Date: June 30, 2023

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

GPC WH FUND LP

by B-FLEXION International GP LLC, its General Partner

By:  

/s/ Ronald Cami

Name:   Ronald Cami
Title:   Authorized Signatory
By:  

/s/ Adam Dilluvio

Name:   Adam Dilluvio
Title:   General Counsel

Date: June 30, 2023

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

NOVO HOLDINGS A/S
By:  

/s/ Barbara Fiorini Due

Name:   Barbara Fiorini Due
Title:   General Counsel

Date: June 30, 2023

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

RESISTANCE GP LLC
By:  

/s/ Adam Dilluvio

Name:   Adam Dilluvio
Title:   Secretary and Treasurer of the General Partner of the Sole Member

 

21


Date: June 30, 2023

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

RESISTANCE TOPCO L.P.
By:  

/s/ Adam Dilluvio

Name:   Adam Dilluvio
Title:   Secretary and Treasurer of the General Partner of the Sole Member of the General Partner

Date: June 30, 2023

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

RESISTANCE HOLDINGS, INC.
By:  

/s/ Adam Dilluvio

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

Date: June 30, 2023

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

RESISTANCE INTERMEDIATE, INC.
By:  

/s/ Adam Dilluvio

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

Date: June 30, 2023

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

RESISTANCE ACQUISITION, INC.
By:  

/s/ Adam Dilluvio

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

Date: June 30, 2023

 

22


After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

RESISTANCE MERGER SUB, INC.
By:  

/s/ Adam Dilluvio

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

Date: June 30, 2023

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

/s/ Evan Loh, M.D.

Evan Loh, M.D.

Date: June 30, 2023

 

23

Exhibit (b)(i)

EXECUTION VERSION

OAKTREE CAPITAL MANAGEMENT, L.P.

333 S. GRAND AVENUE, 28TH

FLOOR

LOS ANGELES, CA 90071

Highly Confidential

June 6, 2023

Resistance Acquisition, Inc.

c/o Gurnet Point Capital

55 Cambridge Parkway, Suite 401

Cambridge MA 02142

Attention: Adam Dilluvio

Project Resistance

Commitment Letter

Ladies and Gentlemen:

You have advised Oaktree Capital Management, L.P. (solely in its capacity as an investment manager to certain funds and accounts managed by it, “Oaktree” and, together with each other person, if any, added as a “Commitment Party” after the date of this Commitment Letter, “we” or “us” and each, a “Commitment Party”) that Resistance Acquisition, Inc., a Delaware corporation (“Borrower” or “you”) and a wholly-owned subsidiary of Resistance Intermediate, Inc., a Delaware corporation (“Holdings”), and Resistance Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and a wholly-owned subsidiary of the Borrower, each an entity formed at the direction of Gurnet Point Capital, LLC and/or its affiliates (collectively, and together with any investment funds controlled or advised by the foregoing entities, the “Sponsor”), intend, directly or indirectly, to acquire a business previously identified to us and code named “Resistance” (“Target”; the Target and its subsidiaries, the “Acquired Business”) and to consummate the other transactions described in Exhibit A hereto. Capitalized terms used but not defined herein have the meanings assigned to them in the Exhibits and other attachments hereto.

1. Commitments.

In connection with the Transactions, each Commitment Party commits to provide, on a several, and not joint and several, basis, that percentage of the Initial Term Facility set forth opposite its name on Schedule I (the “Commitment Schedule”) to this Commitment Letter (each Commitment Party providing such a commitment, an “Initial Lender”).

The Initial Term Facility will contain the terms set forth on the Term Sheet attached to this Commitment Letter as Exhibit B, and the commitments of each Initial Lender are subject only to the satisfaction or waiver by the Lead Arrangers (as defined below) of the Financing Conditions (as defined below). This commitment letter, together with the Term Sheet and the other attachments hereto and thereto, is referred to herein as this “Commitment Letter.” This Commitment Letter and the Fee Letter, together, are referred to herein as the “Commitment Papers.”

 

1

Project Resistance – Commitment Letter


2. Titles and Roles.

In connection with the Transactions, each Commitment Party (acting alone or through or with affiliates selected by it) will act with and have the title(s) and in the role(s) set forth opposite its name with respect to the Initial Term Facility on the Commitment Schedule. Each Commitment Party identified on the Commitment Schedule as a Lead Arranger for the Initial Term Facility, together with each person (if any) that becomes a Lead Arranger after the date of this Commitment Letter for the Initial Term Facility, is referred to in the Commitment Papers as, a “Lead Arranger” and collectively as the “Lead Arrangers”. Each Commitment Party appointed as a “Left Lead Arranger” for the Initial Term Facility on the Commitment Schedule will appear on the top left of the cover page of all marketing materials for the Initial Term Facility and will hold the roles and responsibilities conventionally understood to be associated with such name placement.

Other than as may be separately agreed, no other agents, co-agents, lead arrangers, co-arrangers, bookrunners, managers or co-managers will be appointed, no other titles will be awarded and no compensation to any of the foregoing or any Initial Lender (other than compensation expressly contemplated by the Commitment Papers) will be paid in order to obtain a commitment with respect to any Facility unless you and we agree.

3. Information.

You hereby represent (prior to the Closing Date, with respect to information provided by or concerning the Acquired Business or its operations or assets, to your knowledge) that,

 

  (a)

all written information and written factual data (other than the Projections and information of a general economic or industry nature) (the “Information”) that has been or will be made available to the Commitment Parties by you or by any of your representatives on your behalf, when taken as a whole (after giving effect to all supplements and updates thereto), is or will be correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto); and

 

  (b)

any projections provided in connection with the Senior Secured Term Facilities (together with any financial estimates, forecasts and other forward-looking information, collectively, the “Projections”) that have been or will be made available to the Commitment Parties by you or by any of your representatives on your behalf, when taken as a whole, have been or will be prepared, in good faith based upon assumptions that are believed by you to be reasonable at the time made and at the time any such Projections are delivered to the Commitment Parties; it being understood that (1) Projections are as to future events and are not to be viewed as facts, (2) Projections are subject to significant uncertainties and contingencies, many of which are beyond the control of you, the Acquired Business or the Sponsor, (3) no assurance can be given that any particular Projections will be realized, and (4) actual results may differ and such differences may be material.

You agree that, if at any time prior to the Closing Date, you become aware that any of the representations in the preceding sentence would be incorrect in any material respect if the Information and Projections were being furnished, and such representations were being made, at such time, then you will, and will use your commercially reasonable efforts to cause the Acquired Business to, promptly supplement the Information and the Projections so that (with respect to information provided by or concerning the Acquired Business or its operations or assets, to your knowledge) such representations will be correct in all material respects under those circumstances, it being understood in each case that such supplementation shall cure any breach of such representations. In arranging the Initial Term Facility, the Commitment Parties will be entitled to use and rely on the Information and the Projections without responsibility for independent verification thereof, and the Commitment Parties do not assume responsibility for the accuracy or completeness of the Information or Projections. For the avoidance of doubt, neither the making nor the accuracy of the representations set forth above, nor the provision of any supplement to the Information or Projections as described above, are a condition precedent to the commitments hereunder or the funding of the Initial Term Facility on the Closing Date.

 

2

Project Resistance – Commitment Letter


4. Fees.

As consideration for the commitments of each Initial Lender and each Lead Arranger’s and other agents’ agreements to perform the services described herein, you agree to pay (or cause to be paid) the fees set forth in the Fee Letter dated the date hereof, by and among you and the Commitment Parties, and delivered in connection with the Senior Secured Term Facilities (the “Fee Letter”), if and to the extent payable. Once paid, such fees will not be refundable under any circumstances, except as otherwise contemplated by the Fee Letter or otherwise agreed in writing by the parties hereto.

5. Conditions Precedent.

The commitments of each Initial Lender with respect to the Initial Term Facility and each Lead Arranger’s and each agent’s agreements to perform the services described herein are subject solely to the satisfaction (or waiver by the Lead Arrangers) of the conditions precedent set forth on Exhibit C to this Commitment Letter labeled “Conditions Annex” (such conditions, the “Financing Conditions” and such exhibit, the “Conditions Annex”), and, upon satisfaction (or waiver by the Lead Arrangers) of such conditions, each party thereto will execute and deliver the Facilities Documentation and the funding of the Initial Term Facility shall occur.

Notwithstanding anything in the Commitment Papers, the Facilities Documentation or any other agreement or other undertaking concerning the financing of the Transactions to the contrary, the following provisions (the “Certain Funds Provisions”) will apply:

(a) the only representations and warranties the making and accuracy of which will be a condition to the funding of the Initial Term Facility on the Closing Date will be the Acquisition Agreement Representations (as defined below) and the Specified Representations (as defined below);

(b) the terms of the Facilities Documentation and the Closing Deliverables will be subject to the Documentation Principles, will contain no conditions to the funding of the Initial Term Facility other than the Financing Conditions, and in any event will be in a form such that they do not impair the funding of the Initial Term Facility on the Closing Date if the Financing Conditions are satisfied (or waived by the Lead Arrangers); it being understood that to the extent any lien search (other than UCC searches in the jurisdictions of organization of the Borrower and guarantors), insurance certificate or endorsement, or security interest in any Collateral is not or cannot be provided, created, perfected and/or delivered on the Closing Date (other than the pledge and perfection of the security interests in (x) equity securities of the Borrower and its material, wholly owned domestic subsidiaries (to the extent required under the terms of Exhibit B hereto), (y) assets with respect to which a lien may be validly created pursuant to Article 9 of the New York UCC (“Personal Property Collateral”) and perfected by the filing of a general “all assets” financing statement under the Uniform Commercial Code and (z) U.S. federal intellectual property with respect to which a lien may be perfected by the filing of short-form intellectual property security agreements in the United States Patent and Trademark Office and/or the United States Copyright Office, as applicable; provided that stock certificates for the entities comprising the Acquired Business will only be required to be delivered on the Closing Date to the extent received by you prior to the Closing Date) after your use of commercially reasonable efforts to do so without undue burden or expense, then the provision of any such lien search, insurance certificate or endorsement or the provision and/or perfection of a security interest in such Collateral shall not constitute a condition precedent to the funding of the Initial Term Facility on the Closing Date (and failure to provide the same shall not result in a default or event of default), but instead shall be required to be provided and/or perfected 90 days after the Closing Date (or such longer period as may be agreed by the Administrative Agent, acting reasonably);

 

3

Project Resistance – Commitment Letter


(c) there are no conditions (implied or otherwise) to the commitments and agreements hereunder, and there will be no conditions (implied or otherwise) under the Facilities Documentation to the funding of the Initial Term Facility on the Closing Date (including compliance with the terms of the Commitment Papers or the Facilities Documentation), other than the Financing Conditions, and upon satisfaction (or waiver by the Lead Arrangers) of the Financing Conditions, each Administrative Agent, each Collateral Agent, each Lender and each other party thereto will execute and deliver the Facilities Documentation to which it is a party and the funding under the Initial Term Facility will occur; and

(d) the execution and delivery by the Acquired Business (the “Target Loan Parties”) of the Facilities Documentation to which it is required to be a party on the Closing Date shall be accomplished under escrow arrangements pursuant to which the Target Loan Parties’ signature pages are provided to the Administrative Agent before (or coincident with) the time the Merger is consummated in accordance with the Acquisition Agreement (the “Merger Effective Time”), and such signature pages (and the Facilities Documentation and related deliverables to which the Target Loan Parties are parties) are automatically released from escrow to such Administrative Agent concurrently with the Merger Effective Time and the adoption of related authorizing resolutions. The Target Loan Parties’ signature pages may be executed by individuals that will be officers and/or directors of a Target Loan Parties upon consummation of the Merger, whether or not such individuals are officers and/or directors of such entities prior to the consummation of the Merger, so long as such individuals are authorized in such capacity at the time such signature pages are released from the applicable escrow arrangements.

Acquisition Agreement Representations” means each of the representations and warranties made by the Acquired Business in the Acquisition Agreement as are material to the interests of the Lenders (in their capacities as such), to the extent that you (or your affiliates) have the right (taking into account any applicable notice or cure provisions) to terminate your (or your affiliates’) obligations under the Acquisition Agreement or decline to consummate the Acquisition (in each case, in accordance with the terms of the Acquisition Agreement) as a result of a breach of such representations and warranties in the Acquisition Agreement.

Specified Representations” means the representations and warranties of the Borrower and Holdings set forth in the Facilities Documentation relating to their organizational existence, organizational power and authority (only as to execution, delivery and performance of the Facilities Documentation and the extensions of credit thereunder), their due authorization, execution, delivery and enforceability (against them) of the Facilities Documentation, solvency on a consolidated basis as of the Closing Date (immediately after giving effect to the Transactions) consistent with the solvency certificate attached to this Commitment Letter as Annex I to Exhibit C), no conflicts of Facilities Documentation with their charter documents (as will be in effect upon consummation of, or immediately after consummation of, the Merger and the adoption of any related resolutions), compliance of the Transactions with Federal Reserve margin regulations, the Investment Company Act of 1940 and the Patriot Act, use of proceeds on the Closing Date not violating OFAC, FCPA and applicable sanctions and anti-money laundering laws and attachment and perfection of security interests in the Collateral (subject to permitted liens and the Certain Funds Provisions).

6. Indemnification; Expenses.

You agree to indemnify and hold harmless each Commitment Party and its affiliates and controlling persons and the respective officers, directors, employees, partners, agents and representatives of each of the foregoing and their permitted successors and permitted assigns (each, an “Indemnified Person”) to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities and reasonable, documented out-of-pocket expenses, joint or several, excluding in each case lost profits, to which any such Indemnified Person may become subject arising out of, resulting from or in connection with any actual claim, litigation, investigation or proceeding resulting from the Commitment Papers, the Transactions or the Initial Term Facility (each, an “Action”), regardless of whether any such Indemnified Person is a party thereto and whether or not such Action is brought by you, your equity holders, affiliates, creditors or any other person, and to reimburse each such Indemnified Person, within 30 days after receipt of a written request, together with customary backup documentation in reasonable detail,

 

4

Project Resistance – Commitment Letter


for any reasonable and documented out-of-pocket legal expenses of one firm of outside counsel for all such Indemnified Persons taken as a whole and, if necessary, of a single local counsel in each appropriate jurisdiction (which may include a single special counsel acting in multiple jurisdictions) material to the interests of all such Indemnified Persons, taken as a whole (and, in the case of an actual or perceived conflict of interest where the Indemnified Person affected by such conflict retains its own counsel and informs you, of another firm of counsel for all such affected Indemnified Persons, taken as a whole), or other reasonable and documented out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing (but in the case of fees and expenses of any other advisor or consultant, solely to the extent you have consented to the retention of such person (such consent not to be unreasonably conditioned, withheld or delayed)); provided, that the foregoing indemnity will not apply to losses, claims, damages, liabilities or expenses to the extent (a) resulting from the willful misconduct, bad faith, fraud or gross negligence of an Indemnified Person or any Related Indemnified Persons (as defined below), (b) arising from a material breach of the obligations of an Indemnified Person or any Related Indemnified Persons under the Commitment Papers or the Facilities Documentation, including the failure to fund the Initial Term Facility upon satisfaction of the Financing Conditions (in the case of clauses (a) and (b) as determined by a court of competent jurisdiction in a final and non-appealable judgment), or (c) arising from, or in connection with, any dispute among Indemnified Persons or any Related Indemnified Persons of the foregoing, other than any Actions against any Commitment Party in its capacity as, or in fulfilling its role as, an Administrative Agent or other agency role under the Initial Term Facility to the extent none of the exceptions in clauses (a) and (b) of this proviso would apply.

Notwithstanding any other provision of this Commitment Letter, except to the extent resulting from the willful misconduct, bad faith, fraud or gross negligence of (or breach of the Commitment Papers by) such Indemnified Person or any Related Indemnified Persons of the foregoing (as determined by a court of competent jurisdiction in a final and non-appealable judgment), no Indemnified Person will be liable for any damages arising from the use by others of information or other materials obtained through electronic, telecommunications or other information transmission systems (including the Platform) and neither any Indemnified Person, nor you or the Acquired Business (or any of their respective directors, officers, employees, controlling persons, affiliates or agents) will be liable for any indirect, special, punitive or consequential damages in connection with the Commitment Papers, the Initial Term Facility, the Transactions (including the Initial Term Facility and the use of proceeds thereunder), or with respect to any activities or other transactions related to the Initial Term Facility; provided, that this sentence shall not limit your indemnification or reimbursement obligations set forth herein to the extent such special, indirect, punitive or consequential damages are included in any third party claim in connection with which such Indemnified Person is entitled to indemnification hereunder.

Notwithstanding anything in the Commitment Papers, you will have no obligation to indemnify any Indemnified Person for income taxes (or similar taxes) incurred by such person in connection with the fees or other compensation such person received in connection with the Commitment Papers; provided that this sentence shall not limit your indemnification obligations and other obligations with respect to withholding taxes and other taxes after the Closing Date pursuant to the Facilities Documentation. You will not be liable for any settlement of any Action effected without your prior written consent (such consent not to be unreasonably withheld or delayed), but, if settled with your written consent or if there is a final judgment in any such Actions by a court of competent jurisdiction, you agree to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment in accordance with the indemnification provisions of this Commitment Letter. You will not, without the prior written consent of an Indemnified Person (such consent not to be unreasonably withheld, conditioned or delayed), effect any settlement of any Action in respect of which indemnity could have been sought hereunder by such Indemnified Person unless such settlement (i) includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such Actions and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of such Indemnified Person. Each Indemnified Person shall be severally obligated to refund or return any and all amounts paid by you under this Section 6 to the extent such Indemnified Person is not entitled to payment of such amounts in accordance with the terms hereof.

 

5

Project Resistance – Commitment Letter


For purposes hereof, a “Related Indemnified Person” of an Indemnified Person means (a) any controlling person or controlled affiliate of such Indemnified Person, (b) the respective directors, partners, officers, or employees of such Indemnified Person or any of its controlling persons or controlled affiliates and (c) the respective agents of such Indemnified Person or any of its controlling persons or controlled affiliates, in the case of this clause (c), acting at the instructions of such Indemnified Person, controlling person or such controlled affiliate; provided, that each reference to a controlled affiliate or controlling person in this sentence pertains to a controlled affiliate or controlling person involved in the negotiation of this Commitment Letter and the Initial Term Facility.

You agree to reimburse each Commitment Party on the Closing Date (to the extent an invoice is received as set forth in paragraph 9 of Exhibit C) or, if invoiced after the Closing Date or if the Closing Date does not occur, within 30 days after presentation of a summary statement, for its reasonable and documented out-of-pocket expenses (including expenses of each Commitment Party’s due diligence investigation, travel expenses and reasonable and documented out-of-pocket fees, disbursements and other charges of one outside counsel to the Commitment Parties (taken as a whole) and, if necessary, of one local counsel to the Commitment Parties identified to you prior to the Closing Date in each relevant material jurisdiction, which may be a local counsel acting in multiple material jurisdictions), in each case, incurred in connection with the preparation, negotiation, execution and delivery of the Commitment Papers and the Facilities Documentation (collectively, the “Expenses”); provided that, subject to the immediately following sentence, if the Closing Date does not occur, your reimbursement obligations hereunder shall not exceed $250,000 in the aggregate. Notwithstanding the foregoing, you agree that if the transactions under the Acquisition Agreement shall have been terminated or abandoned and you or any of your affiliates shall receive any compensation in the nature of a break-up fee, termination fee or similar fee pursuant to the Acquisition Agreement, you will promptly apply any such compensation remaining after reimbursement of your and the Sponsor’s (and their respective affiliates’) expenses to reimburse the Commitment Parties for their Expenses in an amount not to exceed $500,000 in the aggregate. You acknowledge that we may receive a benefit, including without limitation, a discount, credit or other accommodation, from any of such counsel based on the fees such counsel may receive on account of their relationship with us, including, without limitation, fees paid pursuant hereto.

7. Sharing Information; Absence of Fiduciary Relationship; Affiliate Activities; Binding Obligations.

You acknowledge that each Commitment Party and its affiliates may be providing debt financing, equity capital or other services (including investment banking and financial advisory services, securities trading, hedging, financing and brokerage activities, and financial planning and benefits counseling) to other companies in respect of which you or the Acquired Business may have conflicting interests. We will not furnish confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or our other relationships with you to such other companies. You also acknowledge that we do not have any obligation to use, in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by us or any of our respective affiliates from such other companies.

You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship between you and any Commitment Party is intended to be or has been created in respect of any of the transactions contemplated by this Commitment Letter, irrespective of whether such Commitment Party has advised or is advising you on other matters, (b) each Commitment Party, on the one hand, and you, on the other hand, have an arm’s-length business relationship that does not, directly or indirectly, give rise to, nor do you rely on, any fiduciary duty on the part of such Commitment Party, and you waive, to the fullest extent permitted by law, any claims you may have against us for breach of fiduciary duty or alleged breach of fiduciary duty and agree that we will have no liability (whether direct or indirect) to you in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on your behalf, including equity holders, employees or creditors, (c) you are capable of evaluating and

 

6

Project Resistance – Commitment Letter


understanding, and you understand and accept, the terms, risks and conditions of the transactions contemplated by this Commitment Letter, (d) you have been advised that each Commitment Party and its affiliates are engaged in a broad range of transactions that may involve interests that differ from your and your affiliates’ interests and that such Commitment Party has no obligation to disclose such interests and transactions to you or your affiliates, (e) you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate, and (f) each Commitment Party has been, is and will be acting solely as a principal and, except as otherwise expressly agreed in writing by the relevant parties, has not been, is not and will not be acting as an advisor, agent or fiduciary for you, any of your affiliates or any other person or entity. In addition, each Commitment Party may employ the services of its affiliates in providing certain services hereunder and may exchange with such affiliates in connection therewith information concerning you and the Acquired Business, and such affiliates will be entitled to the benefits afforded to, and subject to the obligations of (including, for the avoidance of doubt, confidentiality obligations), such Commitment Party under this Commitment Letter.

You further acknowledge that each Commitment Party and its affiliates may be a full service securities firm engaged in securities trading and brokerage activities, as well as providing investment banking and other financial services. In the ordinary course of business, each Commitment Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for their respective own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of you, the Acquired Business and the Sponsor and other companies with which you, the Acquired Business or the Sponsor may have commercial or other relationships. With respect to any securities and/or financial instruments so held by each Commitment Party, its affiliates or any of its customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

You further acknowledge and agree that you are responsible for making your own independent judgment with respect to the Transactions and the process leading thereto. Additionally, you acknowledge and agree that we are not advising you as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. You will consult with your own advisors concerning such matters and will be responsible for making your own independent investigation and appraisal of the transactions contemplated hereby.

We represent and warrant that the Commitment Papers constitute our legally valid and binding obligation to provide the services set forth herein and to fund the Initial Term Facility upon satisfaction (or waiver by the Lead Arrangers) of the Financing Conditions, in each case, enforceable at law and in equity in accordance with their terms. You represent and warrant that the Commitment Papers constitute your legally valid and binding obligation, enforceable at law and in equity against you in accordance with their terms; provided, that nothing contained in the Commitment Papers obligates you or any of your affiliates to consummate any Transaction or to draw upon all or any portion of the Senior Secured Term Facilities. No party hereto will take any position that is inconsistent with the foregoing representations and warranties.

8. Assignments; Amendments; Governing Law, Etc.

This Commitment Letter and the commitments hereunder are not assignable (except (x) assignments by you to an affiliate that is a newly formed domestic “shell” company controlled by the Sponsor that consummates or intends to consummate the Acquisition, (y) assignments by us to our controlled affiliates, managed funds or accounts or limited partners (other than Disqualified Lenders) and (z) any other assignment that occurs as a matter of law) without the prior written consent of each other party hereto, and any attempted assignment without such consent will be null and void. Notwithstanding the right to make assignments in respect of the Initial Term Facility, no Initial Lender will be relieved, released or novated from its obligations under the Commitment Papers in connection with any assignment or participation of the Initial Term Facility, including its commitments and obligations to fund the Initial Term Facility, until after the funding under the Initial Term Facility has occurred.

 

7

Project Resistance – Commitment Letter


Without limitation of the foregoing, any assignment of commitments with respect to a Senior Secured Term Facility by a Commitment Party shall be only to banks, financial institutions and other institutional lenders that are identified by such Commitment Party and, other than any assignment to its controlled affiliates, managed funds or accounts or limited partners, with respect to which you have consented (together with the Initial Lenders and any Incremental Lenders, the “Lenders”). In any event, no assignment shall be made to the following entities (collectively, the “Disqualified Lenders”):

 

  (a)

any entity that competes with the business of the Acquired Business that is designated by you or the Sponsor as a Disqualified Lender in writing to us (or, if on or after the Closing Date, to the Administrative Agent);

 

  (b)

certain banks, financial institutions, other institutional lenders and investors and other entities that are designated by you or the Sponsor as a Disqualified Lender in writing to us on or prior to the date hereof (or, if on or after the date hereof, to the Administrative Agent, with such post-signing updates to occur no more frequently than twice per year and subject to the consent of the Administrative Agent, not to be unreasonably withheld, conditioned or delayed); and

 

  (c)

as to any Disqualified Lender referenced in clauses (a) and (b) above (the “Primary Disqualified Lender)”, such Disqualified Lender’s affiliates that are known or otherwise readily identifiable as such by name (other than Bona Fide Lending Affiliates with respect to which the Primary Disqualified Lender does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies of such entity), or that are identified in writing to us (or, if after the Closing Date, to the Administrative Agent) by you or the Sponsor from time to time.

Bona Fide Lending Affiliate” shall mean any bona fide debt fund, investment vehicle, regulated banking entity, non-regulated lending entity or other similar entity (in each case, other than an entity that is explicitly excluded pursuant to clause (a) or (b) above) that is primarily engaged in commercial loans and similar extensions of credit in the ordinary course of business.

Notwithstanding anything herein or in the Facilities Documentation to the contrary, no Disqualified Lender may become a Lender or have any commitment or right (including a participation right) with respect to the Senior Secured Term Facilities. To the extent persons are identified as Disqualified Lenders in writing by you after the date of this Commitment Letter (or, if on or after the Closing Date, by you to the Administrative Agent) pursuant to clauses (a) or (b) above (or otherwise become a Disqualified Lender after the date of this Commitment Letter), the inclusion of such persons as Disqualified Lenders (or such person becoming a Disqualified Lender) shall not retroactively invalidate prior assignments or participations to such person that were made in compliance with applicable assignment or participation provisions. For the avoidance of doubt, (x) any entity that is a Disqualified Lender under clause (a) or (b) above may not become a Lender due to the fact that it is an affiliate of an existing Lender and (y) “Disqualified Lenders” shall exclude any person that the Borrower has designated as no longer being a “Disqualified Lender” by written notice delivered to the Administrative Agent.

This Commitment Letter is intended to be solely for the benefit of the parties hereto (and Indemnified Persons solely to the extent expressly set forth herein), is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and Indemnified Persons solely to the extent expressly set forth herein) and is not intended to create a fiduciary relationship among the parties hereto. Any and all services to be provided by each Commitment Party hereunder may be performed by or through any of its affiliates or branches, and such affiliates and branches will be entitled to the benefits afforded to, and will be subject to the obligations of (including, for the avoidance of doubt confidentiality obligations), such Commitment Party under this Commitment Letter; provided that the applicable Commitment Party shall remain liable to the Borrower for the performance of such benefits and obligations. Except as otherwise set forth herein, this Commitment Letter may

 

8

Project Resistance – Commitment Letter


not be amended or any provision hereof waived or modified except in a writing signed by each Commitment Party and you. This Commitment Letter may be executed in any number of counterparts, each of which will be an original and all of which, when taken together, will constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile or other electronic transmission (including in “.pdf” format) will be effective as delivery of a manually executed counterpart hereof. Section headings used herein are for convenience of reference only, are not part of this Commitment Letter and will not affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter. The words “execution,” “signed,” “signature,” and words of like import this Commitment Letter or any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. The Commitment Papers supersede all prior understandings, whether written or oral, among you and us with respect to the Initial Term Facility and set forth the entire understanding of the parties hereto with respect thereto.

THIS COMMITMENT LETTER, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATING TO THIS COMMITMENT LETTER, WILL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY; provided, however, that (a) the interpretation of the definition of “Company Material Adverse Effect” (as defined in the Acquisition Agreement) and whether or not a Company Material Adverse Effect has occurred (including for purposes of the Financing Conditions), or any other term used herein that is defined by reference to the Acquisition Agreement, (b) the determination of the accuracy of any Acquisition Agreement Representation and whether as a result of any inaccuracy of any Acquisition Agreement Representation there has been a failure of a Financing Condition and (c) the determination of whether the Merger or Acquisition has been consummated in accordance with the terms of the Acquisition Agreement will, in each case, be governed by, and construed and interpreted in accordance with, the laws governing the Acquisition Agreement as applied to the Acquisition Agreement, without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any other jurisdiction. A determination by any court of competent jurisdiction (including any court arbitration body contemplated by the Acquisition Agreement) with respect to any of the foregoing matters described in clauses (a) through (c) of the proviso of the immediately preceding sentence shall be conclusive for all purposes hereunder.

9. WAIVER OF JURY TRIAL.

EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THE ACQUISITION, THE TRANSACTIONS, THE COMMITMENT PAPERS OR THE PERFORMANCE BY US OR ANY OF OUR AFFILIATES OF THE SERVICES HEREUNDER OR THEREUNDER.

10. Jurisdiction.

Each party hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the jurisdiction of any New York State court or Federal court of the United States of America sitting in the Borough of Manhattan in the City of New York, and any appellate court from any such court, in any suit, action, proceeding, claim or counterclaim arising out of or relating to the Commitment Papers, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such suit, action, proceeding, claim or counterclaim will be

 

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Project Resistance – Commitment Letter


heard and determined in such New York State or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action, proceeding, claim or counterclaim arising out of or relating to the Commitment Papers in any court in which such venue may be laid in accordance with the preceding clause of this sentence, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such suit, action, proceeding, claim or counterclaim in any such court, (d) agrees that a final judgment in any such action or proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law and (e) agrees a determination by any court of competent jurisdiction (including any court contemplated by the Acquisition Agreement and including any alternate dispute resolution procedures as may be contemplated by the Acquisition Agreement) with respect to the right to terminate the Acquisition Agreement and whether the parties thereto have an obligation to consummate the Acquisition (including with respect to termination rights and satisfaction of conditions) shall be conclusive for all purposes under this Commitment Letter. Service of any process, summons, notice or document by registered mail or overnight courier addressed to any of the parties hereto at the addresses above will be effective service of process against such party for any suit, action, proceeding, claim or counterclaim brought in any such court.

11. Confidentiality.

This Commitment Letter is delivered to you on the understanding that neither the Fee Letter nor this Commitment Letter, or their terms or substance, may be disclosed by you to any other person or entity prior to their acceptance by you, except

 

  a)

solely on a confidential basis, to the Sponsor, any Investor or potential Investor and to your and their respective officers, directors, employees, affiliates, controlling persons, members, partners, equity holders, attorneys, accountants, representatives, experts, agents and advisors;

 

  b)

if each Commitment Party consents in writing to such proposed disclosure;

 

  c)

that the Term Sheet and the existence of this Commitment Letter (but not any other contents of the Commitment Papers) may be disclosed to any rating agency in connection with the Transactions;

 

  d)

pursuant to the order of any court or administrative agency in any pending legal or administrative proceeding, or otherwise as required by applicable law or regulation or as requested by a governmental authority, in each case based on the advice of your legal counsel (in which case you agree to inform us promptly thereof to the extent practicable and not prohibited by applicable law, rule or regulation);

 

  e)

you may disclose the Commitment Papers and the contents thereof to the Acquired Business and their respective officers, directors, employees, equity holders, attorneys, accountants, representatives, agents and advisors on a confidential basis (provided that the Fee Letter will be redacted in the manner described in the Acquisition Agreement as of the date hereof);

 

  f)

you may disclose the aggregate amount of the fees (including upfront fees and OID) payable under the Fee Letter as part of the Projections, pro forma information or disclosure regarding sources and uses (but without disclosing any specific fees set forth therein);

 

  g)

you may disclose, on a confidential basis, the Fee Letter and the contents thereof to your and the Acquired Business’ auditors and accounting and tax advisers for customary accounting and tax purposes, including accounting for deferred financing costs;

 

10

Project Resistance – Commitment Letter


  h)

you may disclose the Commitment Papers in connection with the enforcement of your rights or remedies hereunder or under the Fee Letter;

 

  i)

you may disclose this Commitment Letter and its contents (but not the Fee Letter or the contents thereof) after your acceptance thereof or prior thereto to the extent that such information becomes publicly available other than by reason of improper disclosure by you or any of your affiliates in violation of any confidentiality obligations hereunder; and

 

  j)

you may disclose this Commitment Letter and its contents (but not the Fee Letter) in connection with any public filing requirement.

Each Commitment Party and its affiliates will use all confidential information provided to it or such affiliates by or on behalf of you and the contents of the Commitment Papers solely for the purpose of providing the services that are the subject of this Commitment Letter and will treat confidentially all such information and the Commitment Papers; provided, that the foregoing sentence will not prevent such Commitment Party from disclosing any such information, (a) pursuant to the order of any court or administrative agency or otherwise as required by applicable law or regulation (in which case such Commitment Party agrees to inform you promptly thereof to the extent lawfully permitted to do so, unless such Commitment Party is prohibited by applicable law from so informing you), (b) upon the request or demand of any governmental, regulatory authority having jurisdiction over such Commitment Party or any of its affiliates (in which case such Commitment Party agrees to inform you promptly thereof prior to such disclosure, unless such Commitment Party is prohibited by applicable law from so informing you, or except in connection with any routine request as part of any routine or ordinary course regulatory audit or examination conducted by bank accountants or any governmental bank regulatory authority exercising examination or regulatory authority), (c) to the extent that such information becomes publicly available other than by reason of improper disclosure by such Commitment Party or any of its affiliates or any of their respective members, partners (including existing and prospective limited partners), officers, directors, employees, legal counsel, independent auditors, professionals and other experts or agents, advisors, controlling persons and other representatives, (d) to the extent that such information is received by such Commitment Party from a third party that is not to such Commitment Party’s knowledge subject to confidentiality obligations to you, Holdings, the Target, the Sponsor or their respective affiliates, (e) to the extent that such information is independently developed by such Commitment Party without the use of any confidential information, (f) to the members, partners, directors (or equivalent managers), managed funds, managed accounts, officers, employees, agents, affiliates, limited partners, managers, investors, attorneys, accountants, independent auditors or other experts and advisors of such Commitment Party, in each case, who need to know such information in connection with the Transactions, are informed of the confidential nature of such information and are instructed to keep such information confidential (provided that such Commitment Party shall be responsible for the compliance of such persons with the provisions of this paragraph), (g) except with respect to the Fee Letter, to bona fide prospective Lenders, participants or assignees or any bona fide potential counterparty (or its advisors) to any swap or derivative transaction relating to the Acquired Business or any of its subsidiaries or any of their respective obligations, in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph), subject to the proviso below, (h) to ratings agencies for the purposes of obtaining a private rating letter or shadow rating in connection with the Transactions, so long as, prior to any such disclosure, such rating agency shall have agreed in writing to maintain the confidentiality of such materials, or (i) in connection with the enforcement of our rights hereunder or under the Fee Letter; provided, that (i) the disclosure of any such information to any Lenders or prospective Lenders or participants or prospective participants will be made subject to the acknowledgment and acceptance by such Lender or prospective Lender or participant or prospective participant that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and the Commitment Parties, including, without limitation, as agreed in any marketing materials) in accordance with customary market standards for dissemination of such type of information, which will in any event require “click through” or other affirmative actions on the part of the recipient to access such information and (ii) no such disclosure will be made to any Disqualified Lender.

 

11

Project Resistance – Commitment Letter


After the closing of the Transactions and at such Commitment Party’s expense, each Commitment Party may, with the prior written consent of the Borrower, (i) place advertisements in periodicals and on the Internet as it may choose and (ii) on a confidential basis, circulate promotional materials in the form of a “tombstone” or “case study” (and, in each case, otherwise describe the names of any of you or your affiliates and any other information about the Transactions, including the amount, type and closing date of the Initial Term Facility). In addition, the Commitment Parties may disclose the existence of the Initial Term Facility and the information about the Initial Term Facility to market data collectors, similar service providers to the lending industry, and service providers to such Commitment Party in connection with the administration and management of the Initial Term Facility.

The obligations under this section with respect to the Commitment Letter but not the Fee Letter will automatically terminate and be superseded by the confidentiality provisions in the Facilities Documentation (to the extent set forth therein) upon the execution and delivery of the Facilities Documentation and in any event will terminate on the first anniversary of the date of this Commitment Letter.

12. Surviving Provisions.

The compensation, information, indemnification, expense reimbursement, payment of fees, confidentiality, jurisdiction, venue, governing law, no agency or fiduciary duty and waiver of jury trial provisions contained in the Commitment Papers will remain in full force and effect regardless of whether definitive financing documentation is executed and delivered and notwithstanding the termination of this Commitment Letter or the Initial Lenders’ commitments hereunder and the Lead Arrangers’ and other agents’ several agreements to provide the services described herein; provided, that your obligations under the Commitment Papers, other than those relating to compensation, information and confidentiality, shall automatically terminate and be superseded by the Facilities Documentation upon consummation of the Transactions and the payment of all amounts owing at such time under the Commitment Papers.

13. Patriot Act Notification.

We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”) and the requirements of the beneficial ownership certification required by 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation), each Commitment Party and each Lender is required to obtain, verify and record information that identifies the Borrower and each Guarantor, which information includes the name, address, tax identification number and other information regarding the Borrower and each Guarantor that will allow such Commitment Party or such Lender to identify the Borrower and each Guarantor in accordance with the Patriot Act and the Beneficial Ownership Regulation. This notice is given in accordance with the requirements of the Patriot Act and the Beneficial Ownership Regulation and is effective as to each Commitment Party and each Lender.

14. Acceptance and Termination.

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and of the Fee Letter by returning to the Lead Arrangers (or their counsel) counterparts hereof and of the Fee Letter executed by you.

 

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Project Resistance – Commitment Letter


If you do so execute and deliver this Commitment Letter and the Fee Letter to the Lead Arrangers, we agree to hold our commitment available for you until the earliest of (such earliest date being the “Termination Date”): (a) the date that is 5 business days after the “Outside Date” (as defined in the Acquisition Agreement as of the date hereof), (b) the date on which you notify us in writing that the Acquisition Agreement has terminated in accordance with its terms without the funding of the Initial Term Facility and (c) the date of the consummation of the Acquisition (but not, for the avoidance of doubt, prior to the consummation thereof) with or without the effectiveness of the Facilities Documentation or the funding of the Initial Term Facility. Upon the occurrence of the Termination Date, this Commitment Letter and the commitments and undertakings of each Commitment Party hereunder will automatically terminate, unless such Commitment Party, in its discretion, agrees to an extension. The termination of any commitment pursuant to this paragraph will not prejudice your rights and remedies in respect of any breach or repudiation of the Commitment Papers.

You shall have the right to terminate this Commitment Letter and the commitments of the Initial Lenders hereunder in full or in part, on a pro rata basis among the Initial Lenders, at any time upon written notice to them from you, subject to your surviving obligations as set forth in paragraph 12 of this Commitment Letter.

[Signature pages follow]

 

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Project Resistance – Commitment Letter


We are pleased to have this opportunity and we look forward to working with you on this transaction.

 

Very truly yours,

OAKTREE CAPITAL MANAGEMENT, L.P.,

solely in its capacity as investment manager of certain funds or accounts managed by it

By:  

/s/ Matthew Stewart

  Name:   Matthew Stewart
  Title:   Managing Director
By:  

/s/ Mary Gallegly

  Name:   Mary Gallegly
  Title:   Managing Director

 

[SIGNATURE PAGE TO COMMITMENT LETTER]

Project Resistance


Accepted and agreed to as of
the date first written above:
RESISTANCE ACQUISITION, INC.
By:  

/s/ Adam Dilluvio

  Name: Adam Dilluvio
  Title: Secretary and Treasurer

 

[SIGNATURE PAGE TO COMMITMENT LETTER]

Project Resistance


CONFIDENTIAL    SCHEDULE I

Project Resistance

Commitment Schedule1

Commitments

In connection with the Transactions, each Initial Lender commits to provide that percentage of the Initial Term Facility set forth opposite its name in the table below:

 

Initial Lender

   Initial Commitment      Initial Commitment Percentage  

Oaktree Capital Management, L.P.

   $ 175,000,000        100

Total

   $ 175,000,000        100

Titles and Roles

In connection with the Transactions, each Commitment Party (acting alone or through or with affiliates selected by it) will act with and have the title(s) and in the role(s) set forth opposite its name with respect to the Initial Term Facility.

 

Title/Role    Initial Term Facility
Administrative Agent    As set forth on Exhibit B
Collateral Agent    As set forth on Exhibit B
Lead Arrangers    Oaktree Capital Management, L.P.

 

1 

All capitalized terms used but not defined in this exhibit have the meanings given to them in the Commitment Letter to which this exhibit is attached, including the other exhibits thereto. In the event any such capitalized term is subject to multiple and differing definitions, the appropriate meaning thereof in this exhibit is determined by reference to the context in which it is used.

 

Project Resistance – Commitment Letter

Schedule I


CONFIDENTIAL    EXHIBIT A

Project Resistance

Transaction Description2

It is intended that:

(a) The Borrower will directly or indirectly acquire (the “Acquisition”) the Target and its subsidiaries, pursuant to that certain Agreement and Plan of Merger, by and among the Borrower, Merger Sub, the Target, and the other parties thereto (together with the schedules and exhibits to such agreement, as such agreement, schedules and exhibits may amended from time to time in a manner that would not result in a failure of the condition precedent set forth in paragraph 1 of Exhibit C to this Commitment Letter, the “Acquisition Agreement”), and will consummate the other transactions contemplated by the Acquisition Agreement (including making certain payments in connection with the “change of control” of the Target that will be triggered by the Acquisition). The Acquisition is structured as a merger, in which Merger Sub will merge with and into Target, with Target surviving such merger as a wholly-owned direct subsidiary of the Borrower (the “Merger”).

(b) The Sponsor and other equity investors (the “Investors”) will, directly or indirectly, (x) contribute to the Borrower (or a direct or indirect parent of the Borrower) cash and/or equity in exchange for equity of the Borrower (or such direct or indirect parent) (the “Equity Contribution”), in a minimum amount of $290,000,000, inclusive of rollover equity ($275,000,000 excluding rollover equity) (collectively, the “Minimum Equity Contribution”) (and which, with respect to any preferred equity of the Borrower, if any, will be on terms reasonably acceptable to the Lead Arrangers), and (y) fund at least $15,000,000 of additional cash to the balance sheet of Holdings and its subsidiaries (the “Minimum Cash Injection”). Any such parent will contribute, or cause to be contributed, all such cash and equity to the Borrower substantially simultaneously with (or prior to) the funding of the Initial Term Facility. To the extent any stockholder or other equity holder of the Acquired Business has exercised appraisal rights in connection with the Transactions, then on the Closing Date the Investors may elect to issue one or more equity commitment letters and/or arrange for one or more letters of credit to be issued on their behalf in an aggregate amount not less than the amount of consideration that would otherwise be paid under the Acquisition Agreement in respect of the shares or other equity interests subject to such appraisal rights (the “Appraisal Shares”) and, for purposes of this Commitment Letter, an aggregate amount of such equity commitment letters and/or letters of credit up to, but not in excess of, the amount of consideration that would otherwise be paid under the Acquisition Agreement in respect of the Appraisal Shares shall be included in the amount of the Equity Contribution from and after the Closing Date as if such amount was funded in cash (with it being understood that, on or prior to the date of the final resolution of all such appraisal rights, the lesser of (a) the amount necessary to satisfy such appraisal rights in full and (b) an amount equal to the full amount committed under such equity commitment letters and/or the face value of any such letters of credit shall be funded, directly or indirectly, in cash to the Borrower in the form of common equity, or other equity on terms reasonably acceptable to the Commitment Parties).

(c) The Borrower will obtain $175,000,000 in aggregate principal amount of senior secured term loans (the “Initial Term Facility”) having terms materially consistent with those set forth on the term sheet attached to this Commitment Letter as Exhibit B (including the annexes attached thereto, the “Term Sheet”).

 

2 

All capitalized terms used but not defined in this exhibit have the meanings given to them in the Commitment Letter to which this exhibit is attached, including the other exhibits thereto. In the event any such capitalized term is subject to multiple and differing definitions, the appropriate meaning thereof in this exhibit is determined by reference to the context in which it is used.

 

Project Resistance – Commitment Letter

Exhibit A


(d) The proceeds of the Equity Contribution and the borrowing under the Initial Term Facility on the Closing Date will be applied on the Closing Date,

 

  (i)

to consummate the transactions contemplated by, and pursuant to the terms of, the Acquisition Agreement;

 

  (ii)

to finance (1) the repayment of the loan facilities of the Acquired Business pursuant to (x) that certain Loan Agreement, dated as of December 31, 2020 by and between R-Bridge Healthcare Cayman AIV, L.P., as lender and PRTK SPV2 LLC, as borrower, and (y) that certain loan agreement, dated as of February 26, 2019 between Healthcare Royalty Partners III, L.P., as lender and Paratek Royalty Corporation, as borrower (clauses (x) and (y), collectively, the “Existing Loan Facilities”) and (2) the satisfaction of the obligations to repurchase notes or settle conversions with respect to any notes issued pursuant to that certain Indenture, dated April 23, 2018 (the “Indenture” and such notes, the “Convertible Notes”) between the Acquired Business and U.S. Bank National Association as trustee, including any required payment of cash upon conversion or required repurchase of such notes in connection with the “Fundamental Change” (as defined in the Indenture) and/or “Make-Whole Fundamental Change” (as defined in the Indenture) related to the Acquisition (this clause (ii), the “Refinancing”);

 

  (iii)

to pay fees, costs and expenses related to the Transactions (such fees, costs and expenses, the “Transaction Costs”); and

 

  (iv)

for working capital and other general corporate purposes, including, for the avoidance of doubt, to fund cash to the balance sheet of the Borrower.

The transactions described above, together with the transactions related thereto, are collectively referred to herein as the “Transactions.” The Term Sheet (together with the Documentation Principles) reflect all material terms related to the Initial Term Facility. For purposes of the Commitment Papers, “Closing Date” means the date of the funding of the Initial Term Facility. All references to “dollars” and “$” are to the lawful currency of the United States of America.

 

A-2

Project Resistance – Commitment Letter

Exhibit A


CONFIDENTIAL    EXHIBIT B

Project Resistance

Term Sheet1

 

Borrower:    Resistance Acquisition, Inc., a Delaware corporation (or any permitted assignee thereof pursuant to the terms of the Commitment Letter) (the “Borrower”).
Holdings:    Resistance Intermediate, Inc., a Delaware corporation.
Administrative Agent and Collateral Agent:    Oaktree Fund Administration, LLC will act as sole administrative agent (in such capacity, the “Administrative Agent”) and sole collateral agent (in such capacity, the “Collateral Agent”), in each case, for the Lenders under the Senior Secured Term Facilities described in this Term Sheet.
Transactions:    As described on the “Transaction Description” attached to the Commitment Letter as Exhibit A.
Lenders:    The Initial Lenders and, following the funding of the Initial Term Facility on the Closing Date, the Lenders.
Initial Term Facility:    A senior secured first-lien term loan facility (the “Initial Term Facility” and the loans thereunder, the “Initial Term Loans”) in an aggregate principal amount of $175,000,000, to be made available in a single drawing on the Closing Date. Amounts repaid or prepaid with respect to the Term Loans may not be reborrowed.
Incremental Term Facilities:   

The Facilities Documentation will permit the Borrower to add one or more incremental term loan facilities (which may take the form of a delayed draw term facility) and/or to increase any existing term loan facility (any such new facility or increase, an “Incremental Term Facility” and the loans thereunder, “Incremental Term Loans”; all Incremental Term Facilities, together with the Initial Term Facility, are referred to collectively as the “Senior Secured Term Facilities”, and all Incremental Term Loans, together with the Initial Term Loans, are referred to collectively as the “Term Loans”). The original principal amount of any individual Incremental Term Facility must be at least $25,000,000, and the aggregate principal amount of all Incremental Term Facilities, taken together, shall not exceed $100,000,000.

 

Incremental Term Facilities are, for the avoidance of doubt, uncommitted as of the Closing Date, but may be established in one or more tranches at any time on or after the Closing Date, subject only to the consent of the Borrower, the Administrative Agent and the lenders who will be providing the loans and commitments under such Incremental Term Facility (such lenders, the “Incremental Lenders”).

 

1 

Capitalized terms used but not defined in this exhibit have the meanings set forth in the Commitment Letter to which this exhibit is attached or the other exhibits to the Commitment Letter. As used in this exhibit, “Administrative Agent,” “Lead Arrangers,” “Lenders,” and “Loans” refers to the Lead Arrangers, Lenders and Loans under the Facilities described in this Term Sheet.

 

Project Resistance – Commitment Letter

Exhibit B


  

The Borrower shall seek commitments in respect of any Incremental Term Facility from the existing Lenders (each of which shall be entitled to agree or decline to participate in its sole discretion). No Incremental Term Facilities may be provided by any entity other than an existing Lender without the consent of the existing Lenders and the Administrative Agent.

 

The Incremental Term Facilities will have the same guarantees as, and shall be secured on a pari passu basis by the same Collateral securing, the Initial Term Facility, and will otherwise have substantially the same terms as those applicable to the Initial Term Loans (including the interest rate and maturity date).

 

Each Incremental Term Facility shall be established pursuant to an amendment to the Facilities Documentation. Such amendment shall only be required to be executed by the Borrower, the Incremental Lenders providing such Incremental Term Facility and the Administrative Agent, and shall not be executed by (or subject to the consent of) any existing Lender that is not providing such Incremental Term Facility.

Purpose:   

(A)  Proceeds of the Initial Term Loans will be used to finance the Transactions, including the Acquisition and the Merger, the Refinancing and the payment of related fees, costs and expenses, and for working capital and other general corporate purposes (including, for the avoidance of doubt, to fund cash to the balance sheet of the Borrower).

  

(B)  Proceeds of the Incremental Term Loans will be used to finance business development activities (including bolt-on product acquisitions and product in-licensing) and such other purposes as may be consented to by the Administrative Agent.

Conditions to Funding of Incremental Term Loans:    The making of each loan under an Incremental Term Facility shall be conditioned upon (a) delivery of a customary borrowing notice, (b) the accuracy of representations and warranties in all material respects, (c) the absence of defaults or events of default immediately after giving effect to the making of such loan and (d) such other conditions as may be agreed.

 

B-2

Project Resistance – Commitment Letter

Exhibit B


Mandatory Prepayments:   

The Term Loans shall be prepayable:

 

(a) with 100% of the net cash proceeds from asset sales and casualty events (other than (x) certain ordinary course asset sales permitted under the Facilities Documentation and (y) asset sales pursuant to any Specified License or any Permitted Royalty Agreement), subject to customary exceptions and reinvestment rights to be agreed; it being understood that any prepayment premium, exit fees or similar fees that would otherwise be due and payable at the time of such mandatory prepayment may be, at the Borrower’s option, “paid in kind” by being capitalized and added to the principal balance of the Term Loans;

 

(b) with 65% of the net cash proceeds from any Permitted Royalty Agreement, subject to reinvestment rights to be agreed;

 

c) with 100% of the net cash proceeds from the issuance or incurrence of indebtedness other than any indebtedness permitted under the Facilities Documentation;

 

(d) in full upon the occurrence of any change of control; and

 

(e) with 100% of the proceeds from any cash equity contribution made to cure a breach of the minimum sales covenant.

 

Each Lender shall have the right to decline all or a portion of its pro rata share of any mandatory prepayment.

 

Specified Licenses” shall mean, collectively, (x) any license that has terms that are, when taken together as a whole, no less favorable to the Borrower than those identified on the licensing term sheets delivered to the Commitment Parties prior to the date hereof, and (y) any other license relating to the licensing of Nuzyra outside of the U.S. in an arm’s length transaction and on commercially reasonable terms that the Administrative Agent agrees shall constitute a “Specified License” (such consent not to be unreasonably withheld, conditioned or delayed).

 

Permitted Royalty Agreement” shall mean any agreement providing for the sale or other monetization on commercially reasonable terms of royalties (i) due from Almirall, LLC to the Borrower based on U.S. and China sales of Seysara or (ii) due from Zai (Shanghai) Co., Ltd. to the Borrower based on China sales of Nuzyra.

Prepayment Premium:    Any (x) optional prepayment of the Term Loans, (y) mandatory prepayment of the Term Loans or (z) acceleration of the Term Loans pursuant to the Facilities Documentation shall, in each case, be accompanied by a prepayment fee equal to (a) if such prepayment is made prior to the second anniversary of the Closing Date, an amount equal to the Make-Whole Premium, (b) if such prepayment is made on or after the second anniversary of the Closing Date but prior to the third anniversary of the Closing Date, 3.00% of the amount of the principal prepaid, (c) if such prepayment is made on or after the third anniversary of the Closing Date but prior to the fourth anniversary of the Closing Date, 1.00% of the amount of the principal prepaid and (d) if such prepayment is made on or after the fourth anniversary of the Closing Date, 0.00% of the amount of the principal prepaid.

 

B-3

Project Resistance – Commitment Letter

Exhibit B


  

Make-Whole Premium” means, with respect to any Term Loans being prepaid or accelerated on any applicable date, as calculated in good faith by the Borrower, the excess, if any, of: (a) the present value at such prepayment date of (i) the prepayment price of the Term Loans being prepaid at the second anniversary of the Closing Date plus (ii) all required interest payments due on such Term Loans being prepaid to the second anniversary of the Closing Date (excluding accrued but unpaid interest to (but not including) the prepayment date), in the case of each of clauses (i) and (ii) above, computed using a discount rate equal to the Treasury Rate plus 50 basis points; over (b) the then-outstanding principal amount of such Term Loans being prepaid.

 

For purposes of the Make-Whole Premium, “Treasury Rate” means (subject to a 0% floor) the yield to maturity as of the date of the relevant prepayment notice of the most recently issued United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (or is obtainable from the Federal Reserve System’s Data Download Program as of the date of such H.15) that has become publicly available at least two Business Days prior to such date (or, if such Statistical Release is no longer published, any publicly available source of similar market data reasonably acceptable to the Administrative Agent)) most nearly equal to the period from the date of such prepayment notice to the second anniversary of the Closing Date; provided, however, that if the period from such date to the second anniversary of the Closing Date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

Documentation Principles:    The Facilities Documentation will (i) be prepared by counsel to the Sponsor and (ii) be substantially in the form of the Agreed Precedent (as defined below), as modified in a manner consistent with the Commitment Papers and otherwise mutually agreed to be customary and appropriate for transactions of this type. “Agreed Precedent” means the definitive documentation for the senior secured credit facilities incurred by Ginger Merger Sub, Inc. and Radius Health, Inc., on August 15, 2022, in each case, including all agreements and documents relating to such facilities and financings, and with (a) modifications as are necessary to reflect the financing structure and the other terms set forth in this Commitment Letter (including, without limitation, the basket amounts and thresholds set forth in Annex I to Exhibit B hereto) and the Fee Letter, and to give due regard to the Model (as defined below) and the quality of earnings report provided to the Lead Arrangers prior to the date of this Commitment Letter, (b) modifications as are necessary to reflect the operational and strategic requirements of the Borrower and its subsidiaries in light of their industries, businesses, geographic locations, business practices, financial accounting and proposed business plan, and the disclosure schedules to the Acquisition Agreement and (c) modifications to reflect changes in law or accounting standards since the date of such precedent. The two preceding sentences are referred to herein, collectively, as the “Documentation Principles.” Capitalized terms used but not defined in this Term Sheet have the meanings set forth in the Commitment Letter, the Fee Letter or in the Agreed Precedent, as applicable. The Facilities Documentation will contain only those conditions to borrowing expressly set forth in the Commitment Letter and Term Sheet.

 

B-4

Project Resistance – Commitment Letter

Exhibit B


Interest Rate:   

The Term Loans will accrue interest at a rate equal to Term SOFR for a 3-month tenor plus a margin of 7.75% (such margin, the “Margin”); provided that if the trailing-twelve month revenue generated from Nuzyra Sales (as defined below) exceeds $175,000,000 as of any date prior to December 31, 2025, the Margin will be reduced to 7.50% from such date through and including December 31, 2025.

 

The floor for 3-month Term SOFR shall be 2.75%.

 

The Interest will be calculated on the basis of the actual number of days elapsed based on a 360-day year, and will be payable quarterly.

Maturity and Amortization:   

The Term Loans will mature on the date that is five (5) years after the Closing Date (the “Maturity Date”).

 

The Term Loans will be interest-only for the first twelve (12) full fiscal quarters after the Closing Date.

 

Amortization will begin on the thirteenth (13th) full fiscal quarter after the Closing Date, with quarterly installments (payable on the last business day of each applicable fiscal quarter) of:

 

(i) from the thirteenth (13th) full fiscal quarter ending after the Closing Date through and including the sixteenth (16th) full fiscal quarter ending after the Closing Date, 5.0% per quarter of the principal amount of funded Term Loans outstanding on the third anniversary of the Closing Date; and

 

(ii) from the seventeenth (17th) full fiscal quarter ending after the Closing Date through the Maturity Date, 7.5% per quarter of the principal amount of funded Term Loans outstanding on the third anniversary of the Closing Date,

 

with the balance payable on the maturity date set forth above (and in each case, subject to reduction as a result of prepayments consistent with the Documentation Principles).

 

B-5

Project Resistance – Commitment Letter

Exhibit B


Guarantees:    All obligations of the Borrower under the Senior Secured Term Facilities will be unconditionally guaranteed jointly and severally on a senior secured basis (the “Guarantees”) by Holdings and each existing and subsequently acquired or organized subsidiary of the Borrower (the “Subsidiary Guarantors” and, together with Holdings, the “Guarantors” and the Guarantors together with the Borrower, the “Loan Parties”). Notwithstanding the foregoing, the following persons shall not be required to guarantee the Senior Secured Term Facilities (and the Loan Parties shall not include any such subsidiary): (i) any subsidiary incorporated in the Commonwealth of Massachusetts solely for the purpose of holding investments as a Massachusetts security corporation under 830 CMR 63.38B.1 of the Massachusetts tax code and applicable regulations (including, as of the Closing Date, Paratek Securities Corporation) (“MSC Subsidiary”), (ii) any special purpose entity, not-for-profit subsidiary or captive insurance subsidiary, (iii) any immaterial subsidiary (to be defined in the Facilities Documentation), (iv) any subsidiaries that are prohibited by applicable law from guaranteeing the facilities or which would require approval from a third party (including a governmental authority) to guarantee the facilities that is required on the Closing Date or at the time such subsidiary becomes a subsidiary (including pursuant to assumed indebtedness) (but not incurred in contemplation thereof), (v) any subsidiaries for which providing guarantees and/or security would cause a material adverse tax consequence to the Borrower or any of its subsidiaries (as reasonably determined by the Borrower) and (vi) other subsidiaries as mutually agreed. Notwithstanding the foregoing, Paratek Ireland Limited shall not be required to provide guarantees or security with respect to the Senior Secured Term Facilities as of the Closing Date and so long as it remains an immaterial subsidiary.
Security:   

Subject to the Certain Funds Provisions and the Documentation Principles, obligations of the Loan Parties in respect of the Senior Secured Term Facilities will be secured jointly and severally on a first priority basis by substantially all assets of the Loan Parties, wherever located, now owned or hereafter acquired (collectively, the “Collateral”), subject to exceptions to be mutually agreed in the Facilities Documentation, including without limitation:

 

(i)any general intangibles or other rights or interests, in each case arising under any contracts, instruments, leases, licenses, permits, letters of credit, purchase money arrangements, instruments or other documents as to which the grant of a security interest would (A) constitute or result in the unenforceability of any of the foregoing documents or (B) give any other party to such contract, instrument, lease, license, permit, letter of credit, purchase money arrangement, instrument or other document the right to terminate its obligations thereunder;

 

(ii)trademark applications filed in the United States Patent and Trademark Office on the basis of such Grantor’s “intent to use” such trademark pursuant to Section 1(b) of the Lanham Act solely to the extent that granting a lien in such trademark application prior to such filing would adversely affect the enforceability or validity of, or render void or voidable or result in the cancellation of any Loan Party’s right, title or interest in, such trademark application or any trademark issued as a result of such application under applicable law; provided that if the foregoing no longer applies following the issuance of a registered trademark resulting from such intent-to-use trademark application, such intent-to-use trademark application shall be automatically included as Collateral;

 

B-6

Project Resistance – Commitment Letter

Exhibit B


  

(iii)any asset, the granting of a security interest in which would be void or illegal under any applicable law, would require any governmental or regulatory consent, license or authorization (unless such consent, license or authorization has been obtained), or pursuant thereto would result in, or permit the termination of, such asset;

 

(iv)any asset subject to a purchase money security interest, finance lease obligation or similar arrangement to the extent that the grant of other Liens on such asset (A) would result in a breach, violation or invalidation of, or constitute a default under, the agreement or instrument governing such arrangement or (B) would require the consent of any other party to such arrangement;

 

(v)the Excluded Accounts (to be defined in the Facilities Documentation);

 

(vi)any particular asset as to which the Administrative Agent and the Borrower have determined that the burden or cost of providing a pledge thereof or a security interest therein will outweigh the benefits to be obtained by the Lenders therefrom;

 

(vii)any particular asset for which providing guarantees and/or security would cause a material adverse tax consequence to the Borrower or any of its subsidiaries (as reasonably determined by the Borrower);

 

(viii)margin stock;

 

(ix)any fee-owned or leasehold real property other than Material Real Property (to be defined in the Facilities Documentation); and

 

(x)motor vehicles, aircraft and other assets subject to certificates of title, except to the extent a security interest therein can be perfected by the filing of a general “all assets” UCC financing statement.

 

Notwithstanding anything herein to the contrary, the only actions that shall be required for creation or perfection of a security interest in the Collateral are (i) the filing of a general “all asset” UCC-1 financing statement in the applicable filing office, (ii) the delivery of share certificates (if any) with respect to the shares of wholly-owned material domestic subsidiaries, (iii) the filing of short-form intellectual property security agreements in the United States Patent and Trademark Office and/or the United States Copyright Office, as applicable, with respect

 

B-7

Project Resistance – Commitment Letter

Exhibit B


  

to U.S. federal (x) trademark applications and registrations, (y) patent applications and patents and (y) copyright registrations and (iv) the entry into account control agreements with respect to deposit accounts held by Loan Parties (other than Excluded Accounts (to be defined in the Facilities Documentation)), with such account control agreements to be delivered within 45 days after (x) the Closing Date or (y) if later, the opening or acquisition of such deposit account (or in each case, such later date as may be agreed by the Administrative Agent in its reasonable discretion) (and for the avoidance of doubt, cash in such accounts shall still be considered “unrestricted cash” during such interim period). In addition, the Borrower shall use commercially reasonable efforts to obtain landlord waivers with respect to material locations (to be agreed) within 45 days after (x) the Closing Date or (y) if later, the opening or acquisition of such material location (or in each case, such later date as may be agreed by the Administrative Agent in its reasonable discretion).

 

For the avoidance of doubt, in no event shall (a) notices be required to be sent to account debtors or other contractual third-parties prior to the occurrence and during the continuance of an event of default or (b) creation or perfection (except to the extent perfected through the filing of general “all asset” Uniform Commercial Code financing statements) be required with respect to letter of credit rights and commercial tort claims, in each case below a threshold to be agreed or (c) actions in any non-U.S. jurisdiction (including non-U.S. intellectual property filings) be required to be taken in order to create or perfect any security interest in any assets.

Representations and Warranties:    Subject to the Certain Funds Provision and subject to limitations for materiality, exceptions and qualifications to be provided in the Facilities Documentation, the representations and warranties are to be limited to the following (to be applicable to the Borrower and its subsidiaries and, solely with respect to limited matters to be agreed, Holdings): organization and existence, due authorization, execution and delivery of the Facilities Documentation, enforceability of the Facilities Documentation, no violation of, or conflict with, law or organizational documents, compliance with law, material government approvals with respect to the Senior Secured Term Facilities, financial information, no material adverse effect, litigation, labor and environmental matters, subsidiaries, ownership of properties, taxes, benefit plans, accuracy of information as of the Closing Date, Regulations U and X, consolidated solvency as of the Closing Date, intellectual property, Investment Company Act and OFAC, FCPA and other applicable sanctions and anti-money laundering laws.
Affirmative Covenants:    The affirmative covenants shall be limited to the following (to be applicable to the Borrower and its subsidiaries and, solely with respect to further assurances on security, Holdings):

 

B-8

Project Resistance – Commitment Letter

Exhibit B


  

•  financial information and reports (with delivery of (i) quarterly unaudited financials to be delivered within 45 days of the first three quarters of each fiscal year and (ii) annual audited financials to be delivered within 120 days of the end of each fiscal year, accompanied by an opinion of a nationally recognized accounting firm (or another accounting firm reasonably acceptable to the Administrative Agent) that is not subject to any “going concern” or like qualification or exception or emphasis of matter (other than a going concern qualification based solely on (i) the upcoming maturity date of the Loans occurring within 12 months of the date of the relevant audit or (ii) a breach or anticipated breach of financial covenants under the Facilities Documentation) or any qualification or exception as to the scope of the relevant audit (any such “going concern” or like qualification or exception or emphasis of matter that is based on insufficient liquidity, a “Going Concern Liquidity Qualification”);

 

•  compliance certificates (to be delivered (x) concurrently with each set of quarterly and annual financials, and (y) within 10 business days after the end of each calendar month (with the certificate in clause (y) to only contain a certification with respect to compliance with the Minimum Liquidity Covenant));

 

•  delivery of board materials, in each case, subject to customary redactions related to attorney-client privilege or conflicts of interest;

 

•  an annual budget concurrently with the delivery of the audited financial statements for the preceding fiscal year;

 

•  quarterly lender calls, at the reasonable request of the Administrative Agent;

 

•  notices of defaults, events of default and certain other material events;

 

•  maintenance of existence;

 

•  compliance with laws (including ERISA, environmental laws, OFAC, FCPA and other applicable sanctions and anti-money laundering laws);

 

•  maintenance of properties;

 

•  insurance;

 

•  payment of taxes;

 

•  books and records and inspection rights;

 

•  use of proceeds;

 

•  future guarantors and security;

 

B-9

Project Resistance – Commitment Letter

Exhibit B


  

•  cash management;

 

•  changes in business activities;

 

•  changes in legal name, entity type or jurisdiction;

 

•  transactions with affiliates; and

 

•  post-closing matters (as needed);

 

subject, in the case of each of the foregoing covenants, to limitations for materiality, exceptions and qualifications to be provided in the Facilities Documentation.

 

At any time that any MSC Subsidiary holds any cash, the Borrower shall ensure that the aggregate amount of cash and cash equivalents held in controlled accounts is greater than or equal to 105% of the amount required to prepay the outstanding obligations under the Senior Secured Term Facilities in full at such time.

Negative Covenants:   

The negative covenants shall be limited to the following (to be applicable to the Borrower and its subsidiaries and, solely with respect to the passivity covenant, Holdings):

 

•  indebtedness;

 

•  liens;

 

•  financial covenants (as set forth below);

 

•  investments (including permitted acquisitions);

 

•  restricted payments;

 

•  consolidations and mergers;

 

•  dispositions;

 

•  payments of certain indebtedness;

 

•  restrictive agreements;

 

•  modifications and terminations of organizational documents of Loan Parties, to the extent they would be materially adverse to the interests of the Administrative Agent and the Lenders, taken as a whole;

 

•  outbound licenses (subject to the Permitted Licenses outlined below);

 

•  sale and leaseback;

 

•  change in fiscal year;

 

B-10

Project Resistance – Commitment Letter

Exhibit B


  

•  benefit plans and agreements; and

 

•  passive holding company covenant with respect to Holdings;

 

subject, in the case of each of the foregoing covenants, to exceptions and qualifications to be provided in the Facilities Documentation. For the avoidance of doubt, the Facilities Documentation shall permit in all respects (A) the existence of, as well as the conversion and the repurchase of, the Convertible Notes and (B) the consummation of the Transactions.

 

Notwithstanding anything herein to the contrary, the Borrower and its subsidiaries shall be permitted to enter into, maintain, and perform their obligations under the following:

 

(i) licenses of off-the-shelf software that is commercially available to the public;

 

(ii)  non-exclusive intercompany licenses or grants of rights for development, manufacture, production, commercialization (including commercial sales to end users), marketing, promotion, co-promotion, sales or distribution among the Loan Parties;

 

(iii)  any outbound non-exclusive license for the use of intellectual property of any Loan Party for development, manufacture, production, commercialization (including commercial sales to end users), marketing, promotion, co-promotion, sales or distribution of any product, in each case, entered into in the ordinary course; provided, that, with respect to each such license or grant described in clause (iii) above, (A) no event of default has occurred or is continuing at the time of entering into the agreement governing such license, and (B) such license or grant constitutes an arm’s length transaction, the terms of which do not provide for a sale or assignment of intellectual property;

 

(iv) any non-exclusive or exclusive license of intellectual property or technology or a grant of rights for development, manufacture, production, commercialization (including commercial sales to end users), marketing, co-promotion, sales, or distribution; provided that, with respect to each such license, (A) no event of default has occurred or is continuing at the time of entering into agreement governing such license, (B) such license or grant constitutes an arm’s length transaction, the terms of which do not provide for a sale or assignment of intellectual property, and (C) in the case of any exclusive license, any such license could not result in a legal transfer of the title of the licensed property but may be exclusive in respects other than territory and may be exclusive as to territory only as to discrete geographic areas and/or regions outside of the United States; and

 

B-11

Project Resistance – Commitment Letter

Exhibit B


  

(v)   other licenses to which the Administrative Agent shall have consented to in writing (such consent not to be unreasonably withheld, conditioned or delayed) (clauses (i) through (v), collectively, “Permitted Licenses”).

 

Notwithstanding anything herein to the contrary, other than pursuant to any Permitted License:

 

(A) the Borrower and its subsidiaries shall not be permitted to create, incur, assume or permit to exist any Lien on any Material IP securing any indebtedness for borrowed money other than the Senior Secured Term Facilities;

 

(B) the Loan Parties shall not, and shall not permit any of their subsidiaries to (x) directly or indirectly transfer, by means of contribution, sale, assignment, lease or sublease, license or sublicense, or other disposition of any kind (including as an investment, restricted payment or asset sale), any Material IP or Material Agreement (each as defined below) to any person other than a Loan Party or (y) permit any person other than a Loan Party to license or own any interest in any Material IP or Material Agreement owned by such Loan Party; and

 

(C) no Material IP or Material Agreement shall be contributed as an investment or distributed as a restricted payment to any subsidiary other than a Loan Party.

 

Material Agreement” means any contract to the extent that the absence or termination of such contract would reasonably be expected to result in a material adverse effect on (i) the business or operations of Holdings and its subsidiaries as a whole or (ii) Nuzyra.

 

Material IP” means all intellectual property, whether currently owned by (or purported to be owned by), or subject to a license, covenant not to sue or similar right or immunity to (or purported to be subject to a license, covenant not to sue or similar right or immunity to) the Borrower or any of its subsidiaries, or acquired, developed, obtained by, or otherwise subject to a license, covenant not to sue or similar right or immunity to the Borrower or any of its subsidiaries after the Closing Date that is, in each case, material to the current, planned, or anticipated business of Holdings or any of its subsidiaries or that the loss of which could reasonably be expected to result in (i) a Material Adverse Effect (to be defined in the Facilities Documentation) or (ii) a material adverse effect on any product commercialization and development activities with respect to Nuzyra.

 

B-12

Project Resistance – Commitment Letter

Exhibit B


Financial Covenants:   

(a) Minimum Liquidity: At the end of each business day, the unrestricted cash-on-hand and cash equivalents of the Borrower and its subsidiaries held in one or more controlled accounts shall not be less than $25,000,000 (the “Minimum Liquidity Covenant”); provided, that if the Borrower has delivered annual audited financial statements pursuant to the financial statement reporting covenant that contain a Going Concern Liquidity Qualification, the Minimum Liquidity Covenant shall be increased to $50,000,000 until the date on which the Borrower delivers annual audited financial statements that do not contain a Going Concern Liquidity Qualification.

 

For the avoidance of doubt, to the extent any financial institution holding any cash or cash equivalents of the Borrower and its Subsidiaries becomes subject to a bankruptcy, receivership or other insolvency event, such event shall not, in and of itself, cause such cash or cash equivalents to be considered “restricted.”

 

(b) Minimum Sales: As of the last day of each fiscal quarter, commencing with the fiscal quarter ending on December 31, 2023, the Borrower and its subsidiaries shall have generated Nuzyra Sales for the twelve-month period ending on the last day of such fiscal quarter in an amount equal to the lesser of (x) 70% of the Nuzyra Sales figure shown for such period under the “Standalone Base Case” in the file titled “Project Resistance Model – 05.20.2023” (the “Model”) and (y) 175,000,000.

 

(c) Total First Lien Net Leverage: As of the last day of each fiscal quarter, commencing with the 8th full fiscal quarter ending after the Closing Date, the Borrower shall not permit the Total First Lien Net Leverage Ratio to exceed the applicable threshold shown in the table below:

 

Fiscal Quarter

   Maximum Total
First Lien Net
Leverage Ratio

The 8th and 9th full fiscal quarters ending after the Closing Date

   6.00x

The 10th and 11th full fiscal quarters ending after the Closing Date

   5.50x

The 12th full fiscal quarter ending after the Closing Date and thereafter

   5.00x

 

B-13

Project Resistance – Commitment Letter

Exhibit B


  

For purposes of determining compliance with the financial covenant set forth in clause (a) above, any cash equity contribution made to Holdings on or before the 10th business day immediately following the breach of such financial covenant will, at the request of Holdings, be included in the calculation of Liquidity for the purposes of determining compliance with such financial covenant.

 

For purposes of determining compliance with the financial covenants set forth in clauses (b) and (c) above, any cash equity contribution made to Holdings during or after the end of a fiscal quarter for which Holdings is not in compliance with the applicable financial covenants and on or prior to the day that is 10 business days after the day on which financial statements are required to be delivered for such fiscal quarter will, at the request of Holdings, be included in the calculation of Adjusted EBITDA and/or Nuzyra Sales, as applicable, for the purposes of determining compliance with such financial covenants at the end of such fiscal quarter and any applicable subsequent periods which include such fiscal quarter.

 

The Borrower may not exercise the cure rights pursuant to the last two paragraphs more than four times over the life of the Senior Secured Term Facilities, or more than two times in any twelve-month period.

Selected Financial Definitions:   

Adjusted EBITDA” shall be defined as mutually agreed; provided that notwithstanding anything herein to the contrary, such definition shall include, without limitation, all addbacks and adjustments that are expressly included or reflected in the Model.

 

Total First Lien Net Leverage Ratio” shall mean, as of any date of determination, the ratio of (1) funded indebtedness as of such date of determination that is secured by a lien on any asset of the Borrower and its subsidiaries on a first-priority basis (other than any permitted capital leases or permitted hedges/swaps), minus unrestricted cash and cash equivalents of the Borrower and its subsidiaries in an amount up to $60 million, to (2) Adjusted EBITDA of the Borrower and its subsidiaries (on a consolidated basis) for the most recently ended four-fiscal quarter period.

 

Nuzyra Sales” shall mean revenue from the direct sale or licensing of Omadacycline (sold under the trade name “Nuzyra®” or such other trade name) in the United States, in a manner consistent with the Model.

 

Total Net Leverage Ratio” shall mean, as of any date of determination, the ratio of (1) total funded indebtedness as of such date of determination, minus unrestricted cash and cash equivalents of the Borrower and its subsidiaries in an amount up to $60 million, to (2) Adjusted EBITDA of the Borrower and its subsidiaries (on a consolidated basis) for the most recently ended four-fiscal quarter period.

 

B-14

Project Resistance – Commitment Letter

Exhibit B


Events of Default:   

Events of Default shall be limited to the following (subject to limitations for materiality, notice and grace periods, exceptions and qualifications to be provided in the Facilities Documentation):

 

•   nonpayment of principal when due;

 

•   nonpayment of interest or fees after a customary five business day grace period;

 

•   violation of covenants (subject, in the case of affirmative covenants (other than the covenants with respect to financial statement reporting, notices of material events, maintenance of existence of the Borrower, future guarantors and security and post-closing obligations), to a thirty-day grace period (and in the case of the financial statement reporting covenant, to a 7 business day grace period);

 

•   incorrectness of representations and warranties in any material respect;

 

•   cross-payment default and cross-event of default to material indebtedness in excess of the amount set forth on Annex I to this Exhibit B);

 

•   bankruptcy or other insolvency events of Holdings, the Borrower or its material subsidiaries (with a customary grace period for involuntary events);

 

•   monetary judgments in excess of the amount set forth on Annex I to this Exhibit B;

 

•   material ERISA events;

 

•   change of control;

 

•   if any of the following occurs: (i) the Food and Drug Administration or any other regulatory authority initiates enforcement action against, or issues a warning letter with respect to, any Loan Party, Nuzyra or any manufacturing facilities related to the foregoing that causes any Loan Party to discontinue or withdraw marketing or sales of Nuzyra or causes a delay in the manufacture or sale of Nuzyra, or (ii) a recall of Nuzyra that, in each case of clauses (i) and (ii), would reasonably be expected to result or results in a material adverse effect; and

 

B-15

Project Resistance – Commitment Letter

Exhibit B


  

 

•   actual or asserted invalidity of material guarantees or security documents with respect to material Collateral (other than as a result of the Administrative Agent’s failure to file continuation statements or maintain possession of original collateral).

 

For the avoidance of doubt, there shall be no standalone Event of Default for a “material adverse change” (or similar) of the Borrower or its subsidiaries.

Voting:    To be consistent with the Documentation Principles; provided that the consent of each Lender directly and adversely affected thereby will be required with respect to any contractual subordination of the liens on all or substantially all of the Collateral securing the obligations under the Senior Secured Term Facilities or the contractual payment priority of the Senior Secured Term Facilities to any other indebtedness for borrowed money.
Assignments and Participations:    To be consistent with the Documentation Principles; provided that (A) if after giving effect to any assignment, Oaktree would hold loans and commitments representing less than 51% of the total loans and commitments of all Lenders, the consent of the Borrower shall be required for such assignment and (B) in no event shall any assignment or participation be permitted to be made to any Disqualified Lender, in each case of clauses (A) and (B), unless an event of default has occurred and is continuing.
Expenses and Indemnification:    To be consistent with the Documentation Principles.
Governing Law and Forum:    New York.
Counsel to the Lead Arrangers:    Sullivan & Cromwell LLP

 

B-16

Project Resistance – Commitment Letter

Exhibit B


ANNEX I TO EXHIBIT B

Project Resistance

Selected Baskets/Thresholds

 

    

Basket

  

Size

  

Indebtedness

  
1.    Cap Leases/Purchase Money Obligations    $5M in the aggregate outstanding at any time
2.    Reimbursement Obligations for Letters of Credit   

Uncapped for L/Cs in connection with real property leases in the ordinary course

 

Otherwise, capped at $5M in the aggregate outstanding at any time

3.    Reimbursement Obligations for Cash Management Services Secured by Cash    $5M in the aggregate outstanding at any time
4.    Indebtedness for Performance, Surety or Appeal Bonds in the Ordinary Course    $5M in the aggregate outstanding at any time
5.    Non-Speculative Hedging Obligations    (i) Subject to $5M cap for hedging currency risks and (ii) with respect to hedging interest rate risks, in an aggregate notional amount in excess of 50% but not more than 100% of aggregate principal amount
6.    General Indebtedness    $5M in the aggregate outstanding at any time
7.    Intercompany Indebtedness   

Uncapped if (x) between Loan Parties or (y) between Non-Loan Parties

 

Indebtedness owed by a Loan Party to a Non-Loan Party capped at $3M in the aggregate outstanding at any time and subject to subordination

8.    Subordinated Indebtedness    Uncapped if “deeply” subordinated with respect to payment, security and enforcement on terms reasonably acceptable to the Administrative Agent and subject to customary requirements with respect to maturity and no cash payments
9.    Indebtedness Incurred by Non-Loan Parties    $500K, solely for local requirements
10.    Indebtedness Incurred in Connection with RPIs, RSUs, PSUs and Other Similar Incentives Issued Under The “Incentive Plans” (to be specifically defined in the credit agreement)    Subject to a cap to be agreed
   Liens   

 

Project Resistance – Commitment Letter

Annex I to Exhibit B


    

Basket

  

Size

11.    Liens Securing Letters of Credit; Security Deposits in Connection with Real Property Leases   

Uncapped for L/Cs or security deposits in connection with real property leases in the ordinary course

 

$5M for other L/Cs

12.    Liens Securing Non-Speculative Hedging Obligations    Capped at the amount in Item 5 above.
13.    General Liens    $5M
   Investments   
14.    Permitted Acquisitions   

Permitted subject to the following requirements:

 

•   No default or EOD;

 

•   Compliance with laws and governmental approvals;

 

•   Compliance with affirmative covenant to provide guarantees and security within applicable post-closing period (30 days for domestic entities; 60 days for foreign entities);

 

•   Compliance with financial covenants;

 

•   Cash consideration (to be determined in a manner to be mutually agreed) capped at (x) $15M per year plus (y) the amount of any common equity contributions by GPC after the Closing Date (provided, that any cash consideration pursuant to clauses (x) and (y) that, taken together, is in excess of $75M per year shall require the consent of the Administrative Agent);

 

•   Delivery of evidence demonstrating that the Borrower expects to be in pro forma compliance with the Minimum Liquidity Covenant for each of the 12 months following the acquisition;

 

•   If paid in equity interests, must be qualified equity interests;

 

•   Delivery of certain documents and information regarding acquisition (subject to threshold to be agreed); and

 

•   Assumed indebtedness capped at $10M.

 

B-I-2

Project Resistance – Commitment Letter

Annex I to Exhibit B


    

Basket

  

Size

15.    JVs and Strategic Alliances   

$2.5M per fiscal year (to the extent (i) in the ordinary course, (ii) arm’s length and (iii) no EOD)

 

No Material IP may be transferred to a JV

16.    General Investments    Greater of $5M and 2.5% of LTM revenues in aggregate amount outstanding
17.    Intercompany Investments    Uncapped if (x) between Loan Parties or (y) between Non-Loan Parties
18.    Investments by Loan Parties in Non-Loan Parties   

$5M in the aggregate

 

In addition, unlimited investments in Paratek Securities Corporation so long as the Borrower and its subsidiaries have cash in accounts subject to a DACA in favor of the Collateral Agent in an amount equal to or greater than 105% of the principal amount of the Senior Secured Term Loans outstanding at the time such investment is made

19.    Travel Advances, Relocation Loans and Other Ordinary Course Loans to Employees    $2.5M outstanding at any time
20.    Ratio-Based Investments    Up to $150M in the aggregate, subject to pro forma compliance with a Total Net Leverage Ratio < 3.00x
   Asset Sales / Transfers   
21.    General 75% Cash Consideration Basket   

$5M, subject to (i) receiving 75% cash consideration and (ii) receiving FMV

 

No asset sales with respect to Material IP permitted pursuant to this basket

22.    De Minimis Basket   

$2.5M

 

No asset sales with respect to Material IP permitted pursuant to this basket

 

B-I-3

Project Resistance – Commitment Letter

Annex I to Exhibit B


    

Basket

  

Size

23.    Intercompany Transfers   

Uncapped if (x) between Loan Parties, (y) between Non-Loan Parties or (z) made from a Non-Loan Party to a Loan Party

No dispositions from Loan Parties to Non-Loan Parties under this basket

   Distributions   
24.    General    All RP baskets are subject to no EOD
25.    Stock Repurchases    $1M per fiscal year (limited to repurchases from current and former consultants, agents, officers, directors and employees) (with rollover into following fiscal year)
26.    Intercompany Distributions    Uncapped if (x) between Loan Parties, (y) between Non-Loan Parties or (z) made from a Non-Loan Party to a Loan Party
27.    Payment of Fees/Expenses/ Indemnities to the Board of Directors in the Ordinary Course    $250,000 per calendar year
28.    Payments with respect to RPIs, RSUs, PSUs and Other Similar Incentives Issued Under The “Incentive Plans” (to be specifically defined in the credit agreement)    $25M in the aggregate (provided, that the aggregate amount of distributions made pursuant to this basket prior to June 30, 2026 shall not exceed $7.5M)
29.    Payments pursuant to the “Contingent Value Rights Agreement” (to be specifically defined in the credit agreement to refer to the Contingent Value Rights Agreement as in effect on the Closing Date)    Payments in accordance with the terms of the Contingent Value Rights Agreement as in effect on the Closing Date
30.    Ratio-Based RPs    Up to $100M in the aggregate, subject to (i) pro forma compliance with a Total Net Leverage Ratio < 2.50x and (ii) no EOD
   Miscellaneous   
31.    Immaterial Subs (i.e. not required to be loan parties)   

Immaterial if such subsidiary:

 

•   does not hold or control Material IP;

 

•   does not hold or maintain any material regulatory authorization;

 

•   is not party to any Material Agreement; and

 

•   when taken together with all other such immaterial subsidiaries, has both (x) assets ≤ 5% of the consolidated assets of the group and (y) revenue ≤ 5% of the consolidated revenue of the group

 

B-I-4

Project Resistance – Commitment Letter

Annex I to Exhibit B


    

Basket

  

Size

32.    Threshold Amount For Judgment EOD and Cross-Acceleration   

$5M for judgment EOD

 

$5M for cross-payment default and cross-event of default

33.    De minimis accounts not required to be subject to an Account Control Agreement    $1M in the aggregate for all such accounts

 

B-I-5

Project Resistance – Commitment Letter

Annex I to Exhibit B


CONFIDENTIAL    EXHIBIT C

Project Resistance

Conditions Annex 1

Subject in all respects to the Certain Funds Provisions, the commitments of the Initial Lenders, the funding of the Initial Term Loans and the Lead Arrangers’ and other agents’ agreements to perform the services described in this Commitment Letter are, in each case, subject solely to the satisfaction (or waiver by the Lead Arrangers) of the following conditions precedent:

1. The Acquisition shall have been consummated or, substantially concurrently with the initial borrowing of the Initial Term Loans, shall be consummated, in all material respects in accordance with the terms of the Acquisition Agreement, without giving effect to any modifications, amendments, consents or waivers thereto that are materially adverse to the Initial Lenders (in their capacities as such) without the consent of the Commitment Parties (which consent shall not be unreasonably withheld, delayed or conditioned); provided, that

(i) an amendment, supplement, waiver or modification of the Acquisition Agreement that decreases the purchase price thereunder will, in each case, not be deemed to be materially adverse to the Initial Lenders as long as such reduction is less than 10% of the purchase price and is allocated to (x) first, reduce the Equity Contribution to the Minimum Equity Contribution level and (y) second, reduce the Initial Term Facility and the Equity Contribution on a pro rata basis,

(ii) an amendment, supplement, waiver or modification of the Acquisition Agreement that has the effect of increasing the purchase price thereunder will be deemed not to be materially adverse to the Initial Lenders if such increase is not funded with indebtedness for borrowed money, and

(iii) any change to, or waiver with respect to, the definition of “Company Material Adverse Effect” contained in the Acquisition Agreement (as in effect on the date hereof) will be deemed to be adverse in a material respect to the interests of the Initial Lenders;

provided, further, that, in each case, the Commitment Parties shall be deemed to have consented to such modification, amendment, consent or waiver unless they shall object thereto in writing within 2 business days of receipt of written notice of such modification, amendment, consent or waiver.

2. The Commitment Parties will have received copies of (i) audited consolidated balance sheets of the Acquired Business, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit) and cash flows of the Acquired Business, for the fiscal years ended December 31, 2021 and December 31, 2022, and (ii) the unaudited consolidated balance sheet of the Acquired Business as of March 31, 2023, together with the related consolidated statement of operations and comprehensive loss, stockholder’s equity (deficit) and cash flows of the Acquired Business for the fiscal quarter ended March 31, 2023 (it being understood that the Commitment Parties acknowledge the receipt of all such financial statements described in clauses (i) and (ii) above).

 

1 

All capitalized terms used but not defined in this exhibit have the meanings given to them in the Commitment Letter to which this exhibit is attached, including the other exhibits thereto. In the event any such capitalized term is subject to multiple and differing definitions, the appropriate meaning thereof in this exhibit is determined by reference to the context in which it is used.

 

C-1

Project Resistance – Commitment Letter

Exhibit C


3. Each of the (x) Refinancing with respect to the Existing Loan Facilities and (y) the Equity Contribution (in an amount not less than the Minimum Equity Contribution), and (z) the Minimum Cash Injection either has been consummated or will be consummated substantially concurrently with the funding of the Initial Term Facility; it being agreed that the Refinancing may be consummated with the proceeds of the funding of the Initial Term Facility.

4. Since the date of the Acquisition Agreement, there shall not have been a Company Material Adverse Effect (as defined in the Acquisition Agreement) that is continuing as of the Closing Date (as defined in the Acquisition Agreement).

5. The Commitment Parties will have received the following (each such credit agreement and guarantee and security agreement, collectively, the “Facilities Documentation”), in each case, containing terms that are materially consistent with the provisions of the Term Sheet and the Documentation Principles:

 

  (a)

a credit agreement, executed by Holdings and the Borrower;

 

  (b)

a security agreement pursuant to which a lien is granted on the collateral in favor of the Collateral Agent for the ratable benefit of the Lenders, and pursuant to which the Collateral Agent is authorized to file customary “all asset” UCC-1 financing statements with respect thereto, executed by Holdings, the Borrower and each Subsidiary Guarantor;

 

  (c)

a guarantee agreement, executed by Holdings, the Borrower and each Subsidiary Guarantor;

 

  (d)

any certificated securities representing equity of the Borrower and its subsidiaries constituting Collateral, in each case, with customary stock powers executed in blank provided that such certificated securities with respect to equity of the Acquired Business will be required to be delivered on the Closing Date only to the extent actually received from the Acquired Business prior to the Closing Date after the Borrower’s use of commercially reasonable efforts to obtain such certificate; provided further that any such stock certificates not delivered on the Closing Date shall be required to be delivered on or prior to the date that is 90 days after the Closing Date (or such later date after the Closing Date as the Administrative Agent shall agree in its sole, reasonable discretion).

6. The Commitment Parties will have received the following (collectively, the “Closing Deliverables”) in each case subject to the Certain Funds Provision and the applicable Documentation Principles:

 

  (a)

customary legal opinions from your New York and Delaware counsel and local counsel of any other material jurisdictions of organization of a Loan Party;

 

  (b)

an officer’s certificate containing (i) certification of organizational documents and appropriate authorizing resolutions and (ii) a customary incumbency certificate from officers of each of Holdings, the Borrower and the Subsidiary Guarantors (to the extent such officer is executing the Facilities Documentation);

 

  (c)

good standing certificates (to the extent applicable) from the Secretary of State (or equivalent office) of Holdings’, the Borrower’s and the Subsidiary Guarantor’s respective jurisdictions of organization;

 

C-2

Project Resistance – Commitment Letter

Exhibit C


  (d)

a solvency certificate substantially in the form attached as Annex I to this Exhibit C of the Commitment Letter duly executed by the chief financial officer (or other officer with reasonably equivalent responsibilities) of the Borrower; and

 

  (e)

a borrowing request, which must be delivered at least three business days prior to the Closing Date (or such shorter time as the Administrative Agent may agree), which shall be deemed to be conditioned on the consummation of the Transactions.

7. Subject to the Certain Funds Provision, the accuracy of the Acquisition Agreement Representations and the Specified Representations in all material respects on and as of the Closing Date; provided that to the extent that the Acquisition Agreement Representations and the Specified Representations specifically refer to an earlier date, they shall be accurate in all material respects as of such earlier date.

8. The Lenders will have received at least three business days prior to the Closing Date:

 

  (a)

all outstanding documentation and other information about the Loan Parties required under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act (but excluding any beneficial ownership information, which is covered solely by clause (b) below); and

 

  (b)

solely to the extent the Borrower qualifies as a “legal entity customer” under 31 C.F.R. §1010.230, a customary FinCEN beneficial ownership certificate (it being agreed delivery of a signed LSTA Beneficial Ownership Form shall satisfy this clause (b));

in each case of clauses (a) and (b), solely to the extent such information or documentation has been requested in writing to the Borrower by the Administrative Agent at least ten business days prior to the Closing Date.

9. All fees and expenses due to the Commitment Parties under the Commitment Papers and required to be paid on the Closing Date (to the extent an invoice has been delivered to the Borrower at least three business days prior to the Closing Date), shall, upon the funding of the Initial Term Facility, have been paid (which amounts may be offset against the proceeds of the Initial Term Facility).

 

C-3

Project Resistance – Commitment Letter

Exhibit C


CONFIDENTIAL    ANNEX I TO EXHIBIT C

Form of Solvency Certificate

Date: [_____, ____]

Pursuant to Section [__] of the Credit Agreement1, the undersigned, solely in the undersigned’s capacity as the [Chief Financial Officer/equivalent officer] of the Borrower and not in the undersigned’s individual or personal capacity and without personal liability, hereby certifies on behalf of the Borrower that, to his or her knowledge, as of the Closing Date, immediately after giving effect to the Transactions (including the making of the [Loans] under the Credit Agreement on the Closing Date and the application of the proceeds thereof):

 

  (a)

the fair value of the property of the Borrower and its Subsidiaries, on a consolidated basis, is greater than the total amount of liabilities, including contingent liabilities, of the Borrower and its Subsidiaries, on a consolidated basis;

 

  (b)

the present fair saleable value of the assets of the Borrower and its Subsidiaries, on a consolidated basis, is not less than the amount that will be required to pay the probable liabilities of the Borrower and its Subsidiaries, on a consolidated basis, on their debts as they become absolute and matured;

 

  (c)

the Borrower and its Subsidiaries, on a consolidated basis, do not intend to, and do not believe that they will, incur debts or liabilities beyond their ability to pay as such debts and liabilities mature;

 

  (d)

the Borrower and its Subsidiaries, on a consolidated basis, are not engaged in a business or a transaction, and are not about to engage in a business or a transaction, for which the property of the Borrower and its Subsidiaries, on a consolidated basis, would constitute an unreasonably small capital; and

 

  (e)

the Borrower and its Subsidiaries, on a consolidated basis, have not executed the Credit Agreement or any other Loan Document, or made any transfer or incurred any Obligations hereunder or thereunder, with actual intent to hinder, delay or defraud either present or future creditors.

For purposes of this Solvency Certificate, the amount of any contingent liability at any time will be computed as the amount that, in light of all the facts and circumstances existing at such time, would reasonably be expected to become an actual or matured liability. Capitalized terms used but not otherwise defined herein have the meanings assigned to them in the Credit Agreement.

The undersigned is familiar with the business and financial position of the Borrower and its Subsidiaries. In reaching the conclusions set forth in this Solvency Certificate, the undersigned has made such investigations and inquiries as the undersigned has deemed appropriate, having taken into account the nature of the business proposed to be conducted by the Borrower and its Subsidiaries after consummation of the Transactions.

* * *

 

1 

Credit Agreement to be defined.

 

Project Resistance – Commitment Letter

Annex I to Exhibit C


IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate, solely in the undersigned’s capacity as the [Chief Financial Officer/equivalent officer] of the Borrower and not in the undersigned’s individual or personal capacity and without personal liability, on behalf of the Borrower as of the date first stated above.

 

 

  [Borrower]
By:  

         

  Name:
  Title:

 

C-I-1

Project Resistance – Commitment Letter

Annex I to Exhibit C

Exhibit (c)(ii)








































































Exhibit (c)(iii)








































































Exhibit (c)(iv)











































STRICTLY CONFIDENTIAL Pinto Illustrative Financial Analysis Selected Precedent Transactions Analysis – Transaction Metrics 1 Upfront TEV Contingent Value Total Value NTM Rev Consideration Premia Upfront / Announced Target Acquiror Indication ($mm) ($mm) ($mm) ($mm) Cash Equity 1 day 1 month NTM Rev. 02/15/2023 Emergent (Traveler's Vaccines) Bavarian Nordic Typhoid, Cholera $270 $110 $380 $49 100% - NA NA 5.5x Prd. 07/11/2022 La Jolla Innoviva Septic Shock 149 - 149 56 100% - 84% 76% 2.7x Pub. Prd. 02/14/2022 BDSI Collegium Chronic Pain 552 - 552 194 100% - 54% 66% 2.8x Pub. 10/11/2021 Flexion Pacira OA Knee Pain 587 422 1,009 151 100% - 47% 38% 3.9x Pub. 10/11/2021 Adamas Supernus Parkinson's Dyskinesia 457 49 506 112 100% - 76% 72% 4.1x Pub. Pub. Pvt. Pvt. The Medicines Company 11/29/2017 Melinta cUTI, ABSSSI 270 - 270 80 80% 20% NA NA 3.4x Prd. (AI Business) Mean $407 $78 $485 $128 61% 58% 3.4x Median $363 $25 $443 $111 54% 66% 3.2x Pinto at Offer Price (Received 5/22/2023) 2 3 3 Long-Range Plan: $2.15 / share + 0.85 / share CVR $349 $52 $401 $170 100% - 13% 8% 2.0x Pub. And Pvt. denote deals involving a public / private target, respectively. Prd. denotes deals involving the acquisition of a product / product portfolio Source: Company filings, Press releases, Wall Street Research, Capital IQ, Pinto May 2023 LRP (received on 6/2/2023) 1. Represent unaffected premia based on upfront consideration; 1-month premia are based on the target’s VWAP over 30 trading days prior to the transaction announcement [ 43 ] 2. Does not include BARDA procurement revenue in NTM period; revenue consists of product revenue, government contract service & grant revenue, and collaboration & royalty revenue. NTM revenues determined as of 3/31/2023 3. Based on Pinto closing price of $1.91 as of 5/22/2023 and Pinto 30D VWAP of ~$1.98 as of 5/22/2023 per Bloomberg























Exhibit (d)(iv)(a)

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is entered into as of June 6, 2023 by and among Resistance TopCo L.P., a Delaware limited partnership (“Topco LP”), Paratek Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the individual listed on the Schedule A attached hereto (“Subscriber”). Any capitalized term used herein without definition shall have the meaning ascribed to it in the Merger Agreement (as defined below).

WHEREAS, Subscriber was previously employed by the Company and has been granted an award (the RPIP Award”) under, and is a participant in, the Company’s Revenue Performance Incentive Plan (the “RPIP”) pursuant to an Award Agreement, with a grant date of ____________;

WHEREAS, concurrently with the execution of this Agreement, Resistance Acquisition, Inc., a Delaware corporation (“Parent”), Resistance Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), and the Company, are entering into that certain Agreement and Plan of Merger (as amended, amended and restated or otherwise modified from time to time, the “Merger Agreement”), dated as of even date herewith;

WHEREAS, subject to the terms of the Merger Agreement, at the Effective Time, Merger Sub will be merged with and into the Company, with the Company surviving (the “Merger”), and the Company will thereupon be a direct wholly owned subsidiary of Parent and an indirect wholly owned subsidiary of Topco LP;

WHEREAS, in connection with the Merger, Subscriber desires to subscribe for a number of non-voting common units of Topco LP(the “Class B Units”) with a value per Class B Unit equal to the per-unit purchase price of $1,000, on the terms and conditions set forth herein (the “Subscription”); and

WHEREAS, immediately following the Closing, Topco LP, Subscriber and certain other Persons shall enter into an amended and restated agreement of limited partnership of Topco LP.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Subscription.

(a) At the Subscription Closing (as defined below), Subscriber shall purchase from Topco LP, and Topco LP shall sell and issue to Subscriber, a number of Class B Units (the “New Topco Units”) equal to (i) the dollar amount that equals the percentage of Subscriber’s gross, pre-tax payments under the RPIP that become due in connection with the Closing (the “Closing RPIP Payments”) that is set forth opposite Subscriber’s name on Annex A (such amount, the “Subscription Amount”) divided by (ii) the per-unit purchase price of $1,000, rounded to the nearest whole unit.

(b) For the sake of efficiency and the administrative convenience of the parties, Subscriber hereby irrevocably directs that the Company withhold (or cause to be withheld) the Subscription Amount from any after-tax amounts otherwise payable to Subscriber in connection with the Closing pursuant to the RPIP and remit such amount to Topco LP (on behalf of Subscriber) in satisfaction of Subscriber’s obligation to pay the Subscription Amount to Topco LP pursuant to Section 1(a).


(c) The closing of the Subscription (the “Subscription Closing”) shall take place immediately following the Closing at the same location as the Closing.

(d) Prior to the Subscription Closing, Topco LP and Subscriber shall enter into the amended and restated agreement of limited partnership of Topco LP in form and substance reasonably acceptable to Topco LP (the “Topco LP Agreement”), which agreement will (i) provide for drag-along rights, tag-along rights, preemptive rights, and transfers for bona fide estate planning purposes, in each case, which are customary for a transaction such as the Subscription and subject to customary exceptions, (ii) (ii) the right to receive annual financial statements, (iii) not require additional capital contributions from Subscriber (other than with respect to the exercise of preemptive rights or as required by applicable law), and (iv) prohibit amendments to the Topco LP Agreement that disproportionately and adversely affect the Class B Units without the prior written consent of a majority of the holders of the then-outstanding Class B Units.

2. Representations and Warranties of Topco LP. Topco LP hereby represents and warrants to Subscriber as follows:

(a) Topco LP is a limited partnership duly organized, existing and in good standing, under the Laws of the State of Delaware.

(b) Topco LP has full limited partnership power and authority to enter into and perform this Agreement. The execution, delivery and performance of this Agreement by Topco LP has been duly and validly approved by Topco LP. This Agreement has been duly executed and delivered by Topco LP and constitutes a legal, valid and binding agreement of Topco LP, enforceable against Topco LP in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar Laws affecting creditors’ rights generally and by general principles of equity (collectively, the “Enforceability Exceptions”)).

(c) When issued and delivered in accordance with the terms of this Agreement, the New Topco Units will be duly authorized, validly issued and fully paid and will be free of all preemptive rights and any other Liens other than restrictions under the Topco LP Agreement and applicable federal and state securities Laws.

(d) At the Subscription Closing, Topco LP will have an adequate amount of authorized equity interests to effect the issuance of the New Topco Units in accordance with the terms of this Agreement.

(e) Topco LP and each of its direct or indirect Subsidiaries (i) was formed solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, (ii) have no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to the transactions contemplated by the Merger Agreement and this Agreement and (iii) prior to the Effective Time, will not have engaged in any business activities other than those relating to the transactions contemplated by the foregoing agreements.

3. Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to Topco LP as follows:

(a) Subscriber (i) has all requisite power and authority to enter into and perform this Agreement, and (ii) the execution, delivery and performance of this Agreement by Subscriber has been duly and validly approved. This Agreement has been duly executed and delivered by Subscriber and constitutes a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance with its terms (subject to the Enforceability Exceptions).

 

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(b) Subscriber represents that it is an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”).

(c) Subscriber has had an opportunity to fully evaluate an investment in the New Topco Units, is in a financial position to hold the New Topco Units for an indefinite period of time and is able to bear the economic risk and withstand a complete loss of Subscriber’s investment in the New Topco Units.

(d) The New Topco Units to be received by Subscriber at the Subscription Closing pursuant to the terms of this Agreement will be acquired by Subscriber for investment only for Subscriber’s own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities Laws. Subscriber has no current intention of selling, granting participation in or otherwise distributing the New Topco Units in violation of applicable U.S. federal or state or foreign securities Laws.

(e) Subscriber understands that the offer and sale of the New Topco Units have not been registered under the Securities Act or any applicable U.S. state or foreign securities Laws, and that the New Topco Units are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Subscriber’s representations as expressed herein.

(f) Subscriber understands that there will be substantial restrictions on the transferability of the New Topco Units and that on the date of the Subscription Closing and for an indefinite period thereafter there will be no public market for the New Topco Units and, accordingly, Subscriber will not be able to transfer the New Topco Units in case of emergency, if at all (except as permitted by the Topco LP Agreement). In addition, Subscriber understands that the Topco LP Agreement will contain restrictions on the transferability of the New Topco Units and will provide that, in the event that the conditions relating to the transfer of any New Topco Units in such document have not been satisfied, Subscriber will not be able to transfer any such New Topco Units, and unless otherwise specified, Topco LP will not recognize the transfer of any such New Topco Units on its books and records or issue any certificates representing any such New Topco Units, and any purported transfer not in accordance with the terms of the Topco LP Agreement shall be void. As such, Subscriber understands that: (A) if the New Topco Units are certificated, a restrictive legend or legends will be placed on the certificates representing the New Topco Units; (B) a notation will be made in the appropriate records of Topco LP indicating that the New Topco Units are subject to restrictions on transfer and, if Topco LP should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the New Topco Units; and (C) Subscriber will sell, transfer or otherwise dispose of the New Topco Units only in a manner consistent with its representations and warranties set forth herein and then only in accordance with the Topco LP Agreement and applicable Laws.

4. Conditions to Obligations of Topco LP and Subscriber.

(a) The obligations of Topco LP to issue the New Topco Units to Subscriber are subject to the satisfaction or waiver by Topco LP of the following conditions: (i) the representations and warranties of Subscriber contained in Section 3 shall be true and correct on and as of the date hereof and the Effective Time in all material respects (except for such representations and warranties that speak as of an earlier date, which shall be true and correct in all respects as of such date), and (ii) Subscriber shall have performed all of the agreements and covenants contained in or contemplated by this Agreement that are required to be performed by Subscriber under this Agreement at or prior to the Subscription Closing.

 

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(b) The obligations of Subscriber to purchase the New Topco Units are subject to the satisfaction or waiver by Subscriber of the following conditions: (i) the representations and warranties of Topco LP contained in Section 2 shall be true and correct on and as of the date hereof and the Effective Time in all material respects (except for such representations and warranties that speak as of an earlier date, which shall be true and correct in all respects as of such date), and (ii) Topco LP shall have performed all of the agreements and covenants contained in or contemplated by this Agreement that are required to be performed by Topco LP under this Agreement at or prior to the Subscription Closing.

(c) The obligations of Subscriber and Topco LP pursuant to this Agreement are subject in all respects to, and are expressly contingent upon, the receipt of (i) the Company Requisite Vote pursuant to the terms of the Merger Agreement and (ii) the Company Board Recommendation pursuant to the terms of the Merger Agreement. In the event such approvals are not obtained for any reason, this Agreement shall be of no force and effect and shall terminate as set forth in Section 5(l).

(d) The obligations of Subscriber under this Agreement shall be subject to the New Topco Units having the same economic rights and being at the same price per unit as the equity investments made by the other parties to the Topco LP Agreement at Closing to finance the transactions contemplated by the Merger Agreement.

5. Miscellaneous.

(a) Amendments and Waivers. Any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law. Notwithstanding anything to the contrary herein, no amendment or waiver of any provision of this Agreement and no action shall be taken by or on behalf of Subscriber under or with respect to this Agreement without first obtaining the approval of the Company Board (or a committee thereof).

(b) Binding Effect; Benefit; Assignment. This Agreement shall be binding upon, inure solely to the benefit of and be enforceable by each party hereto and their respective permitted successors and assigns. Nothing in this Agreement, express or implied is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto by operation of Law or otherwise without the prior written consent of the other parties. Any purported assignment in violation of this Section 5(b) shall be null and void.

(c) Construction. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; (iv) the term “Section” refers to the specified Section of this Agreement; (v) whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the phrase “without limitation”; and (vi) the word “or” shall be disjunctive but not exclusive. The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Words denoting natural persons shall be deemed to include business entities and vice versa and references to a Person are also to its permitted successors and assigns. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party. All Annexes hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. The word “party” shall, unless the context otherwise requires, be construed to mean a party to this Agreement. Any reference to a party to this Agreement or any other agreement or document contemplated hereby shall include such party’s successors and permitted assigns.

 

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(d) Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other parties hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in . PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement.

(e) Entire Agreement. This Agreement, the Merger Agreement, the Support Agreements and each of the documents, instruments and agreements delivered in connection with the Contemplated Transactions, including the Company Disclosure Letter, constitute the entire agreement of the parties and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein, are not intended to confer upon any other Person any rights or remedies hereunder.

(f) Further Assurances. Each party hereto shall execute and deliver all such further and additional instruments and agreements and shall take such further and additional actions, as may be reasonably necessary or desirable and as reasonably requested by any other party hereto to evidence or carry out the provisions of this Agreement or to consummate the transactions contemplated hereby.

(g) Governing Law; Jurisdiction; Waiver of Jury Trial. Sections 8.7 and 8.10 of the Merger Agreement are hereby incorporated herein by reference, mutatis mutandis.

(h) Notices. All notices and other communications provided for or permitted under this Agreement shall be in writing and deemed to have been duly given and received when delivered by overnight courier or hand delivery, when sent by email (if transmission is confirmed, and each party hereto agrees to promptly confirm if such confirmation is requested) or five days after mailing if sent by registered or certified mail (return receipt requested) postage prepaid, to the parties at the following addresses (or at such other address for any party as specified by like notices).

If to Topco LP, to the General Partner of Topco LP at Topco LP’s headquarters.

If to the Company, to the General Counsel and Deputy General Counsel of the Company at the Company’s headquarters.

If to Subscriber, to the last address that the Company has in its personnel records for Subscriber.

(i) Severability. If any term or other provision of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Contemplated Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner to the end that the Contemplated Transactions are consummated as originally contemplated to the fullest extent possible.

 

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(j) Survival. The representations and warranties set forth in this Agreement shall survive the consummation of the transactions contemplated hereby indefinitely.

(k) Specific Performance. Subscriber acknowledges and agrees that the breach of this Agreement by it would cause irreparable damage to Topco LP and its Affiliates and that Topco LP will not have an adequate remedy under applicable Laws, and Topco LP acknowledges and agrees that the breach of this Agreement by Topco LP would cause irreparable damage to Subscriber and that Subscriber will not have an adequate remedy under applicable Laws. Therefore, the obligations of the parties hereto under this Agreement shall be enforceable by a decree of specific performance if issued by the courts specified in Section 5(g) above, and appropriate injunctive relief may be applied for and granted in connection therewith. Any party seeking an injunction, a decree or order of specific performance or other equitable remedy shall not be required to provide any bond or other security in connection therewith and any such remedy shall be in addition to and not in substitution for any other remedy to which such party is entitled at law or in equity.

(l) Irrevocability; Termination. Each party hereto acknowledges and agrees that it shall not be permitted to terminate or rescind this Agreement; provided, however, that this Agreement shall automatically terminate if, at any time prior to the Subscription Closing, the Merger Agreement shall have been validly terminated for any reason by any of the parties thereto in accordance with its terms and conditions. In the event of any termination of this Agreement as provided in this Section 5(l), this Agreement shall forthwith become wholly void ab initio and of no further force or effect and there shall be no liability on the part of any parties hereto or their respective officers or directors.

(m) RPIP. The portion of Subscriber’s payout with respect to Tranche 2 of the RPIP Award that is not paid at the time of the Merger pursuant to Section 9 of the RPIP, including any such portion that is not deemed achieved in connection with the Merger, will be paid (subject to achievement of the Tranche 2 milestone) in a lump sum in the form of cash in the first quarter of 2027, in accordance with Section 9 of the RPIP.

(n) Incorporation of Recitals. The Recitals set forth above are hereby incorporated into this Agreement and shall be deemed binding provisions hereof.

* * * * *

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

TOPCO LP:
RESISTANCE TOPCO L.P.
By:   Resistance GP LLC, its General Partner
By:   GPC WH Fund LP, its Sole Member
By:   BFLEXION International GP LLC, its
  General Partner

         

Name:   Ronald Cami
Title:   Manager

         

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

[Signature Page to Subscription Agreement]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

COMPANY:
PARATEK PHARMACEUTICALS, INC.

         

Name:
Title:

[Signature Page to Subscription Agreement]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

SUBSCRIBER:
[Name]

         

[Signature Page to Subscription Agreement]


ANNEX A

 

Subscriber

  

Subscription Amount

[Name]     ]% of Closing RPIP Payments

Exhibit (d)(iv)(b)

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is entered into as of June 6, 2023 by and among Resistance TopCo L.P., a Delaware limited partnership (“Topco LP”), Paratek Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the individual listed on the Schedule A attached hereto (“Subscriber”). Any capitalized term used herein without definition shall have the meaning ascribed to it in the Merger Agreement (as defined below).

WHEREAS, Subscriber (i) is employed by the Company, (ii) is party to that certain [Employment Agreement with the Company, dated as of _____, as amended on ______, 2023] (as may be amended or restated from time to time, the “Employment Agreement”), and (iii) has been granted an award (the “RPIP Award”) under, and is a participant in, the Company’s Revenue Performance Incentive Plan (the “RPIP”) pursuant to an Award Agreement, with a grant date of ___________;

WHEREAS, concurrently with the execution of this Agreement, Resistance Acquisition, Inc., a Delaware corporation (“Parent”), Resistance Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), and the Company, are entering into that certain Agreement and Plan of Merger (as amended, amended and restated or otherwise modified from time to time, the “Merger Agreement”), dated as of even date herewith;

WHEREAS, subject to the terms of the Merger Agreement, at the Effective Time, Merger Sub will be merged with and into the Company, with the Company surviving (the “Merger”), and the Company will thereupon be a direct wholly owned subsidiary of Parent and an indirect wholly owned subsidiary of Topco LP;

WHEREAS, in connection with the Merger, Subscriber desires to subscribe for a number of non-voting common units of Topco LP (the “Class B Units”) with a value per Class B Unit equal to the per-unit purchase price of $1,000, on the terms and conditions set forth herein (the “Subscription”); and

WHEREAS, immediately following the Closing, Topco LP, Subscriber and certain other Persons shall enter into an amended and restated agreement of limited partnership of Topco LP.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Subscription.

(a) At the Subscription Closing (as defined below), Subscriber shall purchase from Topco LP, and Topco LP shall sell and issue to Subscriber, a number of Class B Units (the “New Topco Units”) equal to (i) the dollar amount that equals the percentage of Subscriber’s gross, pre-tax payments under the RPIP that become due in connection with the Closing (the “Closing RPIP Payments”) that is set forth opposite Subscriber’s name on Annex A (such amount, the “Subscription Amount”) divided by (ii) the per-unit purchase price of $1,000, rounded to the nearest whole unit.

(b) For the sake of efficiency and the administrative convenience of the parties, Subscriber hereby irrevocably directs that the Company withhold (or cause to be withheld) the Subscription Amount from any after-tax amounts otherwise payable to Subscriber in connection with the Closing pursuant to the RPIP and remit such amount to Topco LP (on behalf of Subscriber) in satisfaction of Subscriber’s obligation to pay the Subscription Amount to Topco LP pursuant to Section 1(a).


(c) The closing of the Subscription (the “Subscription Closing”) shall take place immediately following the Closing at the same location as the Closing.

(d) Prior to the Subscription Closing, Topco LP and Subscriber shall enter into the amended and restated agreement of limited partnership of Topco LP in form and substance reasonably acceptable to Topco LP (the “Topco LP Agreement”), which agreement will (i) provide for drag-along rights, tag-along rights, preemptive rights, and transfers for bona fide estate planning purposes, in each case, which are customary for a transaction such as the Subscription and subject to customary exceptions, (ii) the right to receive annual financial statements, (iii) not require additional capital contributions from Subscriber (other than with respect to the exercise of preemptive rights or as required by applicable law), and (iv) prohibit amendments to the Topco LP Agreement that disproportionately and adversely affect the Class B Units without the prior written consent of a majority of the holders of the then-outstanding Class B Units.

2. Representations and Warranties of Topco LP. Topco LP hereby represents and warrants to Subscriber as follows:

(a) Topco LP is a limited partnership duly organized, existing and in good standing, under the Laws of the State of Delaware.

(b) Topco LP has full limited partnership power and authority to enter into and perform this Agreement. The execution, delivery and performance of this Agreement by Topco LP has been duly and validly approved by Topco LP. This Agreement has been duly executed and delivered by Topco LP and constitutes a legal, valid and binding agreement of Topco LP, enforceable against Topco LP in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar Laws affecting creditors’ rights generally and by general principles of equity (collectively, the “Enforceability Exceptions”)).

(c) When issued and delivered in accordance with the terms of this Agreement, the New Topco Units will be duly authorized, validly issued and fully paid and will be free of all preemptive rights and any other Liens other than restrictions under the Topco LP Agreement and applicable federal and state securities Laws.

(d) At the Subscription Closing, Topco LP will have an adequate amount of authorized equity interests to effect the issuance of the New Topco Units in accordance with the terms of this Agreement.

(e) Topco LP and each of its direct or indirect Subsidiaries (i) was formed solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, (ii) have no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to the transactions contemplated by the Merger Agreement and this Agreement and (iii) prior to the Effective Time, will not have engaged in any business activities other than those relating to the transactions contemplated by the foregoing agreements.

3. Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to Topco LP as follows:

 

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(a) Subscriber (i) has all requisite power and authority to enter into and perform this Agreement, and (ii) the execution, delivery and performance of this Agreement by Subscriber has been duly and validly approved. This Agreement has been duly executed and delivered by Subscriber and constitutes a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance with its terms (subject to the Enforceability Exceptions).

(b) Subscriber represents that it is an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”).

(c) Subscriber has had an opportunity to fully evaluate an investment in the New Topco Units, is in a financial position to hold the New Topco Units for an indefinite period of time and is able to bear the economic risk and withstand a complete loss of Subscriber’s investment in the New Topco Units.

(d) The New Topco Units to be received by Subscriber at the Subscription Closing pursuant to the terms of this Agreement will be acquired by Subscriber for investment only for Subscriber’s own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities Laws. Subscriber has no current intention of selling, granting participation in or otherwise distributing the New Topco Units in violation of applicable U.S. federal or state or foreign securities Laws.

(e) Subscriber understands that the offer and sale of the New Topco Units have not been registered under the Securities Act or any applicable U.S. state or foreign securities Laws, and that the New Topco Units are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Subscriber’s representations as expressed herein.

(f) Subscriber understands that there will be substantial restrictions on the transferability of the New Topco Units and that on the date of the Subscription Closing and for an indefinite period thereafter there will be no public market for the New Topco Units and, accordingly, Subscriber will not be able to transfer the New Topco Units in case of emergency, if at all (except as permitted by the Topco LP Agreement). In addition, Subscriber understands that the Topco LP Agreement will contain restrictions on the transferability of the New Topco Units and will provide that, in the event that the conditions relating to the transfer of any New Topco Units in such document have not been satisfied, Subscriber will not be able to transfer any such New Topco Units, and unless otherwise specified, Topco LP will not recognize the transfer of any such New Topco Units on its books and records or issue any certificates representing any such New Topco Units, and any purported transfer not in accordance with the terms of the Topco LP Agreement shall be void. As such, Subscriber understands that: (A) if the New Topco Units are certificated, a restrictive legend or legends will be placed on the certificates representing the New Topco Units; (B) a notation will be made in the appropriate records of Topco LP indicating that the New Topco Units are subject to restrictions on transfer and, if Topco LP should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the New Topco Units; and (C) Subscriber will sell, transfer or otherwise dispose of the New Topco Units only in a manner consistent with its representations and warranties set forth herein and then only in accordance with the Topco LP Agreement and applicable Laws.

4. Conditions to Obligations of Topco LP and Subscriber.

(a) The obligations of Topco LP to issue the New Topco Units to Subscriber are subject to the satisfaction or waiver by Topco LP of the following conditions: (i) the representations and warranties of Subscriber contained in Section 3 shall be true and correct on and as of the date hereof and the Effective Time in all material respects (except for such representations and warranties that speak as of an earlier date, which shall be true and correct in all respects as of such date), and (ii) Subscriber shall have performed all of the agreements and covenants contained in or contemplated by this Agreement that are required to be performed by Subscriber under this Agreement at or prior to the Subscription Closing.

 

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(b) The obligations of Subscriber to purchase the New Topco Units are subject to the satisfaction or waiver by Subscriber of the following conditions: (i) the representations and warranties of Topco LP contained in Section 2 shall be true and correct on and as of the date hereof and the Effective Time in all material respects (except for such representations and warranties that speak as of an earlier date, which shall be true and correct in all respects as of such date), and (ii) Topco LP shall have performed all of the agreements and covenants contained in or contemplated by this Agreement that are required to be performed by Topco LP under this Agreement at or prior to the Subscription Closing.

(c) The obligations of Subscriber and Topco LP pursuant to this Agreement are subject in all respects to, and are expressly contingent upon, the receipt of (i) the Company Requisite Vote pursuant to the terms of the Merger Agreement and (ii) the Company Board Recommendation pursuant to the terms of the Merger Agreement. In the event such approvals are not obtained for any reason, this Agreement shall be of no force and effect and shall terminate as set forth in Section 6(l).

(d) The obligations of Subscriber under this Agreement shall be subject to the New Topco Units having the same economic rights and being at the same price per unit as the equity investments made by the other parties to the Topco LP Agreement at Closing to finance the transactions contemplated by the Merger Agreement.

5. Repurchase Rights.

(a) For the avoidance of doubt, the New Topco Units are subject to the rights of Topco LP to repurchase the units in accordance the Topco LP Agreement. The repurchase rights will include the right of Topco LP to repurchase the New Topco Units for a purchase price equal to Fair Market Value on the date of repurchase, provided that the purchase price will be equal to the lesser of unreturned cost paid for such units (which may be (but not below) zero) or Fair Market Value on the date of repurchase (i) in the event of a termination of Subscriber’s employment with Topco LP and its Affiliates by the Company for Cause or (ii) in the event Subscriber materially breaches any non-competition, non-solicitation or other restrictive covenant to which Subscriber is subject pursuant to the Employment Agreement or any other agreement between Subscriber and Topco LP or any of its Affiliates. In addition, the repurchase rights will include the right of Topco LP to pay the repurchase price with a promissory note bearing a market rate of interest and with customary terms in accordance with the Topco LP Agreement, which note will be payable no later than the earlier of (A) six years after the applicable repurchase date if the General Partner determines, in its good faith discretion, that Topco LP and its Subsidiaries have liquidity sufficient to satisfy payment of the repurchase price, (B) seven years after the applicable repurchase date, or (C) the occurrence of a Change in Control.

(b) For purposes of this Agreement, the following terms shall have the following meanings:

(i) “Change in Control” means either (A) the consummation of the sale, transfer, conveyance or other disposition (including by way of merger, equity purchase or consolidation) in one or a series of transactions, of the equity securities of Topco LP or its successor held, directly or indirectly, by the Sponsors, such that immediately following such transaction or disposition (or series of transactions or dispositions), the total number of all equity securities of Topco LP or its successor held, directly or indirectly, by the Sponsors represents, in the aggregate, less than 50% of the total voting power of all outstanding equity securities of Topco LP or its successor (as such securities may be adjusted for the occurrence of a corporate event); or (B) the consummation of the sale, lease, transfer, conveyance or other disposition (other than by way of merger, equity purchase or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Topco LP and its subsidiaries, taken as a whole, to any “person” (as such term is defined in Section 13(d)(3) of the Exchange Act).

 

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(ii) “Fair Market Value” means, on any date, the amount that would be received with respect to the Class B Units if Topco LP sold all of its assets for fair market value (as determined by the board of directors of the Topco LP, in good faith, based on such factors as the board, in its sole discretion, considers relevant, without discounts for lack of control, marketability, or other similar discounts) and immediately liquidated and the proceeds were distributed to the partners of Topco LP in accordance with the Topco LP Agreement.

(iii) “Sponsors” means (i) GPC WH Fund LP and Novo Holdings A/S, and (ii) any of their respective affiliates that acquire, directly or indirectly, equity securities or debt of Topco LP or any of its Subsidiaries.

6. Miscellaneous.

(a) Amendments and Waivers. Any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law. Notwithstanding anything to the contrary herein, no amendment or waiver of any provision of this Agreement and no action shall be taken by or on behalf of Subscriber under or with respect to this Agreement without first obtaining the approval of the Company Board (or a committee thereof).

(b) Binding Effect; Benefit; Assignment. This Agreement shall be binding upon, inure solely to the benefit of and be enforceable by each party hereto and their respective permitted successors and assigns. Nothing in this Agreement, express or implied is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto by operation of Law or otherwise without the prior written consent of the other parties. Any purported assignment in violation of this Section 6(b) shall be null and void.

(c) Construction. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; (iv) the term “Section” refers to the specified Section of this Agreement; (v) whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the phrase “without limitation”; and (vi) the word “or” shall be disjunctive but not exclusive. The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Words denoting natural persons shall be deemed to include business entities and vice versa and references to a Person are also to its permitted successors and assigns. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party. All Annexes hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. The word “party” shall, unless the context otherwise requires, be construed to mean a party to this Agreement. Any reference to a party to this Agreement or any other agreement or document contemplated hereby shall include such party’s successors and permitted assigns.

 

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(d) Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other parties hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement.

(e) Entire Agreement. This Agreement, the Merger Agreement, the Support Agreements and each of the documents, instruments and agreements delivered in connection with the Contemplated Transactions, including the Company Disclosure Letter, constitute the entire agreement of the parties and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein, are not intended to confer upon any other Person any rights or remedies hereunder.

(f) Further Assurances. Each party hereto shall execute and deliver all such further and additional instruments and agreements and shall take such further and additional actions, as may be reasonably necessary or desirable and as reasonably requested by any other party hereto to evidence or carry out the provisions of this Agreement or to consummate the transactions contemplated hereby.

(g) Governing Law; Jurisdiction; Waiver of Jury Trial. Sections 8.7 and 8.10 of the Merger Agreement are hereby incorporated herein by reference, mutatis mutandis.

(h) Notices. All notices and other communications provided for or permitted under this Agreement shall be in writing and deemed to have been duly given and received when delivered by overnight courier or hand delivery, when sent by email (if transmission is confirmed, and each party hereto agrees to promptly confirm if such confirmation is requested) or five days after mailing if sent by registered or certified mail (return receipt requested) postage prepaid, to the parties at the following addresses (or at such other address for any party as specified by like notices).

If to Topco LP, to the General Partner of Topco LP at Topco LP’s headquarters.

If to the Company, to the General Counsel and Deputy General Counsel of the Company at the Company’s headquarters.

If to Subscriber, to the last address that the Company has in its personnel records for Subscriber.

(i) Severability. If any term or other provision of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Contemplated Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner to the end that the Contemplated Transactions are consummated as originally contemplated to the fullest extent possible.

 

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(j) Survival. The representations and warranties set forth in this Agreement shall survive the consummation of the transactions contemplated hereby indefinitely.

(k) Specific Performance. Subscriber acknowledges and agrees that the breach of this Agreement by it would cause irreparable damage to Topco LP and its Affiliates and that Topco LP will not have an adequate remedy under applicable Laws, and Topco LP acknowledges and agrees that the breach of this Agreement by Topco LP would cause irreparable damage to Subscriber and that Subscriber will not have an adequate remedy under applicable Laws. Therefore, the obligations of the parties hereto under this Agreement shall be enforceable by a decree of specific performance if issued by the courts specified in Section 6(g) above, and appropriate injunctive relief may be applied for and granted in connection therewith. Any party seeking an injunction, a decree or order of specific performance or other equitable remedy shall not be required to provide any bond or other security in connection therewith and any such remedy shall be in addition to and not in substitution for any other remedy to which such party is entitled at law or in equity.

(l) Irrevocability; Termination. Each party hereto acknowledges and agrees that it shall not be permitted to terminate or rescind this Agreement; provided, however, that this Agreement shall automatically terminate if, at any time prior to the Subscription Closing, the Merger Agreement shall have been validly terminated for any reason by any of the parties thereto in accordance with its terms and conditions. In the event of any termination of this Agreement as provided in this Section 6(l), this Agreement shall forthwith become wholly void ab initio and of no further force or effect and there shall be no liability on the part of any parties hereto or their respective officers or directors.

(m) RPIP. The portion of Subscriber’s payout with respect to Tranche 2 of the RPIP Award that is not paid at the time of the Merger pursuant to Section 9 of the RPIP, including any such portion that is not deemed achieved in connection with the Merger, will be paid (subject to achievement of the Tranche 2 milestone) in a lump sum in the form of cash in the first quarter of 2027, in accordance with Section 9 of the RPIP.

(n) Incorporation of Recitals. The Recitals set forth above are hereby incorporated into this Agreement and shall be deemed binding provisions hereof.

* * * * *

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

TOPCO LP:
RESISTANCE TOPCO L.P.
By:   Resistance GP LLC, its General Partner
By:   GPC WH Fund LP, its Sole Member
By:   BFLEXION International GP LLC, its
  General Partner

         

Name:   Ronald Cami
Title:   Manager

 

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

[Signature Page to Subscription Agreement]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

COMPANY:
PARATEK PHARMACEUTICALS, INC.

         

Name:
Title:

[Signature Page to Subscription Agreement]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

SUBSCRIBER:
[Name]

     

[Signature Page to Subscription Agreement]


ANNEX A

 

Subscriber

  

Subscription Amount

[Name]     ]% of Closing RPIP Payments

Exhibit (d)(iv)(c)

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is entered into as of June 6, 2023 by and among Resistance TopCo L.P., a Delaware limited partnership (“Topco LP”), Paratek Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the individual listed on the Schedule A attached hereto (“Subscriber”). Any capitalized term used herein without definition shall have the meaning ascribed to it in the Merger Agreement (as defined below).

WHEREAS, Subscriber (i) is employed by the Company, (ii) is party to that certain [Employment Agreement with the Company, dated as of ____, as amended on ____, 2023] (as may be amended or restated from time to time, the “Employment Agreement”), (iii) has been granted an award (the “RPIP Award”) under, and is a participant in, the Company’s Revenue Performance Incentive Plan (the “RPIP”) pursuant to an Award Agreement, with a grant date of _______ (as may be amended or restated from time to time, the “RPIP Award Agreement”), and (iv) holds Company Equity Awards;

WHEREAS, concurrently with the execution of this Agreement, Resistance Acquisition, Inc., a Delaware corporation (“Parent”), Resistance Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), and the Company, are entering into that certain Agreement and Plan of Merger (as amended, amended and restated or otherwise modified from time to time, the “Merger Agreement”), dated as of even date herewith;

WHEREAS, subject to the terms of the Merger Agreement, at the Effective Time, Merger Sub will be merged with and into the Company, with the Company surviving (the “Merger”), and the Company will thereupon be a direct wholly owned subsidiary of Parent and an indirect wholly owned subsidiary of Topco LP;

WHEREAS, in connection with the Merger, Subscriber desires to subscribe for a number of non-voting common units of Topco LP(the “Class B Units”) with a value per Class B Unit equal to the per-unit purchase price of $1,000, on the terms and conditions set forth herein (the “Subscription”); and

WHEREAS, immediately following the Closing, Topco LP, Subscriber and certain other Persons shall enter into an amended and restated agreement of limited partnership of Topco LP.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Subscription.

(a) At the Subscription Closing (as defined below), Subscriber shall purchase from Topco LP, and Topco LP shall sell and issue to Subscriber, a number of Class B Units (the “New Topco Units”) equal to (i) the dollar amount that equals the percentage of Subscriber’s gross, pre-tax payments under the RPIP that become due in connection with the Closing (the “Closing RPIP Payments”) that is set forth opposite Subscriber’s name on Annex A (such amount, the “Subscription Amount”) divided by (ii) the per-unit purchase price of $1,000, rounded to the nearest whole unit.

(b) For the sake of efficiency and the administrative convenience of the parties, Subscriber hereby irrevocably directs that the Company withhold (or cause to be withheld) the Subscription Amount from any after-tax amounts otherwise payable to Subscriber in connection with the Closing pursuant to the RPIP and remit such amount to Topco LP (on behalf of Subscriber) in satisfaction of Subscriber’s obligation to pay the Subscription Amount to Topco LP pursuant to Section 1(a).


(c) The closing of the Subscription (the “Subscription Closing”) shall take place immediately following the Closing at the same location as the Closing.

(d) Prior to the Subscription Closing, Topco LP and Subscriber shall enter into the amended and restated agreement of limited partnership of Topco LP in form and substance reasonably acceptable to Topco LP (the “Topco LP Agreement”), which agreement will (i) provide for drag-along rights, tag-along rights, preemptive rights, and transfers for bona fide estate planning purposes, in each case, which are customary for a transaction such as the Subscription and subject to customary exceptions, (ii) the right to receive annual financial statements, (iii) not require additional capital contributions from Subscriber (other than with respect to the exercise of preemptive rights or as required by applicable law), and (iv) prohibit amendments to the Topco LP Agreement that disproportionately and adversely affect the Class B Units without the prior written consent of a majority of the holders of the then-outstanding Class B Units.

2. Representations and Warranties of Topco LP. Topco LP hereby represents and warrants to Subscriber as follows:

(a) Topco LP is a limited partnership duly organized, existing and in good standing, under the Laws of the State of Delaware.

(b) Topco LP has full limited partnership power and authority to enter into and perform this Agreement. The execution, delivery and performance of this Agreement by Topco LP has been duly and validly approved by Topco LP. This Agreement has been duly executed and delivered by Topco LP and constitutes a legal, valid and binding agreement of Topco LP, enforceable against Topco LP in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar Laws affecting creditors’ rights generally and by general principles of equity (collectively, the “Enforceability Exceptions”)).

(c) When issued and delivered in accordance with the terms of this Agreement, the New Topco Units will be duly authorized, validly issued and fully paid and will be free of all preemptive rights and any other Liens other than restrictions under the Topco LP Agreement and applicable federal and state securities Laws.

(d) At the Subscription Closing, Topco LP will have an adequate amount of authorized equity interests to effect the issuance of the New Topco Units in accordance with the terms of this Agreement.

(e) Topco LP and each of its direct or indirect Subsidiaries (i) was formed solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, (ii) have no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to the transactions contemplated by the Merger Agreement and this Agreement and (iii) prior to the Effective Time, will not have engaged in any business activities other than those relating to the transactions contemplated by the foregoing agreements.

 

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3. Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to Topco LP as follows:

(a) Subscriber (i) has all requisite power and authority to enter into and perform this Agreement, and (ii) the execution, delivery and performance of this Agreement by Subscriber has been duly and validly approved. This Agreement has been duly executed and delivered by Subscriber and constitutes a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance with its terms (subject to the Enforceability Exceptions).

(b) Subscriber represents that it is an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”).

(c) Subscriber has had an opportunity to fully evaluate an investment in the New Topco Units, is in a financial position to hold the New Topco Units for an indefinite period of time and is able to bear the economic risk and withstand a complete loss of Subscriber’s investment in the New Topco Units.

(d) The New Topco Units to be received by Subscriber at the Subscription Closing pursuant to the terms of this Agreement will be acquired by Subscriber for investment only for Subscriber’s own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities Laws. Subscriber has no current intention of selling, granting participation in or otherwise distributing the New Topco Units in violation of applicable U.S. federal or state or foreign securities Laws.

(e) Subscriber understands that the offer and sale of the New Topco Units have not been registered under the Securities Act or any applicable U.S. state or foreign securities Laws, and that the New Topco Units are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Subscriber’s representations as expressed herein.

(f) Subscriber understands that there will be substantial restrictions on the transferability of the New Topco Units and that on the date of the Subscription Closing and for an indefinite period thereafter there will be no public market for the New Topco Units and, accordingly, Subscriber will not be able to transfer the New Topco Units in case of emergency, if at all (except as permitted by the Topco LP Agreement). In addition, Subscriber understands that the Topco LP Agreement will contain restrictions on the transferability of the New Topco Units and will provide that, in the event that the conditions relating to the transfer of any New Topco Units in such document have not been satisfied, Subscriber will not be able to transfer any such New Topco Units, and unless otherwise specified, Topco LP will not recognize the transfer of any such New Topco Units on its books and records or issue any certificates representing any such New Topco Units, and any purported transfer not in accordance with the terms of the Topco LP Agreement shall be void. As such, Subscriber understands that: (A) if the New Topco Units are certificated, a restrictive legend or legends will be placed on the certificates representing the New Topco Units; (B) a notation will be made in the appropriate records of Topco LP indicating that the New Topco Units are subject to restrictions on transfer and, if Topco LP should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the New Topco Units; and (C) Subscriber will sell, transfer or otherwise dispose of the New Topco Units only in a manner consistent with its representations and warranties set forth herein and then only in accordance with the Topco LP Agreement and applicable Laws.

 

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4. Conditions to Obligations of Topco LP and Subscriber.

(a) The obligations of Topco LP to issue the New Topco Units to Subscriber are subject to the satisfaction or waiver by Topco LP of the following conditions: (i) the representations and warranties of Subscriber contained in Section 3 shall be true and correct on and as of the date hereof and the Effective Time in all material respects (except for such representations and warranties that speak as of an earlier date, which shall be true and correct in all respects as of such date), and (ii) Subscriber shall have performed all of the agreements and covenants contained in or contemplated by this Agreement that are required to be performed by Subscriber under this Agreement at or prior to the Subscription Closing.

(b) The obligations of Subscriber to purchase the New Topco Units are subject to the satisfaction or waiver by Subscriber of the following conditions: (i) the representations and warranties of Topco LP contained in Section 2 shall be true and correct on and as of the date hereof and the Effective Time in all material respects (except for such representations and warranties that speak as of an earlier date, which shall be true and correct in all respects as of such date), and (ii) Topco LP shall have performed all of the agreements and covenants contained in or contemplated by this Agreement that are required to be performed by Topco LP under this Agreement at or prior to the Subscription Closing.

(c) The obligations of Subscriber and Topco LP pursuant to this Agreement are subject in all respects to, and are expressly contingent upon, the receipt of (i) the Company Requisite Vote pursuant to the terms of the Merger Agreement and (ii) the Company Board Recommendation pursuant to the terms of the Merger Agreement. In the event such approvals are not obtained for any reason, this Agreement shall be of no force and effect and shall terminate as set forth in Section 7(l).

(d) The obligations of Subscriber under this Agreement shall be subject to the New Topco Units having the same economic rights and being at the same price per unit as the equity investments made by the other parties to the Topco LP Agreement at Closing to finance the transactions contemplated by the Merger Agreement.

5. Forfeiture of New Topco Units; Repurchase Rights.

(a) The New Topco Units will be initially unvested and will vest in four equal installments of 25% of the total number of New Topco Units on each six-month anniversary of the Closing Date, subject to Subscriber’s continued employment with the Company and/or its Affiliates through the applicable vesting date; provided, that (i) in the event Subscriber’s employment with the Company and its Affiliates is terminated by the Company or its applicable Affiliate without Cause (as defined in the Employment Agreement), by Subscriber for Good Reason (as defined in the Employment Agreement) or due to Subscriber’s death or Disability or (ii) upon the occurrence of a Change in Control on or prior to Subscriber’s termination of employment with the Company and its Affiliates, 100% of the New Topco Units will vest as of Subscriber’s termination date or the occurrence of such Change in Control, respectively. Any New Topco Units that are not vested in accordance with this Section 5(a) as of the date Subscriber’s employment with the Company and its Affiliates terminates (after giving effect to any accelerated vesting that occurs in connection with such termination of employment) will automatically be forfeited by Subscriber on the date of such termination of employment without any additional consideration therefor and without any further action by Topco LP, unless otherwise determined by the General Partner of Topco LP (the “General Partner”) in its sole discretion.

 

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(b) For the avoidance of doubt, the New Topco Units, including any portion of the New Topco Units that have vested in accordance with Section 5(a), are subject to the rights of Topco LP to repurchase the units in accordance the Topco LP Agreement. The repurchase rights will include the right of Topco LP to repurchase the New Topco Units for a purchase price equal to Fair Market Value on the date of repurchase, provided that the purchase price will be equal to the lesser of unreturned cost paid for such units (which may be (but not below) zero) or Fair Market Value on the date of repurchase (i) in the event of a termination of Subscriber’s employment with Topco LP and its Affiliates by the Company for Cause or (ii) in the event Subscriber materially breaches any non-competition, non-solicitation or other restrictive covenant to which Subscriber is subject pursuant to the Employment Agreement or any other agreement between Subscriber and Topco LP or any of its Affiliates. In addition, the repurchase rights will include the right of Topco LP to pay the repurchase price with a promissory note bearing a market rate of interest and with customary terms in accordance with the Topco LP Agreement, which note will be payable no later than the earlier of (A) six years after the applicable repurchase date if the General Partner determines, in its good faith discretion, that Topco LP and its Subsidiaries have liquidity sufficient to satisfy payment of the repurchase price, (B) seven years after the applicable repurchase date, or (C) the occurrence of a Change in Control (such earlier date, the “Promissory Note Payment Date”).

(c) For purposes of this Agreement, the following terms shall have the following meanings:

(i) “Change in Control” means either (A) the consummation of the sale, transfer, conveyance or other disposition (including by way of merger, equity purchase or consolidation) in one or a series of transactions, of the equity securities of Topco LP or its successor held, directly or indirectly, by the Sponsors, such that immediately following such transaction or disposition (or series of transactions or dispositions), the total number of all equity securities of Topco LP or its successor held, directly or indirectly, by the Sponsors represents, in the aggregate, less than 50% of the total voting power of all outstanding equity securities of Topco LP or its successor (as such securities may be adjusted for the occurrence of a corporate event); or (B) the consummation of the sale, lease, transfer, conveyance or other disposition (other than by way of merger, equity purchase or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Topco LP and its subsidiaries, taken as a whole, to any “person” (as such term is defined in Section 13(d)(3) of the Exchange Act).

(ii) “Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code.

(iii) “Fair Market Value” means, on any date, the amount that would be received with respect to the Class B Units if Topco LP sold all of its assets for fair market value (as determined by the board of directors of the Topco LP, in good faith, based on such factors as the board, in its sole discretion, considers relevant, without discounts for lack of control, marketability, or other similar discounts) and immediately liquidated and the proceeds were distributed to the partners of Topco LP in accordance with the Topco LP Agreement.

(iv) “Sponsors” means (i) GPC WH Fund LP and Novo Holdings A/S, and (ii) any of their respective affiliates that acquire, directly or indirectly, equity securities or debt of Topco LP or any of its Subsidiaries.

6. Other Agreements. Subscriber acknowledges and agrees that Subscriber will receive substantial personal benefit from the completion of the Contemplated Transactions, the Merger and other events related thereto (including the Subscription) and that Subscriber is executing this Agreement of Subscriber’s own free will and for good and valuable consideration. In consideration thereof, Subscriber hereby acknowledges and agrees as follows:

 

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(a) The term “Good Reason” (as defined in the Employment Agreement) will not be triggered solely by or as a result of the Merger, and any changes in the duties and responsibilities as a result of the Company no longer operating as a publicly traded company and becoming a direct wholly owned subsidiary of Parent will not constitute “Good Reason” for purposes of the Employment Agreement.

(b) For purposes of the Employment Agreement, the term “Outstanding Equity” shall exclude any equity or equity-based awards granted by Topco LP or any of its Subsidiaries (including the Company) on or after the Closing Date.

(c) Notwithstanding anything to the contrary in the RPIP or the RPIP Award Agreement, the portion of Subscriber’s payout with respect to Tranche 2 of the RPIP Award that is not paid at the time of the Merger pursuant to Section 9 of the RPIP (the “Unpaid Tranche 2 Award”), including any such portion that is not deemed achieved in connection with the Merger, shall be deemed to be unvested as of the Closing. After the Closing, the Unpaid Tranche 2 Award will vest in four equal installments of 25% of the amount of the Unpaid Tranche 2 Award on each six-month anniversary of the Closing Date, subject to Subscriber’s continued employment with the Company and/or its Affiliates through the applicable vesting date; provided, that (i) in the event Subscriber’s employment with the Company and its Affiliates is terminated by the Company or its applicable Affiliate without Cause, by Subscriber for Good Reason or due to Subscriber’s death or Disability or (ii) upon the occurrence of a Change in Control on or prior to Subscriber’s termination of employment with the Company and its Affiliates, 100% of the Unpaid Tranche 2 Award will vest (subject to achievement of the Tranche 2 milestone) as of Subscriber’s termination date or the occurrence of such Change in Control, respectively. Any portion of the Unpaid Tranche 2 Award that is not vested in accordance with this Section 6(c) as of the date Subscriber’s employment with the Company and its Affiliates terminates (after giving effect to any accelerated vesting that occurs in connection with such termination of employment) will automatically be forfeited by Subscriber on the date of such termination of employment without any additional consideration therefor and without any further action by the Company or its Affiliates. To the extent vested, the Unpaid Tranche 2 Award will be paid (subject to achievement of the Tranche 2 milestone) in a lump sum in the form of cash or vested Class B Units, as determined by the General Partner in its sole discretion (with a Fair Market Value, as of the payment date, equal to the amount of the Unpaid Tranche 2 Award that has become payable), in the first quarter of 2027, in accordance with Section 9 of the RPIP. In the event the Company elects to settle the Unpaid Tranche 2 Award in the form of vested Class B Units, the Company shall retain a number of Class B Units from settlement of the Unpaid Tranche 2 Award sufficient to satisfy all withholding taxes that become due with respect to the Unpaid Tranche 2 Award, based on maximum statutory withholding rates and the Fair Market Value of the such Class B Units as of the payment date. For the avoidance of doubt, the Class B Units, if any, issued in settlement of the Unpaid Tranche 2 Award are subject to the rights of Topco LP to repurchase the units in accordance the Topco LP Agreement. The repurchase rights will include the right of Topco LP to repurchase the New Topco Units for a purchase price equal to Fair Market Value on the date of repurchase, provided that the purchase price will be equal to the lesser of unreturned cost paid for such units (which may be (but not below) zero) or Fair Market Value on the date of repurchase (i) in the event of a termination of Subscriber’s employment with Topco LP and its Affiliates by the Company for Cause or (ii) solely to the extent it would not result in such Class B Units being subject to a substantial risk of forfeiture for purposes of Section 83 of the Code or otherwise result in the imposition of excise taxes under Section 409A of the Code, in the event Subscriber materially breaches any non-competition, non-solicitation or other restrictive covenant to which Subscriber is subject pursuant to the Employment Agreement or any other agreement between Subscriber and Topco LP or any of its Affiliates. In addition, the repurchase rights will include the right of Topco LP to pay the repurchase price with a promissory note bearing a market rate of interest and with customary terms in accordance with the Topco LP Agreement, which note will be payable no later than the Promissory Note Payment Date.

 

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(d) At the Effective Time, each Company Equity Award held by Subscriber that is then outstanding will be cancelled, and Subscriber will be entitled, in exchange therefor, to receive Equity Award Consideration in accordance with the Merger Agreement; provided, that notwithstanding any contrary term of the Merger Agreement, any payment of the Equity Award Consideration in respect of such unvested Company Equity Awards will remain subject to the same vesting conditions as were applicable to the Company Equity Award immediately prior to the Effective Time and shall only become payable to Subscriber to the extent such vesting conditions are satisfied following the Closing. Notwithstanding the foregoing or anything to the contrary in the Company Equity Plan, the award agreement governing the terms of the applicable Company Equity Award, the Merger Agreement or this Agreement, the Equity Award Consideration (if any) will be paid in the form of cash or vested Class B Units, as determined by the General Partner in its sole discretion (with a Fair Market Value, as of the payment date, equal to the amount of the Equity Award Consideration that has become payable), in accordance with the payment schedule set forth in the applicable award agreement. In the event the Company elects to settle the Equity Award Consideration in the form of vested Class B Units, the Company shall retain a number of Class B Units from settlement of the Equity Award Consideration sufficient to satisfy all withholding taxes that become due with respect to the Equity Award Consideration, based on maximum statutory withholding rates and the Fair Market Value of such Class B Units as of the payment date. For the avoidance of doubt, the parties hereto agree that the treatment of the Company Equity Awards under Section 2.2(c) of the Merger Agreement and this Section 6(d) shall be an assumption or continuation of the Company Equity Awards in accordance with the terms of the applicable Company Equity Plan and no Equity Award Consideration shall be payable with respect to Subscriber’s Company Equity Awards for which the vesting conditions are not satisfied on or prior to the date the Company Equity Award would otherwise have been forfeited if such Company Equity Award had remained outstanding following the Closing. As of the Effective Time, Subscriber will cease to have any rights with respect to Subscriber’s Company Equity Awards, except the right to receive the Equity Award Consideration in accordance with Section 2.2(c) of the Merger Agreement and this Section 6(d). For the avoidance of doubt, the Class B Units, if any, issued in settlement of the Company Equity Awards are subject to the rights of Topco LP to repurchase the units in accordance the Topco LP Agreement. The repurchase rights will include the right of Topco LP to repurchase the New Topco Units for a purchase price equal to Fair Market Value on the date of repurchase, provided that the purchase price will be equal to the lesser of unreturned cost paid for such units (which may be (but not below) zero) or Fair Market Value on the date of repurchase (i) in the event of a termination of Subscriber’s employment with Topco LP and its Affiliates by the Company for Cause or (ii) solely to the extent it would not result in such Class B Units being subject to a substantial risk of forfeiture for purposes of Section 83 of the Code or otherwise result in the imposition of excise taxes under Section 409A of the Code, in the event Subscriber materially breaches any non-competition, non-solicitation or other restrictive covenant to which Subscriber is subject pursuant to the Employment Agreement or any other agreement between Subscriber and Topco LP or any of its Affiliates. In addition, the repurchase rights will include the right of Topco LP to pay the repurchase price with a promissory note bearing a market rate of interest and with customary terms in accordance with the Topco LP Agreement, which note will be payable no later than the Promissory Note Payment Date.

7. Miscellaneous.

(a) Amendments and Waivers. Any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege

 

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hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law. Notwithstanding anything to the contrary herein, no amendment or waiver of any provision of this Agreement and no action shall be taken by or on behalf of Subscriber under or with respect to this Agreement without first obtaining the approval of the Company Board (or a committee thereof).

(b) Binding Effect; Benefit; Assignment. This Agreement shall be binding upon, inure solely to the benefit of and be enforceable by each party hereto and their respective permitted successors and assigns. Nothing in this Agreement, express or implied is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto by operation of Law or otherwise without the prior written consent of the other parties. Any purported assignment in violation of this Section 7(b) shall be null and void.

(c) Construction. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; (iv) the term “Section” refers to the specified Section of this Agreement; (v) whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the phrase “without limitation”; and (vi) the word “or” shall be disjunctive but not exclusive. The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Words denoting natural persons shall be deemed to include business entities and vice versa and references to a Person are also to its permitted successors and assigns. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party. All Annexes hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. The word “party” shall, unless the context otherwise requires, be construed to mean a party to this Agreement. Any reference to a party to this Agreement or any other agreement or document contemplated hereby shall include such party’s successors and permitted assigns.

(d) Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other parties hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement.

(e) Entire Agreement. This Agreement, the Merger Agreement, the Support Agreements and each of the documents, instruments and agreements delivered in connection with the Contemplated Transactions, including the Company Disclosure Letter, constitute the entire agreement of the parties and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein, are not intended to confer upon any other Person any rights or remedies hereunder.

 

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(f) Further Assurances. Each party hereto shall execute and deliver all such further and additional instruments and agreements and shall take such further and additional actions, as may be reasonably necessary or desirable and as reasonably requested by any other party hereto to evidence or carry out the provisions of this Agreement or to consummate the transactions contemplated hereby.

(g) Governing Law; Jurisdiction; Waiver of Jury Trial. Sections 8.7 and 8.10 of the Merger Agreement are hereby incorporated herein by reference, mutatis mutandis.

(h) Notices. All notices and other communications provided for or permitted under this Agreement shall be in writing and deemed to have been duly given and received when delivered by overnight courier or hand delivery, when sent by email (if transmission is confirmed, and each party hereto agrees to promptly confirm if such confirmation is requested) or five days after mailing if sent by registered or certified mail (return receipt requested) postage prepaid, to the parties at the following addresses (or at such other address for any party as specified by like notices).

If to Topco LP, to the General Partner of Topco LP at Topco LP’s headquarters.

If to the Company, to the General Counsel and Deputy General Counsel of the Company at the Company’s headquarters.

If to Subscriber, to the last address that the Company has in its personnel records for Subscriber.

(i) Severability. If any term or other provision of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Contemplated Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner to the end that the Contemplated Transactions are consummated as originally contemplated to the fullest extent possible.

(j) Survival. The representations and warranties set forth in this Agreement shall survive the consummation of the transactions contemplated hereby indefinitely.

(k) Specific Performance. Subscriber acknowledges and agrees that the breach of this Agreement by it would cause irreparable damage to Topco LP and its Affiliates and that Topco LP will not have an adequate remedy under applicable Laws, and Topco LP acknowledges and agrees that the breach of this Agreement by Topco LP would cause irreparable damage to Subscriber and that Subscriber will not have an adequate remedy under applicable Laws. Therefore, the obligations of the parties hereto under this Agreement shall be enforceable by a decree of specific performance if issued by the courts specified in Section 7(g) above, and appropriate injunctive relief may be applied for and granted in connection therewith. Any party seeking an injunction, a decree or order of specific performance or other equitable remedy shall not be required to provide any bond or other security in connection therewith and any such remedy shall be in addition to and not in substitution for any other remedy to which such party is entitled at law or in equity.

 

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(l) Irrevocability; Termination. Each party hereto acknowledges and agrees that it shall not be permitted to terminate or rescind this Agreement; provided, however, that this Agreement shall automatically terminate if, at any time prior to the Subscription Closing, the Merger Agreement shall have been validly terminated for any reason by any of the parties thereto in accordance with its terms and conditions. In the event of any termination of this Agreement as provided in this Section 7(l), this Agreement shall forthwith become wholly void ab initio and of no further force or effect and there shall be no liability on the part of any parties hereto or their respective officers or directors.

(m) Employment Agreement. All terms and conditions of the Employment Agreement not amended by Section 6(a) and (b) above, either expressly or by necessary implication, will remain in full force and effect.

(n) Incorporation of Recitals. The Recitals set forth above are hereby incorporated into this Agreement and shall be deemed binding provisions hereof.

* * * * *

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

TOPCO LP:
RESISTANCE TOPCO L.P.
By:   Resistance GP LLC, its General Partner
By:   GPC WH Fund LP, its Sole Member
By:   BFLEXION International GP LLC, its
  General Partner

         

Name:   Ronald Cami
Title:   Manager

 

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

[Signature Page to Subscription Agreement]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

COMPANY:
PARATEK PHARMACEUTICALS, INC.

         

Name:
Title:

[Signature Page to Subscription Agreement]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

SUBSCRIBER:
[Name]

         

[Signature Page to Subscription Agreement]


ANNEX A

 

Subscriber

  

Subscription Amount

[Name]     ]% of Closing RPIP Payments

Exhibit (d)(iv)(d)

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is entered into as of June 6, 2023 by and among Resistance TopCo L.P., a Delaware limited partnership (“Topco LP”), Paratek Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the individual listed on the Schedule A attached hereto (“Subscriber”). Any capitalized term used herein without definition shall have the meaning ascribed to it in the Merger Agreement (as defined below).

WHEREAS, Subscriber (i) is employed by the Company, (ii) is party to that certain [Employment Agreement with the Company, dated as of ______, as amended on ____, 2023] (as may be amended or restated from time to time, the “Employment Agreement”), (iii) has been granted an award (the “RPIP Award”) under, and is a participant in, the Company’s Revenue Performance Incentive Plan (the “RPIP”) pursuant to an Award Agreement, with a grant date of _________ (as may be amended or restated from time to time, the “RPIP Award Agreement”), and (iv) holds Company Equity Awards;

WHEREAS, concurrently with the execution of this Agreement, Resistance Acquisition, Inc., a Delaware corporation (“Parent”), Resistance Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), and the Company, are entering into that certain Agreement and Plan of Merger (as amended, amended and restated or otherwise modified from time to time, the “Merger Agreement”), dated as of even date herewith;

WHEREAS, subject to the terms of the Merger Agreement, at the Effective Time, Merger Sub will be merged with and into the Company, with the Company surviving (the “Merger”), and the Company will thereupon be a direct wholly owned subsidiary of Parent and an indirect wholly owned subsidiary of Topco LP;

WHEREAS, in connection with the Merger, Subscriber desires to subscribe for a number of non-voting common units of Topco LP (the “Class B Units”) with a value per Class B Unit equal to the per-unit purchase price of $1,000, on the terms and conditions set forth herein (the “Subscription”); and

WHEREAS, immediately following the Closing, Topco LP, Subscriber and certain other Persons shall enter into an amended and restated agreement of limited partnership of Topco LP.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Subscription.

(a) At the Subscription Closing (as defined below), Subscriber shall purchase from Topco LP, and Topco LP shall sell and issue to Subscriber, a number of Class B Units (the “New Topco Units”) equal to (i) the dollar amount that equals the percentage of Subscriber’s gross, pre-tax payments under the RPIP that become due in connection with the Closing (the “Closing RPIP Payments”) that is set forth opposite Subscriber’s name on Annex A (such amount, the “Subscription Amount”) divided by (ii) the per-unit purchase price of $1,000, rounded to the nearest whole unit.


(b) For the sake of efficiency and the administrative convenience of the parties, Subscriber hereby irrevocably directs that the Company withhold (or cause to be withheld) the Subscription Amount from any after-tax amounts otherwise payable to Subscriber in connection with the Closing pursuant to the RPIP and remit such amount to Topco LP (on behalf of Subscriber) in satisfaction of Subscriber’s obligation to pay the Subscription Amount to Topco LP pursuant to Section 1(a).

(c) The closing of the Subscription (the “Subscription Closing”) shall take place immediately following the Closing at the same location as the Closing.

(d) Prior to the Subscription Closing, Topco LP and Subscriber shall enter into the amended and restated agreement of limited partnership of Topco LP in form and substance reasonably acceptable to Topco LP (the “Topco LP Agreement”), which agreement will (i) provide for drag-along rights, tag-along rights, preemptive rights, and transfers for bona fide estate planning purposes, in each case, which are customary for a transaction such as the Subscription and subject to customary exceptions, (ii) the right to receive annual financial statements, (iii) not require additional capital contributions from Subscriber (other than with respect to the exercise of preemptive rights or as required by applicable law), and (iv) prohibit amendments to the Topco LP Agreement that disproportionately and adversely affect the Class B Units without the prior written consent of a majority of the holders of the then-outstanding Class B Units.

2. Representations and Warranties of Topco LP. Topco LP hereby represents and warrants to Subscriber as follows:

(a) Topco LP is a limited partnership duly organized, existing and in good standing, under the Laws of the State of Delaware.

(b) Topco LP has full limited partnership power and authority to enter into and perform this Agreement. The execution, delivery and performance of this Agreement by Topco LP has been duly and validly approved by Topco LP. This Agreement has been duly executed and delivered by Topco LP and constitutes a legal, valid and binding agreement of Topco LP, enforceable against Topco LP in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar Laws affecting creditors’ rights generally and by general principles of equity (collectively, the “Enforceability Exceptions”)).

(c) When issued and delivered in accordance with the terms of this Agreement, the New Topco Units will be duly authorized, validly issued and fully paid and will be free of all preemptive rights and any other Liens other than restrictions under the Topco LP Agreement and applicable federal and state securities Laws.

(d) At the Subscription Closing, Topco LP will have an adequate amount of authorized equity interests to effect the issuance of the New Topco Units in accordance with the terms of this Agreement.

(e) Topco LP and each of its direct or indirect Subsidiaries (i) was formed solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, (ii) have no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to the transactions contemplated by the Merger Agreement and this Agreement and (iii) prior to the Effective Time, will not have engaged in any business activities other than those relating to the transactions contemplated by the foregoing agreements.

 

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3. Representations and Warranties of Subscriber. Subscriber hereby represents and warrants to Topco LP as follows:

(a) Subscriber (i) has all requisite power and authority to enter into and perform this Agreement, and (ii) the execution, delivery and performance of this Agreement by Subscriber has been duly and validly approved. This Agreement has been duly executed and delivered by Subscriber and constitutes a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance with its terms (subject to the Enforceability Exceptions).

(b) Subscriber represents that it is an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”).

(c) Subscriber has had an opportunity to fully evaluate an investment in the New Topco Units, is in a financial position to hold the New Topco Units for an indefinite period of time and is able to bear the economic risk and withstand a complete loss of Subscriber’s investment in the New Topco Units.

(d) The New Topco Units to be received by Subscriber at the Subscription Closing pursuant to the terms of this Agreement will be acquired by Subscriber for investment only for Subscriber’s own account, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof in violation of applicable U.S. federal or state or foreign securities Laws. Subscriber has no current intention of selling, granting participation in or otherwise distributing the New Topco Units in violation of applicable U.S. federal or state or foreign securities Laws.

(e) Subscriber understands that the offer and sale of the New Topco Units have not been registered under the Securities Act or any applicable U.S. state or foreign securities Laws, and that the New Topco Units are being issued in reliance on an exemption from registration, which exemption depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Subscriber’s representations as expressed herein.

(f) Subscriber understands that there will be substantial restrictions on the transferability of the New Topco Units and that on the date of the Subscription Closing and for an indefinite period thereafter there will be no public market for the New Topco Units and, accordingly, Subscriber will not be able to transfer the New Topco Units in case of emergency, if at all (except as permitted by the Topco LP Agreement). In addition, Subscriber understands that the Topco LP Agreement will contain restrictions on the transferability of the New Topco Units and will provide that, in the event that the conditions relating to the transfer of any New Topco Units in such document have not been satisfied, Subscriber will not be able to transfer any such New Topco Units, and unless otherwise specified, Topco LP will not recognize the transfer of any such New Topco Units on its books and records or issue any certificates representing any such New Topco Units, and any purported transfer not in accordance with the terms of the Topco LP Agreement shall be void. As such, Subscriber understands that: (A) if the New Topco Units are certificated, a restrictive legend or legends will be placed on the certificates representing the New Topco Units; (B) a notation will be made in the appropriate records of Topco LP indicating that the New Topco Units are subject to restrictions on transfer and, if Topco LP should at some time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the New Topco Units; and (C) Subscriber will sell, transfer or otherwise dispose of the New Topco Units only in a manner consistent with its representations and warranties set forth herein and then only in accordance with the Topco LP Agreement and applicable Laws.

 

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4. Conditions to Obligations of Topco LP and Subscriber.

(a) The obligations of Topco LP to issue the New Topco Units to Subscriber are subject to the satisfaction or waiver by Topco LP of the following conditions: (i) the representations and warranties of Subscriber contained in Section 3 shall be true and correct on and as of the date hereof and the Effective Time in all material respects (except for such representations and warranties that speak as of an earlier date, which shall be true and correct in all respects as of such date), and (ii) Subscriber shall have performed all of the agreements and covenants contained in or contemplated by this Agreement that are required to be performed by Subscriber under this Agreement at or prior to the Subscription Closing.

(b) The obligations of Subscriber to purchase the New Topco Units are subject to the satisfaction or waiver by Subscriber of the following conditions: (i) the representations and warranties of Topco LP contained in Section 2 shall be true and correct on and as of the date hereof and the Effective Time in all material respects (except for such representations and warranties that speak as of an earlier date, which shall be true and correct in all respects as of such date), and (ii) Topco LP shall have performed all of the agreements and covenants contained in or contemplated by this Agreement that are required to be performed by Topco LP under this Agreement at or prior to the Subscription Closing.

(c) The obligations of Subscriber and Topco LP pursuant to this Agreement are subject in all respects to, and are expressly contingent upon, the receipt of (i) the Company Requisite Vote pursuant to the terms of the Merger Agreement and (ii) the Company Board Recommendation pursuant to the terms of the Merger Agreement. In the event such approvals are not obtained for any reason, this Agreement shall be of no force and effect and shall terminate as set forth in Section 7(l).

(d) The obligations of Subscriber under this Agreement shall be subject to the New Topco Units having the same economic rights and being at the same price per unit as the equity investments made by the other parties to the Topco LP Agreement at Closing to finance the transactions contemplated by the Merger Agreement.

5. Forfeiture of New Topco Units; Repurchase Rights; Put Option.

(a) The New Topco Units will be initially unvested and will vest in four equal installments of 25% of the total number of New Topco Units on each six-month anniversary of the Closing Date, subject to Subscriber’s continued employment with the Company and/or its Affiliates through the applicable vesting date; provided, that (i) in the event Subscriber’s employment with the Company and its Affiliates is terminated by the Company or its applicable Affiliate without Cause (as defined in the Employment Agreement), by Subscriber for Good Reason (as defined in the Employment Agreement) or due to Subscriber’s death or Disability or (ii) upon the occurrence of a Change in Control on or prior to Subscriber’s termination of employment with the Company and its Affiliates, 100% of the New Topco Units will vest as of Subscriber’s termination date or the occurrence of such Change in Control, respectively. Any New Topco Units that are not vested in accordance with this Section 5(a) as of the date Subscriber’s employment with the Company and its Affiliates terminates (after giving effect to any accelerated vesting that occurs in connection with such termination of employment) will automatically be forfeited by Subscriber on the date of such termination of employment without any additional consideration therefor and without any further action by Topco LP, unless otherwise determined by the General Partner of Topco LP (the “General Partner”) in its sole discretion.

(b) For the avoidance of doubt, the New Topco Units, including any portion of the New Topco Units that have vested in accordance with Section 5(a), are subject to the rights of Topco LP to repurchase the units in accordance the Topco LP Agreement. The repurchase rights will include the right of Topco LP to repurchase the New Topco Units for a purchase price equal to Fair Market Value on the date of repurchase, provided that the purchase price will be equal to the lesser of unreturned cost paid for such units

 

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(which may be (but not below) zero) or Fair Market Value on the date of repurchase (i) in the event of a termination of Subscriber’s employment with Topco LP and its Affiliates by the Company for Cause or (ii) in the event Subscriber materially breaches any non-competition, non-solicitation or other restrictive covenant to which Subscriber is subject pursuant to the Employment Agreement or any other agreement between Subscriber and Topco LP or any of its Affiliates. In addition, the repurchase rights will include the right of Topco LP to pay the repurchase price with a promissory note bearing a market rate of interest and with customary terms in accordance with the Topco LP Agreement, which note will be payable no later than the earlier of (A) six years after the applicable repurchase date if the General Partner determines, in its good faith discretion, that Topco LP and its Subsidiaries have liquidity sufficient to satisfy payment of the repurchase price, (B) seven years after the applicable repurchase date, or (C) the occurrence of a Change in Control (such earlier date, the “Promissory Note Payment Date”).

(c) In the event (i) Subscriber is not appointed as the Company’s [Chief Financial Officer][General Counsel] on or prior to December 31, 2023 or, if later, the date that is 60 days after the Closing Date (the “Appointment Deadline”), (ii) Subscriber remains employed with the Company and its Affiliates through the Appointment Deadline and (iii) Subscriber resigns Subscriber’s employment within 60 days following the Appointment Deadline, such resignation shall be deemed a resignation for “Good Reason” under and for purposes of the Employment Agreement (a “Deemed Good Reason Resignation”). If a Deemed Good Reason Resignation occurs or Subscriber’s employment with the Company and its Affiliates is terminated by the Company without Cause or by Subscriber for Good Reason prior the Appointment Deadline, then within the 30-day period after Subscriber’s termination date, Subscriber shall have the right (the “Put Option”) to require Topco LP to purchase a number of New Topco Units determined by Subscriber (the “Put Shares”) which is no more than 50% of the New Topco Units by delivery of a written notice (the “Put Notice”) to Topco LP. Subscriber, upon exercise of such Put Option, shall sell to Topco LP or its designee, free and clear of all liens and encumbrances and shall execute and deliver to Topco LP or its designee all instruments of transfer and other documents reasonably requested by Topco LP or its designee (including a customary release of claims arising from ownership of the New Topco Units in form and substance satisfactory to Topco LP or its designee) in connection therewith, and Topco LP or its designee shall be required to purchase, the Put Shares at a price per Put Share equal to the Fair Market Value on the date of purchase (the “Put Price”). The closing of any purchase of Put Shares by Topco LP or its designee shall take place at the principal office of Topco LP on a date determined by Topco LP no later than the 30th Business Day after the delivery of the Put Notice (or such later date permitted under the terms of the Topco LP Agreement). At such closing, Topco LP or its designee shall deliver to Subscriber consideration in cash in an amount equal to the Put Price against delivery of original certificates (if the New TopCo Units are certificated), as well as all other documents reasonably requested by Topco LP or its designee; provided that Topco LP or its designee may pay the Put Price with a promissory note at a market rate of interest and with customary terms in accordance with the Topco LP Agreement, which note will be payable no later than the Promissory Note Payment Date.

(d) For purposes of this Agreement, the following terms shall have the following meanings:

(i) “Change in Control” means either (A) the consummation of the sale, transfer, conveyance or other disposition (including by way of merger, equity purchase or consolidation) in one or a series of transactions, of the equity securities of Topco LP or its successor held, directly or indirectly, by the Sponsors, such that immediately following such transaction or disposition (or series of transactions or dispositions), the total number of all equity securities of Topco LP or its successor held, directly or indirectly, by the Sponsors represents, in the aggregate, less than 50% of the total voting power of all outstanding equity securities of Topco LP or its successor (as such securities may be adjusted for the occurrence of a corporate event); or (B) the consummation of the sale, lease, transfer, conveyance or other disposition (other than by way of merger, equity purchase or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Topco LP and its subsidiaries, taken as a whole, to any “person” (as such term is defined in Section 13(d)(3) of the Exchange Act).

 

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(ii) “Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code.

(iii) “Fair Market Value” means, on any date, the amount that would be received with respect to the Class B Units if Topco LP sold all of its assets for fair market value (as determined by the board of directors of the Topco LP, in good faith, based on such factors as the board, in its sole discretion, considers relevant, without discounts for lack of control, marketability, or other similar discounts) and immediately liquidated and the proceeds were distributed to the partners of Topco LP in accordance with the Topco LP Agreement.

(iv) “Sponsors” means (i) GPC WH Fund LP and Novo Holdings A/S, and (ii) any of their respective affiliates that acquire, directly or indirectly, equity securities or debt of Topco LP or any of its Subsidiaries.

6. Other Agreements. Subscriber acknowledges and agrees that Subscriber will receive substantial personal benefit from the completion of the Contemplated Transactions, the Merger and other events related thereto (including the Subscription) and that Subscriber is executing this Agreement of Subscriber’s own free will and for good and valuable consideration. In consideration thereof, Subscriber hereby acknowledges and agrees as follows:

(a) The term “Good Reason” (as defined in the Employment Agreement) will not be triggered solely by or as a result of the Merger, and any changes in the duties and responsibilities as a result of the Company no longer operating as a publicly traded company and becoming a direct wholly owned subsidiary of Parent will not constitute “Good Reason” for purposes of the Employment Agreement.

(b) For purposes of the Employment Agreement, the term “Outstanding Equity” shall exclude any equity or equity-based awards granted by Topco LP or any of its Subsidiaries (including the Company) on or after the Closing Date.

(c) Notwithstanding anything to the contrary in the RPIP or the RPIP Award Agreement, the portion of Subscriber’s payout with respect to Tranche 2 of the RPIP Award that is not paid at the time of the Merger pursuant to Section 9 of the RPIP (the “Unpaid Tranche 2 Award”), including any such portion that is not deemed achieved in connection with the Merger, shall be deemed to be unvested as of the Closing. After the Closing, the Unpaid Tranche 2 Award will vest in four equal installments of 25% of the amount of the Unpaid Tranche 2 Award on each six-month anniversary of the Closing Date, subject to Subscriber’s continued employment with the Company and/or its Affiliates through the applicable vesting date; provided, that (i) in the event Subscriber’s employment with the Company and its Affiliates is terminated by the Company or its applicable Affiliate without Cause, by Subscriber for Good Reason or due to Subscriber’s death or Disability or (ii) upon the occurrence of a Change in Control on or prior to Subscriber’s termination of employment with the Company and its Affiliates, 100% of the Unpaid Tranche 2 Award will vest (subject to achievement of the Tranche 2 milestone) as of Subscriber’s termination date or the occurrence of such Change in Control, respectively. Any portion of the Unpaid Tranche 2 Award that is not vested in accordance with this Section 6(c) as of the date Subscriber’s employment with the Company and its Affiliates terminates (after giving effect to any accelerated vesting that occurs in connection with such termination of employment) will automatically be forfeited by Subscriber on the date of such termination of employment without any additional consideration therefor and without any further

 

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action by the Company or its Affiliates. To the extent vested, the Unpaid Tranche 2 Award will be paid (subject to achievement of the Tranche 2 milestone) in a lump sum in the form of cash or vested Class B Units, as determined by the General Partner in its sole discretion (with a Fair Market Value, as of the payment date, equal to the amount of the Unpaid Tranche 2 Award that has become payable), in the first quarter of 2027, in accordance with Section 9 of the RPIP. In the event the Company elects to settle the Unpaid Tranche 2 Award in the form of vested Class B Units, the Company shall retain a number of Class B Units from settlement of the Unpaid Tranche 2 Award sufficient to satisfy all withholding taxes that become due with respect to the Unpaid Tranche 2 Award, based on maximum statutory withholding rates and the Fair Market Value of the such Class B Units as of the payment date. For the avoidance of doubt, the Class B Units, if any, issued in settlement of the Unpaid Tranche 2 Award are subject to the rights of Topco LP to repurchase the units in accordance the Topco LP Agreement. The repurchase rights will include the right of Topco LP to repurchase the New Topco Units for a purchase price equal to Fair Market Value on the date of repurchase, provided that the purchase price will be equal to the lesser of unreturned cost paid for such units (which may be (but not below) zero) or Fair Market Value on the date of repurchase (i) in the event of a termination of Subscriber’s employment with Topco LP and its Affiliates by the Company for Cause or (ii) solely to the extent it would not result in such Class B Units being subject to a substantial risk of forfeiture for purposes of Section 83 of the Code or otherwise result in the imposition of excise taxes under Section 409A of the Code, in the event Subscriber materially breaches any non-competition, non-solicitation or other restrictive covenant to which Subscriber is subject pursuant to the Employment Agreement or any other agreement between Subscriber and Topco LP or any of its Affiliates. In addition, the repurchase rights will include the right of Topco LP to pay the repurchase price with a promissory note bearing a market rate of interest and with customary terms in accordance with the Topco LP Agreement, which note will be payable no later than the Promissory Note Payment Date.

(d) At the Effective Time, each Company Equity Award held by Subscriber that is then outstanding will be cancelled, and Subscriber will be entitled, in exchange therefor, to receive Equity Award Consideration in accordance with the Merger Agreement; provided, that notwithstanding any contrary term of the Merger Agreement, any payment of the Equity Award Consideration in respect of such unvested Company Equity Awards will remain subject to the same vesting conditions as were applicable to the Company Equity Award immediately prior to the Effective Time and shall only become payable to Subscriber to the extent such vesting conditions are satisfied following the Closing. Notwithstanding the foregoing or anything to the contrary in the Company Equity Plan, the award agreement governing the terms of the applicable Company Equity Award, the Merger Agreement or this Agreement, the Equity Award Consideration (if any) will be paid in the form of cash or vested Class B Units, as determined by the General Partner in its sole discretion (with a Fair Market Value, as of the payment date, equal to the amount of the Equity Award Consideration that has become payable), in accordance with the payment schedule set forth in the applicable award agreement. In the event the Company elects to settle the Equity Award Consideration in the form of vested Class B Units, the Company shall retain a number of Class B Units from settlement of the Equity Award Consideration sufficient to satisfy all withholding taxes that become due with respect to the Equity Award Consideration, based on maximum statutory withholding rates and the Fair Market Value of such Class B Units as of the payment date. For the avoidance of doubt, the parties hereto agree that the treatment of the Company Equity Awards under Section 2.2(c) of the Merger Agreement and this Section 6(d) shall be an assumption or continuation of the Company Equity Awards in accordance with the terms of the applicable Company Equity Plan and no Equity Award Consideration shall be payable with respect to Subscriber’s Company Equity Awards for which the vesting conditions are not satisfied on or prior to the date the Company Equity Award would otherwise have been forfeited if such Company Equity Award had remained outstanding following the Closing. As of the Effective Time, Subscriber will cease to have any rights with respect to Subscriber’s Company Equity Awards, except the right to receive the Equity Award Consideration in accordance with Section 2.2(c) of the Merger Agreement and this Section 6(d). For the avoidance of doubt, the Class B Units, if any, issued in settlement of the

 

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Company Equity Awards are subject to the rights of Topco LP to repurchase the units in accordance the Topco LP Agreement. The repurchase rights will include the right of Topco LP to repurchase the New Topco Units for a purchase price equal to Fair Market Value on the date of repurchase, provided that the purchase price will be equal to the lesser of unreturned cost paid for such units (which may be (but not below) zero) or Fair Market Value on the date of repurchase (i) in the event of a termination of Subscriber’s employment with Topco LP and its Affiliates by the Company for Cause or (ii) solely to the extent it would not result in such Class B Units being subject to a substantial risk of forfeiture for purposes of Section 83 of the Code or otherwise result in the imposition of excise taxes under Section 409A of the Code, in the event Subscriber materially breaches any non-competition, non-solicitation or other restrictive covenant to which Subscriber is subject pursuant to the Employment Agreement or any other agreement between Subscriber and Topco LP or any of its Affiliates. In addition, the repurchase rights will include the right of Topco LP to pay the repurchase price with a promissory note bearing a market rate of interest and with customary terms in accordance with the Topco LP Agreement, which note will be payable no later than the Promissory Note Payment Date.

7. Miscellaneous.

(a) Amendments and Waivers. Any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law. Notwithstanding anything to the contrary herein, no amendment or waiver of any provision of this Agreement and no action shall be taken by or on behalf of Subscriber under or with respect to this Agreement without first obtaining the approval of the Company Board (or a committee thereof).

(b) Binding Effect; Benefit; Assignment. This Agreement shall be binding upon, inure solely to the benefit of and be enforceable by each party hereto and their respective permitted successors and assigns. Nothing in this Agreement, express or implied is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto by operation of Law or otherwise without the prior written consent of the other parties. Any purported assignment in violation of this Section 7(b) shall be null and void.

(c) Construction. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; (iv) the term “Section” refers to the specified Section of this Agreement; (v) whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the phrase “without limitation”; and (vi) the word “or” shall be disjunctive but not exclusive. The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Words denoting natural persons shall be deemed to include business entities and vice versa and references to a Person are also to its permitted successors and assigns. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party. All Annexes hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. The word “party” shall, unless the context otherwise requires, be construed to mean a party to this Agreement. Any reference to a party to this Agreement or any other agreement or document contemplated hereby shall include such party’s successors and permitted assigns.

 

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(d) Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other parties hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement.

(e) Entire Agreement. This Agreement, the Merger Agreement, the Support Agreements and each of the documents, instruments and agreements delivered in connection with the Contemplated Transactions, including the Company Disclosure Letter, constitute the entire agreement of the parties and supersede all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein, are not intended to confer upon any other Person any rights or remedies hereunder.

(f) Further Assurances. Each party hereto shall execute and deliver all such further and additional instruments and agreements and shall take such further and additional actions, as may be reasonably necessary or desirable and as reasonably requested by any other party hereto to evidence or carry out the provisions of this Agreement or to consummate the transactions contemplated hereby.

(g) Governing Law; Jurisdiction; Waiver of Jury Trial. Sections 8.7 and 8.10 of the Merger Agreement are hereby incorporated herein by reference, mutatis mutandis.

(h) Notices. All notices and other communications provided for or permitted under this Agreement shall be in writing and deemed to have been duly given and received when delivered by overnight courier or hand delivery, when sent by email (if transmission is confirmed, and each party hereto agrees to promptly confirm if such confirmation is requested) or five days after mailing if sent by registered or certified mail (return receipt requested) postage prepaid, to the parties at the following addresses (or at such other address for any party as specified by like notices).

If to Topco LP, to the General Partner of Topco LP at Topco LP’s headquarters.

If to the Company, to the General Counsel and Deputy General Counsel of the Company at the Company’s headquarters.

If to Subscriber, to the last address that the Company has in its personnel records for Subscriber.

(i) Severability. If any term or other provision of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Contemplated Transactions is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner to the end that the Contemplated Transactions are consummated as originally contemplated to the fullest extent possible.

 

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(j) Survival. The representations and warranties set forth in this Agreement shall survive the consummation of the transactions contemplated hereby indefinitely.

(k) Specific Performance. Subscriber acknowledges and agrees that the breach of this Agreement by it would cause irreparable damage to Topco LP and its Affiliates and that Topco LP will not have an adequate remedy under applicable Laws, and Topco LP acknowledges and agrees that the breach of this Agreement by Topco LP would cause irreparable damage to Subscriber and that Subscriber will not have an adequate remedy under applicable Laws. Therefore, the obligations of the parties hereto under this Agreement shall be enforceable by a decree of specific performance if issued by the courts specified in Section 7(g) above, and appropriate injunctive relief may be applied for and granted in connection therewith. Any party seeking an injunction, a decree or order of specific performance or other equitable remedy shall not be required to provide any bond or other security in connection therewith and any such remedy shall be in addition to and not in substitution for any other remedy to which such party is entitled at law or in equity.

(l) Irrevocability; Termination. Each party hereto acknowledges and agrees that it shall not be permitted to terminate or rescind this Agreement; provided, however, that this Agreement shall automatically terminate if, at any time prior to the Subscription Closing, the Merger Agreement shall have been validly terminated for any reason by any of the parties thereto in accordance with its terms and conditions. In the event of any termination of this Agreement as provided in this Section 7(l), this Agreement shall forthwith become wholly void ab initio and of no further force or effect and there shall be no liability on the part of any parties hereto or their respective officers or directors.

(m) Employment Agreement. All terms and conditions of the Employment Agreement not amended by Section 6(a) and (b) above, either expressly or by necessary implication, will remain in full force and effect.

(n) Incorporation of Recitals. The Recitals set forth above are hereby incorporated into this Agreement and shall be deemed binding provisions hereof.

* * * * *

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

TOPCO LP:
RESISTANCE TOPCO L.P.
By:   Resistance GP LLC, its General Partner
By:   GPC WH Fund LP, its Sole Member
By:   BFLEXION International GP LLC, its
  General Partner

 

Name:   Ronald Cami
Title:   Manager

 

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

[Signature Page to Subscription Agreement]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

COMPANY:
PARATEK PHARMACEUTICALS, INC.

 

Name:
Title:

[Signature Page to Subscription Agreement]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and validly executed as of the date first set forth above.

 

SUBSCRIBER:
[Name]

 

[Signature Page to Subscription Agreement]


ANNEX A

 

Subscriber

   Subscription Amount
[Name]     ]% of Closing RPIP Payments

Exhibit (d)(v)

EXECUTION VERSION

LIMITED GUARANTEE

THIS LIMITED GUARANTEE, dated as of June 6, 2023 (this “Limited Guarantee”), by GPC WH FUND LP, a Delaware limited partnership (the “Guarantor”), is in favor of Paratek Pharmaceuticals, Inc., a Delaware corporation (the “Guaranteed Party”).

1. LIMITED GUARANTEE. To induce the Guaranteed Party to enter into that certain Agreement and Plan of Merger, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time pursuant to the terms thereof, the “Merger Agreement”), by and among Resistance Acquisition, Inc., a Delaware corporation (“Parent”), Resistance Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and the Guaranteed Party, pursuant to which Merger Sub will merge with and into the Guaranteed Party, with the Guaranteed Party continuing as the Surviving Corporation (such merger and the other transactions contemplated by the Merger Agreement, the “Transaction”), the Guarantor, intending to be legally bound, hereby absolutely, irrevocably and unconditionally, guarantees to the Guaranteed Party, on the terms and conditions set forth herein, the due and punctual payment of the obligations of Parent, with respect to the payment of (i) the Parent Termination Fee pursuant to Section 7.5(f) of the Merger Agreement and (ii) Parent’s reimbursement and indemnity obligations pursuant to, and to the extent set forth in, Section 5.20(e) of the Merger Agreement, if and when such payment obligation becomes payable under the Merger Agreement (collectively, the “Obligation”); provided that, notwithstanding anything to the contrary contained in this Limited Guarantee, (A) in no event shall the aggregate liability of the Guarantor under this Limited Guarantee exceed $9,250,000 (collectively, the “Cap”) and (B) the Guaranteed Party agrees that this Limited Guarantee may not be enforced against the Guarantor without giving effect to the Cap (and to the provisions of Sections 8 and 9 hereof). This Limited Guarantee may be enforced for the payment of money only. All payments hereunder shall be made in lawful money of the United States, in immediately available funds.

Each capitalized term used but not defined herein shall have the meaning ascribed to it in the Merger Agreement.

2. NATURE OF GUARANTEE. The Guarantor’s liability hereunder is an absolute, unconditional, irrevocable and continuing guaranty of the Obligation subject to the terms and conditions hereof (including the Cap) irrespective of any rescission, compromise, modification, amendment or waiver of or any departure from the Merger Agreement, or any or all of the documents entered into in connection therewith. In the event that any payment to the Guaranteed Party (whether made by Parent or the Guarantor) in respect of the Obligation is rescinded or must otherwise be returned, for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to the Obligation as if such payment had not been made. This Limited Guarantee is an unconditional and continuing guarantee of payment and not of collection.

3. CHANGES IN OBLIGATION, CERTAIN WAIVERS. The Guarantor agrees that the Guaranteed Party may, in its sole discretion, at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of the Obligation, and may also make any agreement with Parent for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of


any agreement between the Guaranteed Party or Parent, without in any way impairing or affecting the Guarantor’s obligations under this Limited Guarantee or affecting the validity or enforceability of this Limited Guarantee. The Guarantor agrees that the obligations of the Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure or delay on the part of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against Parent; (b) any change in the time, place or manner of payment of the Obligation, or any rescission, waiver, compromise, consolidation, or other amendment or modification of any of the terms or provisions of the Merger Agreement, the GPC Equity Commitment Letter or the Debt Commitment Letter; (c) the addition, substitution or release of any person or entity now or hereafter liable with respect to the Obligation or otherwise interested in the transactions contemplated by the Merger Agreement; (d) any change in the partnership or corporate existence, structure or ownership of the Guarantor, Parent or any person or entity now or hereafter liable with respect to the Obligation or otherwise interested in the transactions contemplated by the Merger Agreement; (e) the existence of any claim, offset or other right which (i) the Guarantor may have at any time against Parent or the Guaranteed Party, any of their respective Affiliates or any other person or entity, or (ii) Parent may have at any time against the Guaranteed Party or any other person or entity, in each case described in the foregoing clauses (i) or (ii), (A) whether in connection with the Obligation or otherwise and (B) except as contemplated by the final sentence of the immediately succeeding paragraph; (f) the adequacy of any other means the Guaranteed Party may have of obtaining payment related to the Obligation; (g) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Parent or any other person or entity now or hereafter liable with respect to the Obligation or otherwise interested in the transactions contemplated by the Merger Agreement, or any of their respective assets; (h) the value, genuineness, validity, illegality or enforceability (as it relates to Parent) of the Merger Agreement, the GPC Equity Commitment Letter, the Debt Commitment Letter or any agreement or instrument referred to herein or therein, in each case in accordance with its terms, except as contemplated by the final sentence of the immediately succeeding paragraph, and (i) any discharge of the Guarantor as a matter of applicable law or equity (other than as a result of, and to the extent of, indefeasible payment of the Obligation in accordance with the terms of the Merger Agreement or as a result of defenses to the payment of the Obligation that would be available to Parent under the Merger Agreement). To the fullest extent permitted by applicable law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of any applicable law which would otherwise require any election of remedies by the Guaranteed Party, including any and all surety defenses and rights or defenses arising by reason of any applicable law which would otherwise require any election of remedies by the Guaranteed Party. The Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Obligation, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of the Obligation incurred and all other notices of any kind, all defenses which may be available by virtue of any valuation, stay, moratorium or other similar applicable law now or hereafter in effect, any right to require the marshalling of assets and all suretyship defenses generally (other than (i) fraud or intentional misrepresentation or willful misconduct on Parent by the Guaranteed Party or any of its Affiliates in connection with the Merger Agreement, this Limited Guarantee, the Equity Commitment Letter, the CVR Agreement or the transactions contemplated hereby or thereby or (ii) contractual defenses to the payment of the Obligation that are available to Parent under the Merger Agreement or in respect of a breach by the Guaranteed Party of any of its covenants or agreements in this Limited Guarantee). The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers, agreements, covenants, obligations and other terms in this Limited Guarantee are knowingly made and agreed to in contemplation of such benefits.

 

2


The Guarantor hereby unconditionally and irrevocably waives any rights that it may now have or hereafter acquire against Parent or any other Person interested in the transactions contemplated by the Merger Agreement that arise from the existence, payment, performance or enforcement of the Guarantor’s obligations under or in respect of this Limited Guarantee or any other agreement in connection therewith, including any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against Parent or such other Person, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including the right to take or receive from Parent or such other Person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, and the Guarantor shall not exercise any such rights, in each case, unless and until all of the Obligation shall have been indefeasibly paid in full in immediately available funds. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in immediately available funds of the Obligation, such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of the Guarantor and shall forthwith be promptly paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to payment of its portion of the Obligation until it is paid in full, or to be held as collateral for the Obligation thereafter arising.

The Guarantor hereby waives any and all notice of the creation, renewal, extension or accrual of the Obligation and notice of or proof of reliance by the Guaranteed Party upon this Limited Guarantee or acceptance of this Limited Guarantee. The Obligation and the Merger Agreement, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Limited Guarantee, and all dealings between Parent or the Guarantor, on the one hand, and the Guaranteed Party, on the other hand, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Limited Guarantee. When pursuing its rights and remedies hereunder against the Guarantor, the Guaranteed Party shall be under no obligation to pursue such rights and remedies it may have against Parent or any other person or entity for the Obligation or any right of offset with respect thereto, and any failure by the Guaranteed Party to pursue such other rights or remedies or to collect any payments from Parent or any such other person or entity or to realize upon or to exercise any such right of offset, and any release by the Guaranteed Party of Parent or any such other person or entity or any right of offset, shall not relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Guaranteed Party.

 

3


The Guaranteed Party shall not be obligated to file any claim relating to any Obligation in the event that Parent becomes subject to any insolvency, bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantor’s obligations hereunder.

Notwithstanding anything to the contrary contained in this Limited Guarantee or otherwise, the Guaranteed Party hereby agrees that (i) the Guarantor shall have all defenses to the payment of its obligations under this Limited Guarantee (which in any event shall be subject to the Cap) that would be available to Parent under the terms of the Merger Agreement with respect to the Obligation, and (ii) any breach or failure by the Guaranteed Party to comply with the terms of the Merger Agreement that, in each case, relieves Parent of its obligations under the Merger Agreement shall likewise automatically and without any further action on the part of any Person relieve the Guarantor of its obligations under this Limited Guarantee to the same extent that Parent is actually so relieved.

4. NO WAIVER; CUMULATIVE RIGHTS. No failure to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy or power hereunder preclude any other or future exercise by of any right, remedy or power hereunder. Each and every right, remedy and power hereby granted to the Guaranteed Party shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time. The Guaranteed Party shall not have any obligation to proceed at any time or in any manner against, or exhaust any or all of the their rights against, Parent or any other person or entity now or hereafter liable for any Obligation or interested in the transactions contemplated by the Merger Agreement prior to proceeding against the Guarantor.

5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that:

(a) It is duly organized and validly existing under the laws of its jurisdiction of organization; it has all requisite power and authority to execute, deliver and perform this Limited Guarantee; the execution, delivery and performance of this Limited Guarantee have been duly and validly authorized by all necessary action, and do not and will not (i) result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation, modification or acceleration of any material obligation or the loss of any material benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, permit, franchise, right or license binding on the Guarantor or result in the creation of any lien upon any of its properties, assets or rights, or (ii) contravene any provision of the Guarantor’s partnership agreement or similar organizational documents, any contract to which it is a party or any applicable law or contractual restriction binding on the Guarantor or its assets; and the person or entity executing and delivering this Limited Guarantee on behalf of the Guarantor is duly authorized to do so;

 

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(b) all consents, approvals, authorizations, permits of, filings with and notifications to, any Governmental Body necessary for the due execution, delivery and performance of this Limited Guarantee by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Body is required in connection with the execution, delivery or performance of this Limited Guarantee;

(c) this Limited Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except as may be limited by (i) applicable bankruptcy, reorganization, insolvency, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally from time to time in effect and (ii) the availability of equitable remedies (regardless of whether enforceability is considered in a proceeding at law or in equity); and

(d) the Guarantor has the financial capacity to pay and perform its obligations under, in respect of or in connection with this Limited Guarantee, and all funds necessary for the Guarantor to fulfill such obligations shall be unencumbered and available to the Guarantor (or its permitted assignee pursuant to Section 6 hereof) for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof.

6. NO ASSIGNMENT. Neither this Limited Guarantee nor any right or obligation hereunder may be assigned by any party (by operation of law or otherwise) without the prior written consent of the Guaranteed Party (in the case of an assignment, transfer or delegation by the Guarantor) or the Guarantor (in the case of an assignment, transfer or delegation by the Guaranteed Party); provided, however, that the Guarantor may assign, transfer or delegate all or part of its rights, interests and obligations hereunder, without the prior written consent of the Guaranteed Party, to any other person or entity to which it has allocated all or a portion of its investment commitment in Parent (or any Affiliate thereof, as applicable) in accordance with the terms of the equity commitment letter delivered by the Guarantor in connection with the execution of the Merger Agreement (the “GPC Equity Commitment Letter”); provided, further, that no such assignment, transfer or delegation shall relieve the Guarantor of its obligations hereunder as the primary obligor. Any attempted assignment in violation of this Section 6 shall be null and void.

7. NOTICES. Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given: (a) on the date established by the sender as having been delivered personally, (b) on the date delivered by a nationally recognized overnight delivery service as established by the sender by evidence obtained from such delivery service, or (c) on the date sent by electronic mail, with confirmation of receipt, if sent prior to 5:00 p.m. New York, New York time, or if sent later, then on the next Business Day. Such communications, to be valid, must be addressed as follows:

if to the Guarantor:

 

GPC WH Fund LP
c/o Gurnet Point Capital
55 Cambridge Parkway, Suite 401
Cambridge, MA 02142
Attn:    Adam Dilluvio
Email:    [ * * *]

 

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with a copy to (which alone shall not constitute notice):

 

Latham & Watkins LLP
200 Clarendon Street
Boston, MA 02116
Attention:    Peter Handrinos
   Leah Sauter
Email:    [ * * * ]
   [ * * * ]

If to the Guaranteed Party, as provided in the Merger Agreement.

8. CONTINUING GUARANTEE. This Limited Guarantee may not be revoked or terminated and shall remain in full force and effect and shall be binding on the Guarantor, its successors and permitted assigns, and shall inure to the benefit of, and be enforceable by, the Guaranteed Party and its successors and permitted assigns, until the Obligation (which shall be subject to the Cap) has been indefeasibly paid in full or this Limited Guarantee has been terminated in accordance with the terms hereof. Notwithstanding the foregoing, or anything else express or implied in this Limited Guarantee or otherwise, this Limited Guarantee shall terminate and the Guarantor shall have no further obligations under or in connection with this Limited Guarantee as of the earliest of (i) the Closing Date if, and only if, the Closing occurs, (ii) the date that is thirty (30) days following any valid termination of the Merger Agreement in accordance with its terms, unless prior to such date the Guaranteed Party shall have commenced proceedings in a court in accordance with Section 11(a) to enforce this Limited Guarantee (but in all cases, subject to the Cap), in which case this Limited Guarantee shall terminate upon the final, non-appealable resolution of such proceedings and satisfaction by the Guarantor of any obligations finally determined or agreed to be owed by the Guarantor, consistent with the terms hereof, (iii) the payment to the Guaranteed Party in full of any Obligation or payments in an aggregate amount equal to the Cap and (iv) the funding of the GPC Commitment (as defined in the GPC Equity Commitment Letter) under the GPC Equity Commitment Letter. Notwithstanding any other term or provision of this Limited Guarantee, or anything express or implied in this Limited Guarantee or otherwise, in the event that the Guaranteed Party or any of its Affiliates (A) asserts in writing, or directs any other Person to assert in writing, that the provisions of Section 1 hereof limiting the Guarantor’s liability to the Cap or the provisions of this Section 8 or Section 9 hereof are illegal, invalid or unenforceable in whole or in part, or that a the Guarantor is liable in respect of the Obligation in excess of or to a greater extent than the Cap, or asserting that the Obligation shall be payable more than once, or (B) seeks any remedies against, or asserts any theory of liability against any Non-Recourse Party (as defined in Section 9) with respect to the Merger Agreement, the GPC Equity Commitment Letter, this Limited Guarantee or any other agreement or instrument delivered in connection with the Merger Agreement, the GPC Equity Commitment Letter, this Limited Guarantee, or the transactions contemplated hereby or thereby, other than Retained Claims (as defined in Section 9 hereof) asserted against the Non-Recourse Parties as contemplated by Section 9, or (C) seeks any remedies against the Guarantor, or any of its Affiliates, other than those remedies expressly provided against Parent under the Merger Agreement or expressly provided

 

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against the Guarantor under this Limited Guarantee or the GPC Equity Commitment Letter, then, in any such instance (x) the obligations of the Guarantor under or in connection with this Limited Guarantee shall terminate ab initio and shall thereupon be null and void, (y) if the Guarantor has previously made any payments under or in connection with this Limited Guarantee, it shall be entitled to recover such payments from the Guaranteed Party, together with reasonable out-of-pocket expenses (including reasonable fees of counsel) incurred by the Guarantor in connection with the enforcement of its rights hereunder, and (z) none of the Guarantor or any other Non-Recourse Party shall have any liability whatsoever (whether at law or in equity, whether sounding in contract, tort, statute or otherwise) to the Guaranteed Party or any other person or entity in any way under or with respect to this Limited Guarantee, the GPC Equity Commitment Letter or the Merger Agreement, or the transactions contemplated by the Merger Agreement, the GPC Equity Commitment Letter or this Limited Guarantee.

9. NO RECOURSE. The Guaranteed Party acknowledges and agrees that the assets of Parent are primarily cash in a de minimis amount and Parent’s rights under the Merger Agreement and the GPC Equity Commitment Letter and that no additional funds or assets are expected to be contributed to Parent unless and until the Closing occurs. Other than with respect to any Retained Claim (as hereinafter defined), the Guaranteed Party acknowledges and agrees (for itself and its Affiliates) that: (a) no person or entity other than the Guarantor (and the legal successors and assigns of its obligations hereunder) shall have any obligations under or in connection with this Limited Guarantee notwithstanding the fact that the Guarantor is a Delaware limited partnership with a general partner, (b) the Guarantor shall have no obligations under or in connection with this Limited Guarantee except as expressly provided by this Limited Guarantee, and (c) no personal liability shall attach to, and no recourse shall be had by the Guaranteed Party, any of its Affiliates or any person or entity purporting to claim by or through any of them or for the benefit of any of them under any theory of liability (including without limitation by attempting to pierce a corporate, limited liability company, partnership or similar veil, by attempting to compel Parent to enforce any rights that they may have against any person or entity, by attempting to enforce any assessment, or by attempting to enforce any purported right at law or in equity, whether sounding in contract, tort, statute or otherwise) against any Non-Recourse Party (as hereinafter defined) in any way under or in connection with this Limited Guarantee, the Merger Agreement, the GPC Equity Commitment Letter, or any other agreement or instrument delivered in connection with this Limited Guarantee, the Merger Agreement or the GPC Equity Commitment Letter, or the transactions contemplated hereby or thereby (whether at law or in equity, whether sounding in contract, tort, statute or otherwise). The Guaranteed Party hereby covenants and agrees that it shall not, and shall cause its Affiliates not to, institute any proceeding or bring any other claim arising under, or in connection with, this Limited Guarantee, the Merger Agreement or the transactions contemplated thereby, or the GPC Equity Commitment Letter or the transactions contemplated thereby (whether at law or in equity, whether sounding in contract, tort, statute or otherwise), against the Guarantor or any Non-Recourse Party except for claims: (i) against any Non-Recourse Party that is party to, and solely pursuant to the terms of, the Confidentiality Agreement, the Subscription Agreement, the Support Agreements or the transactions contemplated hereby or thereby; (ii) against the Guarantor (and its legal successors and assigns of its obligations hereunder) under, and pursuant to the terms of, this Limited Guarantee (subject to the applicable limitations herein), (iii) against Parent under, and pursuant to

 

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the terms of, the Merger Agreement and (iv) against the Guarantor for specific performance of its obligations under the GPC Equity Commitment Letter to fund its commitments thereunder in accordance with and pursuant to Section 5 thereof and Section 8.12(b) of the Merger Agreement to the extent expressly permitted thereby (the claims described in clauses (i) through (iv) collectively, the “Retained Claims”). As used herein, the term “Non-Recourse Parties” means, collectively, Parent, the Guarantor, and any of the foregoing’s respective former, current or future equity holders, controlling persons, directors, officers, employees, agents, general or limited partners, managers, management companies, members, stockholders, Affiliates, representatives, assignees or any fund under common control with the Guarantor, Parent or Merger Sub and any and all former, current or future equity holders, controlling persons, directors, officers, employees, agents, attorneys, general or limited partners, managers, management companies, members, stockholders, Affiliates or assignees of any of the foregoing, and any and all former, current or future heirs, executors, administrators, trustees, successors or assigns of any of the foregoing.

For the avoidance of doubt, nothing herein is intended or shall be construed to affect the rights and obligations of any Person pursuant to any confidentiality or other agreement or the rights of Parent, Merger Sub, the Guarantor or the Guaranteed Party under or in connection with the Debt Commitment Letter or with respect to the matters contemplated thereby.

10. GOVERNING LAW. This Limited Guarantee will be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

11. JURISDICTION; WAIVER OF JURY TRIAL.

(a) Each of the parties hereto hereby (i) expressly and irrevocably submits to the exclusive personal jurisdiction of the Court of Chancery of the State of Delaware or if such Court of Chancery lacks subject matter jurisdiction, the United States District Court for the District of Delaware, in the event any dispute arises out of this Limited Guarantee or the transactions contemplated hereby, (ii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iii) agrees that it shall not bring any action relating to this Limited Guarantee or the transactions contemplated hereby in any court other than the Court of Chancery of the State of Delaware or if such Court of Chancery lacks subject matter jurisdiction, the United States District Court for the District of Delaware; provided, that, each of the parties has the right to bring any action or proceeding for enforcement of a judgment entered by such court in any other court or jurisdiction.

(b) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS LIMITED GUARANTEE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THIS LIMITED GUARANTEE, ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO CERTIFIES AND

 

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ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATION OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH OTHER PARTY HAS BEEN INDUCED TO ENTER INTO THIS LIMITED GUARANTEE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

12. COUNTERPARTS AND SIGNATURE. This Limited Guarantee may be executed in counterparts, and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Limited Guarantee shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. The parties hereto agree that the delivery of this Limited Guarantee may be effected by means of an exchange of facsimile signatures or other electronic delivery.

13. NO THIRD PARTY BENEFICIARIES. Except for the provisions of Section 9 which reference Non-Recourse Parties (each of which shall be for the express benefit of and enforceable by each Non-Recourse Party), this Limited Guarantee is not intended, and shall not be deemed, to confer any rights or remedies upon any person or entity other than the parties hereto and their respective successors and permitted assigns.

14. CONFIDENTIALITY. This Limited Guarantee shall be treated as confidential and is being provided to the Guaranteed Party solely in connection with the Transaction and, subject to the remainder of this Section 14, may not be shared by the Guarantor or Guaranteed Party with any other Person. This Limited Guarantee may not be used, circulated, quoted or otherwise referred to in any document by the Guaranteed Party or its Affiliates except with the prior written consent of the Guarantor in each instance; provided that no such written consent is required for any disclosure of the existence of this Limited Guarantee (a) to any party to the Merger Agreement or the GPC Equity Commitment Letter, the legal, financial and accounting advisors to the Guaranteed Party, in each instance off this clause (a), who reasonably need to know such information and are directed to keep such information confidential on the terms contained in this Section 14, (b) if and to the extent required by the Guaranteed Party to enforce this Limited Guarantee in the event of the breach of this Agreement by the Guarantor or (c) if and to the extent required by applicable Law or Governmental Body (including the Nasdaq or the SEC).

15. MISCELLANEOUS.

(a) This Limited Guarantee, along with the GPC Equity Commitment Letter, the Merger Agreement, the agreements and instruments delivered in connection with the Merger Agreement, the CVR Agreement, the Subscription Agreement, the Support Agreements and the Confidentiality Disclosure Agreements, constitute the entire agreement between the parties hereto and supersedes any prior understandings, agreements or representations by or among the Guarantor or any of its Affiliates, on the one hand, and the Guaranteed Party or any of its Affiliates, on the other hand, written or oral, with respect to the subject matter hereof, and the parties hereto specifically disclaim reliance on any such prior understandings, agreements or representations to the extent not embodied in this Limited Guarantee or such other agreements. No amendment, modification or waiver of any provision hereof shall be enforceable unless approved by the Guaranteed Party and the Guarantor in writing.

 

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(b) Any term or provision of this Limited Guarantee that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction; provided, however, that this Limited Guarantee may not be enforced without giving effect to the limitation of the amount payable by the Guarantor hereunder to the Cap provided in Section 1 hereof and to the provisions of Sections 8 and 9 hereof. No party hereto shall assert, and each party hereto shall cause its respective Affiliates not to assert, that this Limited Guarantee or any part hereof is invalid, illegal or unenforceable.

(c) When reference is made in this Limited Guarantee to a Section, such reference shall be to a Section of this Limited Guarantee, unless otherwise indicated. The headings contained in this Limited Guarantee are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Limited Guarantee. The language used in this Limited Guarantee shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party hereto. Whenever the context may require, any pronouns used in this Limited Guarantee shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Whenever the words “include,” “includes” or “including” are used in this Limited Guarantee, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Limited Guarantee shall refer to this Limited Guarantee as a whole and not to any particular provision of this Limited Guarantee. No summary of this Limited Guarantee prepared by any party hereto shall affect the meaning or interpretation of this Limited Guarantee.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Guarantor has caused this Limited Guarantee to be duly executed and delivered as of the date first written above.

 

GPC WH FUND LP
By:   BFLEXION International GP LLC, its General Partner
By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Manager
By:  

/s/ Adam Dilluvio

  Name:   Adam Dilluvio
  Title:   Secretary and Treasurer

[SIGNATURE PAGE TO LIMITED GUARANTEE]


IN WITNESS WHEREOF, the Guaranteed Party has caused this Limited Guarantee to be duly executed and delivered as of the date first written above.

 

PARATEK PHARMACEUTICALS, INC.
By:  

/s/ Evan Loh, M.D.

Name:   Evan Loh, M.D.
Title:   Chief Executive Officer

[SIGNATURE PAGE TO LIMITED GUARANTEE]

Exhibit (d)(vi)

June 6, 2023

Resistance Acquisition, Inc.

c/o Gurnet Point Capital

55 Cambridge Parkway, Suite 401

Cambridge, MA 02142

Ladies and Gentlemen:

This letter agreement (this “Agreement”) sets forth the commitment of GPC WH FUND LP, a Delaware limited partnership (the “Investor”), subject to the terms and conditions contained in this Agreement, to contribute or cause to be contributed to Resistance Acquisition, Inc., a Delaware corporation (“Parent”), directly or indirectly through one or more equityholders of Investor or otherwise, by way of equity, loans or other instruments or securities, an amount equal to $300,000,000 (such amount, the “GPC Commitment”). Reference is made to that certain Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), dated as of the date hereof, by and among Parent, Resistance Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), and Paratek Pharmaceuticals, Inc., a Delaware corporation (the “Company”), pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the Surviving Corporation (such merger and the other transactions contemplated by the Merger Agreement, the “Transaction”). Each capitalized term used and not defined herein shall have the meaning ascribed thereto in the Merger Agreement.

1. Commitments. Subject to the terms and conditions set forth herein, the Investor hereby irrevocably commits that, at or prior to the Closing, it shall contribute or cause to be contributed to Parent (directly or indirectly through one or more equityholders of Investor or otherwise) by way of equity, loans or other instruments or securities, the GPC Commitment to (a) permit Parent to fund a portion of the Cash Consideration and any other amounts required to be paid by Parent or Merger Sub, as applicable, at Closing pursuant to the Merger Agreement and (b) pay related fees and expenses of the Company, Parent and Merger Sub required to be paid by Parent and Merger Sub, as applicable, pursuant to the Merger Agreement. The Investor shall not, under any circumstances, be obligated to contribute to, purchase equity of, or otherwise provide funds to, Parent or any other Person by operation of this letter agreement or otherwise in any amount in excess of the GPC Commitment, and this Agreement will not be enforced without giving effect to this sentence. In the event that Parent does not require all of the GPC Commitment in order to consummate the transactions contemplated by the Merger Agreement, then the amount to be funded by the Investor and/or its permitted assignees with respect to the GPC Commitment shall be proportionately reduced so long as the aggregate of such amounts funded by the Investor, together with cash on hand of the Company, are sufficient for Parent or Merger Sub, as applicable, to pay and perform Parent’s or Merger Sub’s, as applicable, obligations with respect to payment of (i) the Cash Consideration and any other amounts required to be paid by Parent or Merger Sub, as applicable, at Closing pursuant to the Merger Agreement and (ii) pay related fees and expenses of the Company, Parent and Merger Sub required to be paid by Parent and Merger Sub, as applicable, pursuant to the Merger Agreement. Subject to Section 6 hereof, the Investor shall be entitled to assign a portion of the GPC Commitment to one or more Persons; provided, however, that the amount required to be funded by the Investor with respect to the GPC Commitment will only be reduced by the amount actually contributed by such assignees to Investor.


2. Conditions. The Investor’s obligation to fund the GPC Commitment shall be subject to (a) the satisfaction or waiver of each of the conditions to Parent’s and Merger Sub’s obligations to effect the Merger set forth in Section 6.1 and Section 6.2 of the Merger Agreement (other than conditions that by their terms are to be satisfied by the delivery of documents or the taking of actions at the Closing by any party, but subject to the satisfaction or waiver of such conditions at the Closing), (b) the substantially contemporaneous funding of the Debt Financing (including any Alternative Debt Financing that has been obtained in accordance with Section 5.20 of the Merger Agreement) in accordance with the terms thereof and (c) the substantially simultaneous consummation of the Transaction in accordance with the terms of the Merger Agreement.

3. Limited Guarantee. Concurrently with the execution and delivery of this Agreement, the Investor is executing and delivering to the Company a guarantee related to certain of Parent’s obligations under the Merger Agreement (the “Limited Guarantee”).

4. Parties in Interest; Third Party Beneficiary. The parties hereto hereby agree that their respective agreements and obligations set forth herein are solely for the benefit of the other parties hereto and their respective successors and permitted assigns, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto and their respective successors and permitted assigns any benefits, rights or remedies under or by reason of, or any rights to enforce or cause any party hereto to enforce, the obligations set forth herein; provided, that the Company is an express third-party beneficiary of this Agreement solely for the purposes of the enforcement rights provided in clause (ii) of Section 5 below and no others. For the avoidance of doubt, other than as set forth in this Section 4 and clause (ii) of Section 5 below, in no event shall the Company or any of the Company’s Affiliates or equityholders, or any Person claiming by, through or on behalf of any of them, be entitled to rely on or enforce the terms of this letter agreement.

5. Enforceability. This Agreement may only be enforced by (i) Parent at the direction of the Investor and/or (ii) the Company pursuant to an action of specific performance to enforce the obligations of the Investor hereunder, solely to the extent that the requirements for Parent’s obligation to draw down the full proceeds of the GPC Commitment in accordance with (and subject to the requirements of) the terms and conditions of Section 8.12(b) of the Merger Agreement are satisfied, and subject to the express terms, conditions and limitations herein and in the Merger Agreement, including that all of the conditions to funding in Section 2 are satisfied.

6. No Modification; Entire Agreement; Assignment. This Agreement may not be amended or otherwise modified without the prior written consent of Parent, the Investor and the Company. Together with the Merger Agreement, the Limited Guarantee, the CVR Agreement, the Subscription Agreement, the Support Agreements and the Confidential Disclosure Agreements, this Agreement constitutes the sole agreement, and supersedes all prior agreements, understandings and statements, written or oral, between the Investor, or any of its Affiliates, on the one hand, and Parent or any of its Affiliates (other than the Investor), on the other hand, with respect to the transactions contemplated hereby. Except as expressly permitted in Section 1 hereof, no transfer or assignment of any rights or obligations hereunder shall be permitted without the consent of the other party hereto. Any transfer in violation of the preceding sentence shall be null and void.

 

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7. Governing Law. This Agreement will be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

8. Jurisdiction; Waiver of Jury Trial.

a. Each of the parties hereto hereby (i) expressly and irrevocably submits to the exclusive personal jurisdiction of the Court of Chancery of the State of Delaware or if such Court of Chancery lacks subject matter jurisdiction, the United States District Court for the District of Delaware, in the event any dispute arises out of this Agreement or the transactions contemplated hereby, (ii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iii) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated hereby in any court other than the Court of Chancery of the State of Delaware or if such Court of Chancery lacks subject matter jurisdiction, the United States District Court for the District of Delaware; provided, that, each of the parties has the right to bring any action or proceeding for enforcement of a judgment entered by such court in any other court or jurisdiction.

b. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATION OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH OTHER PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

9. Counterparts. This Agreement may be executed in counterparts, and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. The parties hereto agree that the delivery of this Agreement may be effected by means of an exchange of facsimile signatures or other electronic delivery.

 

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10. Confidentiality. This Agreement shall be treated as confidential and is being provided to Parent solely in connection with the Transaction and, subject to the remainder of this Section 10, may not be shared by the Company or Parent with any other Person. This Agreement may not be used, circulated, quoted or otherwise referred to in any document by the Company or Parent, except with the prior written consent of the Investor; provided, that no such written consent is required for any disclosure of the existence or terms of this Agreement (a) to any of the officers, directors and employees of the Company and, legal, financial and accounting advisors of the Company, in each instance of this clause (a) who reasonably need to know such information and are directed to keep such information confidential on the terms contained in this Section 10, (b) if and to the extent required by the Company to enforce this Agreement in the event of the breach of this Agreement by the Investor, or (c) if and to the extent required by applicable Law or Governmental Body (including the Nasdaq or the SEC).

11. Termination. The obligations of the Investor under this Agreement will terminate automatically and immediately upon the earliest to occur of (a) the consummation of the Closing (at which time all such obligations shall be discharged), (b) the termination of the Merger Agreement, (c) the receipt by the Company of the Parent Termination Fee, (d) the Company or any Person claiming by, through or for the benefit of the Company, asserting in writing a claim against the Investor or any Non-Recourse Party (as defined in the Limited Guarantee) under or in connection with the Merger Agreement, the Limited Guarantee or this Agreement or the transactions contemplated hereby or thereby, other than the Company asserting any Retained Claim (as defined in the Limited Guarantee) against certain Non-Recourse Parties against which such Retained Claim may be asserted pursuant to and in accordance with Section 9 of the Limited Guarantee, or (e) the occurrence of any event which, by the terms of the Limited Guarantee, is an event that terminates the Investor’s obligations or liabilities under the Limited Guarantee. Upon any such termination of this Agreement, Parent and the Company shall each have no further rights hereunder and the Investor, Parent, Merger Sub or any of their respective Affiliates shall have no liabilities or obligations hereunder or otherwise in connection with or related to this Agreement and any obligations hereunder will terminate and none of the parties hereto will have any liability whatsoever to any Person (except that the provisions of this Section 11 and Sections 7, 8 and 10 shall survive).

12. Representations and Warranties. The Investor hereby represents and warrants to Parent that (a) it has all applicable organizational power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it (i) has been duly and validly authorized and approved by all necessary limited partnership, corporate or other organizational action by it and (ii) no further actions or proceedings on the part of the Investor are necessary for the execution and delivery of this Agreement and the performance by the Investor of any of its obligations hereunder, (c) this Agreement has been duly and validly executed and delivered by the Investor and constitutes a valid and legally binding obligation of the Investor, enforceable against it in accordance with the terms of this Agreement, (d) the GPC Commitment is less than the maximum amount that the Investor is permitted to invest in any one portfolio investment pursuant to the terms of its constituent documents or otherwise, (e) the Investor has as of the date hereof, and at the Closing will have, sufficient uncalled capital commitments or otherwise has available funds that will at all times be sufficient to satisfy the GPC Commitment plus the aggregate amount of all other commitments and obligations it currently has outstanding,

 

4


and (f) the execution, delivery and performance by the undersigned of this Agreement does not (i) violate the organizational documents of the Investor, (ii) violate any applicable law or judgment or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under, any contract to which the Investor is a party.

13. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is held invalid, illegal or unenforceable by any rule of law or public policy, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby, and, to such end, the provisions of this letter agreement are agreed to be severable; provided, however, that this Agreement may not be enforced without giving effect to Sections 1, 2, 5 and 11 of this Agreement.

[Remainder of Page Intentionally Left Blank]

 

5


 

Sincerely,    
  GPC WH FUND LP
  By:   BFLEXION International GP LLC, its General Partner
  By:  

/s/ Ronald Cami

  Name:   Ronald Cami
  Title:   Manager
  By:  

/s/ Adam Dilluvio

  Name:   Adam Dilluvio
  Title:   Secretary and Treasurer

[SIGNATURE PAGE TO EQUITY COMMITMENT LETTER]


Agreed to, acknowledged and accepted:

 

RESISTANCE ACQUISITION, INC.
By:  

/s/ Adam Dilluvio

Name:   Adam Dilluvio
Title:   Secretary and Treasurer

[SIGNATURE PAGE TO EQUITY COMMITMENT LETTER]


Agreed to, acknowledged and accepted:

 

PARATEK PHARMACEUTICALS, INC.
By:  

/s/ Evan Loh, M.D.

Name:   Evan Loh, M.D.
Title:   Chief Executive Officer

[SIGNATURE PAGE TO EQUITY COMMITMENT LETTER]

Exhibit 107

CALCULATION OF FILING FEE TABLES

Schedule 13E-3

(Form Type)

Paratek Pharmaceuticals, Inc.

GPC WH Fund LP

Novo Holdings A/S

Resistance GP LLC

Resistance TopCo L.P.

Resistance Holdings, Inc.

Resistance Intermediate, Inc.

Resistance Acquisition, Inc.

Resistance Merger Sub, Inc.

Evan Loh, M.D.

(Exact Name of Registrant and Name of Persons Filing Statement)

Table 1: Transaction Valuation

 

       
         Proposed Maximum    
Aggregate Value of
Transaction
 

Fee

Rate

      Amount of    
Filing Fee
       

Fees to Be Paid

  $215,807,568.00(ii)(iii)   .00011020   $23,781.99
       

Fees Previously Paid

  $0.00     $0.00
       

Total Transaction Valuation

  $215,807,568.00      
       

Total Fees Due for Filing

      $23,781.99
       

Total Fees Previously Paid

      $0.00
       

Total Fee Offsets

      $23,781.99(iv)
       

Net Fee Due

          $0.00

Table 2: Fee Offset Claims and Sources

 

               
    

Registrant or Filer

Name

 

Form

or

Filing

Type

 

File

Number

  Initial
Filing
Date
  Filing
Date
 

Fee Offset

Claimed

 

Fee Paid

with Fee

Offset

Source

               
Fee Offset Claims     PREM
14A
  001-36066   June
30,
2023
    $23,781.99    
               
Fee Offset Sources   Paratek
Pharmaceuticals,
Inc.
  PREM
14A
  001-36066       June
30,
2023
      $23,781.99

Capitalized terms used below but not defined herein shall have the meanings assigned to such terms in the Agreement and Plan of Merger, dated June 6, 2023, by and among Paratek Pharmaceuticals, Inc. (the “Company”), Resistance Acquisition, Inc. and Resistance Merger Sub, Inc.

 

(i)

Title of each class of securities to which the transaction applies: Common Stock, par value $0.001 per share of the Company (“Company Common Stock”).

 

(ii)

Aggregate number of securities to which the transaction applies: As of the close of business on June 29, 2023, the maximum number of shares of Company Common Stock to which this transaction applies is estimated to be 72,017,748, which consists of:

 

  a.

57,282,239 issued and outstanding shares of Company Common Stock;

  b.

10,377,361 shares of Company Common Stock reserved and available for future issuance in connection with any conversions of the Company’s 4.75% Convertible Senior Subordinated Notes due 2024;

  c.

34,000 shares of Company Common Stock underlying outstanding and unexercised options that have an exercise price of less than $2.15 (an “In-the-Money Option”);

  d.

70,600 shares of Company Common Stock underlying outstanding and unexercised options that have an exercise price that is equal to or greater than $2.15 and less than $3.00 (a “CVR In-the-Money Option”);

  e.

2,187,565 shares of Company Common Stock underlying restricted stock units; and

  f.

2,065,892 shares of Company Common Stock underlying performance stock units.

 

(iii)

Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

Solely for the purpose of calculating the filing fee, as of the close of business on June 29, 2023, the underlying value of the transaction was calculated as the sum of:

 

  a.

the product of 57,282,239 shares of Company Common Stock entitled to receive the per share consideration of up to $3.00, which consists of $2.15 in upfront per share cash consideration and one contingent value right that the Company estimates could result in additional cash payments of up to $0.85 per share (the “Per Share Merger Consideration”) multiplied by the Per Share Merger Consideration of $3.00;

  b.

the product of 10,377,361 shares of Company Common Stock reserved and available for future issuance in connection with any conversions of the Company’s 4.75% Convertible Senior Subordinated Notes due 2024 multiplied by the Per Share Merger Consideration of $3.00;

  c.

the product of 34,000 shares of Company Common Stock underlying outstanding and unexercised In-the-Money Options, multiplied by $1.09 (which is the excess of $3.00 over $1.91, the weighted average exercise price of such In-the-Money Options);

  d.

the product of 70,600 shares of Company Common Stock underlying outstanding and unexercised CVR In-the-Money Options, multiplied by $0.44 (which is the excess of $3.00 over $2.56, the weighted average exercise price of such CVR In-the-Money Options);

  e.

the product of 2,187,565 shares of Company Common Stock underlying restricted stock units multiplied by the Per Share Merger Consideration of $3.00; and

  f.

the product of 2,065,892 shares of Company Common Stock underlying performance stock units multiplied by the Per Share Merger Consideration of $3.00.

(such sum, the “Total Consideration”).

In accordance with Section 14(g) of the Exchange Act, the filing fee was determined by multiplying the Total Consideration by .00011020.

 

(iv)

The Company previously paid $23,781.99 upon the filing of its Preliminary Proxy Statement on Schedule 14A on June 30, 2023 in connection with the transaction reported hereby.


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