UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2023
Commission file number: 001-39838
Gracell Biotechnologies Inc.
Building 12, Block B, Phase II
Biobay Industrial Park
218 Sangtian St.
Suzhou Industrial Park, 215123
People’s Republic of China
(Address of Principal Executive Offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F x Form 40-F ¨
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Merger Agreement
On December 23, 2023,
Gracell Biotechnologies Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands (“Gracell”
or the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”),
by and among the Company, AstraZeneca Treasury Limited, a private limited company incorporated under the laws of England and Wales (“Parent”)
and Grey Wolf Merger Sub, an exempted company with limited liability incorporated under the laws of the Cayman Islands (the “Merger
Sub”).
Pursuant
to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub will be merged with
and into the Company (the “Merger”), with the Company surviving the Merger as the surviving company and a wholly
owned subsidiary of Parent (the “Surviving Company”). At the effective time of the Merger (the “Effective
Time”), by virtue of the Merger:
| • | each ordinary share, par value $0.0001 per share, of the Company (each a “Share”)
issued and outstanding immediately prior to the Effective Time (other than Shares (including Shares represented by American Depositary
Shares, each representing five Shares (“ADSs”)) held by Parent, Merger Sub, the Company or any of their subsidiaries
and Shares (including ADSs corresponding to such Shares) held by the Company or the Depositary (as defined below) and reserved for issuance
and allocation pursuant to the Company’s equity incentive plans (collectively, “Excluded Shares”), Shares
represented by ADSs, and Shares held by holders who shall have exercised and not withdrawn or otherwise lost their rights to dissent from
the Merger in accordance with Companies Act (As Revised) of the Cayman Islands), shall be cancelled and shall thereafter represent only
the right to receive (i) $2.00 per Share (the “Per Share Closing Amount”) in cash without interest and
(ii) one contingent value right (each a “CVR”) per Share representing the right to receive a contingent
payment of $0.30 per CVR in cash without interest upon the achievement of a milestone set forth in, and subject to and in accordance with
the terms and conditions of, the CVR Agreement (as defined below) (the “Milestone”), in each case subject to
any applicable withholding taxes; and |
| • | each ADS issued and outstanding immediately prior to the Effective Time (other than ADSs representing
the Excluded Shares), together with the underlying Shares represented by such ADSs, shall be cancelled in exchange for the right to receive
(i) $10.00 per ADS in cash without interest and (ii) five CVRs per ADS representing the right to receive a contingent payment
of $0.30 per CVR in cash without interest upon the achievement of the Milestone, in each case, subject to any applicable withholding taxes
and pursuant to the terms and conditions set forth in the Merger Agreement and the Deposit Agreement, dated January 7, 2021, among
the Company, Bank of New York Mellon (the “Depositary”) and all holders from time to time of ADSs issued thereunder
(the “Deposit Agreement”), and in the event of any conflict between the Merger Agreement and the Deposit Agreement,
the Merger Agreement shall prevail and apply. |
Also,
at the Effective Time, by virtue of the Merger:
| • | options to acquire Shares outstanding immediately prior to the Effective Time (“Company Options”)
shall automatically accelerate and become fully vested and exercisable effective immediately prior to, and contingent upon, the Effective
Time, and (a) each Company Option with a per share exercise price that is less than the Per Share Closing Amount (an “In-the-Money
Company Option”) shall be cancelled and converted at the Effective Time into the right to receive (i) an amount in
cash, without interest, equal to the product of (A) the total number of Shares subject to such In-the-Money Company Option multiplied
by (B) the Per Share Closing Amount over the exercise price payable per Share under such In-the-Money Company Option and (ii) one
CVR per Share representing the right to receive a contingent payment of $0.30 per CVR in cash without interest upon the achievement of
the Milestone, in each case subject to any required tax withholding, (b) each Company Option with a per Share exercise price that
is equal to or greater than the Per Share Closing Amount but less than the sum of the Per Share Closing Amount plus $0.30 (each, an “Underwater
Company Option”) shall be cancelled and converted into the right to receive, upon the achievement of the Milestone, an amount
of cash, without interest, equal to the product of (i) the total number of Shares subject to such Underwater Company Option as of
immediately prior to the Effective Time multiplied by (ii) the amount, if any, by which (A) the Per Share Closing Amount
plus $0.30 exceeds (B) the exercise price payable per Share under such Underwater Company Option, less any required tax withholdings
and (c) each Company Option that is outstanding as of immediately prior to the Effective Time and has an exercise price per Share
that is equal to or greater than the sum of the Per Share Closing Amount plus $0.30 shall be cancelled for no consideration; |
| • | each outstanding restricted stock unit that corresponds to a Share (each, a “Company RSU”)
that is outstanding as of immediately prior to the Effective Time shall accelerate and become fully vested effective immediately prior
to, and contingent upon, the Effective Time, and shall be cancelled and converted into the right to receive (a) an amount in cash,
without interest, equal to the Per Share Closing Amount multiplied by the aggregate number of Shares issuable in settlement of
such Company RSU immediately prior to the Effective Time and (b) one CVR with respect to each Share issuable in settlement of such
Company RSU, representing the right to receive a contingent payment of $0.30 per CVR in cash without interest upon the achievement of
the Milestone; and |
| • | each warrant to purchase Shares (each, a “Company Warrant”) outstanding and
not exercised immediately prior to the Effective Time shall be canceled and thereafter represent only the right to receive from the Surviving
Company an amount in cash, without interest, equal to the Black Scholes Value (as defined in the Company Warrant) of the remaining unexercised
portion of such Company Warrant in accordance with its terms, subject to any required tax withholdings. |
The
Merger Agreement contains customary representations, warranties and covenants, including covenants obligating the Company to use
its reasonable best efforts to, and cause each of its subsidiaries to, conduct its and their respective businesses and operations in all
material respects in the ordinary course of business, to cooperate in seeking any required regulatory
approvals and not to engage in certain specified transactions or activities without Parent’s prior consent, and that the parties
will use reasonable best efforts to cause the Merger to be consummated. In addition, subject to certain exceptions, the Company has agreed
not to solicit, initiate or take any action to knowingly facilitate or knowingly encourage the submission or announcement of any acquisition
proposals from third parties or take certain other restricted actions in connection therewith. Notwithstanding the foregoing, if the Company
receives an unsolicited bona fide acquisition proposal that did not result from a breach (other than immaterial non-compliance that does
not adversely affect Parent or Merger Sub) of the non-solicitation provisions of the Merger Agreement, and the Board of Directors
of the Company determines in good faith, after consultations with its financial advisor and outside legal counsel, that such proposal
constitutes, or would reasonably be expected to lead to, a transaction that would be more favorable to the Company’s shareholders,
from a financial point of view, than the Merger (a Superior Proposal as further described and defined in the Merger Agreement) and that
failure to take such action would be inconsistent with the Board of Directors of the Company’s fiduciary duties under applicable
law, then, following delivery of a written notice to Parent, the Company can participate in discussions and negotiations regarding such
acquisition proposal.
The Merger
Agreement also contains certain customary termination rights in favor of each of the Company and Parent, including the Company’s
right, subject to certain limitations, to terminate the Merger Agreement in certain circumstances to accept a Superior Proposal and Parent’s
right to terminate the Merger Agreement if the Board of Directors of the Company changes its recommendation that shareholders of the Company
approve and authorize the Merger Agreement and the Merger (as further described in the Merger Agreement). In addition, either the Company
or Parent may terminate the Merger Agreement if the Merger has not been consummated by June 23, 2024, subject to extension up to
December 23, 2024 in certain specified circumstances if the only condition remaining to be satisfied (other than those conditions that are to be satisfied at the closing)
relates to antitrust laws or foreign investment law clearances. Upon termination of the Merger Agreement under specified circumstances,
the Company will be required to pay Parent a termination fee of $33,800,000. The Merger Agreement also provides that Parent will be required
to pay the Company a reverse termination fee of $41,600,000 upon termination of the Merger Agreement under specified circumstances relating
to the failure to obtain applicable antitrust laws or foreign investment law clearances.
The consummation
of the Merger is subject to customary closing conditions, including (i) the adoption of the Merger Agreement by the affirmative vote
of the holders of Shares representing at least two-thirds of the votes cast by such holders at a shareholders meeting at which at least
50% of the Shares entitled to vote are present in person or by proxy; (ii) the absence of any order, action or law in effect, issued,
enacted, promulgated, entered, enforced, deemed applicable, taken by any governmental entity that prohibits, makes illegal, enjoins or
otherwise prevents the consummation of the Merger; (iii) the expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended; (iv) subject to certain materiality exceptions, the accuracy of certain representations
and warranties of each of the Company and Parent contained in the Merger Agreement and the compliance by each party with the covenants
contained in the Merger Agreement; (v) the absence of a continuing material adverse effect with respect to the Company; and (vi) the
effectiveness of the CVR Agreement.
The
foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is qualified
in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 6-K
(this “Current Report”) and which is incorporated herein by reference.
The
Merger Agreement has been attached as an exhibit to this report to provide information to shareholders and investors regarding its terms.
The Merger Agreement contains representations and warranties that are the product of negotiations among the parties thereto. The assertions
embodied in those representations and warranties are qualified in important part by confidential disclosure schedules delivered by the
Company to Parent and Merger Sub in connection with the Merger Agreement. Moreover, certain representations and warranties in the Merger
Agreement were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed
as material to shareholders or investors or may have been used for the purpose of allocating risk between the parties to the Merger
Agreement. Accordingly, investors should consider the information in the Merger Agreement in conjunction with the entirety of the factual
disclosure about the Company in the Company’s public reports filed with the Securities and Exchange Commission (the “SEC”).
Information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which
subsequent information may or may not be fully reflected in the Company’s public disclosures.
CVR Agreement
Pursuant
to the Merger Agreement, at or immediately prior to the Effective Time, Parent and a rights agent selected by Parent and reasonably acceptable
to the Company (the “Rights Agent”) will enter into a Contingent Value Rights Agreement (“CVR Agreement”)
governing the terms of the CVRs issued pursuant to the Merger Agreement. The Rights Agent
will keep a register of the holders of CVRs (the “Holders”). Holders shall not be permitted to
transfer CVRs (subject to certain limited exceptions).
Each
CVR represents the right to receive $0.30, in cash, without interest, subject to any applicable
withholding taxes, with such payment conditioned upon the receipt by Parent, any of its permitted assignees, any of their respective
affiliates, or any entity that has obtained rights from any of the foregoing entities to file a
biologics license application (a “BLA”) with the United States Food and Drug Administration or any successor
thereto (the “FDA”) for authorization to market or sell any biologic product that contains the product candidate
referred to by the Company as “GC012F”, the composition of matter of which is covered by certain Company patent rights in
the U.S. (the “Product”), or to register, develop or commercialize the Product in the U.S., on or prior to (i) December 31,
2028 of an accelerated approval granted by the FDA of a BLA for the Product for the treatment of multiple myeloma, or (ii) December 31,
2029 of a regulatory approval (excluding an accelerated approval) granted by the FDA of a BLA for the Product for the first-line or second-line
treatment of multiple myeloma. Parent is obligated to use certain specified efforts and resources until December 31, 2028 or 2029,
as applicable, to achieve the Milestone. However, there can be no assurance that the Milestone will be achieved or that the $0.30
Milestone payment will be made. The foregoing description of the CVR Agreement does not purport
to be complete and is qualified in its entirety by references to the full text of the form of CVR Agreement, a copy of which is included
as Exhibit B to the Merger Agreement filed as Exhibit 2.1 to this Current Report and incorporated herein by reference.
Support Agreements
On December 23, 2023, in connection with
the execution of the Merger Agreement, Gracell Venture Holdings Limited, OrbiMed Genesis Master Fund, L.P., The Biotech Growth Trust Plc,
OrbiMed Asia Partners III, L.P., and OrbiMed Partners Master Fund Limited, shareholders of the Company affiliated with certain directors
of the Company (collectively, the “Supporting Shareholders”) entered into Voting and Support Agreements with
Parent (the “Support Agreements”). Under the terms of the Support Agreements, the Supporting Shareholders have
agreed, among other things, to vote their shares in favor of the approval and authorization of the Merger Agreement and the Merger at
an extraordinary general meeting and, subject to certain exceptions, not to transfer any of their shares. As of December 23, 2023,
the Supporting Shareholders owned an aggregate of approximating 25.2% of the outstanding Shares. The Support Agreement will terminate
upon termination of the Merger Agreement and certain other specified events.
The foregoing description of the Support Agreements
does not purport to be complete and is qualified in its entirety by references to the full text of the form of Support Agreement, which
is filed as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
Retention Agreement
In connection with the execution of the Merger
Agreement, Parent entered into a Retention Agreement with William Wei Cao, setting forth the terms and conditions of Dr. Cao’s
continued employment with Parent from and after, and conditioned upon, the consummation of the Merger.
Press Release
On December 26, 2023, the Company issued
a press release (“Press Release”) announcing the execution of the Merger Agreement. The Press Release is attached
hereto as Exhibit 99.2 to this Current Report and is incorporated herein by reference.
CEO Letter to Employees; Frequently Asked Questions to Employees
On December 26, 2023, shortly after the issuance
of Press Release, the Chief Executive Officer of the Company issued a letter to Gracell employees (“Gracell CEO Letter”),
announcing the execution of the Merger Agreement. On the same day, a memo outlining frequently asked questions about the Merger was also
distributed to Gracell employees (the “FAQ”). The Gracell CEO Letter and the FAQ are attached hereto as Exhibit 99.3
and Exhibit 99.4 to this Current Report and is incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
This Current Report contains “forward-looking
statements” within the meaning of The Private Securities Litigation Reform Act of 1995. Statements that are not historical or current
facts, including statements about the beliefs and expectations and statements relating to the proposed transaction involving the Company,
Parent and the Merger Sub, are forward-looking statements. The words “anticipate,” “look forward to,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “target,” “will,”
“would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements
contain these identifying words. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause
actual results to differ materially from those anticipated, including, but not limited to: the satisfaction of the conditions precedent
to the consummation of the proposed transaction, including, the receipt of shareholder approval and regulatory clearances; the possibility
that the milestone related to the contingent value right will not be achieved, even if the proposed Merger is consummated; unanticipated
difficulties or expenditures relating to the proposed transaction; legal proceedings, judgments or settlements, including those that may
be instituted against the Company, the Company’s board of directors and executive officers and others following the announcement
of the proposed transaction; disruptions of current plans and operations caused by the announcement of the proposed transaction; potential
difficulties in employee retention due to the announcement of the proposed transaction; and other risks and uncertainties and the factors
discussed in the section entitled “Risk Factors” in the Company’s most recent annual report on Form 20-F, as well
as discussions of potential risks, uncertainties, and other important factors in the Company’s subsequent filings with the SEC.
Any forward-looking statements contained in this Current Report release speak only as of the date hereof. Except as may be required by
law, neither the Company nor Parent undertakes any duty to update these forward-looking statements.
Additional Information and Where to Find It
In
connection with the proposed transaction, the Company intends to file or furnish relevant materials with the SEC, including a proxy statement.
Promptly after the proxy statement is filed or furnished with the SEC, the Company will mail or otherwise provide the proxy statement
and a proxy card to each of its shareholders entitled to vote at the extraordinary general meeting relating to the proposed transaction.
This communication is not a substitute for the proxy statement or any other document that the Company may file or furnish with the SEC
or send to its shareholders in connection with the proposed transaction. BEFORE MAKING ANY VOTING DECISION, SHAREHOLDERS OF THE COMPANY
ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH
THE PROPOSED TRANSACTION THAT THE COMPANY WILL FILE OR FURNISHED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. The proxy statement and other relevant materials
in connection with the proposed transaction (when they become available), and any other documents filed or furnished with the SEC by the
Company, may be obtained free of charge at the SEC’s website at www.sec.gov or at the Company’s website at www.gracellbio.com.
Participants in the Solicitation
The Company and certain of its directors, executive
officers and other members of management and employees may, under SEC rules, be deemed to be “participants” in the solicitation
of proxies from the Company’s shareholders with respect to the proposed transaction. Information regarding the persons who may be
considered “participants” in the solicitation of proxies will be set forth in the proxy statement relating to the transaction
when it is filed or furnished with the SEC. Additional information regarding the interests of such potential participants will be included
in the proxy statement and the other relevant documents filed or furnished with the SEC when they become available.
No Offer or Solicitation
This Current Report is neither a solicitation
of a proxy, an offer to purchase nor a solicitation of an offer to sell any securities and it is not a substitute for any proxy statement
or other filings that may be made with the SEC should the proposed transaction proceed.
INCORPORATION BY REFERENCE
This
report on Form 6-K is hereby incorporated by reference in the registration statements of Gracell on Form F-3 (No. 333-264545
and No. 333-274191) to the extent not superseded by documents or reports subsequently filed.
EXHIBITS
| Exhibit No. |
Description |
| |
|
| 2.1* |
Merger Agreement, dated December 23, 2023, by and among the Company, Parent and the Merger Sub |
| |
|
| 99.1 |
Form of Voting and Support Agreement |
| |
|
| 99.2 |
Press Release – Gracell Biotechnologies to be acquired by AstraZeneca, furthering cell therapy ambition across oncology and autoimmune diseases, dated December 26, 2023 |
| |
|
| 99.3 |
Gracell CEO Letter to Employees, dated December 26, 2023 |
| |
|
| 99.4 |
Gracell Frequently Asked Questions, dated December 26, 2023 |
*
Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally
a copy of any omitted schedule or exhibit to the SEC upon request.
Signature
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
Gracell Biotechnologies Inc. |
| |
|
| |
By: |
/s/ William Wei Cao |
| |
Name: |
William Wei Cao |
| |
Title: |
Chairman and Chief Executive Officer |
Date: December 26, 2023
Exhibit 2.1
Execution Version
AGREEMENT AND PLAN OF MERGER
by and among
ASTRAZENECA TREASURY LIMITED,
GREY WOLF MERGER SUB
and
GRACELL BIOTECHNOLOGIES INC.
Dated as of December 23, 2023
TABLE OF CONTENTS
| |
|
|
Page |
| |
|
|
|
| Article I THE MERGER |
2 |
| |
|
| Section 1.1 |
|
The Merger |
2 |
| Section 1.2 |
|
Closing |
2 |
| Section 1.3 |
|
Effective Time |
3 |
| Section 1.4 |
|
Effect of the Merger |
3 |
| Section 1.5 |
|
Company Memorandum and Articles of Association |
3 |
| Section 1.6 |
|
Directors and Officers |
3 |
| |
|
|
|
| Article II EFFECT OF MERGER ON ISSUED
SHARE CAPITAL; MERGER CONSIDERATION; EXCHANGE OF CERTIFICATES |
4 |
| |
|
| Section 2.1 |
|
Effect on Share Capital |
4 |
| Section 2.2 |
|
Treatment of Company Equity Awards |
6 |
| Section 2.3 |
|
Exchange of Certificates, Etc. |
8 |
| Section 2.4 |
|
Dissenting Shares |
14 |
| Section 2.5 |
|
Adjustments |
14 |
| Section 2.6 |
|
Termination of Deposit Agreement |
14 |
| Section 2.7 |
|
Agreement of Fair Value |
15 |
| |
|
|
|
| Article III REPRESENTATIONS AND WARRANTIES
OF THE COMPANY |
15 |
| |
|
| Section 3.1 |
|
Organization and Qualification; Subsidiaries |
15 |
| Section 3.2 |
|
Memorandum and Articles of Association |
15 |
| Section 3.3 |
|
Capitalization of the Company |
16 |
| Section 3.4 |
|
Capitalization of the Company’s Subsidiaries |
17 |
| Section 3.5 |
|
Authority |
18 |
| Section 3.6 |
|
No Conflict; Required Filings and Consents |
19 |
| Section 3.7 |
|
Compliance |
19 |
| Section 3.8 |
|
SEC Filings; Financial Statements |
20 |
| Section 3.9 |
|
No Undisclosed Liabilities |
22 |
| Section 3.10 |
|
Indebtedness and Security |
22 |
| Section 3.11 |
|
Material Contracts |
22 |
| Section 3.12 |
|
Absence of Certain Changes or Events. |
25 |
| Section 3.13 |
|
Absence of Litigation |
26 |
| Section 3.14 |
|
Employee Benefit Plans |
26 |
| Section 3.15 |
|
Labor and Employment Matters |
28 |
| Section 3.16 |
|
Insurance |
29 |
| Section 3.17 |
|
Properties |
29 |
| Section 3.18 |
|
Tax Matters |
30 |
| Section 3.19 |
|
Proxy Statement |
31 |
| Section 3.20 |
|
Regulatory Matters |
32 |
| Section 3.21 |
|
Intellectual Property |
34 |
| Section 3.22 |
|
Data Protection |
36 |
| Section 3.23 |
|
Environmental Matters |
37 |
| Section 3.24 |
|
Opinion of Financial Advisor |
37 |
| Section 3.25 |
|
Brokers |
37 |
| Section 3.26 |
|
VIE Entities and Control Documents |
37 |
| Section 3.27 |
|
Anti-Takeover Provisions |
39 |
| Section 3.28 |
|
No Other Representations or Warranties |
39 |
| |
|
|
|
| Article IV REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB |
40 |
| |
|
| Section 4.1 |
|
Organization |
40 |
| Section 4.2 |
|
Authority |
40 |
| Section 4.3 |
|
No Conflict; Required Filings and Consents |
41 |
| Section 4.4 |
|
Absence of Litigation |
41 |
| Section 4.5 |
|
Sufficiency of Funds |
42 |
| Section 4.6 |
|
Operations and Ownership of Merger Sub |
42 |
| Section 4.7 |
|
Brokers |
42 |
| Section 4.8 |
|
Ownership of Shares |
42 |
| Section 4.9 |
|
Information Supplied |
42 |
| Section 4.10 |
|
No Other Representations or Warranties |
43 |
| |
|
|
|
| Article V CONDUCT OF BUSINESS PENDING
THE MERGER |
44 |
| |
|
| Section 5.1 |
|
Conduct of Business of the Company Pending the Merger |
44 |
| Section 5.2 |
|
No Control of the Company’s Business |
48 |
| Article VI ADDITIONAL AGREEMENTS |
48 |
| |
|
| Section 6.1 |
|
Proxy Statement |
48 |
| Section 6.2 |
|
Shareholders Meeting |
49 |
| Section 6.3 |
|
No Solicitation |
50 |
| Section 6.4 |
|
Efforts; Required Action and Forbearance |
55 |
| Section 6.5 |
|
Notification of Certain Matters |
58 |
| Section 6.6 |
|
Access to Information; Confidentiality |
58 |
| Section 6.7 |
|
Stock Exchange Delisting |
59 |
| Section 6.8 |
|
Publicity |
59 |
| Section 6.9 |
|
Employee Matters |
60 |
| Section 6.10 |
|
Directors’ and Officers’ Indemnification
and Insurance |
62 |
| Section 6.11 |
|
Takeover Statutes |
64 |
| Section 6.12 |
|
CVR Agreement |
64 |
| Section 6.13 |
|
Transaction Litigation |
64 |
| Section 6.14 |
|
Resignation of Directors |
64 |
| Section 6.15 |
|
Obligations of Merger Sub; Obligations of Subsidiaries |
64 |
| Section 6.16 |
|
Merger Sub Shareholder Consent |
64 |
| |
|
|
|
| Article VII CONDITIONS OF MERGER |
65 |
| |
|
| Section 7.1 |
|
Conditions to Obligation of Each Party to Effect the
Merger |
65 |
| Section 7.2 |
|
Conditions to Obligations of Parent and Merger Sub |
66 |
| Section 7.3 |
|
Conditions to Obligations of the Company |
66 |
| Section 7.4 |
|
Frustration of Closing Conditions |
67 |
| |
|
|
|
| Article VIII TERMINATION |
67 |
| |
|
| Section 8.1 |
|
Termination |
67 |
| Section 8.2 |
|
Effect of Termination |
69 |
| Section 8.3 |
|
Expenses |
71 |
| |
|
|
|
| Article IX GENERAL PROVISIONS |
71 |
| |
|
| Section 9.1 |
|
Non-Survival of Representations, Warranties, Covenants
and Agreements |
71 |
| Section 9.2 |
|
Modification or Amendment |
72 |
| Section 9.3 |
|
Waiver |
72 |
| Section 9.4 |
|
Notices |
72 |
| Section 9.5 |
|
Certain Definitions |
73 |
| Section 9.6 |
|
Severability |
88 |
| Section 9.7 |
|
Entire Agreement; Assignment |
89 |
| Section 9.8 |
|
Parties in Interest |
89 |
| Section 9.9 |
|
Governing Law |
89 |
| Section 9.10 |
|
Headings |
89 |
| Section 9.11 |
|
Counterparts |
89 |
| Section 9.12 |
|
Specific Performance |
90 |
| Section 9.13 |
|
Jurisdiction and Venue |
90 |
| Section 9.14 |
|
WAIVER OF JURY TRIAL |
91 |
| Section 9.15 |
|
Interpretation |
91 |
| Schedule I |
|
95 |
| |
|
|
| Schedule II |
|
96 |
| |
|
|
| Schedule III |
|
97 |
| |
|
|
| Exhibit A |
|
98 |
| |
|
|
| Exhibit B |
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108 |
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| Schedules: |
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| Schedule I |
Support Agreement Shareholders |
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| Schedule II |
RETENTION AGREEMENT EMPLOYEES |
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| Schedule III |
Parent Knowledge Parties |
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| Exhibits: |
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| Exhibit A |
Plan of Merger |
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| Exhibit B |
Form of Contingent
Value Rights Agreement |
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF
MERGER, dated as of December 23, 2023 (this “Agreement”), is entered into by and among AstraZeneca Treasury Limited,
a private limited company incorporated under the laws of England and Wales (“Parent”), Grey Wolf Merger Sub, an exempted
company with limited liability incorporated under the Laws of the Cayman Islands and a wholly owned Subsidiary of Parent (“Merger
Sub”), and Gracell Biotechnologies Inc., an exempted company with limited liability incorporated under the Laws of the Cayman
Islands (the “Company” and, together with the Parent and Merger Sub, the “Parties” and each, a
“Party”).
RECITALS
WHEREAS, upon the terms and
subject to the conditions of this Agreement and in accordance with Part XVI of the Companies Act (As Revised) of the Cayman Islands
(the “CICA”), it is proposed that Merger Sub will merge with and into the Company (the “Merger”),
with the Company being the surviving company (as defined in the CICA) and becoming a wholly owned Subsidiary of Parent as a result of
the Merger;
WHEREAS, the board of directors
of the Company (the “Board of Directors”) has unanimously adopted resolutions: (a) determining that it is fair
to, and in the commercial interests of, the Company and declared that it is advisable, to enter into this Agreement, the Plan of Merger
and the other Transaction Documents to which the Company is a party; (b) approving the execution, delivery and performance by the
Company of this Agreement, the Plan of Merger, and the other Transaction Documents to which the Company is a party, and the consummation
of the Merger and the other transactions contemplated by this Agreement and the CVR Agreement (collectively, the “Transactions”)
upon the terms and subject to the conditions set forth herein and therein; (c) determining to recommend the approval and authorization
of the execution, delivery and performance by the Company of this Agreement, the Plan of Merger and the other Transaction Documents to
which the Company is a party, and the consummation of the Transactions (including the Merger) to the shareholders of the Company at the
Shareholders Meeting; and (iv) directing that this Agreement, the Merger and the other Transactions be submitted to the shareholders
of the Company at the Shareholders Meeting for their approval;
WHEREAS, (a) the respective
boards of directors of Parent and Merger Sub have (i) authorized and approved the execution, delivery and performance by Parent
and Merger Sub, respectively, of this Agreement, the Plan of Merger, the CVR Agreement and the other Transaction Documents to which Parent
or Merger Sub is or will be party, and the consummation of the Transactions, and (ii) declared it advisable for Parent and Merger
Sub, respectively, to enter into this Agreement and the other Transaction Documents to which Parent or Merger Sub is or will be party
(including for Merger Sub to enter into the Plan of Merger) and to consummate the Transactions upon the terms and subject to the conditions
set forth herein and (b) Parent, as the sole shareholder of Merger Sub, has approved the execution, delivery and performance by
Merger Sub of this Agreement, the Plan of Merger and the other Transaction Documents to which Merger Sub is or will be party, and the
consummation of the Transactions upon the terms and subject to the conditions set forth herein;
WHEREAS, as a condition and
material inducement to Parent’s willingness to enter into this Agreement, concurrently with the execution and delivery of this
Agreement, each of the shareholders of the Company or holders of ADSs set forth on Schedule I has entered into a support agreement
(each, a “Support Agreement”) with Parent, whereby, among other things, such shareholder or ADS holder has agreed
to vote in favor of this Agreement, the Plan of Merger, and the other Transaction Documents to which the Company is a party, and the
consummation of the Transactions and to take actions in furtherance of the Transactions, in each case on the terms and subject to the
conditions set forth therein;
WHEREAS, at or immediately
prior to the Effective Time, Parent and a rights agent selected by Parent and reasonably acceptable to the Company (the “Rights
Agent”) will enter into a Contingent Value Rights Agreement, in the form attached hereto as Exhibit B (subject
to changes permitted by Section 6.12) (the “CVR Agreement”);
WHEREAS, concurrently with
the execution and delivery of this Agreement, and as a condition and inducement to Parent and Merger Sub to enter this Agreement, each
of the Persons listed on Schedule II has entered into and delivered to Parent a retention agreement with Parent or an Affiliate
thereof, to be effective at, and contingent upon, the Effective Time, regarding such Person’s employment with Parent and its Affiliates
following Closing; and
WHEREAS, the Company, Parent
and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with this Agreement.
NOW, THEREFORE, in consideration
of the foregoing premises, and of the representations, warranties, covenants and agreements contained herein, and intending to be legally
bound hereby, the Parties agree as follows:
Article I
THE
MERGER
Section 1.1 The
Merger. Upon the terms and subject to the satisfaction or written waiver (where permitted by applicable Law) of the conditions set
forth in Article VII, and in accordance with the applicable provisions of the CICA, Merger Sub shall be merged with and into
the Company at the Effective Time and the shares in Merger Sub cancelled. As a result of the Merger, Merger Sub shall cease to exist
and will be struck off the Register of Companies by the Registrar of Companies in the Cayman Islands (the “Registrar of Companies”)
and the Company shall survive the Merger and continue as the surviving company (as defined in the CICA) of the Merger (the “Surviving
Company”).
Section 1.2 Closing.
Upon the terms and subject to the conditions set forth in this Agreement, the closing of the Merger (the “Closing”)
shall take place (a) at 8:00 a.m., Eastern Standard Time, via electronic exchange of documents and signature pages, on the third
Business Day following the date on which the conditions set forth in Article VII (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted hereunder and by applicable Law,
waiver of such conditions at the Closing), have been satisfied or, to the extent permitted hereunder and by applicable Law, waived in
accordance with this Agreement, or (b) at such other time and place as the Company and Parent may agree in writing. The date on
which the Closing actually occurs is referred to herein as the “Closing Date.” A condition set forth in Article VII
may only be waived in writing by the Party or Parties entitled to such condition under this Agreement.
Section 1.3 Effective
Time. Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Parent, Merger Sub and the Company
shall (a) cause the Merger to be consummated under the CICA by executing and filing the Plan of Merger with respect to the Merger
substantially in the form attached hereto as Exhibit A (the “Plan of Merger”) with the Registrar of Companies
as provided by Section 233 of the CICA and (b) make any other filings, recordings or publications required to be made by the
Company or Merger Sub, in such forms as are required by, and executed in accordance with, the applicable provisions of the CICA. The
Merger shall become effective on the date the Plan of Merger is registered by the Registrar of Companies or on such other date as specified
in the Plan of Merger in accordance with the CICA (the “Effective Time”).
Section 1.4 Effect
of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement, the Plan of Merger and in
the applicable provisions of the CICA. Without limiting the generality of the foregoing, at the Effective Time, all the property, rights,
privileges, powers and franchises of each of the Company and Merger Sub shall immediately vest in the Surviving Company, and all debts,
liabilities and duties of each of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Company
in accordance with the provisions of the CICA and as provided in this Agreement.
Section 1.5 Company
Memorandum and Articles of Association. At the Effective Time, in accordance with the terms of the Plan of Merger and without any
further action on the part of the Parties, the memorandum and articles of association of Merger Sub, as in effect immediately prior to
the Effective Time, shall become the memorandum and articles of association of the Surviving Company, save and except that (a) all
references therein to the name “Grey Wolf Merger Sub” shall be amended to “Gracell Biotechnologies Inc.”; (b) all
references therein to the authorized share capital of the Surviving Company shall be amended to refer to the correct authorized share
capital of the Surviving Company as approved in the Plan of Merger, until thereafter amended in accordance with the applicable provisions
of the CICA and such memorandum and articles of association; and (c) such memorandum and articles of association shall include such
indemnification provisions as required by Section 6.10(b).
Section 1.6 Directors
and Officers.
(a) The
directors of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be the directors of the Surviving
Company, unless otherwise determined by Parent prior to the Effective Time, each to hold office in accordance with the memorandum and
articles of association of the Surviving Company until their respective successors are duly elected and qualified or until such director’s
earlier death, resignation or removal.
(b) The
officers of Merger Sub immediately prior to the Effective Time shall, from and after the Effective Time, be the officers of the Surviving
Company, unless otherwise determined by Parent prior to the Effective Time, each to hold office in accordance with the memorandum and
articles of association of the Surviving Company until their respective successors are duly elected and qualified or until such officer’s
earlier death, resignation or removal.
Article II
EFFECT
OF MERGER ON ISSUED SHARE CAPITAL; MERGER CONSIDERATION; EXCHANGE OF CERTIFICATES
Section 2.1 Effect
on Share Capital. At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Parent, Merger
Sub or the holders of any of the following securities:
(a) Treatment
of Shares. Each ordinary share, par value $0.0001 per share, of the Company (each, a “Share”) issued and outstanding
immediately prior to the Effective Time (other than the Excluded Shares, Dissenting Shares and Shares represented by ADSs) shall be cancelled
and shall thereafter represent only the right to receive (i) $2.00 per Share in cash without interest (the “Per Share Closing
Amount”) and (ii) one contingent value right (each, a “CVR”) per Share representing the right to receive
a contingent payment of $0.30 per CVR in cash without interest upon the achievement of the Milestone set forth in, and subject to and
in accordance with the terms and conditions of, the CVR Agreement (the Per Share Closing Amount plus one CVR, collectively, the “Per
Share Merger Consideration”), in each case, subject to any applicable withholding Taxes. At the Effective Time, all of the
Shares that have been cancelled and thereafter represent only the right to receive the Per Share Merger Consideration as provided in
the previous sentence of this Section 2.1(a) shall no longer be issued and outstanding, shall be cancelled and cease
to exist, and each former holder of Shares (other than the Excluded Shares, Dissenting Shares and Shares represented by ADSs) that were
outstanding immediately prior to the Effective Time will cease to have any rights with respect to such Shares, except for the right to
receive the Per Share Merger Consideration without interest, to be paid in accordance with this Article II and as set forth
in the CVR Agreement.
(b) Treatment
of American Depositary Shares. Each American Depositary Share, representing five Shares (each, an “ADS”), issued
and outstanding immediately prior to the Effective Time (other than ADSs representing the Excluded Shares), together with the underlying
Shares represented by such ADSs, shall be cancelled and shall thereafter represent only the right to receive (i) $10.00 per ADS
in cash without interest (the “Per ADS Closing Amount”) and (ii) five CVRs per ADS representing the right to
receive a contingent payment of $0.30 per CVR in cash without interest upon the achievement of the Milestone set forth in, and subject
to and in accordance with the terms and conditions of, the CVR Agreement (the Per ADS Closing Amount plus five CVRs, collectively, the
“Per ADS Merger Consideration”), in each case, subject to any applicable withholding Taxes and pursuant to the terms
and conditions set forth in this Agreement and the Deposit Agreement, and in the event of any conflict between this Agreement and the
Deposit Agreement, this Agreement shall prevail and apply. The Per ADS Closing Amount shall be paid by the Paying Agent to the Depositary
as the registered holder of such cancelled underlying Shares and the Depositary shall distribute the Per ADS Closing Amount and any additional
payment that may become payable in accordance with Section 2.1(b)(ii) to the holders of such ADSs pursuant to the terms
and conditions set forth in this Agreement, the CVR Agreement and the Deposit Agreement. At the Effective Time, all such ADSs (and such
underlying Shares represented by the ADSs) that have been cancelled and thereafter represent only the right to receive the Per ADS Merger
Consideration as provided in this Section 2.1(b) shall no longer be issued and outstanding and shall be cancelled, and
shall cease to exist, and each former holder of any such ADSs will cease to have any rights with respect to such ADSs (and such underlying
Shares represented by the ADSs), except the right to receive the Per ADS Merger Consideration without interest, to be paid in accordance
with this Article II and as set forth in the CVR Agreement and the Deposit Agreement.
(c) Treatment
of Company Warrants. Each warrant to purchase Shares (each, a “Company Warrant”) outstanding and not exercised
immediately prior to the Effective Time shall be cancelled and thereafter represent only the right to receive from (or from a Person
on behalf of) the Surviving Company an amount in cash, without interest, equal to the Black Scholes Value (as defined in the Company
Warrant) of the remaining unexercised portion of each Company Warrant in accordance with its terms (the “Company Warrant Consideration”),
subject to any required Tax withholdings as provided in Section 2.3(e)).
(d) Treatment
of Excluded Shares. Each of the Excluded Shares and the ADSs representing the Excluded Shares, in each case issued and outstanding
immediately prior to the Effective Time, shall be cancelled and cease to exist without payment of any consideration or distribution therefor.
(e) Treatment
of Dissenting Shares. Each Share that is issued and outstanding immediately prior to the Effective Time and is held by a holder of
Shares who shall have validly exercised and not effectively withdrawn or have not otherwise lost their rights to dissent from the Merger
(“Dissenter Rights”), in accordance with Section 238 of the CICA (collectively, the “Dissenting Shares”,
and holders of the Dissenting Shares collectively, the “Dissenting Shareholders”) shall be cancelled and cease to
exist at the Effective Time, and the Dissenting Shareholders shall not be entitled to receive the Per Share Merger Consideration (except
as provided in this Section 2.1(e)), and each such Dissenting Shareholder shall instead be entitled to receive only the payment
of the fair value of such Dissenting Shares held by them determined in accordance with the provisions of Section 238 of the CICA
(the “Dissenting Fair Value Payment”). If any Dissenting Shareholder shall have effectively withdrawn or lost its
right to dissent in accordance with the CICA, then as of the later of the Effective Time and the occurrence of such event, the Dissenting
Shareholder shall, in respect of its Shares cancelled at the Effective Time, be entitled to receive the Per Share Merger Consideration
without interest, pursuant to Section 2.1(a) and the CVR Agreement and such Shares shall not be deemed to be Dissenting
Shares.
(f) Share
Capital of Merger Sub. Immediately following cancellation of the Shares and ADSs pursuant to the terms and conditions set out in
Section 2.1(a) to Section 2.1(e), each ordinary share of Merger Sub that is issued and outstanding immediately
prior to the Effective Time shall be cancelled and the Surviving Company shall issue to Parent, in consideration for its payment of the
aggregate Per Share Merger Consideration, the aggregate Per ADS Per ADS Closing Amount and any additional payment that may become payable
in accordance with Section 2.1(b)(ii), and any Dissenting Fair Value Payment in accordance with this Agreement, such validly
issued, fully paid and non-assessable ordinary shares of the Surviving Company as set out in the Plan of Merger, which shall be reflected
in the updated register of members of the Surviving Company. Such ordinary shares of the Surviving Company shall constitute the only
issued and outstanding share capital of the Surviving Company upon the Effective Time.
Section 2.2 Treatment
of Company Equity Awards.
(a) Treatment
of Company Options. Each Company Option that is outstanding as of immediately prior to the Effective Time shall automatically accelerate
and become fully vested and exercisable effective immediately prior to, and contingent upon, the Effective Time.
(i) Treatment
of In-the-Money Company Options. As of the Effective Time, by virtue of the Merger and without any further action on the part of
the holder thereof, Parent, Merger Sub or the Company, each Company Option that is outstanding as of immediately prior to the Effective
Time and has a per-share exercise price that is less than the Per Share Closing Amount (each, an “In-the-Money Company Option”)
shall be cancelled and converted into the right to receive (A) an amount in cash, without interest, equal to the product of (1) the
total number of Shares subject to such In-the-Money Company Option immediately prior to the Effective Time multiplied by (2) the
excess of (I) the Per Share Closing Amount over (II) the exercise price payable per Share under such In-the-Money Company Option,
which amount shall be paid in accordance with Section 2.2(c) (the “In-the-Money Company Option Closing Amount”),
and (B) one CVR with respect to each Share subject to such In-the-Money Company Option, representing the right to receive a contingent
payment of $0.30 per CVR in cash without interest upon the achievement of the Milestone set forth in, and subject to and in accordance
with the terms and conditions of the CVR Agreement (in each case, subject to any required Tax withholdings as provided in Section 2.3(e))
((A) and (B) collectively the “In-the-Money Company Option Consideration”); and
(ii) Treatment
of Underwater Options. As of the Effective Time, by virtue of the Merger and without any further action on the part of the holder
thereof, Parent, Merger Sub or the Company, each Company Option that is outstanding as of immediately prior to the Effective Time and
has an exercise price per Share that is equal to or greater than the Per Share Closing Amount but less than the sum of the Per Share
Closing Amount plus $0.30 (each, an “Underwater Company Option”) shall be canceled and, subject to the remaining terms
of this Section 2.2(a)(ii), converted into the right to receive, as of the delivery of the Milestone Notice, an amount in
cash, without interest, equal to the product of (A) the total number of Shares subject to such Underwater Company Option immediately
prior to the Effective Time multiplied by (B) the amount, if any, by which (I) the Per Share Closing Amount plus
$0.30 exceeds (II) the exercise price payable per Share under such Underwater Company Option (in each case, subject to any required
Tax withholdings as provided in Section 2.3(e)) (the “Underwater Company Option Consideration”). Notwithstanding
the foregoing, (x) no amount shall be payable in respect of an Underwater Company Option if the Milestone is not achieved and no
amount is paid in respect of a CVR (as determined in accordance with the CVR Agreement) and (y) in no event shall a holder of an
Underwater Company Option be entitled to receive in respect of an Underwater Company Option any payment if the sum of the Per Share Closing
Amount plus $0.30 (less any required Tax withholdings as provided in Section 2.3(e)) is equal to or less than the per share
exercise price of such Underwater Company Option.
(iii) Treatment
of Other Options. Notwithstanding anything in this Agreement to the contrary, as of the Effective Time, by virtue of the Merger and
without any further action on the part of the holder thereof, Parent, Merger Sub or the Company, each Company Option that is outstanding
as of immediately prior to the Effective Time and has an exercise price per Share that is equal to or greater than the sum of the Per
Share Closing Amount plus $0.30 shall be canceled for no consideration.
(b) Treatment
of Company RSUs. Each Company RSU that is outstanding as of immediately prior to the Effective Time shall accelerate and become fully
vested effective immediately prior to, and contingent upon, the Effective Time. As of the Effective Time, by virtue of the Merger and
without any further action on the part of the holder thereof, Parent, Merger Sub or the Company, each Company RSU that is outstanding
immediately prior to the Effective Time shall be cancelled and converted into the right to receive (i) an amount in cash, without
interest, equal to (A) the Per Share Closing Amount multiplied by (B) the aggregate number of Shares issuable in settlement
of such Company RSU immediately prior to the Effective Time (the “Company RSU Closing Amount”), which amount shall
be paid in accordance with Section 2.2(c), and (ii) one CVR with the respect to each Share issuable in settlement of
such Company RSU, representing the right to receive a contingent payment of $0.30 per CVR in cash without interest upon the achievement
of the Milestone set forth in, and subject to and in accordance with the terms and conditions of, the CVR Agreement (in each case, subject
to any required Tax withholdings as provided in Section 2.3(e)) ((i) and (ii) collectively, the “Company
RSU Consideration” and, together with the Per Share Merger Consideration, the Per ADS Merger Consideration, the Company Warrant
Consideration, the In-the-Money Company Option Consideration and the Underwater Company Option Consideration, the “Merger Consideration”).
(c) Payment
Procedures. As promptly as reasonably practicable following the Closing Date, but in no event later than the next regularly scheduled
payroll date that occurs more than five Business Days following the Closing Date, Parent shall cause the Surviving Company or an Affiliate
thereof to pay to the applicable holders of In-the-Money Company Options and Company RSUs, through its or such Affiliate’s payroll
system or payroll provider, the In-the-Money Company Option Closing Amount and the Company RSU Closing Amount required to be paid to
such holders in respect of In-the-Money Company Options and Company RSUs that are cancelled and converted pursuant to Section 2.2(a) and
Section 2.2(b) (in each case, subject to any required Tax withholdings as provided in Section 2.3(e)). As
soon as reasonably practicable following the delivery of the Milestone Notice, but in no event later than the next regularly scheduled
payroll date that occurs more than seven Business Days following the delivery of the Milestone Notice (and in all events no later than
the date that is 45 days following the date on which the Milestone is achieved), Parent shall cause the Surviving Company or an Affiliate
thereof to, pay the applicable former holders of Company Options and Company RSUs, through the Surviving Company’s or such Affiliate’s
payroll system or payroll provider, such holder’s payment, if any, due in accordance with Section 2.2(a)(i)(B), Section 2.2(a)(ii) and
Section 2.2(b)(ii). Notwithstanding anything in this Agreement to the contrary, it is the intent of the parties that the
Milestone shall be deemed to constitute a substantial risk of forfeiture within the meaning of Section 409A of the Code. Notwithstanding
anything to the contrary in this Section 2.2(c), if any payment contemplated by Section 2.2(a)(i), Section 2.2(a)(ii) and
Section 2.2(b) is payable to a holder of a Company Equity Award who is not, and was not upon the grant of or at any
time during the vesting period of the Company Equity Award, an employee of the Company or a Subsidiary of the Company for employment
Tax purposes, then Parent shall cause the Surviving Company or an Affiliate thereof to, pay any amounts due to such holder pursuant to
Section 2.2(a)(i), Section 2.2(a)(ii) and Section 2.2(b) through the Surviving Company’s
or an Affiliate’s thereof accounts payable system (subject to any required Tax withholdings as provided in Section 2.3(e)).
(d) Corporate
Actions; Termination of Company Share Plans. As promptly as practicable following the date hereof and in any event prior to the Effective
Time, the Company, the Board of Directors or the relevant committee of the Board of Directors, as applicable, shall pass any resolutions
and take all actions necessary and appropriate to (i) effectuate the provisions of this Section 2.2, (ii) ensure
that after the Effective Time, no holder of any Company Equity Award shall have any right thereunder to acquire any securities of the
Company, the Surviving Company or Parent, or to receive any payment or benefit with respect to any Company Equity Award, expect as provided
in this Section 2.2, and (iii) to terminate the Company Share Plans and all award agreements thereunder, effective as
of, and contingent upon, the Effective Time such that no Company Equity Awards or other rights with respect to Shares shall be granted
or outstanding following the Effective Time.
Section 2.3 Exchange
of Certificates, Etc.
(a) Paying
Agent. Prior to the Closing, Parent or Merger Sub shall enter into an agreement in form and substance reasonably acceptable to the
Company (including the identity of the paying agent) with a paying agent selected by Parent to act as agent for the holders of Shares
(other than the Excluded Shares, Dissenting Shares and Shares represented by ADSs), ADSs (other than ADSs representing Excluded Shares)
and Company Warrants in connection with the Merger (the “Paying Agent”) to receive payments required to be made pursuant
to Section 2.1(a)(i), Section 2.1(b)(i), Section 2.1(c) or, when required thereby, Section 2.1(e) (collectively,
the “Closing Consideration”); provided that the Paying Agent shall not act as agent with respect to any amount
payable with respect to the CVRs. On the Closing Date and promptly following the Effective Time, or in the case of payments pursuant
to Section 2.1(e) when required thereby, Parent shall deposit, or cause to be deposited, with the Paying Agent, for
the benefit of the holders of Shares (other than the Excluded Shares, Dissenting Shares and Shares represented by ADSs), ADSs (other
than ADSs representing Excluded Shares) and Company Warrants a cash amount in immediately available funds that is sufficient in the aggregate
to pay the full amount of Closing Consideration (such cash being hereinafter referred to as the “Exchange Fund”).
The Paying Agent shall invest the Exchange Fund as reasonably directed by Parent; provided that such investments shall be in obligations
of or guaranteed by the United States, in commercial paper obligations rated the highest quality by Moody’s Investors Service, Inc.
or Standard & Poor’s Corporation, respectively, in certificates of deposit, bank repurchase agreements or banker’s
acceptances of commercial banks with capital exceeding $1 billion, or in money market funds having a rating in the highest investment
category granted by a recognized credit rating agency at the time of acquisition or a combination of the foregoing and, in any such case,
no such instrument shall have a maturity exceeding three months; provided that no such investment shall affect the Closing Consideration
payable to the holders of Shares (other than the Excluded Shares, Dissenting Shares and Shares represented by ADSs), ADSs (other than
ADSs representing Excluded Shares) and Company Warrants and, to the extent necessary to pay the Closing Consideration, Parent shall promptly
provide or cause to be provided additional funds to the Paying Agent for the benefit of holders of Shares (other than the Excluded Shares,
Dissenting Shares and Shares represented by ADSs), ADSs (other than ADSs representing Excluded Shares) and Company Warrants entitled
to receive such consideration in the amount of any such losses. Any interest and other income resulting from such investment shall become
a part of the Exchange Fund, and any amounts in excess of the amounts payable for the Closing Consideration shall be promptly returned
to Parent or the Surviving Company, as requested by Parent. The funds deposited with the Paying Agent pursuant to this Section 2.3(a) shall
not be used for any purpose other than as contemplated by this Section 2.3(a) and Section 2.3(e).
(b) Exchange
Procedures.
(i) Transmittal
Materials. Promptly after the Effective Time (and in any event within three Business Days thereafter), Parent and the Surviving Company
shall cause the Paying Agent to mail or otherwise provide to each former holder of Shares of record of a certificate or certificates
that immediately prior to the Effective Time represented issued and outstanding Shares, if any (“Certificates”), and
each former holder of record of Shares held in book-entry form (“Book-Entry Shares”) (in each case, other than holders
of Excluded Shares, Dissenting Shares and Shares represented by ADSs) and each former holder of certificates representing Company Warrants
(the “Warrant Certificates”) and each former holder of Company Warrants held in book-entry form (“Book-Entry
Warrants”) (A) transmittal materials, including a letter of transmittal in customary form as agreed by the Parties, specifying
that delivery shall be effected, and risk of loss and title to the Certificates and Warrant Certificates will pass, only upon delivery
of the Certificates or Warrant Certificates to the Paying Agent or, with respect to Book-Entry Shares or Book-Entry Warrants, only upon
delivery of an “agent’s message” regarding the book-entry transfer of Book-Entry Shares or Book-Entry Warrants (or
such other evidence, if any, of the transfer as the Paying Agent may reasonably request), such transmittal materials to be in such form
and have such other provisions as Parent and the Company may reasonably agree, and (B) instructions for use in effecting the surrender
of Certificates or Warrant Certificates or exchange of Book-Entry Shares or Book-Entry Warrants, as applicable, for the aggregate Closing
Consideration payable in respect thereof. Promptly following any Shares ceasing to be Dissenting Shares (and in any event within five
Business Days thereafter), Parent shall cause the Paying Agent to mail or otherwise provide to the applicable shareholders the documents
described in the immediately preceding sentence.
(ii) Share
Certificates. Upon surrender of Certificates to the Paying Agent (together with a letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, and such other documents as may reasonably be required pursuant to such instructions
(as applicable)), in addition to the right to receive CVRs under this Agreement and the CVR Agreement, each holder of record of one or
more Certificates, if any (other than Certificates representing Excluded Shares, Dissenting Shares and Shares represented by ADSs), shall
be entitled to receive, and Parent shall cause the Paying Agent to pay and deliver as promptly as reasonably practicable after the Effective
Time, a cash amount in immediately available funds (subject to any required Tax withholdings as provided in Section 2.3(e))
equal to the product obtained by multiplying (A) the number of Shares represented by such surrendered Certificates by (B) the
Per Share Closing Amount, and the Certificates so surrendered shall immediately be cancelled. No interest will be paid or accrued on
any amount payable upon due surrender of the Certificates to the Paying Agent. In the event that any Certificates shall have been lost,
stolen or destroyed, the Paying Agent shall issue a check in exchange for such lost, stolen or destroyed Certificates, upon the making
of an affidavit of that fact by the holder thereof and, if reasonably required by the Surviving Company or the Paying Agent, the posting
by such holder of a customary bond issued for lost, stolen or destroyed share certificates, in such reasonable amount as the Surviving
Company or the Paying Agent may direct (which shall not exceed the aggregate Per Share Closing Amount payable to such holder), as indemnity
against any claim that may be made against the Surviving Company or the Paying Agent with respect to such Certificates, an amount in
cash (subject to any required Tax withholdings as provided in Section 2.3(e)) equal to the product of the number of Shares
represented by such Certificates multiplied by the Per Share Closing Amount to which the holder thereof is entitled pursuant to Section 2.1(a) and
Section 2.1(e).
(iii) Warrant
Certificates. Upon surrender of Warrant Certificates to the Paying Agent (together with a letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required pursuant to such
instructions (as applicable)), each holder of record of one or more Warrants Certificates shall be entitled to receive, and Parent shall
cause the Paying Agent to pay and deliver as promptly as reasonably practicable after the Effective Time, a cash amount in immediately
available funds (subject to any required Tax withholdings as provided in Section 2.3(e)) equal to the Company Warrant Consideration,
and the Warrant Certificates so surrendered shall immediately be cancelled. No interest will be paid or accrued on any amount payable
upon due surrender of the Warrant Certificates to the Paying Agent. In the event that the Warrant Certificate shall have been lost, stolen
or destroyed, the Paying Agent shall issue a check in exchange for such lost, stolen or destroyed Warrant Certificate, upon the making
of an affidavit of that fact by the holder thereof and, if reasonably required by the Surviving Company or the Paying Agent, the posting
by such holder of a customary bond issued for lost, stolen or destroyed warrant certificates, in such reasonable amount as the Surviving
Company or the Paying Agent may direct (which shall not exceed the Company Warrant Consideration payable to such holder), as indemnity
against any claim that may be made against the Surviving Company or the Paying Agent with respect to such Warrant Certificate, an amount
in cash (subject to any required Tax withholdings as provided in Section 2.3(e)) equal to the Company Warrant Consideration.
(iv) Book-Entry
Shares. Notwithstanding anything to the contrary contained in this Agreement, any holder of Book-Entry Shares will not be required
to deliver a Certificate to receive the Per Share Closing Amount in respect of such Book-Entry Shares. In lieu thereof, in addition to
the right to receive CVRs under this Agreement and the CVR Agreement, each holder of record of one or more Book-Entry Shares (other than
Excluded Shares, Dissenting Shares and Shares represented by ADSs) shall, upon receipt by the Paying Agent of an “agent’s
message” in customary form or other evidence, if any, as the Paying Agent may have reasonably requested, be entitled to receive,
and Parent shall cause the Paying Agent to pay and deliver as promptly as reasonably practicable after the Effective Time, a cash amount
in immediately available funds (subject to any required Tax withholdings as provided in Section 2.3(e)) equal to the product
obtained by multiplying (A) the number of Shares represented by such Book-Entry Shares by (B) the Per Share Closing
Amount. No interest will be paid or accrued on any amount payable upon due receipt of by the Paying Agent of an “agent’s
message” in customary form or other evidence, if any, as the Paying Agent may have reasonably requested.
(v) Book-Entry
Warrants. Notwithstanding anything to the contrary contained in this Agreement, any holder of Book-Entry Warrants will not be required
to deliver a Warrant Certificate to receive the Company Warrant Consideration in respect of such Book-Entry Warrants. In lieu thereof,
each holder of record of one or more Book-Entry Warrants shall, upon receipt by the Paying Agent of an “agent’s message”
in customary form or other evidence, if any, as the Paying Agent may have reasonably requested, be entitled to receive, and Parent shall
cause the Paying Agent to pay and deliver as promptly as reasonably practicable after the Effective Time, a cash amount in immediately
available funds (subject to any required Tax withholdings as provided in Section 2.3(e)) equal to the Company Warrant Consideration.
No interest will be paid or accrued on any amount payable upon due receipt of by the Paying Agent of an “agent’s message”
in customary form or other evidence, if any, as the Paying Agent may have reasonably requested.
(vi) ADSs.
Prior to the Effective Time, Parent and the Company shall establish procedures with the Paying Agent, the Rights Agent and the Depositary
to ensure that Milestone Payment Amounts (as defined in the CVR Agreement) are made to former holders of ADSs (other than ADSs representing
Excluded Shares) pursuant to this Agreement, the Deposit Agreement and the CVR Agreement and that (A) the Paying Agent will transmit
to the Depositary as promptly as reasonably practicable following the Effective Time an amount in cash in immediately available funds
equal to the product of (x) the number of ADSs issued and outstanding immediately prior to the Effective Time (other than ADSs representing
Excluded Shares) and (y) the Per ADS Closing Amount, and (B) the Depositary will distribute the aggregate Per ADS Merger Consideration
to holders of ADSs pro rata to their holdings of ADSs (other than ADSs representing Excluded Shares) upon surrender by them of the ADSs
and/or the cancellation of such ADSs by the Depositary in accordance with Section 2.1(b), the CVR Agreement and the Deposit
Agreement.
(vii) Interest.
No interest shall be paid or will accrue on any amount payable in respect of the Shares or ADSs pursuant to the provisions of this Section 2.3(b).
(viii) Unrecorded
Transfers; Other Payments. In the event of a transfer of ownership of Shares, ADSs or Company Warrants that is not registered in
the register of members of the Company maintained by the Company, the Company Warrant register maintained by the Company or in the books
maintained by the Depositary, as applicable, or if payment of the aggregate Per Share Closing Amount, the aggregate Per ADS Closing Amount
or the aggregate Company Warrant Consideration is to be made to a Person other than the Person in whose name the Certificates, Warrant
Certificates, the Book-Entry Shares, Book-Entry Warrants or ADSs, as applicable, are registered, a cheque for any cash to be exchanged
upon due surrender of Certificates or Warrant Certificates (or affidavits if Certificates or Warrant Certificates are lost, stolen or
destroyed) or receipt by the Paying Agent of an “agent’s message” or other evidence, if any, as the Paying Agent may
have reasonably requested in the case of Book-Entry Shares or Book-Entry Warrants, or due surrender and/or cancellation of ADSs, as applicable,
may be issued to such transferee or other Person if the Certificates, Warrant Certificates, Book-Entry Shares, Book-Entry Warrants or
ADSs, as applicable, formerly representing such Shares (other than Excluded Shares, Dissenting Shares and Shares represented by ADSs),
ADSs (other than ADSs representing Excluded Shares) or Company Warrants are properly presented to the Paying Agent or the Depositary
(as applicable) accompanied by all documents required to evidence, to the reasonable satisfaction of the Surviving Company, and effect
such transfer and to evidence that any applicable transfer or other similar Taxes have been paid or are not applicable.
(ix) ADS
Expenses. Pursuant to the terms of the Deposit Agreement, the ADS holders will pay any applicable fees, charges and expenses of the
Depositary, stock transfer or other Taxes and other government charges due to or incurred by the Depositary in connection with the cancellation,
termination or surrender of their ADSs.
(c) Termination
of Exchange Fund. Any portion of the Exchange Fund (including the proceeds of any investments thereof) that remains unclaimed by
the former holders of Shares (other than Excluded Shares, Dissenting Shares and Shares represented by ADSs) or ADSs (other than ADSs
representing Excluded Shares) or Company Warrants for 12 months after the Effective Time shall be delivered to Parent or the Surviving
Company, as requested by Parent, upon demand. Any holder of Certificates, Book-Entry Shares or ADSs (in each case, other than Dissenting
Shares, Excluded Shares, Shares represented by ADSs and ADSs representing Excluded Shares) or Warrant Certificates or Book-Entry Warrants
who has not theretofore complied with Section 2.3(b) shall thereafter be entitled to look to Parent for payment of the
relevant aggregate Closing Consideration (subject to any required Tax withholdings as provided in Section 2.3(e) and
deduction of any fees, including ADS cancellation, termination or surrender fees, payable by holders of ADSs in accordance with the Deposit
Agreement) upon due surrender of evidence of Certificates or Warrant Certificates (or affidavits if Certificates or Warrant Certificates
are lost, stolen or destroyed) or delivery of an “agent’s message” or other evidence, if any, as the Surviving Company
may have reasonably requested in the case of Book-Entry Shares, Book-Entry Warrants or ADSs (together with a letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required pursuant
to such instructions (as applicable)), without any interest thereon and Parent, subject to the following sentence, shall remain liable
for payment of such holder’s claim for the relevant aggregate Closing Consideration (subject to any required Tax withholdings as
provided in Section 2.3(e) and deduction of any fees, including ADS cancellation, termination or surrender fees, payable
by holders of ADSs in accordance with the Deposit Agreement) payable upon due surrender of Certificates or Warrant Certificates (or affidavits
if Certificates or Warrant Certificates are lost, stolen or destroyed) or due receipt by the Surviving Company of an “agent’s
message” or other evidence, if any, as the Surviving Company may have reasonably requested in the case of Book-Entry Shares, Book-Entry
Warrants or ADSs. Notwithstanding anything to the contrary herein, none of the Surviving Company, Parent or its Subsidiaries, the Company,
the Paying Agent, the Depositary or any other Person shall be liable to any former holder of Shares or ADSs or Company Warrants for any
amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws. Any amounts remaining
unclaimed by such former holders immediately prior to such time at which such amounts would otherwise escheat to or become property of
any Governmental Entity shall become, to the extent permitted by applicable Law, the property of Parent, free and clear of all claims
of interest of any Person previously entitled thereto.
(d) Transfers.
From and after the Effective Time, the register of members of the Company, the Company Warrant register maintained by the Company and
the books of the Depositary shall be closed, and there shall be no registration of transfers on the register of members of the Surviving
Company, the Company Warrant register or the books and records of the Depositary of the Shares, Company Warrants and ADSs, as applicable,
that were issued and outstanding immediately prior to the Effective Time. If, after the Effective Time, any evidence of a Certificate,
Warrant Certificate, Book-Entry Share, Book-Entry Warrant or ADS is presented, and is acceptable, to the Surviving Company, Parent, the
Paying Agent or the Depositary for transfer, subject to compliance with the procedures set forth in this Section 2.3(d),
it shall be cancelled and thereafter represent only the right to receive the cash amount in immediately available funds to which the
holder thereof would have been entitled pursuant to Section 2.1(a), Section 2.1(b), Section 2.1(c) or
Section 2.1(e), as applicable, and the CVR Agreement (in each case, without interest and subject to any required Tax withholdings
as provided in Section 2.3(e) and deduction of any fees, including ADS cancellation, termination or surrender fees,
payable by holders of ADSs in accordance with the Deposit Agreement). The relevant aggregate Closing Consideration paid upon surrender
of Certificates or Warrant Certificates (or affidavits if Certificates or Warrant Certificates are lost, stolen or destroyed) or receipt
by the Paying Agent, the Depositary, or the Surviving Company, as applicable, of an “agent’s message” or other evidence,
if any, as the Paying Agent, the Depositary, or the Surviving Company, as applicable, may have reasonably requested in the case of Book-Entry
Shares, Book-Entry Warrants or ADSs, in each case, in accordance with the terms of this Section 2.3, shall be deemed to have
been paid in full satisfaction of all rights pertaining to the Shares formerly represented by such Certificates (or affidavits) or Book-Entry
Shares or ADSs, as applicable or Company Warrants formerly represented by such Warrant Certificates (or affidavits) or Book-Entry Warrants.
(e) Withholding
Rights. Notwithstanding anything herein to the contrary, each of the Paying Agent, the Depositary, Parent, and the Surviving Company
shall be entitled to deduct and withhold from any amounts otherwise payable pursuant to this Agreement or the CVR Agreement such amounts
as it is required to deduct and withhold with respect to the making of such payment under any applicable Law. To the extent that amounts
are so deducted or withheld, such deducted or withheld amounts (i) shall be remitted by the Paying Agent, the Depositary, Parent
or the Surviving Company, as applicable, to the applicable Governmental Entity, and (ii) to the extent so remitted, shall be treated
for all purposes of this Agreement or the CVR Agreement as having been paid to the Person in respect of which such deduction and withholding
was made by the Paying Agent, the Depositary, Parent or the Surviving Company, as the case may be.
(f) Untraceable
Shareholders and Company Warrant holders. Remittances for the Per Share Closing Amount, the Per ADS Closing Amount and the Company
Warrant Consideration, as the case may be, shall not be sent to holders of Shares, ADSs or Company Warrants who are untraceable unless
and until they notify the Paying Agent, the Depositary or the Surviving Company, as applicable, of their current contact details. A holder
of Shares, ADSs or Company Warrants will be deemed to be untraceable if (i) such Person has no registered address in the register
of members maintained by the Company, the books maintained by the Depositary, or the Company Warrant register maintained by the Company,
as applicable, (ii) on the last two consecutive occasions on which a dividend has been paid by the Company, a check payable to such
Person by the Company, in respect of such dividend either (x) has been sent to such Person and has been returned undelivered or
has not been cashed or (y) has not been sent to such Person because on an earlier occasion a check for a dividend so payable has
been returned undelivered, and in any such case no valid claim in respect thereof has been communicated in writing to the Company or
the Depositary, as applicable, or (iii) notice of the Shareholders Meeting convened to vote on the Merger or any notice required
to be sent to the holders of Company Warrants in connection with the Merger, as applicable, has been sent to such Person and has been
returned undelivered. Monies due to holders of Shares, ADSs or Company Warrants who are untraceable shall be returned to Parent on demand
and held in a non-interest bearing bank account for the benefit of holders of Shares, ADSs and Company Warrants who are untraceable.
Monies unclaimed after a period of six years from the Closing Date shall be forfeited and shall revert to Parent.
Section 2.4 Dissenting
Shares. The Company shall give Parent (a) prompt notice of any written notices of objection, notice of authorization of the
Merger, notice of dissent to the Merger or demands for appraisal or written offers, under Section 238 of the CICA received by the
Company, written withdrawals of such objections, notices, dissents, demands or offers, and any other instruments served pursuant to applicable
Law of the Cayman Islands and received by the Company relating to the exercise of any rights to dissent from the Merger or appraisal
rights by the Dissenting Shareholders, and (b) the opportunity to participate in all negotiations and proceedings with respect to
any such notice or demand for appraisal under the CICA. The Company shall not, except with the prior written consent of Parent (not to
be unreasonably withheld, conditioned or delayed), make any offers or payment with respect to any exercise by a Dissenting Shareholder
of its rights to dissent from the Merger or any demands for appraisal or offer to settle or settle any such demands or approve any withdrawal
of any such dissenter rights or demands.
Section 2.5 Adjustments.
Notwithstanding anything to the contrary herein, in the event that the number of Shares or ADSs or securities convertible or exchangeable
into or exercisable for Shares (including Shares represented by ADSs) issued and outstanding after the date hereof and prior to the Effective
Time (including any Company Options, Company RSU and Company Warrants) shall have been changed into a different number of Shares or ADSs
or securities or a different class as a result of a reclassification, share split (including a reverse share split), combination, share
dividend or distribution, recapitalization, subdivision, merger, issuer tender or exchange offer, or other similar transaction (but excluding
any change that results from any exercise of Company Options or Company Warrants, the vesting of any Company Options or the settlement
of any Company RSUs), then the Merger Consideration shall be equitably adjusted to provide to Parent and the holders of Shares, ADSs,
Company Options, Company RSUs and Company Warrants the same economic effect as contemplated by this Agreement prior to such event; provided
that nothing in this Section 2.5 shall be construed to permit the Company, any Subsidiary of the Company or any other
Person to take any action that is otherwise prohibited by the terms of this Agreement.
Section 2.6 Termination
of Deposit Agreement. As soon as reasonably practicable after the Effective Time, the Surviving Company shall provide notice to the
Bank of New York Mellon (the “Depositary”) to terminate the deposit agreement, dated January 7, 2021, among the
Company, the Depositary and all holders from time to time of ADSs issued thereunder (the “Deposit Agreement”) in accordance
with its terms.
Section 2.7 Agreement
of Fair Value. Parent, Merger Sub and the Company respectively agree that the Per Share Merger Consideration is equal to or greater
than the fair value of the Shares for the purposes of Section 238(8) of the CICA.
Article III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The Company hereby represents
and warrants to Parent and Merger Sub that, except (i) as disclosed in the SEC Reports filed or furnished and publicly available
on the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) since the Applicable Date and
prior to the date that was two Business Days prior to the date of this Agreement (excluding any disclosures set forth in the SEC Reports
(A) under the captions “Risk Factors” or “Forward-Looking Statements” and (B) in any other section
relating to forward-looking statements, in each case of (A) and (B), to the extent they are cautionary, predictive or forward-looking
in nature and are not specific factual information contained therein), or (ii) as set forth on the corresponding sections or subsections
of the disclosure letter delivered to Parent by the Company concurrently with entering into this Agreement (the “Company Disclosure
Letter”), it being acknowledged and agreed that disclosure of any item in any section or subsection of the Company Disclosure
Letter shall also be deemed disclosure with respect to any other section or subsection of this Agreement to which the relevance of such
item is reasonably apparent on the face of such disclosure:
Section 3.1 Organization
and Qualification; Subsidiaries. Each of the Company and its Subsidiaries (a) is a legal entity duly incorporated or organized,
validly existing and, to the extent such concept is applicable, in good standing under the Laws of its respective jurisdiction of incorporation
or organization, (b) has all requisite corporate or similar power and authority to own, lease and operate its properties and assets
in the manner in which they are currently owned, leased and operated and to conduct its business in the manner as presently conducted,
and is qualified or licensed to do business as a foreign corporation or other legal entity in each jurisdiction where the ownership,
leasing or operation of its assets or properties or present conduct of its business requires such qualification or license, and (c) to
the extent such concept is applicable, is in good standing, in each jurisdiction where the ownership, leasing or operation of its assets
or properties or present conduct of its business requires such qualification, except, in the case of clauses (b) and (c), as would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.2 Memorandum
and Articles of Association.
(a) The
Company has furnished or otherwise made available to Parent, prior to the date hereof, (i) a true, correct and complete copy of
the memorandum and articles of association, as amended to date (the “Memorandum and Articles of Association”), of
the Company in effect as of the date of this Agreement, and (ii) any other Organizational Documents, as amended to date, of each
of the Company and the Company’s Subsidiaries as in effect as of the date of this Agreement, and each of the foregoing documents
is in full force and effect, except in the case of clause (ii), where such failure would not reasonably be expected to be, individually
or in the aggregate, material to the Company and its Subsidiaries, taken as a whole.
(b) The
Company is not in violation of any provision of the Memorandum and Articles of Association.
Section 3.3 Capitalization
of the Company.
(a) The
authorized share capital of the Company is $100,000 divided into 1,000,000,000 shares, of which (x) 600,000,000 are designated as
ordinary shares of $0.0001 par value per share and (y) 400,000,000 are designated as undesignated shares of $0.0001 par value per
share. As of the close of business in New York City on December 19, 2023 (the “Capitalization Date”):
(i) 482,861,887
Shares were issued and outstanding and no Shares are held by the Company in its treasury;
(ii) 4,416,684
Shares were available for issuance pursuant to the Company Share Plans;
(iii) Company
Options to acquire 13,898,525 Shares upon exercise were issued and outstanding;
(iv) Company
RSUs covering 1,113,570 Shares upon settlement were issued and outstanding; and.
(v) Company
Warrants to purchase 44,802,870 Shares were outstanding.
Except as set forth in Section 3.3(a) hereof,
as of the Capitalization Date, there are no other issued and outstanding Equity Securities of the Company. From the close of business
New York City time on the Capitalization Date until the date of this Agreement, the Company has not issued or granted any Shares or other
Equity Securities of the Company, except for issuances of Shares upon the exercise of Company Options, the settlement of Company RSUs
or the exercise of Company Warrants, in each case, outstanding as of the close of business New York City time on the Capitalization Date,
in accordance with their respective terms.
(b) All
issued and outstanding Shares are not subject to, and were not issued in violation of, any preemptive rights, purchase options, call
or right of first refusal or similar rights. There are no accrued and unpaid dividends with respect to any outstanding Shares. All issued
and outstanding Shares are duly authorized, validly issued, fully paid and non-assessable.
(c) Section 3.3(c) of
the Company Disclosure Letter sets forth a true, correct and complete list, as of the Capitalization Date, of all outstanding Company
Equity Awards, including, with respect to each such Company Equity Award, (i) the number of Shares issuable upon exercise or settlement
thereof, (ii) the exercise price with respect thereto (if applicable), (iii) the applicable grant date and expiration date
thereof and the vesting schedule with respect thereto, and (iv) the Company Share Plan under which the Company Equity Award was
granted. The Company has made available to Parent copies of all Company Share Plans and the forms of all equity award agreements evidencing
Company Options and Company RSUs and no Company Option agreement or Company RSU agreement materially deviates from such forms. Each outstanding
Company Equity Award (A) was granted in compliance with all applicable Laws, (B) was granted in all material respects
in accordance with the terms of the Company Share Plans and the Company’s applicable form of award agreement provided to Parent
prior to the date hereof, and (C) is exempt from Section 409A of the Code. The treatment of Company Equity Awards under this
Agreement does not violate in any material respect the terms of any Company Share Plan or any other Contract governing the terms of any
Company Equity Awards.
(d) Except
as set forth in Section 3.3(a) hereof, as of the date of this Agreement, there are (i) no voting trusts, proxies
or similar arrangements to which the Company is party or by which the Company is bound with respect to the voting of any share capital
of, or other equity or voting interest in, the Company; and (ii) no obligations or binding commitments of any character restricting
the transfer of any share capital of, or other equity or voting interest in, the Company to which the Company is party or by which it
is bound. The Company is not a party to any Contract that obligates it to repurchase, redeem or otherwise acquire any Equity Securities
of the Company. The Company does not have a shareholder rights plan in effect.
Section 3.4 Capitalization
of the Company’s Subsidiaries.
(a) The
Equity Securities of each of the Company’s Subsidiaries are (i) duly authorized, validly issued, fully paid and non-assessable,
(ii) owned by (or with respect to the Controlled Entities, controlled through the Control Documents by) the Company or a Subsidiary
of the Company, free and clear of all Liens and free of preemptive rights, rights of first refusal, subscription rights or similar rights
of any Person and transfer restrictions (other than the Controlled Entities to the extent they are subject to and governed by their respective
Control Documents), except for Permitted Liens and such transfer restrictions of general applicability arising under the Securities Act
or other applicable Laws. Except for the Equity Securities of the Company’s Subsidiaries and except for securities held by the
Company in connection with its ordinary course treasury investment activities, neither the Company nor any of its Subsidiaries owns,
directly or indirectly, any Equity Security in any other Person.
(b) A
true, correct and complete copy of an organizational chart showing the ownership structure of each of the Company and its Subsidiaries
as of the date of this Agreement is set forth in Section 3.4(b) of the Company Disclosure Letter. Except for the share
capital, voting securities, or other equity or ownership interests of each of the Company’s Subsidiaries (the ownership of which
is set forth in the organizational chart in Section 3.4(b) of the Company Disclosure Letter), there are (i) no
other issued and outstanding Equity Securities of any of the Company’s Subsidiaries; (ii) other than as set forth in the Control
Documents, no voting trusts, proxies or similar arrangements or understandings to which any Subsidiary of the Company is party or by
which any Subsidiary of the Company is bound with respect to the voting of any share capital of, or other equity or voting interest in,
such Subsidiary; and (iii) other than as set forth in the Control Documents, no obligations or binding commitments of any character
restricting the transfer of any share capital of, or other equity or voting interest in, any Subsidiary of the Company to which such
Subsidiary is party or by which it is bound. Other than as set forth in the Control Documents, neither the Company nor any of its Subsidiaries
is a party to any Contract that obligates it to repurchase, redeem or otherwise acquire any Equity Securities of any Subsidiary of the
Company or provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary of
the Company.
Section 3.5 Authority.
(a) The
Company has all requisite corporate power and authority to execute and deliver this Agreement, and to perform its obligations hereunder
and to consummate the Merger and the other Transactions, subject only to obtaining the Company Requisite Vote. The execution, delivery
and performance by the Company of this Agreement, the Plan of Merger, and the consummation of the Merger and the other Transactions have
been duly and validly authorized by the Board of Directors, and no other corporate action on the part of the Company is necessary to
authorize the execution and delivery by the Company of this Agreement, the Plan of Merger, and the consummation by it of the Merger and
the other Transactions other than the receipt of the Company Requisite Vote and the filings and recordation as required by the CICA.
This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery
hereof by Parent and Merger Sub, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to the effects of applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar Laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and any implied covenant of good faith and fair dealing (the “Bankruptcy and Equity Exception”).
(b) At
a meeting duly called and held prior to the execution and delivery of this Agreement, the Board of Directors duly and unanimously adopted
resolutions (i) determining that it is fair to, and in the commercial interests of, the Company and declared it advisable, to enter
into this Agreement, the Plan of Merger and the other Transaction Documents to which the Company is a party, (ii) approving the
execution, delivery and performance by the Company of this Agreement, the Plan of Merger and the other Transaction Documents to which
the Company is a party, and the consummation of the Transactions upon the terms and subject to the conditions set forth herein and therein,
(iii) determining to recommend the approval and authorization of the execution, delivery and performance by the Company of this
Agreement, the Plan of Merger, and the other Transaction Documents to which the Company is party, and the consummation of the Transactions
(including the Merger) to the shareholders of the Company at the Shareholders Meeting (such recommendation, the “Recommendation”),
and (iv) directing that this Agreement, the Merger and the other Transactions be submitted to the shareholders of the Company at
the Shareholders Meeting for their approval. Except as expressly permitted by Section 6.3, the Recommendation has not been
rescinded, modified or withdrawn in any manner adverse to Parent or Merger Sub.
(c) The
approval and authorization of this Agreement, the Merger, the Plan of Merger, and the Transactions by special resolution passed by the
holders of the Shares, being the affirmative vote of the holders of Shares representing at least two-thirds of the votes cast by such
holders as, being entitled to do so, vote in person or by proxy at the Shareholders Meeting (the “Company Requisite Vote”)
in accordance with Section 233(6) of the CICA and the Company’s Organizational Documents is the only vote of the holders
of Shares that is necessary pursuant to applicable Law and the Company’s Organizational Documents to approve and authorize the
execution, delivery and performance by the Company of this Agreement, the Plan of Merger, and the other Transaction Documents to which
the Company is party, and the consummation of the Transactions.
Section 3.6 No
Conflict; Required Filings and Consents.
(a) The
execution, delivery and performance of this Agreement by the Company and the consummation of the Merger and the other Transactions do
not and will not (i) assuming that the Company Requisite Vote has been obtained, breach, violate or conflict with the Memorandum
and Articles of Association or any other Organizational Documents of the Company or any of its Subsidiaries, (ii) assuming that
all consents, approvals and authorizations contemplated by clauses (i) through (iv) of Section 3.6(b) have
been obtained and all filings described in such clauses have been made and the Company Requisite Vote has been obtained, conflict with,
breach or violate any Law applicable to the Company or any of its Subsidiaries or by which its or any of their respective properties
or assets are bound or (iii) result in any breach or violation of or constitute a default (or an event which with or without notice
or lapse of time or both would become a default), require a consent or result in the loss of a benefit under, or give rise to any right
of termination, cancellation, amendment or acceleration of, or result in the creation of a Lien (except for a Permitted Lien) on any
of the material assets of the Company or any of its Subsidiaries pursuant to any Contract (including any Lease) or Permit, except, in
the case of clauses (ii) and (iii), for any such conflict, violation, breach, default, loss, right or other occurrence which would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) The
execution, delivery and performance of this Agreement by the Company and the consummation of the Merger and the other Transactions by
the Company do not and will not require any consent, approval, authorization or permit of, action by, filing with or notification to,
any Governmental Entity, except for (i) compliance with the applicable requirements of the Exchange Act and the rules and regulations
promulgated thereunder, and state securities, takeover and “blue sky” laws, including the furnishing of Form 6-K with
the proxy statement to be sent to the shareholders of the Company in connection with the Shareholders Meeting (such proxy statement,
as amended or supplemented, including the letter to shareholders, notice of meeting and form of proxy, the “Proxy Statement”),
(ii) compliance with the applicable requirements of NASDAQ, (iii) the filing of the Plan of Merger with the Registrar of Companies
pursuant to the CICA, (iv) compliance with any applicable requirements of the HSR Act and any other applicable Antitrust and Foreign
Investment Laws, and (v) any such consent, approval, authorization, permit, action, filing or notification the failure of which
to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.7 Compliance.
(a) The
Company and its Subsidiaries are not, and since the Applicable Date have not been, in violation of and are, and since the Applicable
Date have been, in compliance with, each Law applicable to the Company or any of its Subsidiaries, except for violations or failures
to be in compliance which have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and as set forth
in Section 3.7(a) of the Company Disclosure Letter, as of the date hereof, the Company and its Subsidiaries have obtained
from any applicable Governmental Entity all Permits (or any approvals therefor), and such Permits are effective as of the date hereof
and no suspension or cancellation of any Permits (or denial of any application for a Permit) is pending or, to the knowledge of the Company,
threatened in writing as of the date hereof. As of the date hereof, none of the Company and its Subsidiaries has received any written
notice or communication from any Governmental Entity of any material non-compliance with any applicable Laws that has not been cured.
(b) None
of the Company or any of its Subsidiaries, any officer or director of any of the foregoing, or, to the knowledge of the Company, agent,
employee or other Person acting on behalf of any of the foregoing, is or has been in material violation of the Anti-Corruption Laws or
Anti-Tax Evasion Laws.
(c) Neither
the Company nor any of its Subsidiaries has, in connection with or relating to the business of the Company or any of its Subsidiaries,
(i) received from any Governmental Entity any written notice, or inquiry, or (ii) made any voluntary or involuntary disclosure
to a Governmental Entity, or conducted any internal investigation, in each case of clauses (i) and (ii), regarding actual or alleged
non-compliance with any applicable Anti-Corruption Laws or Anti-Tax Evasion Laws.
(d) Since
the Applicable Date, the Company has instituted and maintained policies and procedures reasonably designed to ensure compliance in all
material respects with applicable Anti-Corruption Laws and Anti-Tax Evasion Laws by the Company and its Subsidiaries.
(e) Neither
the Company nor any of its Subsidiaries, nor any of their respective officers, directors or employees, nor to the knowledge of the Company,
any agent or other third party representative acting on behalf of the Company or any of its Subsidiaries, is as of the date of this Agreement
and has been since the Applicable Date: (i) a Sanctioned Person, (ii) organized, resident or located in a Sanctioned Country,
(iii) engaging in any dealings or transactions with any Sanctioned Person or in any Sanctioned Country, to the extent such activities
violate applicable Sanctions Laws or Ex-Im Laws, or (iv) otherwise in violation of Sanctions Laws, Ex-Im Laws, or U.S. anti-boycott
Laws.
Section 3.8 SEC
Filings; Financial Statements.
(a) Since
January 8, 2021 (the “Applicable Date”), the Company has timely filed or furnished, as applicable, all reports,
schedules, forms, statements and other documents required to be filed or furnished by it with the SEC (as amended or supplemented since
the time of filing, the “SEC Reports”), all of which have complied as of their respective filing or furnishing dates
or, if amended, supplemented or superseded by a subsequent filing, as of the date of the last such amendment, supplement or superseding
filing, in all material respects with all applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act.
No executive officer of the Company has failed in any respect to make the certifications required of him or her under Sections 302 or
906 of the Sarbanes-Oxley Act with respect to any SEC Report. As of their respective dates (or to the extent that information contained
in such SEC Report has been amended or supplemented by a later filed SEC Report prior to the date of this Agreement, as of the date of
such amendment or supplement) none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received
by the Company from the SEC staff with respect to the SEC Reports. The Company has made available to Parent copies of all material correspondence
through the date hereof between the SEC and the Company.
(b) The
audited and unaudited consolidated financial statements, including the related notes and schedules thereto, of the Company included (or
incorporated by reference) in the SEC Reports (i) complied as to form in all material respects with the applicable published rules and
regulations of the Exchange Act, Securities Act and Sarbanes Oxley Act applicable with respect thereto, as in effect at the time of such
filing or furnishing, (ii) have been prepared in accordance with GAAP (except (A) as may be described in the notes to such
financial statements as permitted by Regulation S-X or (B) in the case of unaudited interim financial statements, as may be permitted
by the SEC on Form 6-K) applied on a consistent basis throughout the periods involved and (iii) fairly present in all material
respects the financial position of the Company and its consolidated Subsidiaries as of their respective dates thereof, and the results
of operations and cash flows of the Company and its consolidated Subsidiaries for the periods presented therein (subject, in the case
of the unaudited financial statements, to the absence of footnotes and normal year-end audit adjustments).
(c) The
Company maintains, and at all times since the Applicable Date has maintained, a system of internal control over financial reporting (as
defined in Rule 13a-15 under the Exchange Act) which is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with GAAP, and includes those policies and
procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and that receipts and expenditures are being made only in accordance
with authorizations of management and the Board of Directors; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the assets of the Company that could have a material effect on the financial
statements. The Company’s management has completed an assessment of the effectiveness of the Company’s system of internal
control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the fiscal year
ended December 31, 2022, and, except as set forth in the SEC Reports filed prior to the date of this Agreement, that assessment
concluded that those controls were effective.
(d) The
Company maintains, and at all times since the Applicable Date has maintained, “disclosure controls and procedures” as defined
in and required by Rule 13a-15 or 15d-15 under the Exchange Act that are reasonably designed to ensure that all information required
to be disclosed in the Company’s reports that it files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC and that all such information is accumulated and communicated
to the Company’s management, the principal executive officer of the Company and the principal financial officer of the Company,
as appropriate to allow timely decisions regarding required disclosure. As of the date of this Agreement, neither the Company nor, to
the knowledge of the Company, the Company’s independent registered public accounting firm, has identified or been made aware of
“significant deficiencies” or “material weaknesses” (as defined by the Public Company Accounting Oversight Board)
in the design or operation of the Company’s internal controls over financial reporting which would reasonably be expected to adversely
affect in any material respect the Company’s ability to record, process, summarize and report financial data, in each case which
has not been subsequently remediated, and to the knowledge of the Company there is no fraud, whether or not material, that involves management
or other employees who have a significant role in the Company’s internal controls over financial reporting.
Section 3.9 No
Undisclosed Liabilities. Except for (a) liabilities or obligations incurred in the ordinary course of business since September 30,
2023 (the “Balance Sheet Date”); (b) as disclosed and provided for in the consolidated financial statements of
the Company (including the notes thereto) included in the Company’s annual report on Form 20-F filed with the SEC on April 25,
2023, (c) liabilities or obligations incurred in connection with the negotiation, execution and implementation of this Agreement
and the Transactions or (d) liabilities or obligations that have not had and would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect, neither the Company nor any of its Subsidiaries has any liabilities or obligations of
any nature, whether accrued, contingent, absolute, determined, or otherwise, that would be required by GAAP to be reflected in a consolidated
balance sheet of the Company.
Section 3.10 Indebtedness
and Security. Neither the Company nor any of its Subsidiaries has any secured creditors holding fixed or floating security interests
with respect to any securities or assets of the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries
has any outstanding unsecured financial indebtedness for borrowed money.
Section 3.11 Material
Contracts.
(a) Except
for (w) Contracts under which the Company or its Subsidiary has no outstanding rights or obligations, (v) this Agreement, (x) each
Contract set forth in Section 3.11(a) of the Company Disclosure Letter, and (y) each Contract filed as an exhibit
to the SEC Reports as a “material contract” pursuant to the Securities Act, as of the date hereof, neither the Company nor
any of its Subsidiaries is party to or bound by any Contract that:
(i) (A) contains
covenants that limit or purport to limit the ability of the Company or any of its Subsidiaries, or that, upon the consummation of the
Merger would limit or purport to limit the ability of Parent or any Subsidiary of Parent, to compete with any Person in any line of business
or to research, develop, sell, supply or distribute any product or service, in each case, in any geographic area, during any period of
time (excluding any out-bound license), (B) contains any “most favored nations” terms and conditions (including with
respect to pricing) granted by the Company or any of its Subsidiaries or (C) grants any right of first refusal, right of first offer,
right of negotiation, option or similar right with respect to any equity interests or material assets or business of the Company or its
Subsidiaries (other than Control Documents);
(ii) provides
for or governs a joint venture, partnership, limited liability company or other similar arrangement, or otherwise relates to the formation,
creation, operation, management or control of any partnership, joint venture or other similar arrangement;
(iii) requires
by its terms aggregate payments by the Company or its Subsidiaries, taken as a whole, or aggregate payments payable to the Company and
its Subsidiaries, taken as a whole, under such Contract of more than $500,000 (or its equivalent in RMB or another currency) for the
fiscal year ending on December 31, 2023 or any fiscal year thereafter;
(iv) constitutes
a material manufacturing or supply agreement that requires by its terms (including the terms of any related statement of work or purchase
order) minimum payment obligations by the Company or its Subsidiaries, taken as a whole, of at least $500,000 (or its equivalent in RMB
or another currency) for the fiscal year ending on December 31, 2023 or any fiscal year thereafter;
(v) is
an indenture, credit agreement, loan agreement, security agreement, guarantee, bond, mortgage or similar Contract relating to indebtedness
for borrowed money of the Company or any of its Subsidiaries, in each case in excess of $500,000 (or its equivalent in RMB or another
currency), is outstanding or secured;
(vi) prohibits
the payment of dividends or the making of distributions or prohibits the pledging, repurchase or redemption of stock or any Equity Securities;
(vii) is
with respect to any acquisition or disposition of assets (including share capital or other equity interest in another Person), whether
by merger, sale of shares, sale of assets or otherwise, and pursuant to which the Company or any of its Subsidiaries has continuing obligations
following the date hereof, including indemnification, guarantee, “earn-out” or other contingent or outstanding payment obligations
that are material to the Company and its Subsidiaries, taken as a whole;
(viii) relates
to the sale, issuance, grant, exercise, award, purchase, repurchase or redemption of any Equity Securities of the Company or any of its
Subsidiaries, other than with respect to any Company Options or Company RSUs, forms of award agreements of which have been made available
to Parent prior to the date hereof (which award agreements are consistent in all material respects with the applicable form);
(ix) is
a Control Document;
(x) is
between the Company or any of its Subsidiaries, on the one hand, and a Governmental Entity or university, college, research center or
other educational institution, on the other hand, in each case, that provides (A) for research and development activities involving
the creation of any Intellectual Property, or (B) the provision of funding by the Company or any of its Subsidiaries to such entity
or institution, or by such entity or institution to the Company or any of its Subsidiaries;
(xi) is
a settlement, conciliation, or similar Contract with any Governmental Entity pursuant to which the Company or any of its Subsidiaries
will have continuing obligations (other than immaterial obligations ordinarily included in Contracts of this nature) or that involve
the payment of more than $500,000 (or its equivalent in RMB or another currency) after the date of this Agreement;
(xii) is
a settlement agreement between the Company or any of its Subsidiaries, on the one hand, and a Taxing Authority, on the other hand, entered
into after the Applicable Date and providing for payments in excess of $500,000 (or its equivalent in RMB or another currency);
(xiii) is
a collective bargaining Contract or other Contract with any labor union, works council, or other labor organization (each, a “CBA”);
(xiv) requires
the Company or any of its Subsidiaries, directly or indirectly, to make any advance, loan, extension of credit or capital contribution
to, or other investment in, any Person (other than the Company or any of its wholly owned Subsidiaries) in any such case which is in
excess of $500,000 (or its equivalent in RMB or another currency);
(xv) any
lease or sublease for real or personal property for which annual rental payments made by the Company or any of its Subsidiaries are expected
to be in excess of $500,000 (or its equivalent in RMB or another currency) for the fiscal year ending December 31, 2024 or any fiscal
year thereafter;
(xvi) is
a loan or other Contract between the Company or any of its Subsidiaries, on the one hand, and any director, executive officer (as defined
in the Exchange Act), major shareholder of the Company or any of its Subsidiaries, holding more than 5% of the Shares (including Shares
represented by ADSs), on the other hand, including such loan or Contract that is required to be reported under Item 7 of Form 20-F
of the SEC, other than any Contract related to (A) payment of salary or fees for services rendered in the capacity of an officer,
director or employee of the Company or any of its Subsidiaries, (B) reimbursement for expenses incurred on behalf of the Company
or any of its Subsidiaries, (C) other employee benefits, including award agreements, notices of grants and other similar documents
under any Company Share Plans and (D) Contracts between or among the Company and its wholly owned Subsidiaries;
(xvii) any
agreement or Contract with a professional employer organization or co-employer organization (a “PEO”);
(xviii) provides
for the (A) the assignment of, or a grant of a license, right or immunity under, any material Intellectual Property owned by third
party, other than Incidental Contracts; or (B) the joint development of products, technology or other Intellectual Property by the
Company or any of its Subsidiaries with a third party, other than Incidental Contracts; or
(xix) provides
for the assignment of, or a grant of a license, right or immunity by the Company or any of its Subsidiaries under, any of its or their
material Intellectual Property to any third party, other than (A) shrink-wrap, click wrap and off-the-shelf Contracts for commercially
available software or services; (B) licenses granted pursuant to materials transfer agreements, sponsored research agreements, confidentiality
or nondisclosure agreements, or non-material services agreements, or non-exclusive out-bound licenses granted to clinical trial sites,
subcontractors or vendors, in each case, entered into in the ordinary course of business where the license is ancillary to the purpose
of the underlying contract; (C) agreements with Company Employees under which such Company Employees assign all of their right,
title and interest in and to the Intellectual Property created, generated or otherwise developed in the scope of their employment or
engagement to the Company or any of its Subsidiaries; and (D) Contracts containing an inbound license to the Company or its Subsidiaries
to use third party Intellectual Property, where such license is (x) non-exclusive, (y) not material to the business of the
Company and its Subsidiaries, taken as a whole, and (z) incidental to the primary purpose of such Contract (clauses (A) through
(D), collectively, “Incidental Contracts”).
Each Contract set forth (or required to be set
forth) in Section 3.11(a) of the Company Disclosure Letter or filed (or which is required to be filed) by the Company
as an exhibit to the SEC Reports as a “material contract” pursuant to Item 601(b)(10) of Regulation S-K under the Securities
Act or Item 4 of the Instructions to the Exhibits to Form 20-F or that would be required to be disclosed under Item 404 of Regulation
S-K under the Securities Act or Item 4 of the Instructions to the Exhibits to Form 20-F, and each such Contract to which the Company
or any of its Subsidiaries becomes a party or by which the Company or any of its Subsidiaries becomes bound after the date of this Agreement,
is referred to herein as a “Material Contract”.
(b) As
of the date of this Agreement, each of the Material Contracts is valid and binding on the Company or each of its Subsidiaries as may
be party thereto and, to the knowledge of the Company, each other party thereto, and is in full force and effect and enforceable in accordance
with its terms, subject to the Bankruptcy and Equity Exception, except (i) to the extent that any Material Contract expires or terminates
in accordance with its terms, and (ii) for such failures to be valid and binding or to be in full force and effect that would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Except as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, (x) neither the Company nor any of its Subsidiaries has received
written notice from any other party to a Material Contract that such other party intends to terminate or renegotiate in any material
respects the terms of any such Material Contract (except in accordance with the terms thereof) and (y) there is no breach or default
under any Material Contract by the Company or any of its Subsidiaries or, to the knowledge of the Company, any other party thereto, in
each case, that has not yet been cured, and to the knowledge of the Company, no event or condition has occurred that constitutes, or,
with or without the lapse of time or the giving of notice or both, would constitute, a default thereunder by the Company or any of its
Subsidiaries or any other party thereto. As of the date of this Agreement, the Company has made available to Parent, true, correct and
complete copies of each Material Contract as in effect as of the date of this Agreement.
Section 3.12 Absence
of Certain Changes or Events.
(a) Since
the Balance Sheet Date through the date of this Agreement, except as contemplated by this Agreement, the Company and its Subsidiaries
have not taken or agreed to take any action that, if taken after the date hereof, would require the consent of Parent pursuant to the
terms of Section 5.1 hereof.
(b) (i) Since
the Balance Sheet Date through the date of this Agreement, except in connection with or related to the discussions, negotiations, transactions
or processes in connection with which the Company and its Representatives discussed and negotiated this Agreement and the transactions
contemplated hereby or other potential strategic transactions, the Company and its Subsidiaries have operated in all material respects
in the ordinary course of business, and (ii) since December 31, 2022, there has not been any event, change, effect, development
or occurrence that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 3.13 Absence
of Litigation. There is no Action pending or, to the knowledge of the Company, threatened in writing against the Company, any of
its Subsidiaries, any present or former officers, directors or employees of the Company or any of its Subsidiaries in their respective
capacities as such, or any of the respective assets or properties, including Intellectual Property, of the Company or any of its Subsidiaries,
other than any such Action that (a) would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect or require any material payment, or result in injunction or cessation of the use, manufacture, import or sale of any Company Product,
or (b) as of the date of this Agreement, in any manner challenges or seeks to prevent, enjoin, alter or materially delay the Transactions
(including the Merger). None of the Company, any of its Subsidiaries, any present or former officers, directors or employees of the Company
or any of its Subsidiaries in their respective capacities as such, or any of the respective properties or assets of the Company or any
of its Subsidiaries, is or are subject to any Order, except for those that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or that, as of the date of this Agreement, would reasonably be expected to prevent, enjoin,
alter or materially delay the Transactions (including the Merger).
Section 3.14 Employee
Benefit Plans.
(a) Section 3.14(a) of
the Company Disclosure Letter sets forth a true, correct and complete list of each material Company Plan in effect as of the date of
this Agreement (except that any employment offer letter or agreement or individual independent contractor or consultant agreement that
is terminable by the Company or its Subsidiaries without notice (or upon a notice period that is no greater than as required by applicable
Law) and does not provide any retention, change in control or severance payments or benefits shall not be required to be listed).
(b) With
respect to each Company Plan, the Company has made available to Parent a true, correct and complete copy of, to the extent applicable,
(i) the current plan document and summary plan description (and for any unwritten plan, a summary of the material terms of such
plan) and all amendments thereto, (ii) each trust agreement, insurance contract, or other funding instrument related thereto, (iii) the
most recent Form 5500 filed with the IRS or similar report required to be filed with any Governmental Entity and the most recent
financial statements and actuarial valuation or similar report with respect thereto, and (iv) all non-routine correspondence from
any Governmental Entity since the Applicable Date relating to any Company Plan.
(c) Except
as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) each Company Plan
has been established, funded, maintained and administered in accordance with its terms and in compliance with the applicable provisions
of all applicable Laws, rules and regulations, and nothing has occurred with respect to any Company Plan that could result in a
Tax, penalty or other liability of the Company or any of its Subsidiaries, and (ii) with respect to each Company Plan, no audits,
investigations, proceedings or other Actions (other than routine claims for benefits) are pending or, to the knowledge of the Company,
threatened in writing, and no fact or circumstance exists that could give rise to any such audit, investigation, proceeding or other
Action. Each Company Plan that is required to be registered has been registered and has been maintained in all material respects in good
standing with the applicable Governmental Entity and regulatory requirements.
(d) Each
Company Plan that is intended to be qualified under Section 401(a) of the Code either has received a favorable determination
letter from the IRS or may rely upon a favorable prototype opinion letter from the IRS as to its qualified status, in each case a copy
of which has been made available to Parent prior to the date of this Agreement, and to the knowledge of the Company, no event has occurred,
either by reason of any action or failure to act, that would reasonably be expected to adversely affect any such qualification. Each
Company Plan (other than a Company Plan subject to the prior sentence) intended to receive favorable Tax treatment under applicable Tax
Law has been qualified or similarly determined to satisfy the requirements of such Laws.
(e) With
respect to each Company Plan, all material contributions, distributions, reimbursements, and premium payments have been timely made,
paid, or properly accrued. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect,
all employer and employee contributions to each Company Plan required by Law or by the terms of such Company Plan have been timely made,
or, if applicable, accrued in accordance with normal accounting practices, and all Company Plans that are required to be funded are fully
funded, and adequate reserves have been established with respect to any Company Plan that is not required to be funded.
(f) No
Company Plan provides, and neither the Company nor any of its Subsidiaries has any current or potential obligation to provide, post-employment
or retiree health or welfare benefits, except to the extent required by applicable Laws. No Company Plan is, and neither the Company
nor any of its Subsidiaries maintains, sponsors, participates in, contributes to, or has any obligation to contribute to, or has any
other current or contingent liability or obligation under or with respect to a defined benefit plan (as defined in ERISA, whether or
not subject to ERISA), a “multiemployer plan” within the meaning of Section 3(37) or Section 4001(a)(3) of
ERISA (whether or not subject to ERISA), a “multiple employer plan” within the meaning of Section 4063 or 4064 of ERISA
(whether or not subject to ERISA), “multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA
(whether or not subject to ERISA), a health or other welfare arrangement that is self-insured by the Company or any Subsidiary of the
Company, seniority premium, termination indemnity, provident fund, gratuity or similar plan or arrangement or has any unfunded or underfunded
liabilities. Neither the Company nor any of its Subsidiaries has any current or contingent liability or obligation under Title IV of
ERISA or by reason of at any time being considered a single employer under Section 414 of the Code with any other Person.
(g) Neither
the execution and delivery of this Agreement nor the consummation of the Transactions (alone or in conjunction with any other event,
including any termination of employment) will (i) accelerate the time of, or result in the payment, vesting, funding, grant of,
or increase the amount of, any compensation or benefit due to or create an entitlement to compensation or benefits for any Company Employee
under any Company Plan or otherwise, (ii) result in any breach or violation of or default under, or limit the Company’s or
any of its Subsidiaries’ right to merge, amend, modify or terminate, any Company Plan, (iii) result in any forgiveness of
indebtedness of any Company Employee, or (iv) result in any payments or benefits which could, individually or in combination with
any other amount, constitute an “excess parachute payment” as defined in Section 280G of the Code.
(h) Neither
the Company nor any of its Subsidiaries has any current or contingent obligation to indemnify, gross-up or otherwise make whole any Person
for any Taxes, including those imposed under Section 4999 or Section 409A of the Code (or any corresponding provisions of state,
local or foreign Tax law).
Section 3.15 Labor
and Employment Matters.
(a) Section 3.15(a) of
the Company Disclosure Letter sets forth a true, correct and complete list of all employees of the Company as the date hereof, setting
forth for each current employee of the Company and its Subsidiaries (i) anonymized employee ID number, (ii) title and grade
level, (iii) employer entity, (iv) employment start date, (v) work location, (vi) whether full-time or part-time,
(vii) classification as exempt or non-exempt under the Fair Labor Standards Act, or working hour category under applicable Law,
(viii) current annual base compensation rate or wage rate, as applicable, (ix) target annual bonus or other incentive-based
compensation opportunity, (x) leave status (and, if on leave, the anticipated return date, if known), and (xi) visa status
(if applicable).
(b) Neither
the Company nor any of its Subsidiaries is a party to or bound by any CBA, no current employee of the Company or any of its Subsidiaries
is represented by any labor union, works council or other labor organization or employee representative body, and no CBA is being negotiated
by the Company or any of its Subsidiaries. There are no strikes, work stoppages, slowdowns, lockouts, picketing, handbilling, material
labor grievances, labor arbitrations, or other material labor disputes pending or, to the knowledge of the Company, threatened in writing
against or affecting the Company or any of its Subsidiaries. There are no, and since the Applicable Date, there have not been any (i) material
claims or allegations of unfair labor practices pending or, to the knowledge of the Company, threatened in writing against the Company
or any of its Subsidiaries before any labor relations tribunal or authority or (ii) union organizing efforts by or involving any
current employees of the Company or any of its Subsidiaries. Since the Applicable Date, no labor union, works council, other labor organization,
or group of employees of the Company or any of its Subsidiaries has made a demand for recognition or certification, and there are no
representation or certification proceedings presently pending or, to the knowledge of the Company, threatened to be brought or filed
with any labor relations tribunal or authority.
(c) As
of the date of this Agreement, there are no pending or, to the knowledge of the Company, threatened in writing material Actions relating
to Company Employees (in connection with their employment or engagement by the Company or its Subsidiaries) or employment practices.
(d) Except
as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) the Company and its
Subsidiaries are, and since the Applicable Date have been, in compliance with all applicable Laws relating to labor, employment and employment
practices, including all laws respecting terms and conditions of employment, labor dispatch, health and safety, wages and hours (including
overtime pay requirements and the proper classification and treatment of individuals as non-employee contractors or consultants), social
security payments and housing fund contribution, mandatory provident fund or other statutory pension contribution, immigration, discrimination,
harassment, retaliation, disability rights and benefits, restrictive covenants, plant closures and layoffs, workers’ compensation
and workplace injury insurance, labor relations, employee leave and holiday requirements, and unemployment insurance, (ii) the Company
and each of its Subsidiaries have fully and timely paid all wages, salaries, wage premiums, commissions, bonuses, severance and termination
payments, fees, and other compensation that have come due and payable to the Company Employees under applicable Laws, Contracts, and
Company policy; and (iii) each individual who currently provides or provided services to the Company or any of its Subsidiaries
and who is or was classified as an independent contractor, consultant, leased employee, or other non-employee service provider employee
is and, since the Applicable Date, has been properly classified and treated as such for all applicable purposes.
(e) As
of the date hereof, to the knowledge of the Company, no employee of the Company or any of its Subsidiaries has given written notice to
the Company or its applicable Subsidiary that he or she plans to terminate employment with the Company or its applicable Subsidiary.
(f) To
the knowledge of the Company, as of the date of this Agreement, no Company Employee is in any material respect in violation of any term
of any employment agreement, non-disclosure agreement, common law nondisclosure obligation, fiduciary duty, non-competition agreement,
non-solicitation agreement, restrictive covenant or other similar obligation: (i) owed to the Company or any of its Subsidiaries;
or (ii) with respect to Company Employees, owed to any third party with respect to such individual’s right to be employed
or engaged by the Company or any of its Subsidiaries.
(g) Since
the Applicable Date through the date of this Agreement, to the knowledge of the Company, no allegations of sexual harassment or sexual
misconduct have been made to the Company or any Subsidiary of the Company against any current or former executive officer, employee in
the position of Supervisor and above or director of the Company or any if its Subsidiaries. Neither the Company nor any Subsidiary of
the Company has entered into any settlement agreements, related to allegations of sexual harassment or sexual misconduct by any Company
Employee.
Section 3.16 Insurance.
Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, all insurance policies
(including any self-insurance or “fronting” insurance programs maintained by the Company or any of its Subsidiaries) of the
Company and its Subsidiaries, (a) are in full force and effect and provide insurance in such amounts and against such risks as is
sufficient to comply with applicable Law and as is customary in all material respects in the industries in which the Company and its
Subsidiaries operate and (b) all premiums due with respect to such insurance policies have been paid in accordance with the terms
thereof.
Section 3.17 Properties.
(a) Neither
the Company nor any of its Subsidiaries own any real property.
(b) Except
as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each Lease is legal,
valid, binding, enforceable against the Company or its applicable Subsidiary party thereto and, to the knowledge of the Company, each
other third party thereto, in each case subject to the Bankruptcy and Equity Exception, and in full force and effect, (ii) neither
the Company nor any of its Subsidiaries (as a party to such Lease) nor, to the knowledge of the Company, any other third party to such
Lease, is in material breach or default under such Lease and (iii) each of the Company and its Subsidiaries has a valid leasehold
interest in each Lease to which it is a party, free and clear of all Liens, except for Permitted Liens.
Section 3.18 Tax
Matters.
(a) The
Company and each of its Subsidiaries (i) have timely filed all income, corporate income, gains and VAT Tax Returns and all other
material Tax Returns required to be filed by any of them (taking into account any extension of time within which to file) and all such
Tax Returns are true, complete and accurate in all material respects; (ii) have timely paid all material Taxes due and owing (whether
or not shown as due and owing on any Tax Return), except for Taxes being contested in good faith pursuant to appropriate procedures and
for which adequate reserves have been established on the financial statements of the Company; (iii) have timely withheld all material
amounts of Taxes required to be withheld and such withheld Taxes have been duly and timely paid to the proper Taxing Authority or properly
reserved; and (iv) have not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency which waiver or extension has not yet expired.
(b) There
are no current Tax audits, examinations, investigations or other proceedings with respect to Taxes of or with respect to the Company
or any of its Subsidiaries and none are currently pending and neither the Company nor any of its Subsidiaries has received a written
notice from a Taxing Authority of a material upcoming audit, examination, investigation or other proceeding with respect to Taxes nor
to the Company’s knowledge, any threatened in writing.
(c) There
are no Liens for Taxes on any of the assets of the Company or any of its Subsidiaries, other than Liens for Taxes which are not yet due
and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in
the financial statements of the Company in accordance with GAAP.
(d) Neither
the Company nor any of its Subsidiaries has participated in any “reportable transactions” within the meaning of Treasury
Regulations Section 1.6011-4 or any similar provision of applicable Law.
(e) Neither
the Company nor any of its Subsidiaries (i) has any liability for the Taxes of any Person (other than the Company or its Subsidiaries)
(A) as a result of being a member of a combined, unitary, consolidated or similar tax group, or as a transferee or successor, by
Contract or otherwise, or (B) pursuant to, or as a result of, any Tax sharing agreement, Tax allocation agreement or Tax indemnity
agreement (other than any other customary commercial Contracts not primarily related to Tax or any agreement among or between only the
Company or any of its Subsidiaries), or (ii) is a party to or bound by (A) any closing agreement (within the meaning of Section 7121(a) of
the Code (or any similar or analogous provision of state, local or non-U.S. Law)) or other ruling or written agreement with a Taxing
Authority, in each case, with respect to Taxes, or (B) any Tax sharing agreement, Tax allocation agreement or Tax indemnity agreement
(other than any other customary commercial Contracts not primarily related to Tax or any agreement among or between only the Company
or any of its Subsidiaries).
(f) The
Company and its Subsidiaries are and have at all times been resident for Tax purposes in their place of incorporation, have not at any
time been treated and recognized by a Taxing Authority as a resident in any other jurisdiction for any Tax purposes. Neither the Company
nor its Subsidiaries has or has had a permanent establishment (within the meaning of an applicable tax treaty) in any country other than
the country in which it is organized. No written claim has been made by a Governmental Entity in a jurisdiction where the Company or
any of its Subsidiaries does not file Tax Returns such that it may be subject to taxation by, or required to file any Tax Return in,
that jurisdiction.
(g) The
Subsidiaries of the Company located in the PRC have, in accordance with applicable PRC Law, duly registered with the relevant PRC Governmental
Entity, obtained and maintained the validity of all business licenses and complied with all requirements imposed by such Governmental
Entities.
(h) Any
submissions made by or on behalf of the Company or any of its Subsidiaries to any Governmental Entity in connection with obtaining Tax
exemptions, Tax holidays, Tax deferrals, Tax incentives or other preferential Tax treatments or Tax rebates were accurate and complete
in all material respects. As of the date hereof, no suspension, revocation or cancellation of any such Tax exemptions, holidays, deferrals,
incentives or other preferential treatments or rebates is pending or, to the knowledge of the Company, threatened in writing.
(i) None
of the Company or any of its Subsidiaries is or has been a member of an affiliated group (other than a group the common parent of which
is or was the Company) filing an affiliated, consolidated, combined or unitary Tax Return.
(j) Neither
the Company nor any of its Subsidiaries is or has been a party to any transaction treated by the parties thereto as one to which Sections
355 or 361 of the Code (or any similar provision of state, local or foreign law) applied within the last two (2) years.
(k) The
Company and its Subsidiaries are and have at all relevant times been in compliance in all material respects with applicable transfer
pricing Laws, including where applicable, the execution and maintenance of contemporaneous documentation substantiating the transfer
pricing practices and methodology.
(l) The
Company is not (and has not been within the last five (5) years) a “United States real property holding corporation”
as defined in Section 897(c)(2) of the Code and the applicable Treasury Regulations.
Section 3.19 Proxy
Statement. None of the information supplied or to be supplied by the Company for inclusion or incorporation by reference in the Proxy
Statement, on the date it (and any amendment or supplement thereto) is first furnished to the SEC, or at the time it is first mailed
to the shareholders of the Company (including holders of ADSs) or at the time of the Shareholders Meeting, will contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they are made, not false or misleading. The Proxy Statement, when furnished to the SEC
by the Company, will comply as to form, in all material respects, with the provisions of the Exchange Act. The representations and warranties
contained in this Section 3.19 will not apply to statements or omissions included or incorporated by reference in the Proxy
Statement to the extent based upon information supplied to the Company by or on behalf of Parent or Merger Sub.
Section 3.20 Regulatory
Matters.
(a) The
Company and its Subsidiaries are, and, to the knowledge of the Company and to the extent relating to the research, development or manufacture
of any Company Product, each Collaboration Partner is, in compliance and, since the Applicable Date, has been in compliance with all
Health Care Laws applicable to the Company or its Subsidiaries or to which any Company Product is otherwise subject, except as would
not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. The
Company and its Subsidiaries are not and have not been subject to, and, to the knowledge of the Company and to the extent relating to
the research, development or manufacture of any Company Product, no Collaboration Partner is or, since the Applicable Date, has been
subject to, any civil or criminal enforcement, regulatory or administrative proceedings against or affecting the Company or any of its
Subsidiaries relating to or arising under the Health Care Laws, and, to the knowledge of the Company, no such enforcement, regulatory
or administrative proceeding has been threatened in writing, in each case, except as would not, individually or in the aggregate, reasonably
be expected to be material to the Company and its Subsidiaries, taken as a whole. Neither the Company or any of its Subsidiaries nor
any officers, directors or employees of the Company or any of its Subsidiaries or, to the knowledge of the Company, no agent or clinical
investigator of the Company or any of its Subsidiaries, is a party to any corporate integrity agreement, monitoring agreement, consent
decree, settlement order or similar agreement with or imposed by any Governmental Entity, except as would not, individually or in the
aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
(b) All
manufacturing operations conducted for the benefit of the Company or any of its Subsidiaries with respect to any Company Product being
used in human clinical trials have been conducted in accordance with all applicable Health Care Laws and Good Manufacturing Practices,
except where the failures to so comply would not, individually or in the aggregate, reasonably be expected to be material to the Company
and its Subsidiaries, taken as a whole. No manufacturing site that has conducted or is conducting manufacturing operations of Company
Products for the benefit of the Company or any of its Subsidiaries is or has been, with respect to such Company Products manufactured
for use in human clinical trials, subject to a shutdown or import or export prohibition imposed or requested by FDA, NMPA or another
Governmental Entity, except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and
its Subsidiaries, taken as a whole.
(c) Neither
the Company or any of its Subsidiaries nor, to the knowledge of the Company, any contract manufacturer for Company Products manufactured
for the benefit of the Company or any of its Subsidiaries, has received any FDA Form 483, warning letter, untitled letter or comparable
enforcement from any Governmental Entity, including the FDA or NMPA that if not complied with, would reasonably be expected to be material
to the Company and its Subsidiaries, taken as a whole, or written notification of any pending or, to the knowledge of the Company, threatened,
claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other Action from any Governmental Entity, including
the FDA or NMPA, alleging or asserting non-compliance by, or liability of, the Company or any of its Subsidiaries under any Health Care
Laws, where such non-compliance or liability would not reasonably be expected to be material to the Company and its Subsidiaries, taken
as a whole.
(d) Neither
the Company or any of its Subsidiaries nor any officer, director or managing employee of the Company or any of its Subsidiaries or, to
the knowledge of the Company and to the extent relating to the research, development or manufacture of any Company Product, any Collaboration
Partner: (i) has, since the Applicable Date, made any untrue statement of material fact or fraudulent statement to the FDA, NMPA
or any other Governmental Entity; (ii) has, since the Applicable Date, failed to disclose a material fact required to be disclosed
to the FDA, NMPA or any other Governmental Entity; (iii) has, since the Applicable Date, committed any other act, made any statement
or failed to make any statement, that (in any such case) establishes a reasonable basis for the FDA, NMPA or any other Governmental Entity
to invoke its Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities Final Policy or any similar policy; (iv) has,
since the Applicable Date, had a civil monetary penalty assessed against it, him or her under Section 1128A of the Social Security
Act, codified at Title 42, Chapter 7, of the United States Code; or (v) is currently listed on the United States General Services
Administration published list of parties excluded from federal procurement programs and non-procurement programs. As of the date hereof,
neither the Company nor any of its Subsidiaries is the subject of any pending or, to the knowledge of the Company, threatened investigation
in writing by the FDA, NMPA or any other Governmental Entity pursuant to its Fraud, Untrue Statements of Material Facts, Bribery, and
Illegal Gratuities Final Policy or any similar policy. Since the Applicable Date, neither the Company or any of its Subsidiaries nor
any officers, directors or employees of the Company or any of its Subsidiaries or, to the knowledge of the Company, any agents or clinical
investigators of the Company or any of its Subsidiaries, has been excluded, suspended or debarred from participation in any national,
federal or state health care program or human clinical research or charged with or convicted of any crime or engaged in any conduct that
could reasonably be expected to result in material debarment, suspension or exclusion, including under 21 U.S.C Section 335a, 42
U.S.C. Section 1320a-7 or any similar Law outside of the United States.
(e) (i) All
filings, declarations, listings, registrations, submissions, reports, documents, claims and notices (including adverse event reports
and investigational new drug safety reports) required to be filed, maintained, or furnished to the FDA, NMPA or any other Governmental
Entity performing functions similar to those performed by the FDA or NMPA by the Company or any of its Subsidiaries have been so filed,
maintained or furnished; and (ii) to the knowledge of the Company, all such filings, declarations, listings, registrations, submissions,
reports, documents, claims and notices were accurate, complete and correct on the date filed (or were corrected in or supplemented by
a subsequent filing) and were in compliance with applicable Laws when filed, and no deficiencies that have been asserted by any applicable
Governmental Entity with respect to any such filings, declarations, listings, registrations, submissions, reports, documents, claims
or notices remain outstanding, except, in each case of clauses (i) and (ii), as would not reasonably be expected to be material
to the Company and its Subsidiaries, taken as a whole.
(f) All
clinical and nonclinical studies, trials or tests conducted or sponsored by or, to the knowledge of the Company, on behalf of the Company
or any of its Subsidiaries have been and, if still pending, are being conducted in all material respects in accordance with all applicable
Health Care Laws and guidance, including Good Clinical Practices requirements and applicable Laws restricting the use and disclosure
of individually identifiable health information. As of the date hereof, none of the FDA, NMPA nor any other Governmental Entity, nor
any institutional review board or independent ethics committee, has sent any written notices or other written correspondence to the Company
or any of its Subsidiaries or an investigator with respect to any clinical or nonclinical studies, trials and tests conducted or sponsored
by or on behalf of the Company or any of its Subsidiaries alleging or asserting material noncompliance with any applicable Laws with
respect to any such study, trial or test, or recommending or requiring the termination, suspension or material modification of such studies,
trials or tests, which modification would reasonably be expected to have a Material Adverse Effect.
(g) All
preclinical and nonclinical tests performed in connection with or as the basis for any regulatory approval or clearance required for
a Company Product either: (i) have been conducted in accordance with applicable Good Laboratory Practices, including the requirements
contained in 21 C.F.R. Part 58; or (ii) involved experimental research techniques that could not be performed by a registered
GLP testing laboratory (with appropriate notice being given to the FDA, NMPA or any other applicable Governmental Entity) and have employed
the procedures and controls generally used by qualified experts in preclinical and nonclinical study of products comparable to those
being developed by or on behalf of the Company or any of its Subsidiaries, except, in each case of clauses (i) and (ii), as has
not had and would not reasonably be expected be material to the Company and its Subsidiaries, taken as a whole.
(h) To
the extent permissible under applicable Laws, the Company has provided or made available true, correct and complete copies of the following
materials in the possession of the Company or any of its Subsidiaries as of the date hereof: (i) INDs; (ii) all material correspondence
submitted to or received from the FDA, NMPA and any other similar health regulatory Governmental Entity, and all other material documents
concerning such correspondence, in each case, held by the Company or any of its Subsidiaries concerning any Company Product; and (iii) all
material nonclinical, clinical and other data contained in or relied upon in any of the foregoing.
Section 3.21 Intellectual
Property.
(a) Section 3.21(a) of
the Company Disclosure Letter sets forth a true, correct and complete list, as of the date hereof, of all Company Registered Intellectual
Property as of the date of this Agreement, together with the name of the current owner(s), the applicable jurisdictions, the issuance,
application or registration numbers and the dates of issuance, application or registration of the item. All responses, submissions, and
other filings and fees required to maintain the registrations of the foregoing that have or will come due prior to the Closing Date or
30 days thereafter, as applicable, have been or will be timely filed with or paid to, respectively, the relevant Governmental Entities
and authorized registrars, and, to the knowledge of the Company, all registrations of the foregoing are otherwise in good standing. The
Company is the sole and exclusive owner or co-owner, or the sole and exclusive or co-exclusive licensee, of all Company Intellectual
Property (provided, that, with respect to licensed Company Intellectual Property, the Company is the sole and exclusive or co-exclusive
licensee within the applicable licensed field of use) and, to the knowledge of the Company, except as would not, individually or in the
aggregate, have a Material Adverse Effect, has sufficient rights to use all other Intellectual Property used or held for use in the conduct
of the business of the Company as currently conducted, in each case, free and clear of any Liens other than Permitted Liens. Neither
the execution, delivery or performance of this Agreement nor the consummation of any of the transactions contemplated hereby will alter,
impair, extinguish or otherwise affect any Company Intellectual Property or the Company’s or any of its Subsidiaries’ rights
therein, except, in each case, as would not, individually or in the aggregate, reasonably be expected to be material to the Company and
its Subsidiaries, taken as a whole.
(b) To
the knowledge of the Company, except as would not, individually or in the aggregate, have a Material Adverse Effect, the Company and
its Subsidiaries have taken commercially reasonable steps to maintain the confidentiality of trade secrets included in Company Intellectual
Property, including by requiring all Persons having access thereto to execute nondisclosure agreements protecting the confidentiality
thereof (which agreements have not been breached by the Company or any of its Subsidiaries or, to the knowledge of the Company, any other
Person). Each Person who is or was an employee or contractor of the Company or any of its Subsidiaries and who is or was involved in
the creation, generation or other development of any material Company Intellectual Property owned or purported to be owned by the Company
or any of its Subsidiaries has executed a valid agreement containing a present assignment to the Company or any of its Subsidiaries of
all of such employee’s or contractor’s ownership interests in and any other rights to such material Company Intellectual
Property.
(c) To
the knowledge of the Company, all material Company Registered Intellectual Property that has been issued or that have completed registration
are valid, subsisting and enforceable. Except as would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, since the Applicable Date, neither the Company nor any of its Subsidiaries has received written notice from any third
party challenging the validity, enforceability, registrability, ownership or use of any Company Intellectual Property, nor is the Company
or any of its Subsidiaries currently a party to any proceeding relating to any such challenge, except for office actions received by
the Company or any of its Subsidiaries in the ordinary course of prosecuting or maintaining the Company Registered Intellectual Property.
To the knowledge of the Company, neither the Company nor any of its Subsidiaries is subject to any Order that does or would restrict
or impair the use of any Company Intellectual Property.
(d) Except
as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, no written claim or action,
and to the knowledge of the Company, any other claim or action has been brought or asserted against the Company or any of its Subsidiaries,
and since the Applicable Date, neither the Company nor any of its Subsidiaries has received any written notice from any third party,
and, to the knowledge of Company, there is no other assertion or threat from any third party, that the operation of the business of Company
as is currently conducted, or the Company Products, infringe, misappropriate or otherwise violate the Intellectual Property of any third
party. Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, to the knowledge
of the Company, neither the Company or any of its Subsidiaries nor the manufacture, use or commercialization of the Company Products
has infringed, misappropriated or otherwise violated (or will infringe, misappropriate or otherwise violate) the Intellectual Property
of any third party.
(e) To
the knowledge of the Company, except for any infringements, misappropriations or other violations that would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, no third party is currently infringing, misappropriating or otherwise
violating any Company Intellectual Property. Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, neither the Company nor any of its Subsidiaries is currently a party to any proceeding (i) challenging
the validity, enforceability, registrability, ownership or use of any third party Intellectual Property or (ii) asserting that the
operation of the business of any third party, or any third party products or services, infringes, misappropriates or otherwise violates
any Company Intellectual Property.
(f) (i) No
funding, grants, facilities, or services of a Governmental Entity or a university, college, research center or other educational institution
was used for, or funding from third parties was used for the primary purpose of, creating, generating or otherwise developing any Company
Intellectual Property; (ii) no such entity has asserted any ownership interest or other right in any Company Intellectual Property;
and (iii) to the knowledge of the Company, no such entity has any basis to assert any ownership interest or other right in any Company
Intellectual Property.
(g) The
Company is not required or obligated to (i) make any royalties or other payments or fees that are contingent upon the occurrence
of future achievement of milestone events or sales of Company Products or (ii) provide any other consideration of any kind, to any
owner or licensor of, or other claimant to, any Intellectual Property, or any other Person, with respect to the use thereof.
Section 3.22 Data
Protection. The Company has (a) complied in all material respects with Applicable Data Protection Requirements; (b) implemented
and maintained technical, physical, organizational, and administrative measures and policies designed to protect Personal Information
and Company Data against unauthorized access, use, modification, disclosure, or loss (each a “Security Incident”),
including, without limitation, backup, security and disaster recovery technology and procedures and has timely and reasonably remediated
or otherwise addressed any audit findings relating to its security safeguards; and (c) where required by Applicable Data Protection
Requirements, contractually obligated any third parties that process, access, or store Personal Information or other Company Data to
abide by terms that are compliant in all material respects with Applicable Data Protection Requirements. There has been no Security Incident
or other breach involving Personal Information or Company Data and the Company has not provided or been required under Applicable Data
Protection Requirements to provide notification of any breach of privacy or data security. No Person (including any Governmental Entity)
has made any written claim or commenced any Action against the Company with respect to alleged violations of Applicable Data Protection
Requirements. Neither the execution, delivery or performance of this Agreement, nor the consummation of the Transactions will result
in any material violation of Applicable Data Protection Requirements.
Section 3.23 Environmental
Matters. Except as would not reasonably be expected to have a Material Adverse Effect: (a) the Company and its Subsidiaries
are and since the Applicable Date have been, in compliance with all applicable Environmental Laws, which compliance has included applying
for, obtaining, maintaining and complying with all material Permits required under such applicable Environmental Laws for the operation
of their respective businesses; (b) as of the date of this Agreement, neither the Company nor any of its Subsidiaries is subject
to any Action or Order or to the Company’s knowledge, has received any written notice regarding any actual or alleged material
violation of or liability (contingent or otherwise) under any Environmental Law; and (c) to the knowledge of the Company, there
has been no release or disposal of, contamination by, or exposure of any Person to any substance, material or waste so as to give rise
to any material liability for the Company or any of its Subsidiaries under any Environmental Law. For purposes of this Agreement, “Environmental
Laws” means all applicable Laws regarding pollution or protection of the environment, or the effect of the environment or hazardous
or toxic substances, materials or wastes on public or worker health or safety.
Section 3.24 Opinion
of Financial Advisor. The Board of Directors has received the oral opinion (to be subsequently confirmed in writing) of Centerview
Partners LLC (the “Financial Advisor”), financial advisor to the Company, on or prior to the date of this Agreement,
that, as of the date of such opinion and based upon and subject to the matters set forth therein, including the various assumptions made,
procedures followed, matters considered and qualifications and limitations set forth therein, the Per ADS Merger Consideration to be
paid to the holders of ADSs (other than ADSs representing Excluded Shares) pursuant to this Agreement is fair, from a financial point
of view, to such holders. A signed, true and complete copy of such opinion will promptly be made available to Parent, for informational
purposes only, following receipt thereof by the Board of Directors and execution of this Agreement.
Section 3.25 Brokers.
No broker, finder or investment banker (other than the Financial Advisor) is entitled to any brokerage, finder’s or other fee or
commission in connection with the Transactions based upon arrangements made by and on behalf of the Company or any of its Subsidiaries.
The Company has made available to Parent a true, complete and correct copy of the engagement letter for the Financial Advisor (the “Financial
Advisor Engagement Letter”). The Financial Advisor Engagement Letter has not been amended, modified for supplement without
the consent of Parent.
Section 3.26 VIE
Entities and Control Documents.
(a) As
of the date of this Agreement, pursuant to the Control Documents with respect to each VIE Entity, the WFOE has had exclusive control
over such VIE Entity and its Subsidiary and is entitled to all of the economic benefits and residual returns from the operations of such
VIE Entity and its Subsidiary. Under the Control Documents, the Company is permitted under applicable Laws and accounting conventions
to properly consolidate the financial results of the Controlled Entities in the consolidated financial statements of the Company in accordance
with the GAAP.
(b) The
WFOE and the Controlled Entities each have the necessary and corporate power and authority, and, to the knowledge of the Company, the
individuals party to the Control Documents each have the capacity, to enter into, execute and deliver the Control Document to which it,
he or she is a party and each other agreement, certificate, document and instrument to be executed and delivered by it, he or she pursuant
to the Control Documents and to perform its, his or hers obligations thereunder. The execution and delivery by WFOE and the Controlled
Entities to each Control Document to which it is a party and the performance by such party of its obligations thereunder have been duly
authorized by all requisite corporate actions on the part of such party.
(c) The
execution and delivery by the Company and each of its Subsidiaries named in each Control Document, and the performance by the Company
and/or such Subsidiary, as applicable, of its obligations thereunder and the consummation by it of the transactions contemplated therein
shall not (i) result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time
or the giving of notice, any provision of its corporate documents as in effect, any applicable Law, or any contract to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound, (ii) accelerate, or constitute
an event entitling any Person to accelerate, the maturity of any indebtedness or other liability of the Company or any of its Subsidiaries
or to increase the rate of interest presently in effect with respect to any indebtedness of the Company or any of its Subsidiaries, or
(iii) result in the creation of any Lien upon any of the properties or assets of the Company or any of its Subsidiaries, in each
case of clauses (i) through (iii), except for any such conflict, violation, breach, default, acceleration, event, Lien or other
occurrence which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(d) Since
the Applicable Date through the date of this Agreement, all consent, approval, authorization or permit of, or filing with or notification
to any Governmental Entity required under any applicable Laws in connection with the Control Documents have been made or unconditionally
obtained in writing, and no such consent, approval, authorization, permit, filings or notifications has been withdrawn or is subject
to any condition precedent, which has not been fulfilled or performed, except in each case, as would not reasonably be expected to have
a Material Adverse Effect.
(e) Each
Control Document is duly executed by the parties thereto and constitutes a valid and legally binding obligation of the parties named
therein, is in full force and effect and enforceable in accordance with its terms, subject to the Bankruptcy and Equity Exception. All
of such Control Documents taken as a whole are legal, valid, enforceable and admissible as evidence under PRC Laws, except in each case,
as would not reasonably be expected to have a Material Adverse Effect. No party to any Control Document is in material breach or default
in the performance or observance of any of the material terms or provisions of such Control Document and to the knowledge of the Company,
none of the parties to any Control Document has sent or received any written communication regarding termination of or intention not
to renew any Control Document, and no such termination or non-renewal has been threatened in writing by any of the parties thereto.
(f) Since
the Applicable Date through the date of this Agreement, there have been no written disputes, disagreements, claims or legal proceedings,
raised by any Governmental Entity or any other Person, pending or, to the knowledge of the Company, threatened in writing against any
of the Controlled Entities or the Company or any of its Subsidiaries that (i) challenge the validity or enforceability of any part
or all of the Control Documents, individually or taken as a whole, (ii) challenge the “variable interest entity” structure
or the ownership structure as set forth in the Control Documents, (iii) claim any ownership, share, equity or interest in the Controlled
Entities or the Company or any of its Subsidiaries, or claim any compensation for not being granted any ownership, share, equity or interest
in the Controlled Entities or the Company or any of its Subsidiaries or (iv) claim any of the Control Documents or the ownership
structure thereof or any arrangement or performance of or in accordance with the Control Documents was, is or will violate any PRC Laws,
in each case of clauses (i) through (iv), except as would not, individually or in the aggregate, be material to the Company and
its Subsidiaries, taken as a whole.
(g) Except
as reflected or otherwise reserved against on the consolidated financial statements of the Company (including the notes thereto) included
in the Company’s annual report on Form 20-F filed with the SEC on April 25, 2023, neither the Company nor any of its
Subsidiaries are subject to any liabilities or obligations in connection with any liquidation, dissolution, deregistration or similar
corporate event involving any Controlled Entity.
Section 3.27 Anti-Takeover
Provisions. There are no “fair prices,” “moratoriums,” “business combinations,” “control
share acquisitions” or other similar forms of anti-takeover statutes or regulations enacted under any Laws, or “poison pills”,
“shareholder rights plans” or similar Contracts to each of which the Company is a party with respect to any shares of capital
stock of the Company, or similar provisions under the Organizational Documents of the Company and its Subsidiaries (collectively, “Takeover
Statute”), in each case applicable to this Agreement, the Merger or the other Transactions. The Company has taken all necessary
actions to exempt this Agreement, the Merger and the other Transactions from any Takeover Statute applicable to this Agreement, the Merger
or the other Transactions.
Section 3.28 No
Other Representations or Warranties.
(a) The
Company is not relying and has not relied on any representations or warranties whatsoever regarding the subject matter of this Agreement,
express or implied, except for the representations and warranties in Article IV and in any certificate delivered in connection
with this Agreement. Such representations and warranties by Parent and Merger Sub constitute the sole and exclusive representations and
warranties of Parent and Merger Sub in connection with the Transactions and the Company understands, acknowledges and agrees that all
other representations and warranties of any kind or nature whether express, implied or statutory are specifically disclaimed by Parent
and Merger Sub.
(b) In
connection with the Transactions, each of the Company, its Subsidiaries and their respective Affiliates, shareholders, directors, officers,
employees, agents, Representatives and advisors have received and may continue to receive after the date of this Agreement from Parent
and Merger Sub and their respective Affiliates, shareholders, directors, officers, employees, consultants, agents, Representatives and
advisors certain estimates, projections, forecasts and other forward-looking information, as well as certain business plan information,
regarding Parent and Merger Sub and their business and operations. The Company hereby acknowledges that there are uncertainties inherent
in attempting to make such estimates, projections, forecasts and other forward-looking statements, as well as in such business plans,
and that the Company will have no claim against Parent and Merger Sub, or any of their Affiliates, shareholders, directors, officers,
employees, consultants, agents, Representatives or advisors, or any other person with respect thereto other than, subject to the terms
and conditions of this Agreement, with respect to Parent and Merger Sub, any such information is expressly addressed or included in a
representation or warranty contained in Article IV. Accordingly, the Company hereby acknowledges and agree that neither Parent
and Merger Sub nor any of their respective Affiliates, shareholders, directors, officers, employees, consultants, agents, Representatives
or advisors, nor any other person, has made or is making any express or implied representation or warranty with respect to such estimates,
projections, forecasts, forward-looking statements or business plans, other than, with respect to Parent and Merger Sub, subject to the
terms and conditions of this Agreement, any such information is expressly addressed or included in a representation or warranty made
by Parent and Merger Sub contained in Article IV.
Article IV
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby,
jointly and severally, represent and warrant to the Company that:
Section 4.1 Organization.
Each of Parent and Merger Sub (a) is a legal entity duly incorporated, validly existing and in good standing under the Laws of its
respective jurisdiction of incorporation, (b) has all requisite corporate or similar power and authority to own, lease and operate
its properties and assets in the manner in which they are currently owned, leased and operated and to conduct its business in the manner
as presently conducted and (c) is qualified or licensed to do business and, to the extent such concept is applicable, is in good
standing as a foreign corporation or other legal entity in each jurisdiction where the ownership, leasing or operation of its assets
or properties or conduct of its business requires such qualification, except where the failure to be so organized, qualified or, to the
extent such concept is applicable, in such good standing, or to have such power or authority, would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. Each of Parent and Merger Sub has made available to the Company (i) true,
complete and correct copies of its Organizational Documents, as currently in effect including all amendments thereto, and (ii) a
true and complete list of all directors and executive officers of Parent and Merger Sub, as of the date hereof.
Section 4.2 Authority.
Each of Parent and Merger Sub has all requisite corporate power and authority, and has taken all corporate or other action necessary,
in order to execute, deliver and perform its obligations under, this Agreement (and with respect to Parent, the CVR Agreement), and to
consummate the Transactions. The execution, delivery and by each of Parent and Merger Sub of this Agreement (and with respect to Parent,
the CVR Agreement) and the consummation by each of Parent and Merger Sub of the Transactions have been duly and validly authorized and
approved by all necessary corporate or similar action of each of Parent and Merger Sub, and no other corporate proceedings or shareholder
or similar action on the part of Parent or Merger Sub or any of their Affiliates are necessary to authorize or approve this Agreement
(and with respect to Parent, the CVR Agreement), to perform their respective obligations hereunder or thereunder, or to consummate the
Transactions (other than the filing of the Plan of Merger with the Registrar of Companies pursuant to the CICA). This Agreement has been
duly and validly executed and delivered by each of Parent and Merger Sub and, assuming the due authorization, execution and delivery
hereof by the Company, is a legal, valid and binding obligation of each of Parent and Merger Sub, enforceable against each of Parent
and Merger Sub in accordance with its terms, subject to the Bankruptcy and Equity Exception. The CVR Agreement, when executed and delivered
by Parent and, assuming the due authorization, execution and delivery thereof by the Rights Agent, is a legal, valid and binding obligation
of Parent, enforceable against Parent in accordance with its terms, subject to the Bankruptcy and Equity Exception.
Section 4.3 No
Conflict; Required Filings and Consents.
(a) The
execution, delivery and performance of this Agreement by Parent and Merger Sub and of the CVR Agreement by Parent do not, and the consummation
of the Transactions will not (i) breach, violate or conflict with the memorandum and articles of association or other governing
documents of each of Parent and Merger Sub or the comparable governing instruments of any of their respective Subsidiaries, (ii) assuming
that all consents, approvals and authorizations contemplated by clauses (i) through (iv) of Section 4.3(b) have
been obtained, and all filings described in such clauses have been made, conflict with, breach or violate any Law applicable to Parent
or Merger Sub or by which either of them or any of their respective properties or assets are bound or (iii) result in any breach
or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default), require a consent
or result in the loss of a benefit under, or give rise to any right of termination, cancellation, amendment or acceleration of, or result
in the creation of a Lien (except for a Permitted Lien) on any of the material assets of Parent or Merger Sub pursuant to any Contracts
to which Parent or Merger Sub, or any Affiliate thereof, is a party or by which Parent or Merger Sub or any of their Affiliates or its
or their respective properties or assets are bound (including any Contract to which an Affiliate of Parent or Merger Sub is a party),
except, in the case of clauses (ii) and (iii), for any such conflict, violation, breach, default, loss, right or other occurrence
which would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b) The
execution, delivery and performance of this Agreement by each of Parent and Merger Sub and of the CVR Agreement by Parent and the consummation
of the Merger and the other Transactions by each of Parent and Merger Sub do not and will not require any consent, approval, authorization
or permit of, action by, filing with or notification to, any Governmental Entity, except for (i) compliance with the applicable
requirements, if any, of the Exchange Act and the rules and regulations promulgated thereunder and state securities, takeover and
“blue sky” laws, (ii) compliance with the applicable requirements of NASDAQ, (iii) the filing of the Plan of Merger
with the Registrar of Companies pursuant to the CICA, (iv) compliance with any applicable requirements of the HSR Act and any applicable
foreign Antitrust and Foreign Investment Laws, (v) any filings with respect to Tax, and (vi) any such consent, approval, authorization,
permit, action, filing or notification the failure of which to make or obtain would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect.
Section 4.4 Absence
of Litigation. As of the date of this Agreement, there are no Actions pending or, to the knowledge of Parent, threatened against
Parent or Merger Sub or any of their respective Subsidiaries, other than any such Action that would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect. Neither Parent nor any of its Subsidiaries nor any of their respective
material properties or assets is or are subject to any Order, except for those that would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect.
Section 4.5 Sufficiency
of Funds. At the Closing, Parent will have, cash resources in immediately available funds and in an amount sufficient to consummate
the Transactions and satisfy all of Parent’s obligations under this Agreement, including the payment of the aggregate Per Share
Closing Amount and Per ADS Closing Amount, and procuring payment of the Company Warrant Consideration, In-the-Money Company Option
Closing Amount and Company RSU Closing Amount, payable in respect of all Shares (other than the Excluded Shares, Dissenting Shares and
Shares represented by ADSs), ADSs (other than ADSs representing the Excluded Shares), Company Warrants, Company Options and Company RSUs
issued and outstanding as of immediately prior to the Effective Time, and to pay all related fees and expenses required to be paid by
Parent or Merger Sub pursuant to the terms of this Agreement at the Effective Time. On the Milestone Payment Date, Parent will have cash
resources in immediately available funds and in an amount sufficient to satisfy Parent’s cash payment obligations under the CVR
Agreement. Parent’s and Merger Sub’s obligations under this Agreement and the CVR Agreement, including their obligations
to consummate the Merger, are not subject to a condition regarding Parent’s or Merger Sub’s obtaining of funds to consummate
the transactions contemplated by this Agreement and the CVR Agreement.
Section 4.6 Operations
and Ownership of Merger Sub. All of the issued and outstanding capital stock of Merger Sub is, and at and immediately prior to the
Effective Time will be, owned by Parent. Merger Sub has been formed solely for the purpose of engaging in the Transactions and prior
to the Effective Time will have engaged in no other business activities and will have no assets, liabilities or obligations of any nature
other than (i) as expressly contemplated herein or in any other Transaction Document and (ii) liabilities and obligations incidental
to its formation and the maintenance of its existence.
Section 4.7 Brokers.
No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission for which the Company
will be liable prior to the Effective Time in connection with the Transactions based upon arrangements made by and on behalf of Parent
or Merger Sub.
Section 4.8 Ownership
of Shares. As of the date of this Agreement, none of Parent, Merger Sub or any of their respective Affiliates directly or indirectly
beneficially owns (as defined in Rule 13d-3 under the Exchange Act) any Shares or any other Equity Securities of the Company.
Section 4.9 Information
Supplied. None of the information supplied or to be supplied by or on behalf of Parent or Merger Sub for inclusion or incorporation
by reference in the Proxy Statement, on the date it (and any amendment or supplement thereto) is first furnished to the SEC, or at the
time it is first mailed to the shareholders of the Company (including holders of ADSs) or at the time of the Shareholders Meeting, will
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which they are made, not false or misleading. All documents and
information supplied by or on behalf of Parent, Merger Sub or their respective Representatives for inclusion in the Proxy Statement,
will comply as to form, in all material respects, with the provisions of the Exchange Act. Notwithstanding the foregoing, neither Parent
nor Merger Sub makes any representation or warranty with respect to any statement made in any of the foregoing documents based on information
supplied by or on behalf of the Company or any of its Representatives which is contained or incorporated by reference in the Proxy Statement.
Section 4.10 No
Other Representations or Warranties.
(a) Neither
Parent nor Merger Sub is relying and neither Parent nor Merger Sub has relied on any representations or warranties whatsoever regarding
the subject matter of this Agreement, express or implied, except for the representations and warranties in Article III and
in any certificate delivered in connection with this Agreement. Such representations and warranties by the Company constitute the sole
and exclusive representations and warranties of the Company and its Subsidiaries in connection with the Transactions and each of Parent
and Merger Sub understands, acknowledges and agrees that all other representations and warranties of any kind or nature whether express,
implied or statutory are specifically disclaimed by each of the Company and its Subsidiaries.
(b) In
connection with the due diligence investigation of each of the Company and its Subsidiaries by Parent and Merger Sub and their respective
Affiliates, shareholders, directors, officers, employees, agents, Representatives or advisors, Parent and Merger Sub and their respective
Affiliates, shareholders, directors, officers, employees, agents, Representatives and advisors have received and may continue to receive
after the date of this Agreement from the Company and its Subsidiaries and their Affiliates, shareholders, directors, officers, employees,
consultants, agents, Representatives and advisors certain estimates, projections, forecasts and other forward-looking information, as
well as certain business plan information, regarding the Company and its Subsidiaries and their business and operations. Parent and Merger
Sub hereby acknowledge that there are uncertainties inherent in attempting to make such estimates, projections, forecasts and other forward-looking
statements, as well as in such business plans, and that Parent and Merger Sub will have no claim against the Company and its Subsidiaries,
or any of their Affiliates, shareholders, directors, officers, employees, consultants, agents, Representatives or advisors, or any other
person with respect thereto other than, subject to the terms and conditions of this Agreement, with respect to the Company, any such
information is expressly addressed or included in a representation or warranty contained in Article III. Accordingly, Parent
and Merger Sub hereby acknowledge and agree that neither the Company and its Subsidiaries nor any of their respective Affiliates, shareholders,
directors, officers, employees, consultants, agents, Representatives or advisors, nor any other person, has made or is making any express
or implied representation or warranty with respect to such estimates, projections, forecasts, forward-looking statements or business
plans, other than, with respect to the Company, subject to the terms and conditions of this Agreement, any such information is expressly
addressed or included in a representation or warranty made by the Company contained in Article III.
Article V
CONDUCT
OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct
of Business of the Company Pending the Merger. From the date of this Agreement until the earlier of the Effective Time and the valid
termination of this Agreement in accordance with Article VIII, except (i) as required or otherwise expressly provided
for by the Transaction Documents, (ii) as specifically set forth in Section 5.1 of the Company Disclosure Letter, (iii) as
required to comply with applicable Law, or (iv) as Parent shall otherwise consent in writing (which consent shall not be unreasonably
withheld, conditioned or delayed):
(a) the
Company shall use its reasonable best efforts to, and shall use its reasonable best efforts to cause each of its Subsidiaries to, conduct
its and their respective businesses and operations in all material respects in the ordinary course of business and preserve intact its
and each of its subsidiaries’ business organization, including keeping available the services of current executive officers, and
to preserve the present relationships with those Persons having significant business relationships with the Company, and
(b) without
limiting the foregoing, the Company shall not and shall cause each of its Subsidiaries not to do any of the following:
(i) amend,
adopt any amendment to or otherwise change its Memorandum and Articles of Association or other Organizational Documents;
(ii) effect
or commence any complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization, reorganization,
or similar transaction;
(iii) merge
or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among the Company and its
wholly owned Subsidiaries;
(iv) make
any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment
in any interest in, any business or any corporation, partnership or other business organization or division thereof or any property,
assets or securities, in each case, except for (A) purchases of pharmaceutical ingredients, inventory and other assets in the ordinary
course of business, (B) acquisitions or investments pursuant to existing Contracts in effect as of the date hereof, (C) investments
in or other transactions with any wholly owned Subsidiary of the Company, or (D) capital expenditures in accordance with Section 5.1(b)(xiii);
(v) issue,
sell, grant, authorize, pledge, encumber or dispose of (or authorize the issuance, sale, grant, authorization, pledge, encumbrance or
disposition of) any Equity Securities of the Company or any of its Subsidiaries, except for (A) any issuance, sale or disposition
to the Company or a wholly owned Subsidiary of the Company by any Subsidiary of the Company, (B) any issuance of Shares upon the
exercise of Company Options or Company Warrants or settlement of Company RSUs, in each case outstanding as of the date hereof in accordance
with their terms in effect on the date hereof, or (C) withholding of Shares in full or partial payment of any purchase price or
exercise price and any applicable Taxes payable by such holder upon the exercise, settlement or lapse of conditions or restrictions on
the Company Equity Awards, in each case outstanding as of the date hereof in accordance with their terms in effect on the date hereof;
(vi) reclassify,
combine, split, reverse split, consolidate, recapitalize, subdivide, redeem, purchase or otherwise acquire any Equity Security of the
Company or any of the Company’s Subsidiaries or consummate or authorize any other similar transaction with respect to shares of
capital stock or ownership interests of the Company or any of its Subsidiaries (or any warrants, options or other rights to acquire the
foregoing) other than (A) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company
Equity Awards or the withholding of Shares in full or partial payment of any purchase price or exercise price and any applicable Taxes
payable by such holder upon the exercise, settlement or lapse of conditions or restrictions on the Company Equity Awards, in each case,
outstanding as of the date hereof in accordance with their terms in effect on the date hereof, (B) in connection with the forfeiture
of Company Equity Awards outstanding as of the date hereof in accordance with their terms in effect on the date hereof, (C) purchase,
transfer or other disposal between or among the Company and its wholly owned Subsidiaries, or (D) pursuant to existing Contracts
in effect as of the date hereof;
(vii) create
or incur any Lien, other than Permitted Liens, on any assets of the Company or its Subsidiaries, other than (A) increased obligations
under existing Liens resulting from indebtedness incurred in accordance with Section 5.1(b)(xvii), (B) as required pursuant
to existing Contracts in effect as of the date hereof as set forth in Section 5.1(b)(xiv) of the Company Disclosure
Letter, (C) in the ordinary course of business or (D) pursuant to Incidental Contracts;
(viii) authorize
or make any loans, advances (other than ordinary course business expenses, any advance or prepayment for any capital expenditure otherwise
permitted under Section 5.1(b)(xiii)), capital contributions to, or other investments in, any Person (other than the Company
or any of its Subsidiaries) in excess of $500,000 (or its equivalent in RMB or another currency) in the aggregate;
(ix) sell,
transfer or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership
or other business organization or division thereof or otherwise sell, lease, assign, license, transfer, exchange, swap, abandon, knowingly
fail to renew or permit to lapse or expire, grant an easement or covenant not to assert with respect to, grant any rights under, or subject
to any Lien (other than Permitted Liens), fail to maintain or defend in full force and effect (including any failure to protect the confidentiality
of any material Intellectual Property, or disclose, license, release, deliver, escrow or otherwise make available or grant any rights
to any source code), or dispose of any material assets, rights or properties (including material Intellectual Property) other than (A) sale
or disposition of inventory (or, in the case of Intellectual Property, non-exclusive licenses or covenants not to sue which are (x) not
material to the business of the Company and its Subsidiaries, taken as a whole, and (y) incidental to the primary purpose of the
applicable arrangement) in the ordinary course of business or are otherwise pursuant to an Incidental Contract, (B) pursuant to
existing Contracts in effect as of the date hereof, (C) between or among the Company and its wholly owned Subsidiaries, (D) with
respect to tangible assets with a fair market value of less than $125,000 (or its equivalent in RMB or another currency) in a single
transaction or series of related transactions or are otherwise dispositions or abandonments of immaterial assets in the ordinary course
of business, or (E) such actions that are taken for the purpose of permitting to expire Intellectual Property registrations expiring
at the end of their statutory terms;
(x) unless
mandated by a Governmental Entity, (A) make any changes to, discontinue, terminate or suspend any ongoing research and development
program or clinical trial relating to a Company Product or (B) commence, alone or with any third party, any research and development
program or clinical trial that has not been disclosed to Parent prior to the date of this Agreement;
(xi) make
any material submissions or filings to the FDA, NMPA or any other applicable health regulatory Governmental Entity related to the Company’s
business and operations or any Company Product, without, to the extent practicable and legally permissible, (A) providing Parent
with a reasonable opportunity to review and comment on such submissions or filings and (B) using good faith efforts to incorporate
any of Parent reasonable comments that are received in a timely fashion;
(xii) declare,
set aside, establish a record date for, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or
otherwise, with respect to any of the Company’s or its Subsidiaries’ capital stock, (except for any dividend or distribution
by a Subsidiary of the Company to the Company or any Subsidiary of the Company);
(xiii) authorize,
make or incur any capital expenditures or obligations or liabilities in connection therewith, other than (A) any capital expenditures
contemplated by the capital expenditure budget of the Company and its Subsidiaries made available to Parent prior to the date of this
Agreement as set forth in Section 5.1(b)(xiii) of the Company Disclosure Letter, and (B) capital expenditures of
less than $200,000 (or its equivalent in RMB or another currency) individually or $500,000 (or its equivalent in RMB or another currency)
in the aggregate;
(xiv) other
than Incidental Contracts, (A) enter into any Contract that would have been a Material Contract if it had been in effect as of the
date hereof, except for any statement of work issued under an existing Material Contract, in each case not in excess of $500,000 individually,
or (B) modify or amend in any material respect, terminate, permit to expire or waive any material rights or obligations under any
Material Contract;
(xv) enter
into any Contract or make any other commitment pursuant to which the Company or any of its Affiliates would receive, directly or indirectly,
the benefit of any funding, grants, facilities, services or other resources of a Governmental Entity, including any such commitment pursuant
to which such Governmental Entity would be entitled to any ownership interest or other right in or to any Intellectual Property;
(xvi) voluntarily
terminate, suspend, abrogate, amend, let lapse or modify any material Permit in a manner materially adverse to the Company and its Subsidiaries,
taken as a whole;
(xvii) except
for intercompany loans between the Company and any of its wholly owned Subsidiaries or between any wholly owned Subsidiaries of the Company,
incur, prepay, issue, syndicate, refinance, or otherwise become liable for, indebtedness for borrowed money in excess of $500,000 (or
its equivalent in RMB or another currency), or modify in any material respect the terms of any such indebtedness for borrowed money,
or assume, guarantee or endorse the obligations of any Person (other than a wholly owned Subsidiary of the Company), in each case, in
excess of $500,000 (or its equivalent in RMB or another currency), other than (A) guarantees incurred in compliance with this Section 5.1
by the Company of indebtedness of Subsidiaries of the Company, (B) the incurrence or guarantee of indebtedness under any existing
credit facilities or other Contracts as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized
under the Contracts evidencing such indebtedness, or (C) in the ordinary course of business;
(xviii) except
to the extent required by Law, pursuant to this Agreement or the terms of any Company Plan as in effect on the date hereof, or mandated
by a Governmental Entity, (A) increase the compensation or benefits of any Company Employee, (B) grant or pay (or otherwise
increase) any cash or equity-based incentive compensation (including any Company Equity Awards) change in control, retention, severance,
termination pay or other similar arrangement for any Company Employee, (C) establish, adopt, enter into, amend or terminate any
Company Plan or any other compensation or benefit plan, program, agreement or arrangement that would be a Company Plan if in effect on
the date of this Agreement, (D) grant, cancel or forgive any loan or advance of any money or any other property to any Company Employee,
(E) hire, promote or terminate any employee at (or who would be at) the level of Vice President or above (other than a termination
for cause as determined by the Company consistent with past practice), (F) increase the use of labor dispatch employees, or (G) take
any action to accelerate the vesting, funding or payment of any compensation, or benefits under, any Company Plan or otherwise;
(xix) change,
in any material respect, in any financial accounting principles, except as may be required to conform to changes in applicable Law or
GAAP or regulatory requirements with respect thereto;
(xx) except
to the extent required by applicable Law, (A) adopt or change any material Tax accounting method , (B) make, revoke, or change
any material Tax election, claim, surrender, notice or consent, (C) affirmatively surrender any claim for a refund of a material
amount of Taxes, (D) enter into any closing agreement or other written ruling or agreement with a Taxing Authority with respect
to a material amount of Taxes, (E) amend any material Tax Return, (F) settle, compromise or otherwise resolve any material
legal proceeding, audit, examination or investigation relating to Taxes, (G) fail to file when due (taking into account any extensions
automatically granted) any material Tax Return or to pay when due any material Taxes, (H) change any annual Tax accounting period,
or (I) change its residence for any Tax purpose or establish any permanent establishment or taxable presence in a jurisdiction where
it is not so resident;
(xxi) except
to the extent required by applicable Law or mandated by a Governmental Entity, enter into or negotiate any CBA, or organize or certify
any labor union or other labor organization as the bargaining representative for any Company Employee;
(xxii) waive,
release, settle or compromise any Action, other than settlements or compromises of any Action (A) that only involve payment of money
damages where the amounts paid (net of insurance proceeds received) does not exceed $500,000 (or its equivalent in RMB or another currency)
individually, (B) in the ordinary course of business, or (C) pursuant to or in connection with the Transaction Documents;
(xxiii) terminate
or cancel, let lapse, or amend or modify in any material respect, other than renewals in the ordinary course of business, any material
insurance policies maintained by it which are not promptly replaced by a comparable amount of insurance coverage;
(xxiv) enter
any new line of business outside of its existing business as of the date hereof that is material to the Company and its Subsidiaries,
taken as a whole; or
(xxv) agree,
authorize or commit to do or take any of the foregoing actions described in Section 5.1(b)(i) through Section 5.1(b)(xxiv).
Section 5.2 No
Control of the Company’s Business. Without in any way limiting any Party’s rights or obligations under this Agreement
(including Section 5.1), nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the
right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective
Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its
and its Subsidiaries’ operations.
Article VI
ADDITIONAL
AGREEMENTS
Section 6.1 Proxy
Statement.
(a) The
Company will, as soon as reasonably practicable following the date of this Agreement and in any event within 15 Business Days, with the
reasonable assistance of Parent and Merger Sub, prepare and furnish to the SEC the Proxy Statement. The Company shall use its reasonable
best efforts to ensure that the Proxy Statement complies in all material respects with the applicable provisions of the Exchange Act
and CICA. Parent shall furnish all information concerning itself and its Affiliates and provide such other assistance as may be reasonably
requested in connection with the preparation, furnishing and distribution of the Proxy Statement, and shall promptly inform the Company
whenever Parent discovers any fact or event relating to Parent or any of its Affiliates, officers or directors that is required to be
corrected or set forth in an amendment or supplement to the Proxy Statement. Notwithstanding the foregoing, except as otherwise expressly
provided in Section 6.3 or as contemplated by Section 6.8, prior to mailing the Proxy Statement or any other
proxy or consent solicitation statement with respect to any meeting of the shareholders of the Company in connection with the Merger,
the Company shall cooperate and provide Parent with a reasonable opportunity to review and comment on such document or response in advance
and consider in good faith any comments provided by Parent or any of its Representatives with respect thereto.
(b) If,
at any time prior to the receipt of the Company Requisite Vote, any information relating to the Company or Parent, respectively, or any
of their respective Affiliates, should be discovered by the Company or Parent which, in the reasonable judgment of the Company or Parent,
respectively, should be set forth in an amendment of, or a supplement to, the Proxy Statement, so that the Proxy Statement would not
include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, the Party which discovers such information shall promptly notify the other
Parties, and the Company and Parent shall cooperate in the prompt furnishing to the SEC of any necessary amendment of, or supplement
to, the Proxy Statement and, to the extent required by applicable Law, in disseminating the information contained in such amendment or
supplement to shareholders of the Company. Nothing in this Section 6.1(b) shall limit the obligations of any Party under
Section 6.1(a). For purposes of this Section 6.1, any information concerning or related to the Company, its Affiliates
or the Shareholders Meeting will be deemed to have been provided by the Company, and any information concerning or related to Parent
or its Affiliates will be deemed to have been provided by Parent. Except to the extent that the Board of Directors shall have made a
Change of Recommendation as expressly set forth in Section 6.3 or as contemplated by Section 6.8, the Proxy Statement
will include the Recommendation.
Section 6.2 Shareholders
Meeting.
(a) The
Company will, as soon as reasonably practicable following the date of this Agreement, duly call, give notice of, convene and hold a meeting
of its shareholders (the “Shareholders Meeting”) for the purpose of seeking the approval of this Agreement, the Merger
and the Plan of Merger by the Company Requisite Vote and, except if the Board of Directors shall have made a Change of Recommendation
in accordance with Section 6.3, will use its reasonable best efforts to solicit approval of this Agreement and the Merger
and the Plan of Merger. The Company will schedule the Shareholders Meeting as promptly as reasonably practicable following the dissemination
of the Proxy Statement in accordance with applicable Law; provided that the Company may, without the prior consent of Parent,
and shall if requested by Parent (with respect to the following clause (i)), adjourn or postpone the Shareholders Meeting if the Company
or Parent, as applicable, believes in good faith that such adjournment or postponement is reasonably necessary to allow reasonable additional
time to (i) solicit additional proxies necessary to achieve quorum or obtain approval of this Agreement by the Company Requisite
Vote at the Shareholders Meeting (including any adjournment or postponement thereof), or (ii) distribute any supplement or amendment
to the Proxy Statement that the Board of Directors has determined in good faith after consultation with outside legal counsel is necessary
under applicable Law and for such supplement or amendment to be reviewed by the Company’s shareholders prior to the Shareholders
Meeting (including any adjournment or postponement thereof), provided, however, that the Shareholders Meeting shall not
be postponed or adjourned for more than 10 Business Days in each instance or 30 Business Days in the aggregate from the originally scheduled
date of the Shareholders Meeting without the prior written consent of Parent (if such postponement or adjournment is made by the Company)
or by mutual agreement of the Company and Parent (if such postponement or adjournment is requested by Parent).
(b) In
the event that subsequent to the date of this Agreement, the Board of Directors makes a Change of Recommendation or shall have provided
any notice of its intent to make a Change of Recommendation pursuant to Section 6.3, except as is necessary to provide for
the expiration of any time period required under Section 6.3, the Company shall nevertheless submit this Agreement, the Merger
and the Plan of Merger to the shareholders for approval and authorization at the Shareholders Meeting in accordance with this Section 6.2
unless this Agreement shall have been terminated in accordance with its terms prior to the Shareholders Meeting.
Section 6.3 No
Solicitation.
(a) From
the date hereof until the Effective Time or, if earlier, the valid termination of this Agreement in accordance with Article VIII:
(i) the
Company and its controlled Affiliates shall not, and shall cause their respective directors and officers to not, and shall use their
respective reasonable best efforts to cause their respective Representatives to not, directly or indirectly:
(A) solicit,
initiate or take any other action to knowingly facilitate or knowingly encourage (including by way of furnishing information) any inquiries
regarding, or the making, submission, modification or amendment or announcement of any proposal or offer, including any proposal or offer
to its shareholders, that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal;
(B) enter
into, engage in, continue or otherwise participate in any manner in any discussions or negotiations regarding an Acquisition Proposal
or any inquiry, proposal or offer that would reasonably be expected to lead to an Acquisition Proposal;
(C) provide
any information or data concerning the Company or any of its Affiliates, or afford access to the business, properties, assets, books
or records of the Company or any of its Affiliates, to any Person (other than Parent, Merger Sub or any designees of Parent or Merger
Sub) with the intent to induce the making, submission or announcement of an Acquisition Proposal or the intent to encourage, facilitate
or assist an Acquisition Proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an Acquisition Proposal;
(D) approve,
endorse, recommend, execute or enter into, or propose to approve, endorse, recommend, execute or enter into, any letter of intent, agreement
in principle, merger agreement, acquisition agreement, option agreement or other similar agreement (whether written or oral, binding
or nonbinding) (other than an Acceptable Confidentiality Agreement) providing for, relating to, or that would reasonably be expected
to result in, any Acquisition Proposal (each, an “Alternative Acquisition Agreement”);
(E) amend
or grant any waiver or release under any confidentiality, standstill or similar agreement, to which the Company or any of its Affiliates
is a party, with respect to any class of equity interests of the Company or any of its Affiliates in connection with any Acquisition
Proposal (provided, that if the Board of Directors determines in its good faith judgment after consultation with its financial advisor
and outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Law,
the Company may waive any such provision solely to the extent necessary to permit the Person bound by such provision to make an Acquisition
Proposal to the Board of Directors on a confidential basis);
(F) (1) withdraw
or qualify, amend or modify the Recommendation in any manner adverse to Parent or Merger Sub, (2) fail to include the Recommendation
in the Proxy Statement when mailed to the shareholders of the Company, (3) recommend, adopt or approve or publicly propose to recommend,
adopt or approve any Acquisition Proposal or enter into any Alternative Acquisition Agreement, (4) fail to recommend against any
Acquisition Proposal that is a tender offer or exchange offer subject to Regulation 14D promulgated under the Exchange Act within 10
Business Days after the commencement (within the meaning of Rule 14d-2 under the Exchange Act) of such tender offer or exchange
offer, or (5) resolve to effect or publicly announce an intention or resolution to effect any of the foregoing (any of the foregoing
in this clause (F), a “Change of Recommendation”);
(G) take
any action to make any Takeover Statute inapplicable to any Person (other than Parent, Merger Sub or any designees of Parent or Merger
Sub) or any Acquisition Proposal; or
(H) resolve,
propose or agree to do any of the foregoing; and
(ii) except
as expressly permitted by this Section 6.3, the Company and its controlled Affiliates shall, and shall cause their respective
directors and officers to, and shall use their respective reasonable best efforts to cause their respective Representatives to, promptly
cease and cause to be terminated any existing activities, discussions or negotiations with any Persons conducted heretofore with respect
to any Acquisition Proposal or any inquiry, proposal or offer that would reasonably be expected to lead to an Acquisition Proposal. The
Company shall promptly (A) terminate all access of any Person (other than Parent and its Representatives) to any electronic data
room maintained by the Company in connection with any Acquisition Proposal and (B) request each Person that has heretofore executed
a confidentiality agreement in connection with such Person’s consideration of any Acquisition Proposal, to return (or if permitted
by the applicable confidentiality agreement, destroy) all information required to be returned (or, if applicable, destroyed) by such
Person under the terms of the applicable confidentiality agreement.
(b) The
Company agrees that it will as promptly as practicable (and, in any event, within 36 hours) notify Parent in writing if it or, to its
knowledge, any of its Representatives becomes aware that (i) any Acquisition Proposal (or any inquiry, proposal or offer that would
reasonably be expected to lead to an Acquisition Proposal) is received by the Company, or (ii) any discussions or negotiations are
sought to be initiated or continued with, the Company, its Board of Directors (or any committee thereof) or any Representative of the
foregoing in connection with any Acquisition Proposal (or any inquiry, proposal or offer that would reasonably be expected to lead to
an Acquisition Proposal). Such notice shall expressly state the identity of the Person or group of Persons making such Acquisition Proposal
(or such inquiry, proposal or offer that would reasonably be expected to lead to an Acquisition Proposal) and the material terms and
conditions of such Acquisition Proposal (or such inquiry, proposal or offer that would reasonably be expected to lead to an Acquisition
Proposal), together with copies of any written material documents relating thereto provided to the Company, its Board of Directors (or
any committee thereof) or any Representative of the foregoing, and thereafter the Company shall keep Parent reasonably informed, on a
reasonably current basis, of any material change to the terms of any such Acquisition Proposal (or such inquiry, proposal or offer that
would reasonably be expected to lead to an Acquisition Proposal), together with copies of any new written material documents (as well
as written summaries of any material oral communications) relating thereto provided by such Person or group of Persons making such Acquisition
Proposal to the Company, its Board of Directors (or any committee thereof) or any Representative of the foregoing.
(c) Notwithstanding
anything to the contrary in this Agreement, at any time prior to the receipt of the Company Requisite Vote, the Company may (subject
to compliance with this this Section 6.3), directly or indirectly through its Subsidiaries and its and their respective Representatives,
following the receipt of an unsolicited bona fide written Acquisition Proposal that did not result from a breach of this Section 6.3
(in each case, other than any immaterial non-compliance that does not adversely affect Parent or Merger Sub):
(i) contact
the Person or group of Persons who has made such Acquisition Proposal solely (A) to clarify and understand the terms and conditions
thereof solely to the extent the Board of Directors shall have determined in good faith that such contact is necessary to clarify ambiguities
in the terms or conditions proposed in order to determine whether such Acquisition Proposal constitutes a Superior Proposal or would
reasonably be expected to result in a Superior Proposal, and (B) to notify such Person of the restrictions of this Section 6.3;
(ii) provide
information (including any information or data concerning the Company or any of its Subsidiaries) in response to the request of the Person
or group of Persons who has made such Acquisition Proposal (including as modified or amended), if and only if prior to providing such
information, the Company has received from the Person or group of Persons so requesting such information an executed Acceptable Confidentiality
Agreement; provided that the Company shall provide or make available to Parent any such information (to the extent that such information
has not been previously provided or made available to Parent) substantially concurrently with the time it is provided to made available
to such Person or group of Persons making an Acquisition Proposal; or
(iii) engage
or participate in any discussions or negotiations with the Person or group of Persons who has made such Acquisition Proposal (including
as modified or amended);
provided
that prior to taking any action described in Section 6.3(c)(ii) or Section 6.3(c)(iii) above,
the Board of Directors shall have (1) determined in its good faith judgement, after consultation with its financial advisor and
outside legal counsel, that such Acquisition Proposal (including as modified or amended) constitutes, or would reasonably be expected
to lead to, a Superior Proposal and that failure to take such action would be inconsistent with the directors’ fiduciary duties
under applicable Laws and (2) first delivered to Parent written notice advising Parent that the Company intends to take such action,
which notice, in and of itself, shall not constitute a Change in Recommendation.
(d) Notwithstanding
anything to the contrary set forth in this Agreement but subject to compliance by the Company with this Section 6.3, at any
time prior to obtaining the Company Requisite Vote, in connection with its receipt of a bona fide written Acquisition Proposal,
the Board of Directors may effect a Change of Recommendation or terminate this Agreement in accordance with Section 8.1(c)(ii) to
enter into a definitive agreement providing for such Superior Proposal, if and only if:
(i) the
Board of Directors determines in its good faith judgement after consultation with its financial advisor and outside legal counsel, in
response to an unsolicited bona fide Acquisition Proposal that did not result from any breach of this Section 6.3
by the Company (other than any immaterial non-compliance that does not adversely affect Parent or Merger Sub), that such Acquisition
Proposal constitutes a Superior Proposal and that failure to effect a Change of Recommendation with respect to such Acquisition Proposal
would be inconsistent with the directors’ fiduciary duties under applicable Laws;
(ii) prior
to effecting a Change of Recommendation in connection with an Acquisition Proposal in accordance with this Section 6.3(d),
(A) the Company shall have provided prior written notice (the “Change Notice”) to Parent that the Board of Directors
intends to effect a Change of Recommendation or terminate this agreement in accordance with Section 8.1(c)(ii), describing
in reasonable detail the reasons for such action (which notice shall specify the identity of the party making the Acquisition Proposal
and the material terms thereof (including the consideration offered therein) and shall be delivered with complete copies of all relevant
documents (other than redacted terms of financing documents) relating to such Acquisition Proposal), and (B) the Company shall,
and shall cause its Representatives to, for four Business Days (the “Notice Period”), negotiate with Parent and its
Representatives in good faith (to the extent Parent desires to negotiate) any proposed modifications to the terms and conditions of this
Agreement so that such Acquisition Proposal ceases to constitute a Superior Proposal; provided that, in the event of any material
revisions to the Acquisition Proposal, the Company shall deliver a new Change Notice to Parent and comply again with the requirements
of this Section 6.3(d)(ii) with respect to such new Change Notice; provided, further, that with respect
to the new Change Notice to Parent, the Notice Period shall be deemed to be a two-Business Day period rather than the four Business Day
period first described above; and
(iii) following
the end of the Notice Period (and any renewed period thereof), the Board of Directors shall have determined in its good faith judgement
(after consultation with its financial advisor and outside legal counsel), after considering the terms of any proposed amendment or modification
to this Agreement, that the Acquisition Proposal continues to constitute a Superior Proposal and failure to effect a Change of Recommendation
with respect to such Acquisition Proposal would still be inconsistent with the directors’ fiduciary duties under applicable Laws.
(e) Notwithstanding
anything to the contrary set forth in this Agreement, prior to the time, but not after, the Company Requisite Vote is obtained, if an
Intervening Event has occurred, the Board of Directors may make a Change of Recommendation (other than in response to a Superior Proposal,
which shall be governed by Section 6.3(d)), if and only if:
(i) the
Board of Directors determines in its good faith judgment after consultation with its financial advisor and outside legal counsel that,
in light of an Intervening Event, failure to make a Change of Recommendation would be inconsistent with its fiduciary duties under applicable
Law;
(ii) prior
to effecting a Change of Recommendation in connection with an Intervening Event in accordance with this Section 6.3(e), (A) the
Company shall have provided a prior written notice (the “Intervening Event Notice”) to Parent that the Board of Directors
intends to effect a Change of Recommendation in connection with such Intervening Event, which notice shall specify the nature of the
Intervening Event in reasonable detail, and (B) after providing such Intervening Event Notice and prior to making such Change of
Recommendation in connection with such Intervening Event, the Company shall, and shall cause its Representatives to, for four Business
Days (the “Intervening Event Notice Period”), negotiate with Parent and its Representatives in good faith (to the
extent that Parent desires to negotiate) any proposed modifications to the terms and conditions of this Agreement in a manner that obviates
the need for such Change of Recommendation or so that failure to effect a Change of Recommendation would no longer be inconsistent with
the directors’ fiduciary duties under applicable Laws; and
(iii) following
the end of such Intervening Event Notice Period, the Board of Directors shall have determined in its good faith judgement (after consultation
with its financial advisor and outside legal counsel), after considering the terms of any proposed amendment or modification to this
Agreement, that failure to effect a Change of Recommendation with respect to such Intervening Event would still be inconsistent with
the directors’ fiduciary duties under applicable Laws.
(f) Nothing
contained in this Section 6.3 or elsewhere in this Agreement shall prevent the Board of Directors of the Company from (x) complying
with Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A under the Exchange Act with regard to an Acquisition
Proposal, so long as any action taken or statement made to so comply is consistent with this Section 6.3, or (y) making
any required disclosure to the shareholders of the Company if the Board of Directors of the Company determines in good faith, after consultation
with its outside legal counsel, that the failure to make such disclosure would be inconsistent with applicable Law. A “stop, look
and listen” disclosure or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act shall
not be a Change of Recommendation; provided, that any such disclosure by the Company shall state that the Recommendation continues
to be in effect unless, prior to the time of such public disclosure, a Change of Recommendation has been made in compliance with this
Section 6.3.
(g) Notwithstanding
anything to the contrary set forth in this Section 6.3 the Company acknowledges and agrees that (i) any violation of
the restrictions or obligations set forth in this Section 6.3 by any controlled Affiliate of the Company or their respective
Representatives shall constitute a breach of this Section 6.3 by the Company, and (ii) it shall not nor shall it permit
its controlled Affiliates to enter into any agreement that prohibits or restricts the Company from providing to Parent the information
contemplated by this Section 6.3 or otherwise complying with this Section 6.3.
Section 6.4 Efforts;
Required Action and Forbearance.
(a) Reasonable
Best Efforts. Subject to Section 6.4(d), upon the terms and subject to the conditions set forth in this Agreement, Parent
and Merger Sub, on the one hand, and the Company, on the other hand, will use their respective reasonable best efforts to (i) take
(or cause to be taken) all actions; (ii) do (or cause to be done) all things; and (iii) assist and cooperate with the other
Parties in doing (or causing to be done) all things, in each case as are necessary, proper or advisable pursuant to applicable Law or
otherwise to consummate and make effective, as soon as reasonably practicable (and in any event by no later than the End Date), the Transactions,
including by using reasonable best efforts to (A) cause the conditions to the Merger set forth in Article VII to be
satisfied, (B) (1) seek to obtain all consents, waivers, approvals, Orders, authorizations and expirations or terminations
of waiting periods from Governmental Entities; and (2) make all registrations, declarations and filings with Governmental Entities,
in each case that are necessary or advisable in connection with the consummation of the Merger, and (C) subject to obtaining the
prior approval of Parent (not to be unreasonably withheld, conditioned or delayed) as to the form and content of all communications and
notifications, (1) seek to obtain all consents, waivers and approvals and (2) deliver all notifications, in each case pursuant
to any Contracts of the Company or its Subsidiaries so as to seek to maintain and preserve the benefits to the Surviving Company of such
Contracts as of and following the consummation of the Merger.
(b) Filings
Under the HSR Act and Other Applicable Antitrust and Foreign Investment Laws. Each of Parent and Merger Sub (and their respective
Affiliates, if applicable), on the one hand, and the Company (and its Affiliates, if applicable), on the other hand, will (and will cause
its respective Affiliates to) promptly (and in the case of the Notification and Report Form relating to this Agreement and the Merger
as required by the HSR Act, in any event no later than ten Business Days after the date of this Agreement) file (i) a Notification
and Report Form relating to this Agreement and the Merger as required by the HSR Act with the FTC and the Antitrust Division of
the DOJ; and (ii) comparable pre-merger or post-merger notification filings, forms and submissions with any Governmental Entity
pursuant to other Antitrust and Foreign Investment Laws as may be necessary, proper, or advisable to effectuate, or in connection with
the effectuation of, the Transactions. Each of Parent and the Company will (and will cause each of its respective Representatives, as
applicable, to) (A) cooperate and coordinate with the other in the making of such filings; (B) use its respective reasonable
best efforts to supply the other (or cause the other to be supplied) any information that may be required in order to make such filings;
(C) use its respective reasonable best efforts to supply (or cause the other to be supplied) with any additional information that
reasonably may be required or requested in relation to such filings by the FTC, the DOJ or the Governmental Entities of any other applicable
jurisdiction in which any such filing is made; (D) subject to Section 6.4(d), use its respective reasonable best efforts
to take all action necessary to obtain any approvals, consents and clearances pursuant to any Antitrust and Foreign Investment Laws as
may be necessary, proper, or advisable to effectuate, or in connection with the effectuation of, the Transactions as promptly as practicable
(and in any event by no later than the End Date) and to remove any court or regulatory orders under the Antitrust and Foreign Investment
Laws impeding the ability to consummate the Transactions by the End Date; and (E) subject to Section 6.4(d), take any
and all actions reasonably necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act and other
Antitrust and Foreign Investment Laws prior to the End Date, and to avoid any impediment to the consummation of the Merger under any
Antitrust and Foreign Investment Laws, including (1) proposing, offering, negotiating, committing to and effecting, by consent decree,
hold separate order or otherwise, (x) conduct of business restrictions, a sale, divestiture, license or other disposition, or imposition
of any Lien or impediment upon, any or all of the capital stock or other equity or voting interests, assets (whether tangible or intangible),
rights, products or businesses of Parent, Merger Sub, their respective Affiliates, the Company or any of its Affiliates or (y) any
other restrictions on the activities of Parent, Merger Sub, their respective Affiliates, the Company or any of its Affiliates, including
any limitation on the ability of Parent, Merger Sub, their respective Affiliates, the Company or its Affiliates to conduct their respective
businesses or own any capital stock or assets or to acquire, hold or exercise full rights of ownership of their respective businesses
or assets and, in the case of Parent, the businesses or assets of the Company and its Subsidiaries and (2) proposing, offering,
negotiating, committing to and effecting any concession, release, admission of liability, compromise, settlement or loss of rights in
connection with any actual or threatened Action (such actions under clause (E), each, a “Remedy Action”); provided,
however, that none of Parent, Merger Sub or the Company shall be required to agree to any Remedy Action unless such Remedy Action
is conditioned upon the Closing. Each Party shall, after consultation with the other Parties, use reasonable best efforts to certify
compliance with any request for additional information or documentary material from any Governmental Entity with respect to the Merger
pursuant to the HSR Act or any other Antitrust and Foreign Investment Laws applicable to the Merger. Parent shall pay all filing fees
for any filings required under Antitrust and Foreign Investment Laws, but the Company shall bear its own costs for the preparation of
any such filings.
(c) Cooperation.
In furtherance and not in limitation of the foregoing, the Company, Parent and Merger Sub shall (and shall cause each of their respective
Affiliates, as applicable, to), subject to any restrictions under applicable Law, (i) promptly notify the other Parties of (and,
if in writing, furnish them with copies of (or, in the case of oral communications, advise them of the contents of)) any substantive
communication received by such Person from a Governmental Entity in connection with the Transactions and permit the other Parties to
review and discuss in advance (and to consider in good faith any comments made by the other Parties in relation to) any proposed draft
notifications, formal notifications, filings, submissions or other written communications (and any analyses, memoranda, white papers,
presentations, correspondence or other documents submitted therewith) made in connection with the Transactions to a Governmental Entity;
(ii) keep the other Parties reasonably informed with respect to the status of any such submissions and filings to any Governmental
Entity in connection with the Transactions and any developments, meetings or discussions with any Governmental Entity in respect thereof,
including with respect to (A) the receipt of any non-action, action, clearance, consent, approval or waiver; (B) the expiration
of any waiting period; (C) the commencement or proposed or threatened commencement of any Action; and (D) the nature and status
of any objections raised or proposed or threatened to be raised by any Governmental Entity with respect to any of the Transactions; and
(iii) not independently participate in any meeting, hearing, proceeding or discussions with or before any Governmental Entity in
respect of the Transactions without giving the other Parties reasonable prior notice of such meeting, hearing, proceeding or discussion,
and, unless prohibited by such Governmental Entity, the opportunity to attend or participate. However, each of the Company, Parent and
Merger Sub may designate any non-public information provided to any Governmental Entity as restricted to “outside counsel”
only and any such information will not be shared with the Representatives of the other Parties without approval of the Party providing
the non-public information. Each of the Company, Parent and Merger Sub may redact any information (A) to remove references concerning
the valuation of the Company, and (B) as necessary to preserve the legal privilege before sharing any information provided to any
Governmental Entity with another Party on an “outside counsel” only basis. This Section 6.4(c) shall not
apply with respect to any communications with (including any meeting, hearing, proceeding or discussions with or before) any Taxing Authority.
No Party shall enter into any timing agreement or commit to or agree with any Governmental Entity to stay, toll or extend any applicable
waiting period, or pull and refile, under the HSR Act or any other applicable Antitrust and Foreign Investment Laws, or not to consummate
the Transactions for any period of time, without the prior written consent of the other Parties.
(d) Limitations.
Notwithstanding anything to the contrary in this Agreement (including Section 6.1 and this Section 6.4):
(i) from
the date of this Agreement until the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article VIII,
Parent shall not, and shall cause its Affiliates not to, acquire or agree to acquire by merging or consolidating with, or by purchasing
equity in, or by any other manner (including exclusive licensing), a controlling interest in any Person, or otherwise acquire or agree
to acquire a substantial portion of the assets of any Person, in each case, related to the development or commercialization of autologous
CAR-T cell therapies for the treatment of multiple myeloma or system lupus erythematosus if the entering into of an agreement relating
to or the consummation of such acquisition, merger or consolidation would reasonably be expected to (i) impose any substantial delay
in the obtaining of, or significantly increase the risk of not obtaining, any authorizations, consents, orders, declarations or approvals
of any Governmental Entity necessary to consummate the Transactions or the expiration or termination of any applicable waiting period
or (ii) significantly increase the risk of any Governmental Entity entering an order prohibiting the consummation of the Transactions;
(ii) none
of Parent, Merger Sub or any of their respective Affiliates shall be required to (and, without the prior written consent of Parent, none
of the Company or its Affiliates may) (A) take any Remedy Action (x) with respect to any assets, categories of assets or portions
of any business of the Company or any of its Subsidiaries with a fair market value in excess of $5,000,000, or (y) with respect
to any assets, categories of assets or portions of any business of Parent or its Affiliates, (B) initiate, contest, defend or appeal
any Actions, whether judicial or administrative, against any Governmental Entities relating to challenges to this Agreement or any of
the Transactions or (C) commit to seek prior approval from any Governmental Entity of any future transaction.
(iii) Following
good faith consultation with the Company, Parent shall have the right, to make all strategic and tactical decisions as to any necessary
approval under applicable Antitrust and Foreign Investment Laws, taking into account reasonable views of the Company. The Company will
not, nor will it permit any of its Subsidiaries or Representatives to, make any communications with, or proposals relating to, or enter
into, any understanding, undertaking or agreement with, any Governmental Entity relating to any approval under applicable Antitrust and
Foreign Investment Laws required with respect to the Transactions without Parent’s prior review and approval.
(e) Remedial
Actions. Without limiting any obligations of the Company under this Agreement, the Company shall, and shall cause its Subsidiaries
to, agree to such Remedy Actions and enter into such Contracts as may be requested by Parent so long as such Remedy Actions and Contracts
are conditioned on the Closing having occurred.
Section 6.5 Notification
of Certain Matters. Subject to applicable Law and the requirements of this Agreement, the Company shall give prompt written notice
to Parent, and Parent shall give prompt written notice to the Company, of (a) any material notice or other communication received
by such Party from any Governmental Entity (other than a Taxing Authority) in connection with the Transactions, (b) any written
notice or other written communication received by such Party from any Person alleging that the consent of such Person is or may be required
in connection with the Transactions, if the failure of such Party to obtain such consent would reasonably be expected to prevent or materially
delay the consummation of the Transactions, and (c) any Action commenced or, to such Party’s knowledge, threatened against,
relating to or involving or otherwise affecting such Party or any of its Subsidiaries or Affiliates which relate to the Merger or any
of the other Transactions; provided that the delivery of any notice pursuant to this Section 6.5 shall not (i) cure
any breach of, or non-compliance with, any other provision of this Agreement or (ii) limit the remedies available to the Party receiving
such notice. The Parties agree and acknowledge that the Company’s, on the one hand, and Parent’s, on the other hand, compliance
or failure of compliance with (but not Willful Breach of) this Section 6.5 shall not be taken into account for purposes of
determining the satisfaction of the condition referred to in Section 7.2(b) or Section 7.3(b), respectively.
Section 6.6 Access
to Information; Confidentiality.
(a) From
the date hereof until the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article VIII,
upon reasonable prior written notice from Parent to an executive officer or other Person designated by the Company, the Company shall,
and shall use its reasonable best efforts to cause its Subsidiaries, officers, directors and employees to, (i) afford Parent and
its Representatives reasonable access, consistent with applicable Law, at normal business hours, to the Company’s and its Subsidiaries’
respective senior officers and key employees, properties, offices, and other facilities and to all books and records, and (ii) reasonably
promptly furnish Parent with such existing financial, operating and other data and information concerning the Company’s and its
Subsidiaries’ businesses, Contracts, properties, assets and liabilities as Parent or its Representatives may from time to time
reasonably request. Notwithstanding the foregoing, any such investigation or consultation shall be conducted in such a manner as not
to interfere unreasonably with the business or operations of the Company or its Subsidiaries or the prompt and timely discharge by such
officers or employees of their normal duties, and any such access shall be conducted at Parent’s expense under the supervision
of appropriate personnel of the Company or its Subsidiaries and shall not include invasive testing. Neither the Company nor any of its
Subsidiaries shall be required to provide access or to disclose information where such access or disclosure would jeopardize any attorney-client
privilege of the Company or any of its Subsidiaries or contravene any applicable Law or binding agreement entered into prior to the date
of this Agreement. In addition, certain information disclosed pursuant to this Section 6.6 may be disclosed subject to execution
of a joint defence agreement in customary form, and disclosure may be limited to external counsel for Parent, in each case, solely to
the extent the Company determines (after consultation with outside legal counsel) that doing so is reasonably required for the purpose
of complying with applicable Antitrust and Foreign Investment Laws.
(b) Each
of Parent and Merger Sub shall comply with, and shall cause their respective Representatives and Affiliates to comply with, all of their
respective obligations under the applicable terms and conditions of the Reciprocal Confidentiality Agreement, dated May 16, 2023,
by and between Gracell Biopharmaceuticals, Inc. and AstraZeneca Pharmaceuticals LP, as amended and novated to the Company and AstraZeneca
UK Limited on December 12, 2023 (the “Confidentiality Agreement”), which shall remain in full force and effect
in accordance with its terms. All information disclosed to Parent or its Representatives pursuant to this Section 6.6 shall
be subject to the Confidentiality Agreement. Parent shall be responsible for any unauthorized disclosure of any such information provided
or made available pursuant to Section 6.6 by its Representatives. Notwithstanding anything to the contrary in this Agreement
or the Confidentiality Agreement, it is hereby understood and agreed that reports made to Taxing Authorities in connection with the Transactions
shall not be deemed a breach of the Confidentiality Agreement.
Section 6.7 Stock
Exchange Delisting. Prior to the Closing Date, the Company shall cooperate with Parent and use its reasonable best efforts to take,
or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under
applicable Laws and rules and policies of NASDAQ to enable the delisting by the Surviving Company of the Shares and ADSs from NASDAQ
and the deregistration of the Shares and ADSs under the Exchange Act as promptly as practicable after the Effective Time.
Section 6.8 Publicity.
Except as may be required by applicable Law, the press release announcing the execution of this Agreement shall be issued only in such
form as shall be mutually agreed upon by the Company and Parent. Thereafter, at any time prior to the earlier of the Effective Time and
the valid termination of this Agreement pursuant to Article VIII, the Company and Parent shall consult with each other prior
to issuing, and provide each other a reasonable opportunity to review and comment on (and consider such proposed comments in good faith),
any press releases or any public announcements with respect to this Agreement or the Transactions (including the Merger) by the Company
or Parent; provided that (A) any such press release or public announcement as may be required by applicable Laws or by any
listing agreement with or rule of a national securities exchange may be issued prior to such consultation if the Party proposing
to issue such press release or make such public announcement has used its reasonable best efforts to consult in good faith with the other
Parties on a timely basis before making any such public announcements, (B) each Party may, without such consultation or consent,
make any public statement in response to questions from the press, analysts, investors or those attending industry conferences and each
Party may make disclosures in documents filed or furnished with the SEC or otherwise required to be disclosed pursuant to applicable
Law, in each case so long as such statements are consistent with previous press releases, public disclosures or public statements made
jointly by the Parties (or individually, if approved by the other Parties) and (C) the foregoing shall not apply to any internal
announcements by the Company to its employees which are not made public. Notwithstanding the foregoing, the restrictions set forth in
this Section 6.8 shall not apply to any release or announcement made or proposed to be made by (x) the Company, Parent
or Merger Sub in connection with a Change of Recommendation made in compliance with this Agreement or (y) by the Company pursuant
to Section 6.3(f), or with respect to an Acquisition Proposal made in compliance with this Agreement.
Section 6.9 Employee
Matters.
(a) For
a period of 12 months following the Closing Date, Parent shall provide, or shall cause its applicable Affiliates (including, after the
Closing, the Surviving Company and its Subsidiaries) to provide, to each person who is an employee of the Company or its Subsidiaries
immediately prior to the Effective Time and who continues to be so employed immediately after the Effective Time (each, a “Continuing
Employee”), (i) a base salary or base wage rate, as applicable, target annual or short-term cash incentive opportunities
and severance and termination benefits that are, in each case, no less favorable than the base salary or base wage rate, as applicable,
target annual or short-term cash incentive opportunities and severance and termination benefits provided to such Continuing Employee
immediately prior to the Effective Time, and (ii) other employee benefits that are, taken as a whole, no less favorable than either
(A) the employee benefits that were provided to such Continuing Employee immediately prior to the Effective Time or (B) those
provided to similarly situated employees of Parent or its Affiliates and (iv) with respect to any Continuing Employee outside of
the United States, any other material terms and conditions of employment as were provided to such Continuing Employee immediately prior
to the Effective Time; provided that, the term “other material terms and conditions” is limited to practices that, if changed
or eliminated, would give rise to a claim for monetary damages or severance, redundancy or separation benefits under applicable Law.
Notwithstanding the foregoing, for all purposes of this Section 6.9(a), (x) defined benefit pension benefits, retiree
medical and other post-termination medical and welfare benefits, equity-based compensation and benefits, deferred compensation, retention,
change in control, transaction and similar non-recurring bonuses or arrangements shall be excluded and (y) if, with respect to any
Continuing Employee outside of the United States, greater compensation or benefits are required to be provided under applicable Law,
Parent shall provide, or cause to be provided, such applicable greater compensation or benefits (to the extent required).
(b) With
respect to any benefit plan or arrangement maintained by Parent or its Affiliates (including, after the Closing, the Surviving Company)
in which any Continuing Employee is eligible to participate during the calendar year in which the Closing occurs (each, a “Parent
Plan”), for purposes of determining eligibility to participate and vesting (but not for purposes of benefit accrual, except
under Parent’s or its Affiliates’ vacation policy), each Continuing Employee’s service with the Company or any of its
Subsidiaries (as well as service with any predecessor employer) prior to the Closing Date shall be treated as service with Parent and
its Affiliates (including the Surviving Company) as of the Closing Date to the same extent and for the same purpose that such service
was credited for such Continuing Employee under the corresponding Company Plan in which such Continuing Employee participated immediately
prior to the Closing; provided that the foregoing shall not apply (x) to the extent that it would result in any duplication
of benefits, compensation, or coverage for the same period of service or (y) with respect to any pension plan or retiree medical
welfare benefit program. With respect to any Parent Plan that is a group health plan, Parent shall, or shall cause its Affiliates (including
the Surviving Company) to, use commercially reasonable efforts to, for the plan year in which the Closing occurs, (i) waive, or
cause to be waived, all preexisting condition, limitations, actively-at-work requirements and waiting periods with respect to participation
by and coverage of each Continuing Employee (and his or her eligible dependents) to the same extent such condition, limitations, requirements
and waiting periods were already satisfied or did not apply under the corresponding Company Plan that is a group health plan in which
such Continuing Employee participated immediately prior to the Closing; and (ii) recognize, or cause to be recognized, the dollar
amount of all coinsurance, deductibles and out-of-pocket expenses paid by each Continuing Employee (and his or her eligible dependents)
under a Company Plan that is a group health plan during the portion of the applicable plan year prior to the Closing Date for purposes
of satisfying the applicable plan year’s deductible and coinsurance limitations under the Parent Plan that is a group health plan
in which each Continuing Employee (and his or her eligible dependents) participate during such applicable plan year.
(c) If
requested by Parent in a writing delivered to the Company following the date hereof and at least 15 Business Days prior to the Closing
Date, the Company shall take all necessary action (including the adoption of resolutions and plan amendments and the delivery of any required
notices) to terminate, effective as of no later than the day immediately preceding the Closing Date, any Company 401(k) Plan. The
Company shall provide Parent with a copy of the resolutions, plan amendments, notices and other documents prepared to effectuate the termination
of the Company 401(k) Plans, each of which shall be subject to review and approval by Parent (which shall not be unreasonably withheld,
conditioned or delayed). Upon the distribution of the assets in the accounts under the Company 401(k) Plan to the participants, Parent
shall permit the Continuing Employees who are then actively employed with Parent or its Subsidiaries to make rollover contributions of
“eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code), in the form of cash, from the
Company 401(k) Plan to the applicable tax-qualified defined contribution plans of Parent or its Subsidiaries, if so elected by such
Continuing Employees in accordance with applicable Law.
(d) Nothing
in this Agreement shall confer upon any Continuing Employee or any other Person any right to employment (or any term or condition of employment)
or to continue in the employ or service of Parent, the Surviving Company or any Subsidiary or Affiliate of Parent or the Surviving Company,
or shall interfere with or restrict in any way the rights of Parent, the Surviving Company or any Subsidiary or Affiliate of Parent or
the Surviving Company, which rights are hereby expressly reserved, to discharge or terminate the services of any Person or any Continuing
Employee at any time and for any reason whatsoever, with or without cause, subject to the terms of any applicable Company Plan or Law.
Notwithstanding any provision in this Agreement to the contrary, nothing in this Section 6.9 shall (i) be deemed or construed
to be an establishment, amendment, termination or other modification of any Company Plan or any other benefit or compensation plan, program,
policy, agreement or arrangement, (ii) prevent Parent, the Surviving Company or any Subsidiary or Affiliate of Parent or the Surviving
Company from establishing, amending or terminating any Company Plans or any benefit or compensation plan, program, policy, agreement or
arrangement at any time assumed, established, sponsored or maintained by any of them, or (iii) create any third-party beneficiary
or other rights or remedies in any Person, other than the Parties, including any current or former service provider of the Company or
its Affiliates (or any beneficiaries or dependents thereof).
Section 6.10 Directors’
and Officers’ Indemnification and Insurance.
(a) From
and after the Effective Time, the Surviving Company shall, and Parent shall cause the Surviving Company to, indemnify and hold harmless
each present and former director and officer of the Company or any of its Subsidiaries and any person who becomes a director or officer
of the Company or any of its Subsidiaries prior to the Effective Time (in each case, when acting in such capacity) (the “Indemnified
Parties”), against any costs or expenses (including reasonable attorneys’ fees and expenses), judgments, fines, losses,
claims, damages, liabilities or awards paid in settlement incurred in connection with any actual or threatened Action, whether civil,
criminal, administrative or investigative and whether formal or informal, arising out of, relating to or in connection with such directorship
or office at or prior to the Effective Time (including the fact that such Person is or was a director or officer of the Company or any
of its Subsidiaries or any acts or omissions occurring or alleged to occur from such directorship or office (including acts or omissions
with respect to the approval of this Agreement or the Transactions or arising out of or pertaining to the Transactions and actions to
enforce this provision or any other indemnification or advancement right of any Indemnified Party) prior to the Effective Time), whether
asserted or claimed prior to, at or after the Effective Time, to the fullest extent that the Company would have been permitted under the
Laws of the Cayman Islands and its Memorandum and Articles of Association in effect on the date of this Agreement to indemnify such Person
and Parent or the Surviving Company shall advance expenses (including reasonable attorneys’ fees) incurred in the defense of any
Action, including any expenses incurred in successfully enforcing such Person’s rights under this Section 6.10. This
Section 6.10 shall not apply with respect to any Taxes on the Indemnified Parties’ remuneration or benefits from such
directorship or office.
(b) The
Surviving Company shall, and Parent shall cause the Surviving Company to, honor and perform the obligations under any indemnification
provision, advance of expenses and any exculpation provision in (i) the Memorandum and Articles of Association or comparable Organizational
Documents of the Company or any of its Subsidiaries, or (ii) any indemnification agreements between the Company or any of its Subsidiaries,
on the one hand, and any Indemnified Party, on the other hand (collectively, the “Indemnification Agreements”). The
provisions in the Surviving Company’s memorandum and articles of association (or in such documents of any successor to the business
of the Surviving Company) and in the memorandum and articles of association and other Organizational Documents of the Company’s
Subsidiaries with respect to indemnification, advancement of expenses and exculpation of any Indemnified Party shall be no less favorable
to such Indemnified Party than such provisions contained in the Company’s Memorandum and Articles of Association in effect as of
the date hereof, which provisions shall not be amended, repealed or otherwise modified in any manner that would adversely affect any right
or obligation thereunder of any Indemnified Party for a period of six years after the Effective Time except as required by applicable
Law.
(c) Parent
shall maintain, or shall cause the Surviving Company to maintain, at no expense to the beneficiaries, in effect for at least six years
from the Effective Time the current policies of the directors’ and officers’ liability insurance and fiduciary liability insurance
maintained by the Company or any of its Subsidiaries (provided that Parent or the Surviving Company may substitute therefor policies
of at least the same coverage containing terms and conditions which are not less advantageous to any beneficiary thereof) with respect
to matters existing or occurring at or prior to the Effective Time and from insurance carriers having at least an “A” rating
by A.M. Best with respect to directors’ and officers’ liability insurance; provided, however, that after
the Effective Time, Parent and the Surviving Company shall not be required to pay pursuant to this Section 6.10(c) more
than an amount per annum equal to 300% of the last annual premium paid by the Company prior to the date hereof (such amount, the “Maximum
Annual Premium”) in respect of the coverage required to be obtained pursuant hereto under each such policy; provided,
further, that if such insurance is not available or the aggregate annual premium for such insurance exceeds the Maximum Annual
Premium, Parent shall, or shall cause the Surviving Company to, obtain insurance with as much coverage as reasonably practicable for the
Maximum Annual Premium. In lieu of maintaining the directors’ and officers’ liability insurance policies contemplated by this
Section 6.10(c), the Company may, and at Parent’s request, the Company shall, purchase from insurance carriers with
comparable credit ratings, no later than the Effective Time, a six-year prepaid “tail policy” providing at least the same
coverage and amounts containing terms and conditions that are no less advantageous to the insured than the current policies of directors’
and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its Subsidiaries with respect
to claims arising from facts or events that occurred at or before the Effective Time, including the Transactions, and from insurance carriers
having at least an “A” rating by A.M. Best with respect to directors’ and officers’ liability insurance,
so long as the aggregate cost for such “tail” policy does not exceed the Maximum Annual Premium in respect of the coverage
required to be obtained pursuant hereto under each such “tail” policy; provided that, if such “tail” policy
is not available or the aggregate cost for such “tail” policy exceeds the Maximum Annual Premium, the Company shall obtain
a “tail” policy with as much coverage as reasonably practicable for the Maximum Annual Premium. If the Company elects to purchase
such “tail policy”, the Surviving Company shall (and Parent shall cause the Surviving Company to) maintain such “tail
policy” in full force and effect and continue to honor their respective obligations thereunder. Parent agrees to honor and perform
under, and to cause the Surviving Company to honor and perform under, for a period of six years after the Effective Time, all Indemnification
Agreements.
(d) If
Parent or the Surviving Company or any of their respective successors or assigns (i) shall consolidate or amalgamate with or merge
into any other corporation or entity and shall not be the continuing, merged or surviving company or entity of such consolidation or merger
or (ii) shall transfer all or substantially all of its properties and assets to any individual, corporation or other entity, then,
and in each such case, proper provisions shall be made so that the successors and assigns of Parent or the Surviving Company shall assume
all of the obligations set forth in this Section 6.10.
(e) The
provisions of this Section 6.10 shall survive the Merger and, following the Effective Time, are intended to be for the benefit
of, and shall be enforceable by, each of the Indemnified Parties and their heirs and representatives, each shall be a third party beneficiary
of the provisions of this Section 6.10.
(f) The
rights of the Indemnified Parties under this Section 6.10 shall be in addition to any rights such Indemnified Parties may
have under the Memorandum and Articles of Association of the Company or the comparable Organizational Documents of any of its Subsidiaries,
or under any applicable Contracts or Laws. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or
impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect
to the Company or its officers, directors and employees, it being understood that the indemnification provided for in this Section 6.10
is not prior to, or in substitution for, any such claims under any such policies.
Section 6.11 Takeover
Statutes. If any Takeover Statute is or may become applicable to the Merger or the other Transactions, each of the Company and Parent
and the members of their respective boards of directors shall grant such approvals and take such actions as are reasonably necessary
so that such transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and the CVR Agreement
and otherwise act to eliminate or minimize the effects of such Takeover Statute on such transactions.
Section 6.12 CVR
Agreement. At or prior to the Effective Time, Parent shall authorize and duly adopt, execute and deliver, and will ensure that a
duly qualified Rights Agent executes and delivers, the CVR Agreement, subject to any reasonable revisions to the CVR Agreement that are
requested by such Rights Agent (provided that such revisions are not, individually or in the aggregate, detrimental or adverse, taken
as a whole, to any holder of a CVR). Parent and the Company shall cooperate, including by making changes to the form of CVR Agreement,
as necessary to ensure that the CVRs are not subject to registration under the Securities Act, the Exchange Act or any applicable state
securities or “blue sky” laws.
Section 6.13 Transaction
Litigation. In the event that any shareholder litigation related to this Agreement, the Merger or the other Transactions is brought
or threatened against the Company, its officers or any members of the Board of Directors prior to the Effective Time (the “Transaction
Litigation”), the Company shall promptly notify Parent of any such Transaction Litigation and shall keep Parent reasonably
informed with respect to the status thereof, including by promptly providing Parent copies of all proceedings and correspondence relating
to such Transaction Litigation. The Company shall give Parent a reasonable opportunity to participate in the defense or settlement of
any Transaction Litigation and shall consider in good faith Parent’s advice with respect to such Transaction Litigation. The Company
shall not settle or agree to settle any Transaction Litigation, or take any action to settle any Transaction Litigation, without Parent’s
prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.
Section 6.14 Resignation
of Directors. At the Closing, except as otherwise may be agreed by Parent, the Company shall cause to be delivered to Parent the
resignation of all members of the Board of Directors who are in office immediately prior to the Effective Time, which resignations shall
be effective at, and conditioned upon, the Effective Time, and shall not affect any employment relationship with the Company or any of
its Subsidiaries, as applicable.
Section 6.15 Obligations
of Merger Sub; Obligations of Subsidiaries.
(a) Parent
shall take all actions reasonably necessary to cause Merger Sub and the Surviving Company to perform their respective obligations under
this Agreement.
(b) The
Company shall take all actions reasonably necessary to cause its Subsidiaries to perform their respective obligations under this Agreement.
Section 6.16 Merger
Sub Shareholder Consent. Immediately following the execution of this Agreement, Parent shall execute and deliver, in accordance with
the CICA and in its capacity as the sole shareholder of Merger Sub, a written consent adopting and approving this Agreement.
Article VII
CONDITIONS
OF MERGER
Section 7.1 Conditions
to Obligation of Each Party to Effect the Merger. The respective obligations of each Party to effect the Merger shall be subject
to the satisfaction (or written waiver, if permissible under Law, by Parent and the Company) at or prior to the Closing of the following
conditions:
(a) Shareholder
Approval. The Company Requisite Vote shall have been obtained in accordance with the CICA and the Memorandum and Articles of Association.
(b) No
Prohibitive Injunctions or Laws. No (i) temporary restraining order, preliminary or permanent injunction or other Order issued
by any court of competent jurisdiction or other legal or regulatory restraint or prohibition will be in effect, or (ii) action will
have been taken by any Governmental Entity of competent jurisdiction, (iii) Law shall have been issued, enacted, promulgated, entered,
enforced or deemed applicable to the Merger, that, in the case of each of the foregoing clauses (i), (ii) or (iii), prohibits, makes
illegal, enjoins or otherwise prevents the consummation of the Merger (any such order, injunction, other Order, restraint, prohibition,
action or Law, a “Restraint”); provided that the condition in this Section 7.1(b) may not
be invoked by a Party if such Party (or, in the case of Parent, Parent or Merger Sub) is in material breach of, or has breached, in any
material respect, any of its obligations under this Agreement required to be performed at or prior to the Effective Time, which breach
has been the proximate cause of such Restraint.
(c) Antitrust
and Foreign Investment Laws. (i) The waiting period (and any extensions thereof) (including any voluntary agreements with a
Governmental Entity not to consummate the Transactions for any period of time), if any, applicable to the Transactions, pursuant to the
HSR Act shall have expired or otherwise been terminated and (ii) all approvals, clearances and consents relating to the Transactions
shall have been obtained and all waiting periods (including any extensions thereof) (including any timing agreements with the applicable
Governmental Entities that have been agreed to by the Parties in accordance with this Agreement) relating to the Transactions shall have
expired or otherwise been terminated under any other Antitrust and Foreign Investment Laws as set forth in Section 7.1(c) of
the Company Disclosure Letter.
Section 7.2 Conditions
to Obligations of Parent and Merger Sub. The obligations of Parent and Merger Sub to effect the Merger shall be further subject to
the satisfaction (or written waiver by Parent) at or prior to the Closing of the following conditions:
(a) Representations
and Warranties. The representations and warranties of the Company set forth in (i) Article III (other than Section 3.1,
Section 3.3(a), Section 3.5 and Section 3.25) shall have been true and correct in all respects (without
giving effect to any qualification as to “materiality”, “Material Adverse Effect” or similar qualifiers contained
in any such representations and warranties) as of the date hereof and shall be true and correct as of the Effective Time (without giving
effect to any qualification as to “materiality”, “Material Adverse Effect” or similar qualifiers contained in
any such representations and warranties) as though made on and as of such date (in each case, except to the extent that any such representation
or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such
earlier date), except where the failures of such representations and warranties to be so true and correct, individually or in the aggregate,
has not had and would not reasonably be expected to result in a Material Adverse Effect, (ii) Section 3.1, Section 3.5
and Section 3.25 (A) that are not qualified by “materiality”, “Material Adverse Effect”
or similar qualifications shall have been true and correct in all material respects as of the date hereof and shall be true and correct
in all material respects as of the Effective Time as though made on and as of such date (in each case, except to the extent that any
such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true
and correct as of such specified date) and (B) that are qualified by “materiality”, “Material Adverse Effect”
or similar qualifications shall have been true and correct in all respects as of the date hereof and shall be true and correct in all
respects as of the Effective Time as though made on and as of such date (in each case, except to the extent that any such representation
or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such
specified date), and (iii) Section 3.3(a) shall have been true and correct in all respects as of the date hereof
and shall be true and correct in all respects as of the Effective Time as though made on and as of such date (except to the extent that
any such representation or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be
true and correct as of such specified date), except for any de minimis inaccuracies;
(b) Performance
of Obligations of the Company. The Company shall have performed in all material respects the obligations, and complied in all material
respects with the agreements and covenants, required to be performed by, or complied with by, it under this Agreement at or prior to the
Closing Date;
(c) No
Material Adverse Effect. No Material Adverse Effect shall have occurred after the date of this Agreement and is continuing; and
(d) Certificate.
Parent shall have received a certificate of an executive officer of the Company, dated as of the Closing Date, certifying that the conditions
set forth in Section 7.2(a), Section 7.2(b) and Section 7.2(c) have been satisfied.
Section 7.3 Conditions
to Obligations of the Company. The obligation of the Company to effect the Merger shall be further subject to the satisfaction (or
written waiver by the Company) at or prior to the Closing of the following conditions:
(a) Representations
and Warranties. Each of the representations and warranties of Parent and Merger Sub set forth in this Agreement shall have been true
and correct (without giving effect to any “materiality,” “Parent Material Adverse Effect” or similar qualifiers
contained in any such representations and warranties), as of the date hereof and shall be true and correct (without giving effect to any
“materiality,” “Parent Material Adverse Effect” or similar qualifiers contained in any such representations and
warranties) as of the Effective Time as though made on and as of such date (in each case, except to the extent that any such representation
or warranty expressly is made as of an earlier date, in which case such representation and warranty shall be true and correct as of such
earlier date), except where the failure of any such representations and warranties to be true and correct, individually or in the aggregate,
would not reasonably be expected to prevent, materially delay or have a material adverse effect on the ability of Parent or Merger Sub
to consummate the Transactions or otherwise have a material adverse effect on the ability of Parent or Merger Sub to perform their obligations
under this Agreement (a “Parent Material Adverse Effect”);
(b) Performance
of Obligations of Parent and Merger Sub. Each of Parent and Merger Sub shall have performed in all material respects the obligations,
and complied by or complied with by it under this Agreement at or prior to the Closing; and
(c) Certificate.
The Company shall have received a certificate of an executive officer of Parent, dated as of the Closing Date, certifying that the conditions
set forth in Section 7.3(a) and Section 7.3(b) have been satisfied.
(d) CVR
Agreement. The CVR Agreement shall be in full force and effect.
Section 7.4 Frustration
of Closing Conditions. Prior to the End Date, none of the Company, Parent or Merger Sub may rely on the failure of any condition
set forth in this Article VII to be satisfied if such failure was caused by such Party or by such Party’s failure to
act in good faith to comply with this Agreement and consummate the Transactions.
Article VIII
TERMINATION
Section 8.1 Termination.
This Agreement may only be
terminated and the Merger may only be abandoned at any time prior to the Effective Time:
(a) by
mutual written consent of Parent and the Company;
(b) by
written notice from either Parent or the Company:
(i) if
any Restraint having the effect set forth in Section 7.1(b) shall have become final and non-appealable; provided
that the right to terminate this Agreement pursuant to this Section 8.1(b) shall not be available to the Party seeking
to terminate if such Party (or, in the case of Parent, Parent or Merger Sub) is in breach of, or has breached, in any material respect,
any of its obligations under this Agreement required to be performed at or prior to the Effective Time, which breach has been the primary
cause of such Restraint becoming final and non-appealable;
(ii) if
the Effective Time shall not have occurred on or before 11:59 p.m. London Time on June 23, 2024 (such time and date, as it
may be extended by the proviso to this Section 8.1(b)(ii), the “End Date”); provided, that, if,
as of the most recently scheduled End Date, any of the conditions set forth in Section 7.1(b) or Section 7.1(c) (if
such Restraint arises as a result of an Antitrust and Foreign Investment Law) have not been satisfied, then the End Date will automatically
be extended (without any action required of Parent or the Company) by three months on no more than two occasions (i.e., to an End Date
that is not beyond 11:59 p.m. on the 12-month anniversary of the date hereof); provided, further, that the right to
terminate this Agreement pursuant to this Section 8.1(b)(ii) shall not be available to the Party seeking to terminate
if such Party (or, in the case of Parent, Parent or Merger Sub) is in breach of, or has breached, in any material respect, any of its
obligations under this Agreement required to be performed at or prior to the Effective Time, which breach has been the primary cause
of the failure of the Effective Time to occur on or before the End Date; or
(iii) if
the Company Requisite Vote shall not have been obtained at the Shareholders Meeting duly convened therefor or at any adjournment or postponement
thereof, in each case, at which a vote on the approval of this Agreement, the Merger and the other Transactions was taken;
(c) by
written notice from the Company:
(i) if
(x) there shall have been a breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub contained
in this Agreement, or any such representation or warranty shall be untrue, such that the conditions set forth in Section 7.3(a) or
Section 7.3(b) would not be satisfied and (y) such breach or failure of condition is not curable or, if curable,
is not cured prior to the earlier of (A) 30 days after written notice thereof is given by the Company to Parent or (B) the End
Date; provided that the Company shall not have the right to terminate this Agreement pursuant to this Section 8.1(c)(i) if
the Company is then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement
that would cause a condition set forth in Section 7.1 or Section 7.2 not to be satisfied; or
(ii) if
(A) the Board of Directors effects a Change of Recommendation or determines to terminate this Agreement pursuant to Section 6.3(d) as
a result of a Superior Proposal, (B) the Company has complied in all material respects with Section 6.3, and (C) substantially
concurrently with or promptly after the termination of this Agreement, the Company enters into an Alternative Acquisition Agreement with
respect to the Superior Proposal referred to in the foregoing clause (A);
(d) by
written notice from Parent:
(i) if
(x) there shall have been a breach of any representation, warranty, covenant or agreement on the part of the Company contained in
this Agreement, or any such representation or warranty shall be untrue, such that the conditions set forth in Section 7.2(a) or
Section 7.2(b) would not be satisfied and (y) such breach or failure of condition is not curable or, if curable,
is not cured prior to the earlier of (A) 30 days after written notice thereof is given by Parent to the Company or (B) the End
Date; provided that Parent shall not have the right to terminate this Agreement pursuant to this Section 8.1(d)(i) if
Parent or Merger Sub is then in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement
that would cause a condition set forth in Section 7.1 or Section 7.3 not to be satisfied; or
(ii) the
Board of Directors shall have made, prior to obtaining the Company Requisite Vote, a Change of Recommendation.
Section 8.2 Effect
of Termination.
(a) Effect
of Termination Generally. In the event of the valid termination of this Agreement pursuant to Section 8.1, written notice
thereof shall be given to the other Party or Parties hereto, specifying the provision hereof pursuant to which such termination is made
and the basis of termination, and this Agreement shall forthwith become void and there shall be no liability or obligation on the part
of any Party hereto, except (i) as provided Section 6.6(b), Section 6.8, the expense reimbursement and indemnification
provisions of this Section 8.2, Section 8.3 and Article IX (but not Section 9.12 with
respect to provisions of this Agreement that have been terminated) and the Confidentiality Agreement, which shall survive such valid termination
in accordance with its terms and (ii) the termination of this Agreement shall not relieve any Party from any liability for any Willful
Breach of this Agreement prior to the date of termination. Nothing contained in this Agreement shall limit or prevent any Party from exercising
any rights or remedies it may have under Section 9.12 in lieu of terminating this Agreement pursuant to Section 8.1.
(b) Company
Termination Payment. In the event that:
(i) this
Agreement is validly terminated by the Company pursuant to Section 8.1(c)(ii), then the Company shall pay to Parent (or one
or more of its designees) in cash and by way of compensation an amount equal to $33,800,000 (the “Company Termination Payment”)
by wire transfer of immediately available funds, such payment to be made prior to or concurrently with and as a condition to the valid
termination of this Agreement;
(ii) this
Agreement is validly terminated by Parent pursuant to Section 8.1(d)(ii), then the Company shall pay to Parent (or one or
more of its designees) by way of compensation the Company Termination Payment by wire transfer of immediately available funds, such payment
to be made within five Business Days following such termination;
(iii) this
Agreement is validly terminated by either Parent or the Company pursuant to Section 8.1(b)(ii), Section 8.1(b)(iii) or
by Parent pursuant to Section 8.1(d)(i) (as a result of a material breach of any covenant or agreement in this Agreement)
and (x) at any time after the date hereof but prior to such termination, a bona fide Acquisition Proposal shall have been
publicly announced or an Acquisition Proposal shall have otherwise become publicly known or delivered to the Company, and in each case
not withdrawn more than two Business Days prior to the Shareholders Meeting, and (y) prior to the 12-month anniversary of the termination
of this Agreement, the Company or any of its Subsidiaries shall have entered into any acquisition agreement, merger agreement or other
similar definitive agreement with respect to any Acquisition Proposal that is subsequently consummated, or shall have consummated any
Acquisition Proposal, then, within five Business Days following the date on which such Acquisition Proposal is consummated, the Company
shall pay to Parent by way of compensation the Company Termination Payment by wire transfer of immediately available funds. For the purpose
of this Section 8.2(b)(iii)(y), all references in the definition of the term Acquisition Proposal to “20% or more”
will be deemed to be references to “more than 50%”.
(c) Parent
Termination Payment. Parent shall pay to the Company in cash and by way of compensation an amount equal to $41,600,000 (the “Parent
Termination Payment”) by wire transfer of immediately available funds concurrently with the termination of this Agreement, in
the event that:
(i) (A) this
Agreement is terminated pursuant to Section 8.1(b)(ii) and (B) all of the conditions set forth in Section 7.1
and Section 7.2 have been satisfied (or, if any such conditions are by their nature to be satisfied at the Closing, are, on
the date of such termination, capable of being satisfied) or waived by Parent and Merger Sub, other than the conditions set forth in Section 7.1(b) (to
the extent that the applicable Restraint is related to any Antitrust and Foreign Investment Laws) or Section 7.1(c); or
(ii) this
Agreement is terminated pursuant to Section 8.1(b)(i) (to the extent that the applicable Restraint is related to any
Antitrust and Foreign Investment Laws).
(d) Payment;
Default.
(i) Each
of the Company, Parent and Merger Sub acknowledges that the agreements contained in this Section 8.2 are an integral part
of the Transactions and that, without these agreements, the Parties would not enter into this Agreement and that any amounts payable pursuant
to this Section 8.2 do not constitute a penalty. Accordingly, if the Company or Parent, as applicable, fails to timely pay
an amount due pursuant to Section 8.2(b) or Section 8.2(c), the Company or Parent, as applicable, shall pay
to the other Party its reasonable and documented out-of-pocket costs and expenses (including reasonable and documented out-of-pocket attorneys’
fees and the reasonable and documented out-of-pocket fees and expenses of any expert or consultant engaged by Parent or the Company (as
applicable)) in connection with the collection and enforcement of this Section 8.2, together with interest on the unpaid amount
of such payment from the date such payment was required to be made until the date of payment at the prime rate as published in The
Wall Street Journal, Eastern Edition in effect on the date of such payment. Such collection expenses shall not otherwise diminish
in any way the payment obligations hereunder. The Parties acknowledge and hereby agree that in no event shall either the Company or Parent
be required to pay the Company Termination Payment or Parent Termination Payment, as applicable, on more than one occasion.
(ii) Any
payment of the Company Termination Payment or the Parent Termination Payment shall be made free and clear of and without deduction or
withholding of any Taxes, except as required by applicable Law.
(iii) The
Parties anticipate that the Company Termination Payment and the Parent Termination Payment are not and will not be treated as consideration
for a taxable supply for VAT purposes. If, however, a Party (or the representative member of any VAT group of which Parent is a member)
is required to account for VAT in respect of a supply for which the Company Termination Payment or the Parent Termination Payment is consideration
(other than under a reverse charge mechanism), the Party making such payment shall (subject to receipt of a valid VAT invoice) pay an
additional amount equal to such VAT.
(e) Company
Termination Payment as Exclusive Remedy. Notwithstanding anything in this Agreement to the contrary, in the event the Agreement is
terminated under the circumstances in which the Company Termination Payment is paid: (i) the payment by the Company of the Company
Termination Payment pursuant to Section 8.2(b) (including, in each case, any additional amount payable pursuant to Section 8.2(d))
shall be the sole and exclusive remedy of Parent, Merger Sub, and their respective Affiliates and any direct or indirect current, former
or future shareholder, partner, manager, member or other equity or security holder, director or officer of Parent or Merger Sub or any
of their respective Affiliates or any Representative of any of the foregoing (each, a “Parent Related Party”) and any
other Person, and (ii) none of the Company, its Affiliates, the direct and indirect current, former or future shareholders, partners,
managers, members or other equity or security holders, directors or officers of the Company or any of its Affiliates or any Representative
of any of the foregoing (each, a “Company Related Party”) shall have any liability for or with respect to any Action
against the Company or any Company Related Party or otherwise arising out of this Agreement, any of the Transactions (including the Merger),
any breach of any agreement or covenant or any inaccuracy in any representation or warranty set forth in this Agreement, any matters forming
the basis for such termination or any loss suffered as a result of the failure of Transactions (including the Merger) to be consummated.
Notwithstanding the foregoing, payment of the Company Termination Payment shall not relieve the Company from liability for any common
law fraud or Willful Breach.
(f) Parent
Termination Payment as Exclusive Remedy. Notwithstanding anything in this Agreement to the contrary, in the event the Agreement is
terminated under the circumstances in which the Parent Termination Payment is paid: (i) the payment by Parent of the Parent Termination
Payment pursuant to Section 8.2(c) (including, in each case, any additional amount payable pursuant to Section 8.2(d))
shall be the sole and exclusive remedy of the Company Related Parties and any other Person, and (ii) none of the Parent Related
Parties shall have any liability for or with respect to any Action against Parent or any Parent Related Party or otherwise arising out
of this Agreement, any of the Transactions (including the Merger), any breach of any agreement or covenant or any inaccuracy in any representation
or warranty set forth in this Agreement, any matters forming the basis for such termination or any loss suffered as a result of the failure
of Transactions (including the Merger) to be consummated. Notwithstanding the foregoing, payment of the Parent Termination Payment shall
not relieve Parent or Merger Sub from liability for any common law fraud or Willful Breach.
Section 8.3 Expenses.
Except as otherwise specifically provided herein, each Party shall bear its own expenses in connection with this Agreement and the Transactions.
Article IX
GENERAL
PROVISIONS
Section 9.1 Non-Survival
of Representations, Warranties, Covenants and Agreements. None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement (other than those in the CVR Agreement) shall survive the Effective Time. None of the
covenants or agreements of the Parties in this Agreement shall survive the Effective Time, except for (a) the covenants and agreements
contained in this Article IX, Article II, Section 6.9 and Section 6.10, and (b) those
other covenants and agreements contained herein that by their terms apply or are to be performed in whole or in part after the Effective
Time, which shall survive the Effective Time until fully performed.
Section 9.2 Modification
or Amendment. Subject to the provisions of applicable Law, at any time prior to the Effective Time, the Parties may modify or amend
this Agreement by written agreement, executed and delivered by duly authorized officers of the respective Parties; provided that
after receipt of the Company Requisite Vote, no amendment may be made to this Agreement that would require further approval by the shareholders
of the Company pursuant to the CICA or the Memorandum and Articles of Association without such further approval. No amendments or modifications
to the provisions of which the Parent Related Parties are expressly made third-party beneficiaries pursuant to Section 9.8
shall be permitted in a manner materially adverse to any such Parent Related Party without the prior written consent of such Parent Related
Party (which shall not be unreasonably withheld, conditioned or delayed).
Section 9.3 Waiver.
At any time prior to the Effective Time, any Party hereto may (a) extend the time for the performance of any of the obligations
or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) subject to the requirements of applicable Law, waive compliance with any of the agreements
or conditions contained herein. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the Party
or Parties to be bound thereby and specifically referencing this Agreement. The failure of any Party to assert any rights or remedies
shall not constitute a waiver of such rights or remedies, nor shall any single or partial exercise thereof preclude any other or further
exercise of any other right or remedy hereunder.
Section 9.4 Notices.
All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given when delivered in person
or sent by courier or sent by registered post or sent by electronic mail to the intended recipient thereof at its address or at its email
address set out below (or to such other address or email address as a party may from time to time notify the other parties). Any such
notice, request, claim, demand and other communication shall be deemed to have been duly served (a) if given personally or sent
by courier, upon delivery during normal business hours at the location of delivery or, if later, then on the next Business Day after
the day of delivery; (b) if sent by electronic mail during normal business hours at the location of delivery, immediately, or, if
later, then on the next Business Day after the day of delivery (provided that no “bounce back” or similar message of non-delivery
is received by the sender); (c) the third Business Day following the day sent by reputable international overnight courier (with
written confirmation of receipt), and (d) if sent by registered post, five days after posting.
(a) if
to Parent or Merger Sub:
AstraZeneca
Treasury Limited
1800 Concord Pike
Wilmington, Delaware 19850
Attention: Kevin Durning, North America CFO
with an additional copy (which shall
not constitute notice) to:
| Attention: | Deputy General Counsel, Corporate |
with an additional copy (which shall
not constitute notice) to:
Freshfields
Bruckhaus Deringer US LLP
601 Lexington Avenue, 31st Floor
New York, NY 10022
| Attention: | Sebastian
L. Fain
Zheng Zhou |
| Email: | sebastian.fain@freshfields.com
zheng.zhou@freshfields.com |
(b) if
to the Company:
Gracell
Biotechnologies Inc.
41st Floor, Building A,
No. 188 Hongbaoshi Road,
Changning District, Shanghai 201103,
the People’s Republic of China
Attention: William Cao; [*****]
Email: [*****]
with an additional copy (which shall not constitute notice)
to:
Cooley LLP
10265 Science Center Drive
San
Diego, CA 92121
Attention: Rama Padmanabhan, Rowook Park and Izzy Lubarsky
rpark@cooley.com
ilubarsky@cooley.com
Section 9.5 Certain
Definitions.
(a) Defined
Terms. For purposes of this Agreement:
“Acceptable Confidentiality
Agreement” means a confidentiality agreement that (i) does not contain any provision that would prevent the Company or
any of its Subsidiaries from complying with its obligation to provide disclosure to Parent pursuant to Section 6.3 and (ii) contains
provisions that are no less favorable to the Company, in the aggregate, than those contained in the Confidentiality Agreement (except
that the confidentiality agreement need not contain a standstill provision);
“Acquisition Proposal”
means any indication of interest, proposal or offer from any Person or Group, other than Parent and its Affiliates, relating to any (i) direct
or indirect acquisition (whether in a single transaction or a series of related transactions) of assets of the Company or any of its Subsidiaries
(including securities of Subsidiaries) equal to 20% or more of the consolidated assets of the Company, or to which 20% or more of the
revenues or earnings of the Company on a consolidated basis are attributable for the most recent fiscal year for which audited financial
statements are then available, (ii) direct or indirect acquisition or issuance (whether in a single transaction or a series of related
transactions) of 20% or more of the outstanding voting power of the Company or the outstanding Shares, (iii) tender offer or exchange
offer that, if consummated, would result in such Person or Group beneficially owning 20% or more of the outstanding voting power of the
Company or outstanding Shares, or (iv) merger, consolidation, share exchange, business combination, joint venture, reorganization,
recapitalization, liquidation, dissolution or similar transaction or series of related transactions involving the Company or any of its
Subsidiaries, under which such Person or Group or, in the case of clause (B), the shareholders or equityholders of any such Person or
Group would acquire, directly or indirectly, (A) assets equal to 20% or more of the consolidated assets of the Company, or to which
20% or more of the revenues or earnings of the Company on a consolidated basis are attributable for the most recent fiscal year for which
audited financial statements are then available, or (B) beneficial ownership of 20% or more of the outstanding voting power of the
Company or the surviving or resulting entity in such transaction, or 20% or more of the outstanding voting securities of the surviving
or resulting entity in such transaction or 20% or more of the outstanding Shares;
“Action”
means any action, cause of action, claim, demand, litigation, suit, investigation, arbitration or other similar proceeding of any nature,
civil, criminal, regulatory, administrative or otherwise, whether in equity or at law, in contract, tort or otherwise before any Governmental
Entity;
“Affiliate”
means, with respect to any Person, (i) any other Person directly or indirectly, controlling, controlled by, or under common control
with, such Person; (ii) with respect to any natural person, shall also include any member of the immediate family of such natural
person; provided that prior to the Closing, Parent and Merger Sub shall not be deemed to be Affiliates of the Company and/or any
of the Company’s Subsidiaries and vice versa;
“Anti-Corruption
Laws” means any provision of the U.S. Foreign Corrupt Practices Act of 1977 (as amended), the UK Bribery Act of 2010, any applicable
anti-corruption Laws of the PRC (including the Criminal Law of the PRC passed by the National People’s Congress on July 1,
1979 (as amended), the Law of the PRC for Countering Unfair Competition passed by the National People’s Congress on September 2,
1993 (as amended) and the Interim Provisions Prevention of Commercial Bribery passed by the State Administration for Industry and Commerce
of the PRC on November 15, 1996), the Prevention of Bribery Ordinance of Hong Kong, the Banking Ordinance of Hong Kong and the Independent
Commission Against Corruption Ordinance of Hong Kong, or any other similar applicable Law that prohibits corruption or bribery and regulate
record keeping and internal controls;
“Anti-Tax Evasion
Laws” means any applicable Law in any jurisdiction that prohibits tax evasion and/or the facilitation of tax evasion;
“Antitrust and Foreign
Investment Laws” means, collectively, the Sherman Antitrust Act of 1890, the Clayton Antitrust Act of 1914, the HSR Act, the
Federal Trade Commission Act of 1914 and all other Laws that are designed or intended to prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade or significant impediments or lessening of competition or the creation or
strengthening of a dominant position through merger or acquisition, in any case that are applicable to the Merger and all Laws and Orders
relating to foreign investment or national security matters;
“Applicable Data
Protection Requirements” means all Laws applicable to the Company, Contracts binding on the Company, publicly posted Company
privacy policies or notices, and industry standards or self-regulatory frameworks binding on the Company, each to the extent relating
to privacy, data protection, or data security.
“Business Day”
means any day other than a Saturday or Sunday and other than a day on which banks are required or authorized to close in the Cayman Islands,
the PRC, Hong Kong, the City of New York, New York or London, United Kingdom;
“Code”
means the U.S. Internal Revenue Code of 1986, as amended;
“Collaboration Partners”
means the Company’s and its Subsidiaries’ licensees or licensors of Intellectual Property or any third party with which the
Company or any of its Subsidiaries has entered into a Contract that relates to the research, development, supply, manufacturing, testing,
or other exploitation of any Company Product;
“Company 401(k) Plan”
means any Company Plan that is a defined contribution plan that includes a qualified cash or deferred arrangement within the meaning of
Section 401(k) of the Code.
“Company Employee”
means any current or former director, officer, employee, contractor, consultant or individual service provider of the Company or any Subsidiary
of the Company;
“Company Equity Award”
means any Company Option or Company RSU;
“Company Data”
means all non-public data contained in the Company Systems and used by the Company;
“Company
Intellectual Property” means all Intellectual Property: (a) owned or purported to be owned (solely or jointly) by
the Company; or (b) exclusively or co-exclusively licensed to the Company;
“Company Option”
means each outstanding option to purchase Shares, whether granted pursuant to the Company Share Plans or otherwise;
“Company Product”
means any product (including any product candidates) that is being researched, tested, developed, manufactured or otherwise exploited
by or on behalf of the Company or any of its Subsidiaries and that is owned by, licensed to, or otherwise used in the business of, the
Company or any of its Subsidiaries, or for which the Company or any of its Subsidiaries has the right to receive payment related thereto,
regardless of whether such product or product candidate is developed using any of the Platforms;
“Company Registered
Intellectual Property” means all of the Registered Intellectual Property owned or co-owned (or purported to be owned or co-owned)
by, or exclusively or co-exclusively licensed to, the Company or any of its Subsidiaries;
“Company
Plan” means each “employee benefit plan” (within the meaning of Section 3(3) of ERISA, whether or not
subject to ERISA) and each other benefit or compensation plan, policy, program, Contract or arrangement (i) in respect of any Company
Employee, including any bonus or incentive, employment, consulting, severance, separation pay, employee loan, fringe benefits, change
in control, retention, transaction or similar bonus, incentive equity or equity-based compensation, phantom equity, deferred compensation,
health, welfare or fringe benefit plans, policies, programs, Contracts or arrangements, or (ii) that is contributed to (or required
to be contributed to), sponsored or maintained by the Company or any of its Subsidiaries, or with respect to which the Company or any
of its Subsidiaries has any current or contingent obligation or liability (including any plans, policies, programs, Contracts or
arrangements that are sponsored by a PEO under which any Company Employee is eligible to receive benefits in connection with engagement
of a PEO by the Company or any Subsidiary of the Company), other than a plan, policy, program, or arrangement that is required to be maintained
by applicable Law;
“Company RSU”
means each outstanding restricted stock unit that corresponds to a Share, whether granted pursuant to the Company Share Plans or otherwise;
“Company Share Plans”
means the 2020 Share Incentive Plan and the Company’s Third Amended and Restated 2017 Employee Stock Option Plan, in each case as
amended from time to time; “Contract” means any contract, subcontract, note, bond, mortgage, indenture, lease, license,
sublicense or other agreement or instrument;
“Company Systems”
means all computerized, automated, information technology or similar systems, platforms and networks owned, used or held for use by, for,
or on behalf of the Company or any of its Subsidiaries, including Software, hardware, data processing and storage, record keeping, communications,
telecommunications, network equipment, peripherals, data centers, information technology, mobile and other platforms, and data and information
contained in or transmitted by any of the foregoing, together with documentation relating to any of the foregoing;
“control”
(including the terms “controlling”, “controlled”, “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and such power or authority shall
conclusively be presumed to exist by possession of (i) the beneficial ownership or power to direct the vote of more than 50% of the
votes entitled to be cast at a meeting of the members or shareholders of such Person, or (ii) the power to appoint or elect a majority
of the members of the board of directors of such Person;
“Controlled Entities”
means the VIE Entities and their respective Subsidiaries;
“Control Documents”
means the documents set forth in Section 3.26 of Company Disclosure Letter;
“DOJ” means
the United States Department of Justice;
“Equity Securities”
means, with respect to any Person, (i) shares of capital stock, share capital, voting securities, or other equity or ownership interests
of such Person, (ii) securities of such Person convertible into, exercisable for, or exchangeable for shares, shares of capital stock,
voting securities or other equity or ownership interests of such Person, (iii) subscriptions, options, restricted shares, restricted
share units, stock appreciation rights, performance shares, contingent value rights, warrants, convertible debts, convertible instruments,
calls, phantom stock or other similar rights, agreements, or commitments of any character to acquire from such Person, or obligations
of such Person to issue or sell, any issued or unissued shares, shares of capital stock, voting securities, or other equity or ownership
interests or securities convertible into, exercisable for, or exchangeable for, or giving any Person a right to subscribe for or acquire,
any shares, shares of capital stock, voting securities or other equity or ownership interests of such Person, (iv) bonds, debentures,
notes or other indebtedness of such Person having the right to vote (or convertible into, exercisable for, or exchangeable for shares,
shares of capital stock, voting securities or other equity or ownership interests of such Person having the right to vote) on any matters
on which shareholders of such Person may vote, or (v) securities or rights issued by such Person, in each case, that are derivative
of, or provide economic benefit based on the value of, shares, shares of capital stock, voting securities or other equity or ownership
interests of such Person;
“ERISA”
means the U.S. Employee Retirement Income Security Act of 1974;
“Exchange Act”
means the Securities Exchange Act of 1934, as amended;
“Excluded Shares”
means, collectively, (i) any Shares (including Shares represented by ADSs) held by Parent, Merger Sub, the Company or any of their
Subsidiaries, and (ii) any Shares (including ADSs corresponding to such Shares) held by the Company or the Depositary and reserved
for issuance and allocation pursuant to the Company Share Plans;
“Ex-Im Laws”
means all U.S. and non-U.S. Laws relating to export, reexport, transfer, and import controls, including the Export Administration Regulations,
the International Traffic in Arms Regulations, and the customs and import Laws administered by U.S. Customs and Border Protection;
“Fair Labor Standards
Act” means the Fair Labor Standards Act of 1938, as amended, and similar applicable state, local and foreign Laws.
“FDA” means
the United States Food and Drug Administration or any successor thereto;
“FDCA”
means the United States Food, Drug, and Cosmetic Act (21 U.S.C. §§ 301 et seq.);
“FTC” means
the United States Federal Trade Commission;
“GAAP”
means the generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or
in such other statements by such other entity as may be approved by a significant segment of the accounting profession in the United States,
in each case, as applicable, as of the time of the relevant financial statements referred to herein;
“Governmental
Entity” means any foreign, domestic, federal, territorial, state or local governmental or regulatory authority of any nature
(including any government or any governmental agency, instrumentality, court, tribunal or commission, or any subdivision, department or
branch of any of the foregoing) or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police,
regulatory or Taxing Authority, including any stock exchange, including the FDA, NMPA and any other domestic or foreign entity
that regulates or has jurisdiction over the quality, identity, strength, purity, safety, efficacy, testing, manufacturing, marketing,
distribution, sale, storage, pricing, import or export of any Company Product;
“Good Clinical Practices”
means standards for clinical trials (including all applicable requirements relating to protection of human subjects), as set forth in
the FDCA and applicable regulations promulgated thereunder (including, for example, 21 C.F.R. Parts 50, 54, 56, 210, and 211), and such
standards of good clinical practice (including all applicable requirements relating to protection of human subjects) as are required by
Governmental Entities in any other country or jurisdiction (including the NMPA), including applicable regulations or guidelines from the
International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use;
“Good Laboratory
Practices” or “GLP” means standards for laboratories, as set forth in the FDCA and applicable regulations
promulgated thereunder, and such standards of good laboratory practices as are required by Governmental Entities in any other country
or jurisdiction (including the NMPA), including applicable regulations or guidelines from the International Council for Harmonisation
of Technical Requirements for Pharmaceuticals for Human Use;
“Good Manufacturing
Practices” means standards for the manufacture, processing, packaging, testing, transportation, handling, and holding of chemicals,
intermediates, bulk products, or finished biopharmaceutical or diagnostic products, as set forth in the FDCA and applicable regulations
promulgated thereunder, and such standards of good manufacturing practices as are required by Governmental Entities in any other country
or jurisdiction (including the NMPA), including applicable regulations or guidelines from the International Council for Harmonisation
of Technical Requirements for Pharmaceuticals for Human Use;
“Group”
means a “group” as defined in Section 13(d) of the Exchange Act;
“Health
Care Laws” means any Law applicable to the research, development, design, manufacture, processing, production, packaging, labelling,
distribution, importation, exportation, handling, quality, safety surveillance, reporting of adverse events, or other commercialization
or marketing of prescription drug or other health care products, or to the licensing, permitting, certification, accreditation, or registration
of, and standards for, establishments involved in any such activities, including: (a) the FDCA; (b) the Public Health Service
Act (42 U.S.C. §§ 201 et seq.); (c) the Health Insurance Portability and Accountability Act of 1996, as amended by the
Health Information and Technology for Economic and Clinical Health Act; (d) any and all federal, state and local fraud and abuse
laws, including the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Physician Payments Sunshine Act (42 U.S.C. §
1320a-7h), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the criminal False Claims Law (42 U.S.C. § 1320a-7b(a)),
the exclusion laws (42 U.S.C. § 1320a-7), and the civil monetary penalties law (42 U.S.C. § 1320a-7a); (e) Laws which are
cause for exclusion from any federal health care program; (f) the Administrative Regulations on Human Genetic Resource (2019) of
the People’s Republic of China (中华人民共和国人类遗传资源管理条例);
and (g) all comparable non-U.S. or other Laws relating to the foregoing;
“Hong Kong”
means the Hong Kong Special Administrative Region;
“HSR Act”
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
“IND” means
an Investigational New Drug Application submitted to the FDA pursuant to 21 C.F.R. Part 312 for the investigation of the Company
Products or the equivalent application or filing submitted to any equivalent agency or Governmental Entity outside the United States (including
the NMPA), together with all supplements, amendments, variations, extensions and renewals thereof that may be submitted with respect to
the foregoing;
“Intellectual
Property” means all of the following in any jurisdiction in the world: (i) inventions, whether patentable or not, and all
patents and patent applications, together with all reissuances, provisionals, nonprovisionals, substitutions, continuations, continuations-in-part,
divisions, revisions, renewals, extensions, supplementary protection certificates, reexaminations, term extensions, confirmations, utility
models, certificates of invention, and the equivalents of any of the foregoing, statutory invention registrations and invention disclosures;
(ii) copyrights, copyrightable works, works of authorship, content, moral rights, and data and database rights, including all rights
of authorship, use, publication, publicity, reproduction, distribution, income, performance and transformation; (iii) Software; (iv) trademarks,
service marks, certification marks, domain names, corporate names, trade names, logos, designs, brands, rights to social media accounts,
trade dress, other indicia of source, origin or quality, and the goodwill of the business symbolized by any of the foregoing; (v) all
trade secrets, know-how (including recipes, specifications, formulae, manufacturing and other processes, operating procedures, methods,
techniques and all research and development information), improvements, formulae, technology, technical data, technical databases, technical
data collections, and other confidential information and all proprietary rights and intellectual property therein, whether patentable
or not, and all documentation relating to the foregoing; (vi) registrations, applications and renewals related to any of the foregoing;
and (vii) all other intellectual property, industrial property and proprietary rights of any kind or nature;
“Intervening Event”
means any material event, change, effect, development or occurrence that (i) was not known or reasonably foreseeable to the Board
of Directors as of or prior to the date of this Agreement and (ii) does not relate to or involve (A) any Acquisition Proposal,
(B) any change in the market price or trading volume of the Shares (provided, that the underlying cause of such event, change, effect,
development or occurrence may constitute an Intervening Event), (C) any event, change or circumstance relating to Parent or any
of its Affiliates, (D) any change in conditions generally (including any regulatory changes) affecting the industries or sectors
in which the Company, Parent or any of their respective Subsidiaries operates, (E) clearance of the Merger under the Antitrust and
Foreign Investment Laws or any matters relating thereto or arising therefrom, or (F) the fact, in and of itself, that the Company
or any of its Subsidiaries has met or exceeded any internal or published projections, forecasts, estimates or predictions, revenues, earnings
or other financial or operating metrics for any period (provided, that the underlying cause of such event, change, effect, development
or occurrence may constitute an Intervening Event);
“IRS” means
the U.S. Internal Revenue Service;
“knowledge”
means, with respect to the Company, the knowledge of any of the individuals listed in Section 9.5(a) of the Company Disclosure
Letter after due inquiry, and with respect to Parent or Merger Sub, the knowledge of any of the individuals listed in Schedule III
hereto after due inquiry;
“Law” means
any federal, state, local, municipal, foreign or other law, act, statute, constitution, principle of common law, ordinance, code, Order,
rule, regulation or requirement issued, enacted, adopted, promulgated, implemented or otherwise having the force of law or Orders of any
Governmental Entity;
“Lease”
means any and all leases, subleases, licenses, concessions, sale/leaseback arrangements or similar arrangements and other occupancy agreements
(written or oral) pursuant to which the Company or any of its Subsidiaries holds any Leased Real Property, including the right to all
security deposits and other amounts and instruments deposited by or on behalf of the Company or any of the Company’s Subsidiaries
thereunder;
“Leased Real Property”
means the real property leased, subleased, licensed or otherwise occupied by the Company or any of its Subsidiaries as tenant, sublessee,
licensee or occupier, together with, to the extent leased by the Company or any of its Subsidiaries, all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all fixtures, systems and equipment affixed thereto and all easements,
licenses, rights, hereditaments and appurtenances relating to the foregoing;
“Liens”
means any security interest, pledge, hypothecation, mortgage, lien (including environmental and Tax liens), violation, charge, lease,
license, covenant not to sue or use, encumbrance, servient easement, adverse claim, reversion, reverter, preferential arrangement, restrictive
covenant, condition or restriction of any kind, including any right of first refusal, right of first offer, call option, and any other
restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership;
“Material
Adverse Effect” means any event, development, change, effect or occurrence that, individually or in the aggregate with all other
events, developments, changes, effects or occurrences, (1) has had, or would reasonably be expected to have, a material adverse effect
on the business, results of operation or financial condition, or assets of the Company and its Subsidiaries, taken as a whole; provided
that, no events, developments, changes, effects or occurrences relating to, arising out of or in connection with or resulting from any
of the following shall be taken into account in determining whether a Material Adverse Effect has occurred or is reasonably expected to
occur: (i) general changes or developments in the economy or the financial, debt, capital, credit or securities markets in the United
States, the PRC or elsewhere in the world in which the Company or its Subsidiaries have material operations or the economy generally,
(ii) general changes or developments in the industries in which the Company or its Subsidiaries operate, (iii) the execution
and delivery of this Agreement or the public announcement or pendency of the Merger or the other Transactions, the public announcement
or disclosure of or performance of this Agreement or the Transactions, the pendency or consummation of the Transactions, or the identity
of the parties hereto, including any impact thereof on relationships, contractual or otherwise, with customers, employees, suppliers,
licensors, licensees, distributors, providers, contractors, lenders, investors, partners of the Company or any of its Subsidiaries (provided,
that this clause (iii) shall not apply to any representation or warranty to the extent the purpose of such representation or warranty
is to directly address the consequences resulting from the execution and delivery of this Agreement or the consummation of the Transactions
(including the Merger), subject to the disclosures in the Company Disclosure Letter), (iv) changes in any applicable Laws or regulations
or applicable accounting regulations or principles or interpretation or enforcement thereof, (v) any hurricane, tornado, earthquake,
flood, tsunami, natural or man-made disaster, act of God, escalation of hostilities or war (whether or not declared), military actions
or any act of sabotage or terrorism, or national or international political or social conditions, epidemics, pandemic (including COVID-19)
or other public health crises, other comparable events or outbreak, (vi) any decline in the market price or trading volume of the
Shares or ADSs or the credit rating of the Company (provided, that the facts, circumstances, developments, events, changes, effects or
occurrences giving rise to or contributing to such decline that are not otherwise listed in clause (i) through (xii)) may be deemed
to constitute, or be taken into account in determining whether there has been or would reasonably be expected to be, a Material Adverse
Effect), (vii) any failure by the Company to meet any published analyst estimates or expectations of the Company’s revenue,
earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Company to meet
its internal or published projections, budgets, plans or forecasts of its revenues, earnings or other financial performance or results
of operations (provided, that the facts, circumstances, developments, events, changes, effects or occurrences giving rise to or contributing
to such decline may be deemed to constitute, or be taken into account in determining whether there has been or would reasonably be expected
to, a Material Adverse Effect), (viii) any adverse effect directly arising from or otherwise directly relating to any action
taken by the Company at the written direction of Parent, (ix) changes or developments in or affecting regional, domestic or any foreign
interest or exchange rates, or (x) any Action threatened, made or brought by any of the current or former shareholders of the Company
(or on their behalf or on behalf of the Company) against the Company or any of its directors, officers or employees arising out of this
Agreement or the Merger, or (xi) any results, outcomes, data, adverse events or side effects arising from any clinical trials being
conducted by or on behalf of the Company or any regulatory matters related to such results, outcomes, data, adverse events or side effects
(other than, in each case, if related to safety) or the announcements thereof; except in the cases of clauses (i), (ii), (iv) or
(v), to the extent that the Company and its Subsidiaries, taken as a whole, are disproportionately affected thereby as compared with other
participants in the same industries in which the Company and its Subsidiaries operate (in which case solely the incremental disproportionate
impact or impacts may be taken into account in determining whether there has been or would reasonably be expected to be a Material Adverse
Effect); or (2) would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or have a
material adverse effect on the ability of the Company to consummate the Transactions or otherwise have a material adverse effect on the
ability of the Company to perform its obligations under this Agreement;
“Milestone”
shall have the meaning set forth in the CVR Agreement;
“Milestone Notice” shall have the meaning
set forth in the CVR Agreement;
“Milestone Payment
Date” shall have the meaning set forth in the CVR Agreement;
“NASDAQ”
means the Nasdaq Global Select Market;
“NMPA”
means the National Medical Products Administration (formerly the China Food and Drug Administration);
“OFAC”
means the U.S. Department of Treasury Office of Foreign Assets Control;
“Open Source Software”
means all Software that is distributed as “free software,” “open source software” or under a similar licensing
or distribution model or any other license described by the Open Source Initiative as set forth anywhere on www.opensource.org or that
otherwise conditions any rights granted in such license upon the disclosure, distribution or licensing of any other Software or the grant
of a license to any patent;
“Order”
means any Law, order, judgment, injunction, award, decision, determination, stipulation, ruling, subpoena, writ, decree or verdict enacted,
issued, promulgated, enforced or entered by or with any Governmental Entity;
“Organizational Documents”
means the articles of association, articles of incorporation, certificate of incorporation, memorandum of association, charter, bylaws,
articles of formation, certificate of formation, operating agreement, certificate of limited partnership, partnership agreement, exempted
limited partnership agreement, limited liability company agreement and all other similar documents, instruments or certificates executed,
adopted or filed in connection with the creation, formation or organization of a Person, including any amendments thereto;
“Permits”
means the permits, licenses, authorizations, exemptions, orders, consents, approvals and franchises from Governmental Entities that are
required for the Company and its Subsidiaries to conduct their respective businesses and own, lease, operate and develop their respective
assets and properties as being conducted, owned, leased, operated, developed as of the date hereof, including the following: (i) environmental
protection approval (环评批复), (ii) energy conservation review opinion (节能审查意见),
(iii) power supply approval (供电批复), (iv) land
use right certificate (土地使用权证),
(v) construction land planning approval (建设用地规划许可证),
(vi) project planning approval (建设工程规划许可证),
(vii) construction work commencement permit (施工许可证
), (viii) certificate of completion of fire inspection (消防验收意见),
(ix) energy conservation acceptance report (节能验收报告),
(x) environmental protection acceptance report (环保验收报告),
or (xi) construction project acceptance report/filing form (建设项目竣工验收报告/备案表);
“Permitted Liens”
means (i) statutory liens securing payments not yet due and payable as of the Closing Date, including liens of lessors pursuant to
the terms of any lease; (ii) easements, covenants and rights of way and other similar restrictions of record affecting title to real
property, and zoning, building and other similar restrictions, in each case that do not adversely affect in any material respect the current
use or occupancy of the applicable property owned, leased, used or held for use in the operation of the business of the Company or any
of its Subsidiaries conducted thereon; (iii) Liens for Taxes, assessments and other governmental levies, fees or charges which are
not due and payable as of the Closing Date or which are being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in the financial statements of the Company in accordance with GAAP; (iv) pledges or deposits made in
the ordinary course of business to secure obligations under workers’ compensation, unemployment insurance, social security, retirement
and similar Laws or similar legislation or to secure public or statutory obligations (other than liens securing indebtedness for borrowed
money); (v) mechanics’, carriers’, workmen’s, repairmen’s or other like encumbrances arising or incurred
in the ordinary course of business for amounts which are not yet past due or which are being contested by appropriate proceedings; (vi) non-exclusive
licenses or covenants not to sue of Intellectual Property granted by the Company or its Subsidiaries in the ordinary course of business
where the grant of such rights is incidental and not material to the counterparty’s performance under the applicable agreement;
and (vii) Liens imposed by applicable Law; (viii) Liens securing indebtedness, obligations or liabilities that are reflected
in the SEC Reports filed or furnished prior to the date hereof, or have otherwise been disclosed to Parent or Merger Sub or any of their
Affiliates as of the date of this Agreement;
“Person”
means an individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, unincorporated organization, other entity or group (as defined in Section 13(d)(3) of
the Exchange Act), including any group of Persons;
“Personal
Information” means any information in the Company’s possession, custody, or control that relates to an identified or identifiable
individual or otherwise constitutes “personal data,” “personal information,” or similar term as defined
by applicable Laws.
“Platforms”
means, collectively, the Company’s proprietary platform technologies known as FasTCAR™, TruUCAR™, Dual CAR and
SMART CART™;
“PRC” means
the People’s Republic of China, but solely for purposes of this Agreement, excluding Hong Kong, the Macau Special Administrative
Region and Taiwan;
“Processing”
(or “Process”) means processing, collection, acquisition, recording, organization, storage, use, handling, alteration,
modification, transmission, provision, disclosure, sharing, access, use, retrieval, transfer, encryption, destruction or disposal of any
data or information;
“Registered Intellectual
Property” means all Intellectual Property that is the subject of any issuance, application, certificate, filing, registration
or other document issued by, filed with or recorded by, any Governmental Entity or authorized private registrar in any jurisdiction, including
registered trademarks, internet domain names, copyright registrations, issued and reissued patents and pending applications for any of
the foregoing;
“Representatives”
of a Person means such Person’s officers, directors, employees, accountants, consultants, legal counsel, financial or other advisors,
agents and other representatives;
“RMB” means
the lawful currency of the PRC;
“Sanctioned Country”
means any country or region that is the subject or target of a comprehensive embargo under Sanctions Laws (including Cuba, Iran,
North Korea, Syria, Venezuela, and the Crimea, Donetsk, and Luhansk regions of Ukraine);
“Sanctioned Person”
means any individual or entity that is the subject or target of sanctions or restrictions under Sanctions Laws or Ex-Im Laws, including:
(i) any individual or entity listed on any applicable U.S. or non-U.S. sanctions- or export-related restricted party list, including
OFAC’s Specially Designated Nationals and Blocked Persons; (ii) any entity that is, in the aggregate, 50% or greater owned,
directly or indirectly, or otherwise controlled by a Person or Persons described in clause (i); or (iii) any national of a Sanctioned
Country;
“Sanctions Laws”
means all U.S. and non-U.S. Laws relating to economic or trade sanctions, including, without limitation, the Laws administered or enforced
by the United States (including by OFAC or the U.S. Department of State), and the United Nations Security Council;
“Sarbanes-Oxley Act”
shall mean the Sarbanes-Oxley Act of 2002, as amended.
“SEC” shall
mean the United States Securities and Exchange Commission.
“Securities Act”
shall mean the Securities Act of 1933, as amended.
“Software”
means any software of any type, including computer programs, applications, architectures, libraries, firmware, and middleware, software
development kits, libraries, tools, interfaces, and software implementations of algorithms, models and methodologies, in each case, whether
in source code or object code, together with all intellectual property, industrial property and proprietary rights in and to any of the
foregoing;
“Subsidiary”
or “Subsidiaries” means with respect to any Person, each other Person in which the first Person (a) owns, directly
or indirectly, share capital or other equity interests representing at least a majority of the outstanding voting shares, stock or other
equity interests (including through any contractual arrangement), (b) holds, directly or indirectly, the right to at least a majority
of the economic interests, including interests held through a variable-interest-entity structure or other similar contractual arrangements
(including the Control Documents), and (c) has a relationship such that the financial statements of the other Person may be consolidated
into the financial statements of the first Person under applicable accounting conventions. For purposes of this Agreement, each branch
office of any Subsidiary of the Company, whether registered or not as required by the applicable Laws of the jurisdiction of its operation,
shall be deemed as a Subsidiary of the Company;
“Superior Proposal”
means any bona fide, written Acquisition Proposal that did not result from a material breach of Section 6.3 for an
Acquisition Proposal on terms that the Board of Directors (or a duly authorized committee thereof) determines in good faith, after consultation
with its financial advisor and outside legal counsel, and taking into account all legal, financial, regulatory and other aspects of the
Acquisition Proposal (including the identity of the Person making the Acquisition Proposal and the expected timing and likelihood of consummation,
any governmental or other approval requirements (including divestitures and entry into other commitments and limitations), break-up fees,
expense reimbursement provisions, conditions to consummation and availability of necessary financing (including, if a cash transaction
(in whole or in part), the availability of such funds and the nature, terms and conditionality of any committed financing)), to be more
favorable to the Company’s shareholders, from a financial point of view, than the terms of the Merger (including any adjustment
to the terms and conditions proposed by Parent in response to such proposal); provided, however, that for purposes of the reference
to an “Acquisition Proposal” in this definition of a “Superior Proposal”, all references to “20% or more”
in the definition of “Acquisition Proposal” shall be deemed to be references to “a majority”;
“Taxes”
means all federal, state, local and non-U.S. income, profits, gains, franchise, gross receipts, windfall, environmental, customs duty,
share capital, capital stock, severance, stamp, payroll, sales, employment, unemployment, disability, social security, use, property,
withholding, excise, license, production, value added, occupancy, escheat or unclaimed property, land value appreciation, deed, registration,
alternative, add-on minimum, branch profits, premium, business and national tax and other taxes, duties or other like assessments of any
nature whatsoever imposed by any Governmental Entity together with all interest, penalties and additions imposed with respect to such
amounts and any interest in respect of such penalties and additions and regardless of whether such amounts are chargeable directly or
primarily against or attributable directly or primarily to the relevant person or any other person and of whether any amount is recoverable
in respect of them from any other person;
“Tax Return”
means any return, report, document, statement, declaration or other information filed or required to be filed with any Taxing Authority
with respect to Taxes, including information returns, claims for refunds and any documents with respect to or accompanying payments of
estimated Taxes, and including any attachment thereto and any amendment thereof;
“Taxing Authority”
means any Governmental Entity competent to impose any Tax liability, or assess or collect any Tax;
“Third-Party Components”
means, with respect to Company Intellectual Property, all material Software that is not exclusively owned by the Company or one of its
Subsidiaries that is used in, incorporated into, combined with, linked with, distributed with, provided to any Person in connection with,
or otherwise made available to consumers with or through Company Intellectual Property;
“Transaction Documents”
means, collectively, this Agreement, the Confidentiality Agreement, the Support Agreements, the CVR Agreement and any other agreement
or document contemplated thereby or any document or instrument delivered in connection hereunder or thereunder;
“United States”
or “U.S.” means the United States of America;
“VAT” means
any value added tax and any similar sales or turnover tax;
“VIE
Entities” means the variable interest entities, including Gracell Biotechnologies (Shanghai) Co., Ltd. (in Chinese “亘喜生物科技（上海）有限公司”)
and its Subsidiary, Suzhou Gracell Biotechnologies Co., Ltd. (in Chinese “苏州亘喜生物科技有限公司”);
“WFOE”
means, Gracell Bioscience (Shanghai) Co., Ltd. (in Chinese “亘利生物科技（上海）有限公司”),
a wholly foreign-owned enterprise of the Company; and
“Willful Breach”
means with respect to any breaches or failures to perform any of the covenants or other agreements contained in this Agreement, a material
breach that is a consequence of an act or failure to act undertaken by the breaching Party with actual knowledge that such Party’s
act or failure to act would, or would reasonably be expected to, result in or constitute a material breach of this Agreement.
(b) Other
Defined Terms. The following terms have the meanings set forth in the Sections set forth below:
| Defined Term |
Section |
| |
|
| ADS |
Section 2.1(b) |
| Agreement |
Preamble |
| Alternative Acquisition Agreement |
Section 6.3(a)(i)(D) |
| Applicable Date |
Section 3.8(a) |
| Balance Sheet Date |
Section 3.9 |
| Bankruptcy and Equity Exception |
Section 3.5(a) |
| Board of Directors |
Recitals |
| Book-Entry Shares |
Section 2.3(b)(i) |
| Book-Entry Warrants |
Section 2.3(b)(i) |
| Capitalization Date |
Section 3.3(a) |
| CBA |
Section 3.11(a)(xii) |
| CICA |
Recitals |
| Certificates |
Section 2.3(b)(i) |
| Change of Recommendation |
Section 6.3(a)(i)(F) |
| Change Notice |
Section 6.3(d)(ii) |
| Closing |
Section 1.2 |
| Closing Consideration |
Section 2.3(a) |
| Closing Date |
Section 1.2 |
| Company |
Preamble |
| Company Disclosure Letter |
Article III |
| Company Related Party |
Section 8.2(e) |
| Company Requisite Vote |
Section 3.5(c) |
| Company RSU Closing Amount |
Section 2.2(a)(iii) |
| Company RSU Consideration |
Section 2.2(a)(iii) |
| Company Termination Payment |
Section 8.2(b)(i) |
| Company Warrant |
Section 2.1(c) |
| Company Warrant Consideration |
Section 2.1(c) |
| Defined Term |
Section |
| |
|
| Confidentiality Agreement |
Section 6.6(b) |
| Continuing Employee |
Section 6.9(a) |
| CVR |
Section 2.1(a) |
| CVR Agreement |
Recitals |
| Deposit Agreement |
Section 2.6 |
| Depositary |
Section 2.6 |
| Dissenter Rights |
Section 2.1(e) |
| Dissenting Fair Value Payment |
Section 2.1(e) |
| Dissenting Shares |
Section 2.1(e) |
| Dissenting Shareholders |
Section 2.1(e) |
| EDGAR |
Article III |
| Effective Time |
Section 1.3 |
| End Date |
Section 8.1(b)(ii) |
| Environmental Laws |
Section 3.23 |
| Exchange Fund |
Section 2.3(a) |
| Financial Advisor |
Section 3.24 |
| Financial Advisor Engagement Letter |
Section 3.25 |
| In-the-Money Company Option |
Section 2.2(a) |
| In-the-Money Company Option Closing Amount |
Section 2.2(a) |
| In-the-Money Company Option Consideration |
Section 2.2(a) |
| Incidental Contracts |
Section 3.11(a)(xix) |
| Indemnified Parties |
Section 6.10(a) |
| Indemnification Agreements |
Section 6.10(b) |
| Intervening Event Notice |
Section 6.3(e)(ii) |
| Intervening Event Notice Period |
Section 6.3(e)(ii) |
| Material Contract |
Section 3.11(a) |
| Memorandum and Articles of Association |
Section 3.2 |
| Merger |
Recitals |
| Merger Consideration |
Section 2.2(a)(iii) |
| Merger Sub |
Preamble |
| Notice Period |
Section 6.3(d)(ii) |
| Parent |
Preamble |
| Parent Material Adverse Effect |
Section 7.3(a) |
| Parent Plan |
Section 6.9(b) |
| Parent Related Party |
Section 8.2(e) |
| Parent Termination Payment |
Section 8.2(c) |
| Defined Term |
Section |
| |
|
| Party/Parties |
Preamble |
| Paying Agent |
Section 2.3(a) |
| PEO |
Section 3.11(a)(xvii) |
| Per ADS Closing Amount |
Section 2.1(b) |
| Per ADS Merger Consideration |
Section 2.1(b) |
| Per Share Closing Amount |
Section 2.1(a) |
| Per Share Merger Consideration |
Section 2.1(a) |
| Plan of Merger |
Section 1.3 |
| Proxy Statement |
Section 3.6(b) |
| Recommendation |
Section 3.5(b) |
| Rights Agent |
Recitals |
| Registrar of Companies |
Section 1.1 |
| Remedy Action |
Section 6.4(b) |
| Restraint |
Section 7.1(b) |
| Security Incident |
Section 3.22 |
| Share |
Section 2.1(a) |
| Shareholders Meeting |
Section 6.2(a) |
| Support Agreement |
Recitals |
| Surviving Company |
Section 1.1 |
| Takeover Statute |
Section 3.27 |
| Transaction Litigation |
Section 6.13 |
| Transactions |
Recitals |
| Underwater Company Option |
Section 2.2(a)(ii) |
| Underwater Company Option Consideration |
Section 2.2(a)(ii) |
| Warrant Certificates |
Section 2.3(b)(i) |
Section 9.6 Severability.
If any term or other provision of this Agreement is found by a court of competent jurisdiction 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 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
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that the Transactions are fulfilled to the fullest extent possible.
Section 9.7 Entire
Agreement; Assignment. This Agreement (including the Exhibits hereto and the Company Disclosure Letter), the CVR Agreement (including
any annexes, schedules and exhibits thereto) and the other Transaction Documents constitute the entire agreement among the Parties with
respect to the subject matter hereof 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 thereof. This Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of each of the other Parties, and any assignment without such consent shall be null and void; provided
that Parent and/or Merger Sub may assign all or any of their rights and obligations hereunder to any wholly owned Subsidiary of Parent
by prior notice to the Company.
Section 9.8 Parties
in Interest. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any rights, benefits or remedies of any nature whatsoever under
or by reason of this Agreement, other than (a) at and after the Effective Time, with respect to the provisions of Section 6.10
which shall inure to the benefit of the Persons or entities benefiting therefrom who are intended to be third-party beneficiaries
thereof, (b) at and after the Effective Time, the rights of the holders of Shares (other than the Excluded Shares, Dissenting Shares
and Shares represented by ADSs), ADSs (other than ADSs representing the Excluded Shares), Company Warrants, Company Options and Company
RSUs issued and outstanding as of immediately prior to the Effective Time to receive the Merger Consideration payable pursuant to Section 2.1
and Section 2.2in accordance with the terms and conditions of this Agreement, (c) each Company Related Party shall
be a third-party beneficiary of Section 8.2(e), and (d) each Company Related Party shall be a third-party beneficiary
of Section 8.2(f).
Section 9.9 Governing
Law. This Agreement shall be interpreted, construed and governed by and in accordance with the Laws of the State of Delaware without
regard to the conflicts of law principles thereof that would subject such matter to the Laws of another jurisdiction, except that the
following matters arising out of or relating to this Agreement shall be exclusively interpreted, construed and governed by and in accordance
with the Laws of the Cayman Islands, in respect of which the Parties hereto hereby irrevocably submit to the exclusive jurisdiction of
the courts of the Cayman Islands: (a) the Merger; (b) the vesting of the undertaking, property and liabilities of each of the
Company and Merger Sub in the Surviving Company; (c) the cancellation of the Shares (including Shares represented by ADSs); (d) the
fiduciary or other duties of the Board of Directors and the sole director of Merger Sub; (e) the general rights of the respective
shareholders of the Company and Merger Sub, including the rights provided for in Section 238 of the CICA with respect to any Dissenting
Shares; and (f) the internal corporate affairs of the Company and Merger Sub.
Section 9.10 Headings.
The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 9.11 Counterparts.
This Agreement may be executed and delivered (including by facsimile transmission, “.pdf,” or other electronic transmission)
in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be
an original but all of which taken together shall constitute one and the same agreement.
Section 9.12 Specific
Performance.
(a) The
Parties agree that irreparable damage, for which monetary damages, even if available, would not be an adequate remedy, would occur in
the event that the Parties do not perform the provisions of this Agreement in accordance with its specified terms or otherwise breach
such provisions. The Parties acknowledge and agree that, subject in all respects to the terms and conditions of this Section 9.12,
the Parties shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof, without any requirement for the posting of any bond or other security, this
being in addition to any other remedy to which they are entitled at law or in equity. The Parties hereby further acknowledge and agree
that prior to the Closing, the Company shall be entitled to specific performance to enforce specifically the terms and provisions of,
and to prevent or cure breaches of this Agreement, including Section 6.4, by Parent or Merger Sub.
(b) Each
of the Parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief as provided
herein on the basis that (i) either Party has an adequate remedy at law or (ii) an award of specific performance is not an appropriate
remedy for any reason at law or equity. Any Party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement shall not be required to provide any bond or other security in connection with
any such order or injunction.
(c) Notwithstanding
anything herein to the contrary, while the Parties may pursue both a grant of specific performance pursuant to Section 9.12
to the extent permitted hereunder prior to the termination of this Agreement and the payment of the amounts set forth in Section 8.2,
neither Parent and Merger Sub, on the one hand, nor the Company, on the other hand, shall be permitted or entitled to receive both a grant
of specific performance that results in a Closing and payment of such amounts set forth in Section 8.2.
Section 9.13 Jurisdiction
and Venue. Each of the Parties irrevocably and unconditionally agrees that any legal action or proceeding with respect to this Agreement
and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and
the rights and obligations arising hereunder brought by the another Party or its successors or assigns, shall be brought and determined
exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, solely if the
Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware).
Each of the Parties hereby irrevocably and unconditionally submits with regard to any such action or proceeding for itself and in respect
of its property to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement
or any of the Transactions (including the Merger) in any court other than the aforesaid courts. Each of the Parties hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect
to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts, (b) any claim
that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) to the fullest extent permitted by applicable Law, any claim that (i) the suit, action or proceeding in such court
is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement,
or the subject matter hereof, may not be enforced in or by such courts. To the fullest extent permitted by applicable Law, each of the
parties hereto hereby consents to the service of process in accordance with Section 9.4; provided, that nothing herein
shall affect the right of any Party to serve legal process in any other manner permitted by applicable Law.
Section 9.14 WAIVER
OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE MERGER OR THE OTHER TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 9.14.
Section 9.15 Interpretation.
When reference is made in this Agreement to an Article, Exhibit, Schedule or Section, such reference shall be to an Article, Exhibit,
Schedule or Section of this Agreement unless otherwise indicated. Whenever the words “include”, “includes”
or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”
The words “hereof,” “herein,” “hereby” and “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined
in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless
otherwise defined therein. Words of any gender include each other gender and neuter genders and words using the singular or plural number
also include the plural or singular number, respectively. Any Contract or Law defined or referred to herein means such Contract or Law
as from time to time amended, modified or supplemented, including (in the case of Contracts) by waiver or consent and (in the case of
Laws) by succession or comparable successor statutes and references to all attachments thereto and instruments incorporated therein.
The word “or” shall not be exclusive and shall be deemed to mean “and/or” as the context requires. For purposes
of this Agreement, any item shall be considered “made available” to Parent, to the extent such phrase appears in this Agreement,
if such item has been provided in writing (including via electronic mail) to Parent, posted by the Company or its Representatives in
the electronic data room established by the Company or its Representatives or, in the case of any documents filed with the SEC, filed
by the Company with the SEC prior to the date hereof. With respect to the determination of any period of time, “from” means
“from and including”. The word “will” shall be construed to have the same meaning as the word “shall”.
Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. The
word “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply
“if”. Where under the terms of this Agreement any party is liable to indemnify or reimburse another party for any costs and
expenses, the amount to be indemnified or reimbursed shall include amounts equal to any VAT thereon not otherwise recoverable by the
other party or any representative member of any VAT group of which it forms a part. References to “dollars” or “$”
are to United States dollars. Any deadline or time period set forth in this Agreement that by its terms ends on a day that is not a Business
Day shall be automatically extended to the next succeeding Business Day. Each of the Parties has participated in the drafting and negotiating
of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if it is drafted
by all the Parties and without regard to any presumption or rule requiring construction or interpretation against the Party drafting
or causing any instrument to be drafted.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Company,
Parent and Merger Sub and have caused this Agreement to be executed as of the date first written above by their respective officers thereunto
duly authorized.
| |
COMPANY: |
| |
GRACELL BIOTECHNOLOGIES INC. |
| |
|
|
| |
By: |
/s/ William Wei Cao |
| |
Name: |
William Wei Cao |
| |
Title: |
Chief Executive Officer |
[Signature Page to Merger Agreement]
| |
PARENT: |
| |
ASTRAZENECA TREASURY LIMITED |
| |
|
|
| |
By: |
/s/ Alistair
Collins |
| |
Name: |
Alistair Collins |
| |
Title: |
Director |
[Signature Page to Merger Agreement]
| |
MERGER SUB: |
| |
GREY WOLF MERGER SUB |
| |
|
|
| |
By: |
/s/ David E.
White |
| |
Name: |
David E. White |
| |
Title: |
Director |
[Signature Page to Merger Agreement]
Schedule
I
Support
Agreement Shareholders
[*****]
Schedule
II
rETENTION
aGREEMENT eMPLOYEES
[*****]
Schedule
III
Parent
Knowledge Parties
[*****]
Exhibit A
Plan
of Merger
PLAN OF MERGER
THIS PLAN OF MERGER is made on _______________
BETWEEN
| (1) | Gracell Biotechnologies Inc., an exempted company incorporated under the laws of the Cayman Islands
having its registered office at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands
(the “Company” or the “Surviving
Company”); and |
| (2) | Grey Wolf Merger Sub, an exempted company incorporated under the laws of the Cayman Islands having
its registered office at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Island (the “Merger
Sub” and together with the Company, the “Constituent Companies”). |
WHEREAS
| (A) | The respective boards of directors of the Company and the Merger Sub have approved the merger of the Constituent
Companies pursuant to Section 233(3) of the Companies Act (As Revised) of the Cayman Islands (the “Companies
Act”), pursuant to which the Merger Sub will merge with and into the Company and cease to exist, with the Surviving Company
continuing as the surviving company in the merger and that the undertaking, property and liabilities of the Merger Sub vest in the Surviving
Company (the “Merger”), upon the terms and subject to the conditions of the
Agreement and Plan of Merger, dated December 22, 2023, by and among AstraZeneca Treasury Limited, a private limited company incorporated
under the laws of England and Wales (“Parent”), the Company and the Merger Sub (the “Merger
Agreement”), a copy of which is annexed at Annexure 1 hereto, and this Plan of Merger and pursuant to the provisions
of Part XVI of the Companies Act. |
| (B) | The shareholders of each of the Company and the Merger Sub have approved and authorised this Plan of Merger
on the terms and subject to the conditions set forth herein and otherwise pursuant to Section 233(6) of the Companies Act. |
| (C) | Each of the Company and the Merger Sub wishes to enter into this Plan of Merger pursuant to the provisions
of Part XVI of the Companies Act. |
IT IS AGREED
| 1. | DEFINITIONS AND INTERPRETATION |
| 1.1 | Terms not otherwise defined in this Plan of Merger shall have the meanings given to them in the Merger
Agreement, a copy of which is annexed at Annexure 1 hereto. |
| (a) | The constituent companies (as defined in the Companies Act) to this Merger are the Company and the Merger
Sub. |
| (b) | The surviving company (as defined in the Companies Act) is the Surviving Company, which shall continue
to be named Gracell Biotechnologies Inc. |
| (c) | The registered office of the Company at the date of this Plan of Merger is at 4th Floor, Harbour Place,
103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. The registered office of the Merger Sub at the date of
this Plan of Merger is at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Island.
Following the effectiveness of the Merger, the registered office of the Surviving Company is at the offices of Maples Corporate Services
Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Island. |
| (d) | Immediately prior to the Effective Time (as defined below), the authorised share capital of the Company
is US$100,000 divided into 1,000,000,000 shares, 600,000,000 of which shall be ordinary shares, US$0.0001 par value per share, and 400,000,000
shares of which shall be undesignated shares, US$0.0001 par value per share, of which [●] ordinary shares of the Company have been
issued. |
| (e) | Immediately prior to the Effective Time, the authorised share capital of the Merger Sub is US$50,000 divided
into 50,000 ordinary shares of a par value of US$1.00 each, of which one (1) share has been issued. |
| (f) | On the Effective Time and immediately following cancellation of the Shares and ADSs pursuant to the terms
and conditions set out in Section 2.1(a) to Section 2.1(e) of the Merger Agreement and Clauses 2.3.1(a) to (f) (inclusive) of this Plan
of Merger and immediately prior to the issue of ordinary shares of the Surviving Company to Parent pursuant to Section 2.1(f) of the Merger
Agreement and Clause 2.3.1(g) of this Plan of Merger, the authorised share capital of the Surviving Company shall, upon the Merger, be
amended from US$100,000 divided into 1,000,000,000 shares, 600,000,000 of which shall be ordinary shares, US$0.0001 par value per
share, and 400,000,000 shares of which shall be undesignated shares, US$0.0001 par value per share to US$50,000 divided into 50,000
ordinary shares of a par value of US$1.00 each, which shall be effected by: (i) the cancellation of 600,000,000 ordinary shares,
US$0.0001 par value per share; (ii) the cancellation of 100,000,000 undesignated shares, US$0.0001 par value per share; (iii) the consolidation
of 300,000,000 undesignated shares, US$0.0001 par value per share into 50,000 undesignated shares, US$1.00 par value per share; and (iv)
following (iii), the re-designation of 50,000 undesignated shares, US$1.00 par value per share to 50,000 ordinary shares of a par value
of US$1.00 each, having the rights and restrictions as set out in the memorandum and articles of association in the form annexed at Annexure
2 hereto. |
In accordance with Section 233(13) of
the Companies Act, the Merger shall be effective on the date that this Plan of Merger is registered by the Registrar of Companies in the
Cayman Islands (the “Effective Time”).
| 2.3 | Terms and Conditions; Share Rights |
| 2.3.1 | At the Effective Time, and in accordance with the terms and conditions of the Merger Agreement: |
| (a) | Share Capital of Merger Sub. Immediately prior to the steps set out in the remainder of this Clause 2.3,
each ordinary share of Merger Sub that is issued and outstanding immediately prior to the Effective Time shall be cancelled. |
| (b) | Treatment of Shares. Each ordinary share, par value $0.0001 per share, of the Company (each, a “Share”)
issued and outstanding immediately prior to the Effective Time (other than the Excluded Shares, Dissenting Shares and Shares represented
by ADSs) shall be cancelled and shall thereafter represent only the right to receive (i) $2.00 per Share in cash without interest (the
“Per Share Closing Amount”), and (ii) one contingent value right (each, a “CVR”) per Share representing
the right to receive a contingent payment of $0.30 per CVR in cash without interest upon the achievement of the Milestone set forth in,
and subject to and in accordance with the terms and conditions of, the CVR Agreement (the Per Share Closing Amount plus one CVR, collectively,
the “Per Share Merger Consideration”), in each case, subject to any applicable withholding Taxes. At the Effective
Time, all of the Shares that have been cancelled and thereafter represent only the right to receive the Per Share Merger Consideration
as provided in Section 2.1(a) of the Merger Agreement shall no longer be issued and outstanding, shall be cancelled and cease to exist,
and each former holder of Shares (other than the Excluded Shares, Dissenting Shares and Shares represented by ADSs) that were outstanding
immediately prior to the Effective Time will cease to have any rights with respect to such Shares, except for the right to receive the
Per Share Merger Consideration without interest, to be paid in accordance with Article II of the Merger Agreement and as set forth in
the CVR Agreement. |
| (c) | Treatment of American Depositary Shares. Each American Depositary Share, representing five Shares (each,
an “ADS”), issued and outstanding immediately prior to the Effective Time (other than ADSs representing the Excluded
Shares), together with the underlying Shares represented by such ADSs, shall be cancelled and shall thereafter represent only the right
to receive (i) $10.00 per ADS in cash without interest (the “Per ADS Closing Amount”), and (ii) five CVRs per ADS representing
the right to receive a contingent payment of $0.30 per CVR in cash without interest upon the achievement of the Milestone set forth in,
and subject to and in accordance with the terms and conditions of, the CVR Agreement (the Per ADS Closing Amount plus five CVRs, collectively,
the “Per ADS Merger Consideration”), in each case, subject to any applicable withholding Taxes and pursuant to the
terms and conditions set forth in the Merger Agreement and the Deposit Agreement, and in the event of any conflict between the Merger
Agreement and the Deposit Agreement, the Merger Agreement shall prevail and apply. The Per ADS Closing Amount shall be paid by the Paying
Agent to the Depositary as the registered holder of such cancelled underlying Shares and the Depositary shall distribute the Per ADS Closing
Amount and any additional payment that may become payable in accordance with Section 2.1(b)(ii) of the Merger Agreement to the
holders of such ADSs pursuant to the terms and conditions set forth in the Merger Agreement, the CVR Agreement and the Deposit Agreement.
At the Effective Time, all such ADSs (and such underlying Shares represented by the ADSs) that have been cancelled and thereafter represent
only the right to receive the Per ADS Merger Consideration as provided in Section 2.1(b) of the Merger Agreement shall no longer be issued
and outstanding and shall be cancelled, and shall cease to exist, and each former holder of any such ADSs will cease to have any rights
with respect to such ADSs (and such underlying Shares represented by the ADSs), except the right to receive the Per ADS Merger Consideration
without interest, to be paid in accordance with Article II of the
Merger Agreement and as set forth in the CVR Agreement and the Deposit Agreement. |
| (d) | Treatment of Company Warrants. Each warrant to purchase Shares (each, a “Company Warrant”)
outstanding and not exercised immediately prior to the Effective Time shall be cancelled and thereafter represent only the right to receive
from (or from a Person on behalf of) the Surviving Company an amount in cash, without interest, equal to the Black Scholes Value (as defined
in the Company Warrant) of the remaining unexercised portion of each Company Warrant in accordance with its terms (the “Company
Warrant Consideration”), subject to any required Tax withholdings as provided in Section 2.3(e) of the Merger Agreement. |
| (e) | Treatment of Excluded Shares. Each of the Excluded Shares and the ADSs representing the Excluded Shares,
in each case issued and outstanding immediately prior to the Effective Time, shall be cancelled and cease to exist without payment of
any consideration or distribution therefor. |
| (f) | Treatment of Dissenting Shares. Each Share that is issued and outstanding immediately prior to the Effective
Time and is held by a holder of Shares who shall have validly exercised and not effectively withdrawn or have not otherwise lost their
rights to dissent from the Merger (“Dissenter Rights”), in accordance with Section 238 of the Companies Act (collectively,
the “Dissenting Shares”, and holders of the Dissenting Shares collectively, the “Dissenting Shareholders”)
shall be cancelled and cease to exist at the Effective Time, and the Dissenting Shareholders shall not be entitled to receive the Per
Share Merger Consideration (except as provided in this Section 2.1(e) of the Merger Agreement), and each such Dissenting Shareholder shall
instead be entitled to receive only the payment of the fair value of such Dissenting Shares held by them determined in accordance with
the provisions of Section 238 of the Companies Act (the “Dissenting Fair Value Payment”). If any Dissenting Shareholder
shall have effectively withdrawn or lost its right to dissent in accordance with the Companies Act, then as of the later of the Effective
Time and the occurrence of such event, the Dissenting Shareholder shall, in respect of its Shares cancelled at the Effective Time, be
entitled to receive the Per Share Merger Consideration without interest, pursuant to Section 2.1(a) of the Merger Agreement and the CVR
Agreement and such Shares shall not be deemed to be Dissenting Shares. |
| (g) | Issuance of Surviving Company Shares. Immediately following cancellation of the Shares and ADSs pursuant
to the terms and conditions set out in Section 2.1(a) to Section 2.1(e) of the Merger Agreement, the Surviving Company shall issue to
Parent, in consideration for its payment of the aggregate Per Share Merger Consideration, the aggregate Per ADS Closing Amount and any
additional payment that may become payable in accordance with Section 2.1(b)(ii) of the Merger Agreement, and any Dissenting Fair
Value Payment in accordance with the Merger Agreement, 50,000 validly issued, fully paid and non-assessable ordinary shares of par value
of US$1.00 each of the Surviving Company as set out in this Plan of Merger, which shall be reflected in the updated register of members
of the Surviving Company. Such ordinary shares of the Surviving Company shall constitute the only issued and outstanding share capital
of the Surviving Company from the Effective Time. |
| 2.3.2 | At the Effective Time, the rights and restrictions attaching to the ordinary shares of the Surviving Company
shall be as set out in the memorandum and articles of association in the form annexed at Annexure 2 hereto. |
| 2.3.3 | At the Effective Time, the fourth amended and restated memorandum and articles of association of the Company
adopted by a special resolution passed on 18 December 2020 and effective immediately prior to the completion of the initial public offering
of the ADSs representing the Company’s ordinary shares, as amended by a special resolutions adopted in the annual general meeting
of shareholders of the Company on 13 July 2023, shall be amended and restated by their deletion in their entirety and the substitution
in their place of the memorandum and articles of association in the form annexed at Annexure 2 hereto. |
| 2.3.4 | At the Effective Time, the rights, property of every description including choses in action, and the business,
undertaking, goodwill, benefits, immunities and privileges of each of the Constituent Companies shall immediately vest in the Surviving
Company which shall be liable for and subject, in the same manner as the Constituent Companies, to all mortgages, charges, or security
interests and all contracts, obligations, claims, debts and liabilities of each of the Constituent Companies. |
| 2.4 | Directors’ Interests in the Merger |
| (a) | The name and address of each director of the Surviving Company after the Merger becomes effective are: |
| (i) | David White of 1800 Concord Pike, Wilmington, DE 19803; and |
| (ii) | Kevin Durning of 1800 Concord Pike, Wilmington, DE 19803 |
| (b) | There are no amounts or benefits paid or payable to any director of either of the Constituent Companies
or the Surviving Company consequent upon the Merger. |
| (a) | The Company has no secured creditor and has granted no fixed or floating security interests that are outstanding
as at the date of this Plan of Merger. |
| (b) | The Merger Sub has no secured creditor and has granted no fixed or floating security interests that are
outstanding as at the date of this Plan of Merger. |
| 3.1 | This Plan of Merger has been approved by the board of directors of each of the Surviving Company and the
Merger Sub pursuant to section 233(3) of the Companies Act. |
| 3.2 | This Plan of Merger has been authorised by the sole shareholder of the Merger Sub pursuant to section
233(6) of the Companies Act and by the shareholders of the Surviving Company pursuant to section 233(6) of the Companies Act by way of
resolutions passed at an extraordinary general meeting of the Surviving Company. |
| 4.1 | At any time prior to the Effective Time, this Plan of Merger may be amended by the boards of directors
of both the Company and the Merger Sub to: |
| (i) | change the Effective Time provided that such changed date shall not be a date later than the ninetieth
day after the date of registration of this Plan of Merger with the Registrar of Companies in the Cayman Islands; and |
| (ii) | effect any other changes to this Plan of Merger which the directors of both the Surviving Company and
the Merger Sub deem advisable, provided that such changes do not materially adversely affect any rights of the shareholders of the Surviving
Company or the Merger Sub, as determined by the directors of both the Surviving Company and the Merger Sub, respectively or as the Merger
Agreement or this Plan of Merger may expressly authorise the boards of directors of both the Company and the Merger Sub to effect in their
discretion. |
| 4.1 | At any time prior to the Effective Time, this Plan of Merger may be terminated by the boards of directors
of both the Company and the Merger Sub in accordance with the terms of the Merger Agreement. |
| 5.1 | This Plan of Merger may be executed in any number of counterparts, all of which taken together shall constitute
one and the same instrument. Any party may enter into this Plan of Merger by executing any such counterpart. |
| 6.1 | This Plan of Merger and the rights and obligations of the parties shall be governed by and construed in
accordance with the laws of the Cayman Islands. |
| 6.2 | Each of the parties agrees that the courts of the Cayman Islands shall have jurisdiction to hear and determine
any action or proceeding arising out of or in connection with this Plan of Merger only, and any non-contractual obligations arising out
of or in connection with it, and for that purpose each party irrevocably submits to the jurisdiction of the courts of the Cayman Islands. |
IN WITNESS whereof this Plan
of Merger has been entered into by the parties on the day and year first above written.
| SIGNED for and on behalf of Grey Wolf Merger Sub: |
) |
Duly Authorised Signatory |
| |
) |
|
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) |
Name: |
|
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) |
|
| |
) |
Title: |
|
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) |
|
| |
) |
|
| SIGNED for and on behalf of Gracell Biotechnologies Inc.: |
) |
Duly Authorised Signatory |
| |
) |
|
| |
) |
Name: |
|
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) |
|
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) |
Title: |
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|
ANNEXURE 1
MERGER AGREEMENT
ANNEXURE 2
Memorandum and Articles of Association of
the Surviving Company
Exhibit B
Form of
Contingent Value Rights Agreement
THIS CONTINGENT VALUE RIGHTS
AGREEMENT (this “Agreement”), dated as of [●], is entered into by and between AstraZeneca Treasury Limited, a
private limited company incorporated under the laws of England and Wales (“Parent”), and [●], a [●], as
Rights Agent.
Introduction
WHEREAS, Parent, Grey Wolf
Merger Sub, an exempted company with limited liability incorporated under the Laws of the Cayman Islands and a wholly owned Subsidiary
of Parent (“Merger Sub”), and Gracell Biotechnologies Inc., an exempted company with limited liability incorporated
under the Laws of the Cayman Islands (the “Company”), have entered into an Agreement and Plan of Merger dated as of
December 23, 2023 (as it may be amended or supplemented from time to time pursuant to the terms thereof, the “Merger Agreement”),
pursuant to which Merger Sub will be merged with and into the Company (the “Merger”) and the shares in Merger Sub cancelled,
with the Company continuing as the surviving company (as defined in the Companies Act (Revised) of the Cayman Islands) of the Merger (the
“Surviving Company”);
WHEREAS, pursuant to the Merger
Agreement, as a result of the consummation of the Merger, the holders of Shares (other than Excluded Shares and Dissenting Shares), holders
of In-the-Money Company Options (as defined in the Merger Agreement) and holders of Company RSUs as of immediately prior to the Effective
Time will become entitled to receive the contingent cash payment hereinafter described upon the achievement of the milestone hereinafter
described;
WHEREAS, pursuant to this
Agreement, the potential amount payable per CVR (as defined below) is $0.30 in cash, without interest; and
WHEREAS, pursuant to the Deposit
Agreement and the Merger Agreement, the Depositary shall distribute the applicable Per ADS Merger Consideration, including the CVRs, to
the Eligible ADS Holders as soon as practicable after the Effective Time in accordance with the Deposit Agreement and the Merger Agreement.
NOW, THEREFORE, in consideration
of the foregoing and the consummation of the transactions referred to above, Parent and Rights Agent agree, for the equal and proportionate
benefit of all Holders, as follows:
ARTICLE 1
DEFINITIONS; CERTAIN RULES OF CONSTRUCTION
Section 1.1 Definitions.
As used in this Agreement, the following terms will have the following meanings:
“Accelerated Approval”
means the receipt by a Payment Obligor on or prior to December 31, 2028 of an accelerated approval granted by the FDA of a BLA for
the Product for the treatment of multiple myeloma on the basis of an application made pursuant to 21 C.F.R. § 601 Subpart E (Accelerated
Approval of Biological Products for Serious or Life-Threatening Illnesses) or any successor program in the United States.
“Acting Holders”
means, at the time of determination, Holders of at least 40% of the outstanding CVRs as set forth in the CVR Register.
“ADSs”
means the American Depositary Shares issued pursuant to the Deposit Agreement (other than ADSs representing the Excluded Shares), each
representing five Shares, outstanding immediately prior to the Effective Time.
“ADS Beneficial Owners”
has the meaning set forth in Section 2.3(b).
“Affiliate”
means, with respect to any Person, any other Person directly or indirectly, controlling, controlled by, or under common control with,
such Person; provided, that prior to the Closing, Parent and Merger Sub shall not be deemed to be Affiliates of the Company and/or
any of the Company’s subsidiaries and vice versa. For this purpose, “control” (including, the terms “controlling”,
“controlled” “controlled by” and “under common control with”) means the possession, directly or indirectly,
of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership
or other ownership interests, by contract or otherwise, and such power or authority shall conclusively be presumed to exist by possession
of (i) the beneficial ownership or power to direct the vote of more than 50% of the votes entitled to be cast at a meeting of the
members or shareholders of such Person, or (ii) the power to appoint or elect a majority of the members of the board of directors
of such Person.
“Agreement”
has the meaning set forth in the preamble hereto.
“Assignee”
has the meaning set forth in Section 6.3.
“BLA” means
a biologics license application submitted to the FDA pursuant to 42 U.S.C. § 262 or any other application submitted to the FDA for
authorization to market or sell a pharmaceutical or biological product in the U.S., including any supplements or amendments thereto.
“Business Day”
means a day except a Saturday or Sunday and other than a day on which banks are required or authorized to remain closed in the Cayman
Islands, the People’s Republic of China, Hong Kong or the City of New York, New York.
“Change
of Control” means (a) a sale or other disposition of all or substantially all of the assets of Parent on a consolidated
basis (other than to any subsidiary of Parent, AstraZeneca PLC or any of its subsidiaries), (b) a merger, consolidation or other
business combination involving Parent in which Parent is not the surviving entity or (c) any transaction (including (x) any
issuance of securities and (y) a merger, consolidation or other business combination in which Parent is the surviving entity) involving
Parent in which the holders of voting securities of Parent immediately prior to such transaction collectively own securities representing
less than 50% of Parent’s voting power immediately after such transaction, in the case of each of the foregoing clauses (a), (b) and
(c), whether effected directly or indirectly, and whether effected in a single transaction or a series of related transactions.
“Closing”
means the closing of the Merger in accordance with the Merger Agreement.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Commercially Reasonable
Efforts” means the level of efforts and resources that is consistent with the level of efforts and resources that Parent and
its Affiliates would devote to a product at a similar stage of development and product life with similar market potential as the Product
(“Relevant Product”) based on conditions then prevailing, taking into consideration the market (including actual and
anticipated market conditions and the geographic market), the regulatory environment and market and other regulatory exclusivity and all
other scientific, commercial and other relevant factors that Parent would normally take into account with respect to a Relevant Product
that it owns or has in-licensed, including patent coverage, expiration and term extension, manufacturing and supply chain, product profile,
safety and efficacy, actual and anticipated product labeling, the competitiveness of alternative products in the marketplace or under
development, the regulatory structure involved, the availability of coverage and reimbursement and the expected profitability and profit
potential of the applicable product, including actual and expected development costs and timelines, cost of goods and all other costs
associated with the applicable product and timelines associated with commercial entry; provided, that such level of efforts and
resources shall be determined without taking into account the obligation to pay the Milestone Payment Amounts hereunder.
“Company”
has the meaning set forth in the recitals hereto.
“Company Option”
has the meaning set forth in the Merger Agreement.
“Company Patent Rights”
means (a) all Patent Rights owned or exclusively licensed by the Company or any of its Affiliates immediately prior to the Effective
Time, and (b) all Patent Rights owned or exclusively licensed by the Company or any of its Affiliates that claim priority to any
Patent Rights described in the preceding clause (a).
“Company RSU”
has the meaning set forth in the Merger Agreement.
“Company Share Plans”
has the meaning set forth in the Merger Agreement.
“Covered”
means, with respect to any Company Patent Right, that, in the absence of a license granted under, or ownership of, such Company Patent
Right, the manufacture, use, offer for sale, sale or importation of a given product or component thereof, or practice of a method, would
infringe an issued claim of such Company Patent Right.
“CVR” means
the rights of Holders to receive a contingent cash payment pursuant to the Merger Agreement and this Agreement.
“CVR Register”
has the meaning set forth in Section 2.3(b).
“Deposit Agreement”
means the Deposit Agreement, dated as of January 7, 2021, by and between the Company, the Depositary and all holders from time to
time of American Depositary Shares issued thereunder.
“Depositary”
means The Bank of New York Mellon, in its capacity as Depositary under the Deposit Agreement.
“Dissenting Shares”
means each Share that is issued and outstanding immediately prior to the Effective Time that is held by a holder of Shares who shall have
validly exercised and not effectively withdrawn or have not otherwise lost their rights to dissent from the Merger in accordance with
Section 238 of the Companies Act (Revised) of the Cayman Islands.
“DTC” means
The Depository Trust Company or any successor thereto.
“Effective Time”
means the time at which the Plan of Merger is registered with the Registrar of Companies in accordance with the Companies Act (Revised)
of the Cayman Islands on the date specified in the Plan of Merger.
“Eligible ADS Holders”
means holders of record of ADSs which shall include Cede & Co. in respect of all ADSs held through DTC as of immediately prior
to the Effective Time.
“Eligible ADS Beneficial
Owners” means the beneficial owners of ADSs held through a nominee (including, without limitation, DTC and any participant in
DTC) as of immediately prior to the Effective Time.
“Employee Equity
Award” means a Company Option or a Company RSU that was granted to a holder who is, or was upon the grant of or at any time
during the vesting period of such Company Option or Company RSU, as applicable, an employee of the Company or a Subsidiary of the Company
for employment Tax purposes.
“Entity”
means any corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust,
association, organization, unincorporated organization, other entity or group (as defined in Section 13(d)(3) of the Exchange
Act), including any group of Persons.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended.
“Excluded Shares”
means, collectively, (a) any Shares (including Shares represented by ADSs) held by Parent, Merger Sub, the Company or any of their
subsidiaries and (b) any Shares (including ADSs corresponding to such Shares) held by the Company or the Depositary and reserved
for issuance and allocation pursuant to the Company Share Plans.
“FDA”
means the United States Food and Drug Administration or any successor thereto.
“Full Approval”
means the receipt by a Payment Obligor on or prior to December 31, 2029 of regulatory approval granted by the FDA of a BLA for the
Product for the first-line or second-line treatment of multiple myeloma that is not subject to specific obligations under 21 C.F.R §
601 Subpart E (Accelerated Approval of Biological Products for Serious or Life-Threatening Illnesses) or any successor program in the
United States.
“Governmental Entity”
means any foreign, domestic, federal, territorial, state or local governmental or regulatory authority of any nature (including any government
or any governmental agency, instrumentality, court, tribunal or commission, or any subdivision, department or branch of any of the foregoing)
or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or Taxing Authority.
“Holder”
means a Person in whose name a CVR is registered in the CVR Register at the applicable time.
“IRS” has
the meaning set forth in Section 2.4(d).
“Merger”
has the meaning set forth in the recitals hereto.
“Merger Agreement”
has the meaning set forth in the recitals hereto.
“Merger Sub”
has the meaning set forth in the recitals hereto.
“Milestone”
means the earlier to occur of Accelerated Approval or Full Approval.
“Milestone Notice”
has the meaning set forth in Section 2.4(a).
“Milestone Outside
Date” means December 31, 2029.
“Milestone Payment”
means $0.30 per CVR.
“Milestone Payment
Amount” means, for a given Holder, the product of (a) the Milestone Payment and (b) the number of CVRs held by such
Holder, as such number of CVRs is reflected on the CVR Register as of the close of business on the date of the Milestone Notice.
“Milestone Payment
Date” has the meaning set forth in Section 2.4(a).
“Non-Employee Award”
means each Company Option or Company RSU that is not an Employee Award.
“Officer’s
Certificate” means a certificate signed by an authorized officer of Parent, in his or her capacity as such an officer, and delivered
to the Rights Agent.
“Parent”
has the meaning set forth in the preamble hereto.
“Patent Rights”
means all patents and patent applications, together with all reissuances, provisionals, nonprovisionals, substitutions, continuations,
continuations-in-part, divisions, revisions, renewals, extensions, supplementary protection certificates, reexaminations, term extensions,
confirmations, utility models, certificates of invention, and the equivalents of any of the foregoing, statutory invention registrations
and invention disclosures.
“Payment Fund”
has the meaning set forth in Section 2.4(a).
“Payment Obligor”
means Parent, any Assignee, each of their respective Affiliates, and any Entity that has obtained rights from any of the foregoing Entities
to file a BLA for the Product or to register, develop, or commercialize the Product in the U.S., whether through license, sublicense,
asset transfer or otherwise.
“Permitted Transfer”
means a transfer of one or more CVR(s) (a) upon death of a Holder by will or intestacy, (b) by instrument to an inter
vivos or testamentary trust in which the CVRs are passed to beneficiaries of the Holder upon the death of the Holder, (c) pursuant
to a court order (including in connection with bankruptcy or liquidation), (d) by operation of law (including by consolidation or
merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability
company, partnership or other Entity, (e) in the case of CVRs held in book-entry or other similar nominee form (including CVRs held
through DTC on behalf of the beneficial owners of CVRs and by the Depositary on behalf of Eligible ADS Holders and Eligible ADS Beneficial
Owners), from a nominee to a beneficial owner and, if applicable, through an intermediary, to the extent allowable by DTC or the Depositary,
as applicable, (f) if the applicable Holder is a partnership or limited liability company, a distribution by the transferring partnership
or limited liability company to its partners or members, as applicable (provided that such distribution does not subject the CVRs
to a requirement of registration under the Securities Act or the Exchange Act), (g) with the written consent of Parent, or (h) as
provided in Section 2.6. For the avoidance of doubt, the distribution and transfer of the CVRs by the Depositary to, and the
registration by the Rights Agent of such CVRs in the name of (x) DTC f/b/o the Eligible ADS Beneficial Owners and (y) Eligible
ADS Holders, in each case, as contemplated by this Agreement, the Merger Agreement and the Deposit Agreement shall be a “Permitted
Transfer” for all purposes hereunder.
“Person”
means any individual, Entity or Governmental Entity.
“Plan of Merger”
means the Plan of Merger with respect to the Merger.
“Product”
means any biological product: (a) that contains the product candidate referred to by the Company as of the Effective Time as “GC012F,”
which is an autologous chimeric antigen receptor T cell (CAR-T) therapeutic candidate, dual targeting CD19 and B-cell maturation antigen,
which utilizes the Company’s proprietary platform technology known as FasTCAR™, alone or in combination with any other active
ingredient(s); and (b) the composition of matter of which is Covered by any Company Patent Right in the U.S.
“Qualified Pharmaceutical
Company” means an Entity that, together with its Affiliates, in the good faith determination of Parent, has sufficient capabilities
and experience in the development, manufacture, distribution and commercialization of pharmaceutical products as well as the financial
resources to achieve the Milestone.
“Rights Agent”
means the Rights Agent named in the preamble to this Agreement, until a successor Rights Agent will have become such pursuant to the applicable
provisions of this Agreement, and thereafter “Rights Agent” will mean such successor Rights Agent.
“Securities Act”
means the Securities Act of 1933, as amended.
“Shares”
means the ordinary shares, $0.0001 par value per share, of the Company.
“subsidiary”
or “subsidiaries” means with respect to any Person, each other Person in which the first Person (a) owns, directly
or indirectly, share capital or other equity interests representing at least a majority of the outstanding voting shares, stock or other
equity interests (including through any contractual arrangement), (b) holds, directly or indirectly, the right to at least a majority
of the economic interests, including interests held through a variable-interest-entity structure or other similar contractual arrangements,
and (c) has a relationship such that the financial statements of the other Person may be consolidated into the financial statements
of the first Person under applicable accounting conventions.
“Surviving Company”
has the meaning set forth in the preamble hereto.
“Taxes”
means all federal, state, local and non-U.S. income, profits, gains, franchise, gross receipts, windfall, environmental, customs duty,
share capital, capital stock, severance, stamp, payroll, sales, employment, unemployment, disability, social security, use, property,
withholding, excise, license, production, value added, occupancy, escheat or unclaimed property, land value appreciation, deed, registration,
alternative, add-on minimum, branch profits, premium, business and national tax and other taxes, duties or other like assessments of any
nature whatsoever imposed by any Governmental Entity together with all interest, penalties and additions imposed with respect to such
amounts and any interest in respect of such penalties and additions, and regardless of whether such taxes, duties or other like assessments,
penalties, interest and additions are chargeable directly or primarily against or attributable directly or primarily to the relevant person
or any other person and of whether any amount in respect of them is recoverable from any other person.
“Tax Return”
means any return, report, document, statement, declaration or other information filed or required to be filed with any Tax authority with
respect to Taxes, including information returns, claims for refunds and any documents with respect to or accompanying payments of estimated
Taxes, and including any attachment thereto and any amendment thereof.
“Taxing Authority”
means any Governmental Entity competent to impose any Tax liability, or assess or collect any Tax.
Section 1.2 Construction.
(a) For
purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter
gender shall include masculine and feminine genders. For purposes of this Agreement, where a word or phrase is defined in this Agreement,
each of its other grammatical forms has a corresponding meaning unless the context otherwise requires.
(b) As
used in this Agreement, unless otherwise indicated, the words “include,” “includes” and “including”
shall be deemed in each case to be followed by the words “without limitation.” As used in this Agreement, unless otherwise
indicated, the words “hereof,” “herein” and “hereunder” and words of like import shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. As used in this Agreement, unless otherwise indicated, the
word “or” shall not be exclusive (i.e., “or” shall be deemed to mean “and/or”). As used in this Agreement,
unless otherwise indicated, the word “extent” in the phrase “to the extent” shall mean the degree to which a subject
or other thing extends and shall not simply mean “if.”
(c) Except
as otherwise indicated, all references in this Agreement to “Sections” and “Exhibits” are intended to refer to
Sections of this Agreement or Exhibits to this Agreement.
(d) The
parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any applicable law holding or rule of construction providing that ambiguities in an agreement or other document
will be construed against the drafting party of such agreement or document.
(e) References
to any contract are to that contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.
(f) References
to any law are to that law as amended, modified or supplemented and to any rules, regulations or interpretations promulgated thereunder.
(g) References
to “$” or “dollars” refer to United States dollars unless otherwise noted.
(h) The
headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of this Agreement.
(i) References
to any Person shall include the successors and assigns of that Person.
(j) Reference
to the date hereof shall mean the date of this Agreement.
(k) Where
under the terms of this Agreement any party is liable to indemnify or reimburse another party for any costs and expenses, the amount to
be indemnified or reimbursed shall include amounts equal to any VAT thereon not otherwise recoverable by the other party or any representative
member of any VAT group of which it forms a part.
ARTICLE 2
CONTINGENT VALUE RIGHTS
Section 2.1 CVRs.
The CVRs represent the rights of Holders to receive a contingent cash payment pursuant to the Merger Agreement and this Agreement. The
initial Holders shall be determined pursuant to the terms of the Merger Agreement and this Agreement, and a list of the initial Holders
shall be furnished by or on behalf of Parent to the Rights Agent in accordance with Section 4.1 hereof.
Section 2.2 Nontransferable.
The CVRs may not be sold, assigned, transferred, pledged, encumbered or in any other manner transferred or disposed of, in whole or in
part, other than through a Permitted Transfer. Any attempted sale, assignment, transfer, pledge, encumbrance or disposition of any CVR,
in whole or in part, in violation of this Section 2.2 shall be null and void ab initio and of no effect.
Section 2.3 No
Certificate; Registration; Registration of Transfer; Change of Address.
(a) The
CVRs will not be evidenced by a certificate or other instrument.
(b) The
Rights Agent will keep a register (the “CVR Register”) for the purpose of (i) identifying the Holders of CVRs
and (ii) registering CVRs and Permitted Transfers thereof. In the case of CVRs to be received by the holders of Shares (other than
Excluded Shares, Shares represented by ADSs and Dissenting Shares), In-the-Money Company Options and Company RSUs, such CVRs shall
initially be registered in the name and address of the holder of such Shares, In-the-Money Company Options and Company RSUs, as applicable,
as set forth in the records of the Company at the Effective Time and as set forth in the form the Company furnishes to the Rights Agent.
In the case of CVRs to be received by the Depositary in respect of the Shares represented by ADSs, (i) such CVRs shall initially
be registered in the name and to the address of the Depositary (f/b/o Eligible ADS Holders and Eligible ADS Beneficial Owners) and (ii) upon
distribution of the CVRs by the Depositary to Eligible ADS Holders, the CVR Register shall be updated to reflect the distribution of such
CVRs to the Eligible ADS Holders. After distribution of the CVRs by the Depositary to DTC, the CVR Register will show one position for
Cede & Co. representing all of the CVRs that are distributed in respect of ADSs held through DTC on behalf of the Eligible ADS
Beneficial Owners (after such distribution of the CVRs to DTC, the “ADS Beneficial Owners”). The Rights Agent will
have no responsibility whatsoever directly to the ADS Beneficial Owners or DTC participants with respect to transfers of CVRs unless and
until such CVRs are transferred into the name of such ADS Beneficial Owners in accordance with Section 2.2. The Rights Agent
will have no responsibilities whatsoever with regard to the distribution of payments by DTC to such ADS Beneficial Owners unless and until
such CVRs are transferred into the name of such ADS Beneficial Owners in accordance with Section 2.2.
(c) Subject
to the restrictions on transferability set forth in Section 2.2, every request made to transfer a CVR must be in writing and
accompanied by a written instrument of transfer in a form reasonably satisfactory to the Rights Agent pursuant to its guidelines, duly
executed by the Holder thereof, the Holder’s attorney duly authorized in writing, the Holder’s personal representative or
the Holder’s survivor, and setting forth in reasonable detail the circumstances relating to the proposed transfer. Upon receipt
of such written notice, the Rights Agent will, subject to its reasonable determination that the transfer instrument is in proper form
and the proposed transfer otherwise complies with the other terms and conditions of this Agreement (including the provisions of Section 2.2),
register the transfer of the CVRs in the CVR Register. Parent and Rights Agent may require payment of a sum sufficient to cover any stamp
or other Tax or governmental charge that is imposed in connection with any such registration of transfer. The Rights Agent shall have
no duty or obligation to take any action under any Section of this Agreement that requires the payment by a Holder of a CVR of applicable
Taxes or charges unless and until the Rights Agent is satisfied that all such Taxes or charges have been paid. All duly transferred CVRs
registered in the CVR Register will be the valid obligations of Parent and will entitle the transferee to the same benefits and rights
under this Agreement as those held immediately prior to the transfer by the transferor. No transfer of a CVR will be valid until registered
in the CVR Register in accordance with this Agreement.
(d) A
Holder (or an authorized representative thereof) may make a written request to the Rights Agent to change such Holder’s address
of record in the CVR Register. The written request must be duly executed by the Holder (or an authorized representative thereof). Upon
receipt of such written notice, the Rights Agent will promptly record the change of address in the CVR Register.
Section 2.4 Payment
Procedures.
(a) As
soon as reasonably practicable following the achievement of the Milestone, but in no event later than 30 days after the date on which
the Milestone is achieved (the “Milestone Payment Date”), Parent shall deliver to the Rights Agent (i) written
notice indicating that the Milestone has been achieved (the “Milestone Notice”) and instructing the Rights Agent to
solicit tax forms or other information required to make any Tax deductions or withholdings as set forth in Section 2.4(d),
(ii) any letter of instruction reasonably required by the Rights Agent and (iii) cash, by wire transfer of immediately available
funds to an account specified by the Rights Agent, equal to the aggregate amount necessary to pay the Milestone Payment Amounts to all
Holders pursuant to Section 2.4(b) other than Milestone Payment Amounts with respect to Employee Equity Awards and Non-Employee
Awards (with respect to which any such amounts payable shall be retained by Parent for payment pursuant to Section 2.4(b))
(the total cash deposited with the Rights Agent, the “Payment Fund”).
(b) The
Rights Agent will promptly, and in any event within 10 Business Days of receipt of the Milestone Notice, send each Holder at its registered
address (or, in the case of Cede & Co., pursuant to the applicable procedures of DTC) a copy of the Milestone Notice and pay
the applicable Milestone Payment Amount (other than Milestone Payment Amounts that are payable with respect to Employee Equity Awards
and Non-Employee Awards) to each of the Holders (i) by check mailed to the address of each such respective Holder as reflected in
the CVR Register as of the close of business on the last Business Day before such Payment Date, (ii) with respect to any Holder who
has provided the Rights Agent with wire transfer instructions meeting the Rights Agent’s requirements, by wire transfer of immediately
available funds to such account, or (iii) with respect to Cede & Co., by wire transfer of immediately available funds pursuant
to the applicable procedures of DTC. As soon as reasonably practicable following delivery of the Milestone Notice, but in no event later
than the next regularly scheduled payroll date that occurs no more than seven Business Days following the delivery of the Milestone Notice
(and in all events no later than the date that is 45 days following the date on which the Milestone is achieved), Parent shall cause the
Surviving Company or an Affiliate of the Surviving Company to, (A) with respect to Milestone Payment Amounts that are payable with
respect to Employee Equity Awards, pay through the Surviving Company’s or the applicable Affiliate’s payroll system or payroll
provider the aggregate Milestone Payment Amount payable to the applicable holders with respect to such Employee Equity Awards (net of
any Tax withholdings required to be deducted and withheld by applicable Tax law in accordance with the Merger Agreement or Section 2.4(d))
and (B) with respect to Milestone Payment Amounts that are payable with respect to Non-Employee Awards, pay through the Surviving
Company’s or the applicable Affiliate’s accounts payable system or other general account (other than the payroll account)
the aggregate Milestone Payment Amount payable to the applicable holders with respect to such Non-Employee Awards (net of any Tax withholdings
required to be deducted and withheld by applicable Tax law in accordance with the Merger Agreement or Section 2.4(d)). Notwithstanding
anything in this Agreement to the contrary, it is the intent of the parties that the Milestone shall be deemed to constitute a substantial
risk of forfeiture within the meaning of Section 409A of the Code.
(c) Except
to the extent any portion of the Milestone Payment Amounts are required to be treated as imputed interest pursuant to applicable law,
the Holders and the parties hereto agree, for U.S. federal and applicable state and local income Tax purposes, to treat (i) the CVRs
(other than CVRs received in respect of Employee Equity Awards and Non-Employee Awards) and the Milestone Payment Amounts of such CVRs
for all U.S. federal and applicable state and local income Tax purposes as additional consideration for the Shares (other than Excluded
Shares and Dissenting Shares but including, for the avoidance of doubt, any ADSs or Shares represented by ADSs) pursuant to the Merger
Agreement and (ii) CVRs received in respect of Employee Equity Awards and Non-Employee Awards and the Milestone Payments of such
CVRs, and not the receipt of any such CVR, for all U.S. federal and applicable state and local income Tax purposes, as compensation (subject
to Tax withholdings to the extent required by applicable law) in the year in which such Milestone Payment is made (or, in any jurisdiction
outside of the United States, to apply such treatment as may be determined by Parent in its good faith discretion following consultation
with a reputable international tax accounting firm), and none of the Holders and the parties hereto will take any position to the contrary
on any Tax Return or for other Tax purposes except as required by applicable law. Parent and the Surviving Company shall report imputed
interest on the CVRs (other than CVRs in respect of the Employee Equity Awards and Non-Employee Awards) pursuant to Section 483 of
the Code.
(d) Notwithstanding
anything herein to the contrary, each of the Surviving Company (and any applicable Affiliate), Parent, Merger Sub and Rights Agent shall
be entitled to deduct and withhold from any amounts payable pursuant to this Agreement such amounts as it is required to deduct and withhold
by any applicable law. Prior to making any such Tax deductions or withholdings or causing any such Tax deductions or withholdings to be
made with respect to any Holder (other than a Holder in such Holder’s capacity as a holder of an Employee Equity Award), Parent
shall instruct the Rights Agent to solicit Internal Revenue Service (“IRS”) Form W-9s or W-8s, or any other appropriate
forms or information, from Holders within a reasonable amount of time in order to provide a reasonable opportunity for the Holder to timely
provide any necessary Tax forms (including an IRS Form W-9 or an applicable IRS Form W-8) in order to avoid or reduce such withholding,
and the Milestone Payment Amount may be reasonably delayed in order to gather such necessary Tax forms. To the extent that amounts are
so withheld and remitted to the appropriate Governmental Entity, such amounts so remitted shall be treated for all purposes under this
Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.
(e) Any
portion of any Milestone Payment Amount that remains undistributed to a Holder 12 months after the date of the Milestone Payment Date
will be delivered by the Rights Agent to Parent, and any Holder shall be entitled to look to Parent (subject to abandoned property, escheat
and other similar applicable law) only as general creditors thereof with respect to the Milestone Payment Amount payable hereunder, without
any interest thereon. None of Parent, the Surviving Company or the Rights Agent shall be liable to any Holder for any such consideration
delivered in respect of a CVR to a public official pursuant to any abandoned property, escheat or other similar applicable law. Any amounts
remaining unclaimed by such holders at such time at which such amounts would otherwise escheat to or become property of any Governmental
Entity shall become, to the extent permitted by applicable law, the property of Parent or its designee, free and clear of all claims or
interest of any Person previously entitled thereto.
(f) The
Payment Fund shall not be used for any purpose other than the payment of the Milestone Payment Amounts; provided that any interest
or income produced by investments with respect to the Payment Fund shall be the property of Parent. The Payment Fund may be invested by
the Rights Agent as directed by the Parent; provided that such investments shall be (i) in obligations of, or guaranteed by,
the United States of America, (ii) in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc.
or Standard & Poor’s Corporation, respectively, (iii) in certificates of deposit, bank repurchase agreements or banker’s
acceptances of commercial banks with capital exceeding $1 billion, or (iv) in money market funds having a rating in the highest investment
category granted by a recognized credit rating agency at the time of acquisition or a combination of the foregoing, and, in any such case,
no such investment will (x) relieve Parent or the Rights Agent from making the payment required by this Section 2.4 or
(y) have maturities that could prevent or delay payments to be made pursuant to this Agreement.
Section 2.5 No
Voting, Dividends or Interest; No Equity or Ownership Interest in Parent.
(a) The
CVRs will not have any voting or dividend rights, and interest will not accrue on any amounts payable on the CVRs to any Holder.
(b) The
CVRs will not represent any equity or ownership interest in Parent, any constituent company to the Merger or any of their respective
Affiliates.
Section 2.6 Ability
to Abandon CVR. A Holder may at any time, at such Holder’s option, abandon all of such Holder’s remaining rights in a
CVR by transferring such CVR to Parent without consideration therefor, which a Holder may effect via delivery of a written notice of
such abandonment to Parent. Nothing in this Agreement shall prohibit Parent or any of its Affiliates from offering to acquire or acquiring
any CVRs for consideration from the Holders, in private transactions or otherwise, in its sole discretion. Any CVRs acquired by Parent
or any of its Affiliates shall be automatically deemed extinguished and no longer outstanding, including for purposes of the definition
of Acting Holders and ARTICLE 5 and Section 6.3.
ARTICLE 3
THE RIGHTS AGENT
Section 3.1 Certain
Duties and Responsibilities.
(a) The
Rights Agent will not have any liability for any actions taken or not taken in connection with this Agreement, except to the extent of
its willful or intentional misconduct, bad faith or gross negligence.
(b) Each
Holder shall be deemed to have irrevocably appointed, authorized and directed the Rights Agent (including any successor in accordance
with this ARTICLE 3) to act as the Rights Agent, and such Holder’s agent, representative, proxy and attorney-in-fact
for the purpose of enforcing such Holder’s rights under this Agreement, and exercising, on behalf of all Holders, the rights and
powers of the Holders hereunder and thereunder. Without limiting the generality of the foregoing, the Rights Agent shall have full power
and authority, and is hereby directed, for and on behalf of the Holders, to take such action, and to exercise such rights, power and authority,
as are authorized, delegated and granted to the Rights Agent hereunder in connection with the transactions contemplated hereby or to the
extent directed to by the Acting Holders in writing. Parent and its Affiliates shall be entitled to rely solely on the Rights Agent as
an authorized representative of the Holders with respect to any such matters concerning the Holders arising hereunder for which the Rights
Agent is acting at the written direction of the Acting Holders.
(c) The
Rights Agent may in its discretion or upon the written request of the Acting Holders proceed to and shall be entitled and empowered to
protect and enforce the rights of the Holders hereunder by such appropriate judicial proceedings as the Rights Agent shall deem most effectual
to protect and enforce any such rights. The Rights Agent may only proceed to and shall be entitled and empowered to protect and enforce
the rights herein for the benefit of and on behalf of all Holders to the extent directed to by the Acting Holders in writing; provided
that the Rights Agent shall have the right to decline to follow any such direction if the Rights Agent, being advised by counsel in writing,
shall determine that the action or proceeding so directed may not lawfully be taken or if the Rights Agent in good faith shall determine
that the action or proceedings so directed would involve the Rights Agent in personal liability or if the Rights Agent in good faith shall
so determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests
of Holders not joining in the giving of said direction. No individual Holder shall be entitled to protect and enforce its rights or the
rights of the Holders other than through the Rights Agent under the direction of the Acting Holders, as provided for in this Section 3.1.
Section 3.2 Certain
Rights of Rights Agent. The Rights Agent undertakes to perform such duties and only such duties as are specifically set forth in
this Agreement, and no implied covenants or obligations will be read into this Agreement against the Rights Agent. In addition:
(a) the
Rights Agent may rely and will be protected and held harmless by Parent in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order or other paper or document reasonably believed by
the Rights Agent to be genuine and to have been signed or presented by the proper party or parties;
(b) whenever
the Rights Agent will deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder,
the Rights Agent may rely upon an Officer’s Certificate, which shall constitute full authorization and protection to the Rights
Agent, and the Rights Agent shall, in the absence of bad faith, gross negligence or willful or intentional misconduct on its part, incur
no liability and be held harmless by Parent for or in respect of any action taken, suffered or omitted to be taken by the Rights Agent
under the provisions of this Agreement in reliance upon such Officer’s Certificate;
(c) the
Rights Agent may engage and consult with counsel of its selection and the written advice of such counsel or any written opinion of such
counsel will be full and complete authorization and protection to the Rights Agent and the Rights Agent shall be held harmless by Parent
in respect of any action taken, suffered or omitted by the Rights Agent hereunder in good faith and in reliance thereon and that does
not constitute gross negligence or willful or intentional misconduct;
(d) the
permissive rights of the Rights Agent to do things enumerated in this Agreement will not be construed as a duty;
(e) the
Rights Agent will not be required to give any note or surety in respect of the execution of such powers or otherwise in respect of the
premises;
(f) the
Rights Agent shall not be liable for or by reason of, and shall be held harmless by Parent with respect to, any of the statements of fact
or recitals contained in this Agreement or be required to verify the same, but all such statements and recitals are and shall be deemed
to have been made by Parent only;
(g) the
Rights Agent will have no liability and shall be held harmless by Parent in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution and delivery hereof by the Rights Agent and the enforceability of this Agreement against
the Rights Agent, assuming the due execution and delivery hereof by Parent); nor shall the Rights Agent be responsible for any breach
by Parent of any covenant or condition contained in this Agreement;
(h) Parent
shall indemnify Rights Agent for, and hold Rights Agent harmless against, any loss, claims, demands, suits, liability or expense arising
out of or in connection with the Rights Agent’s duties under this Agreement, including the reasonable and documented out-of-pocket
costs and expenses of defending the Rights Agent against any claims, charges, demands, suits or loss, unless such loss has been determined
by a court of competent jurisdiction to be a result of Rights Agent’s gross negligence, bad faith or willful or intentional misconduct
(and provided that Parent shall not be obliged to indemnify Rights Agent for, or hold Rights Agent harmless against, Taxes imposed on
or measured by the Rights Agent’s net income and franchise or similar Taxes imposed on it in lieu of net income Taxes);
(i) Parent
shall (i) pay the reasonable and documented out-of-pocket fees and expenses of the Rights Agent in connection with this Agreement
as set forth on Exhibit A attached hereto and (ii) reimburse the Rights Agent for all Taxes and governmental charges, reasonable
and documented out-of-pocket expenses incurred by the Rights Agent in the execution of this Agreement (other than Taxes imposed on or
measured by the Rights Agent’s net income and franchise or similar Taxes imposed on it in lieu of net income Taxes), and for all
necessary and documented out-of-pocket expenses paid or incurred by it in connection with the administration by the Rights Agent of its
duties hereunder;
(j) no
provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to the Rights Agent;
and
(k) no
Holder shall be obligated to indemnify the Rights Agent for, or hold the Rights Agent harmless against, any loss, liability, claim, demand,
suit or expense arising out of or in connection with the Rights Agent’s duties under this Agreement or to pay or reimburse the Rights
Agent for any fees, costs or expenses incurred by the Rights Agent in connection with this Agreement or the administration of its duties
hereunder, and the Rights Agent shall not be entitled to deduct any amount from any Milestone Payment Amount in any circumstance except
as provided in Section 2.4(d).
Section 3.3 Resignation
and Removal; Appointment of Successor.
(a) The
Rights Agent may resign at any time by giving written notice thereof to Parent specifying a date when such resignation will take effect,
which notice will be sent at least 60 days prior to the date so specified but in no event will such resignation become effective until
a successor Rights Agent has been appointed. Parent has the right to remove the Rights Agent at any time by specifying a date when such
removal will take effect but no such removal will become effective until a successor Rights Agent has been appointed. Notice of such
removal will be given by Parent to Rights Agent, which notice will be sent at least 60 days prior to the date so specified.
(b) If
the Rights Agent provides notice of its intent to resign, is removed pursuant to Section 3.3(a) or becomes incapable
of acting, Parent will as soon as is reasonably possible appoint a qualified successor Rights Agent who, unless otherwise consented to
in writing by the Acting Holders, shall be a stock transfer agent of national reputation or the corporate trust department of a commercial
bank. The successor Rights Agent so appointed will, forthwith upon its acceptance of such appointment in accordance with Section 3.4,
become the successor Rights Agent.
(c) Parent
will transmit, or will cause to be transmitted, through the facilities of DTC in accordance with DTC’s procedures (in respect of
CVRs registered in the name of Cede & Co. only) or by first class mail to the Holders at their addresses as they appear on the
CVR Register, a notice of each resignation and each removal of a Rights Agent and each appointment of a successor Rights Agent. Each
notice will include the name and address of the successor Rights Agent. If Parent fails to transmit or cause to be transmitted such notice
within 10 days after acceptance of appointment by a successor Rights Agent in accordance with Section 3.4, the successor
Rights Agent will cause the notice to be transmitted at the expense of Parent.
(d) The
Rights Agent will cooperate with Parent, at Parent’s expense, and any successor Rights Agent as reasonably requested in connection
with the transition of the duties and responsibilities of the Rights Agent to the successor Rights Agent, including transferring the
CVR Register to the successor Rights Agent.
Section 3.4 Acceptance
of Appointment by Successor. Every successor Rights Agent appointed pursuant to Section 3.3(b) will execute, acknowledge
and deliver to Parent and to the retiring Rights Agent an instrument accepting such appointment and a counterpart of this Agreement,
and thereupon such successor Rights Agent, without any further act, deed or conveyance, will become vested with all the rights, powers,
trusts and duties of the retiring Rights Agent hereunder. On request of Parent or the successor Rights Agent, the retiring Rights Agent
will execute and deliver an instrument transferring to the successor Rights Agent all the rights, powers and trusts of the retiring Rights
Agent hereunder.
ARTICLE 4
COVENANTS
Section 4.1 List
of Holders. Parent will furnish or cause to be furnished to the Rights Agent (a) in such form as Parent receives from the Company’s
transfer agent or the Depositary (or other agent performing similar services for the Company with respect to the Shares (other than Excluded
Shares, Shares represented by ADSs and Dissenting Shares) and ADSs, the names and addresses of the Holders (including the Eligible ADS
Holders) of such securities within 30 Business Days after the Effective Time and (b) in the case of In-the-Money Company Options
and Company RSUs not held on the Company’s transfer agent’s books and records, the name and address of the Holders who held
any In-the-Money Company Options or Company RSUs as of the immediately prior to the Effective Time as set forth in the books and records
of the Company at the Effective Time.
Section 4.2 Commercially
Reasonable Efforts.
(a) From
the Effective Time until the earlier to occur of the date on which the Milestone is achieved and the Milestone Outside Date, Parent shall,
and shall cause each of its Affiliates and any other applicable Payment Obligor to, use Commercially Reasonable Efforts to achieve the
Milestone.
(b) In
the event that Parent desires to consummate a Change of Control after the Effective Time and prior to the Milestone Outside Date, Parent
will cause the Person acquiring Parent in connection with such Change of Control to assume Parent’s obligations, duties and covenants
under this Agreement, effective as of the effective time of such Change of Control and in an instrument supplemental hereto executed and
delivered by such Person to the Rights Agent.
(c) Subject
to Section 4.2(b), Parent shall not, and shall cause its Affiliates (including the Surviving Company) not to, sell, assign,
transfer or exclusively license all or substantially all of their rights to research, develop, manufacture, commercialize and otherwise
exploit the Product to a third party prior to the Milestone Outside Date if the Milestone Payment Amounts remain unpaid, unless, as a
condition to such sale, assignment, transfer or exclusive license, (i) such third party expressly and unconditionally assumes, by
an assumption agreement, executed and delivered to the Rights Agent, all obligations of Parent, including any payment obligations, set
forth in this Agreement with respect to the Milestone, including the obligation to pay such unpaid Milestone Payment Amounts if and when
due hereunder and the obligations of Parent pursuant to Section 4.2(a) with respect to the Milestone, subject to
and in accordance with the terms hereunder, and (ii) if such third party is not a Qualified Pharmaceutical Company, Parent shall
remain liable to the extent such third party does not perform such obligations. Parent may assign any or all such rights or obligations
to an Affiliate without executing an assumption agreement; provided, that if such Affiliate is not a Qualified Pharmaceutical Company,
Parent shall remain liable to the extent such Affiliate does not perform such obligations. Parent shall provide the Rights Agent and the
Holders (or cause the Rights Agent to provide to the Holders) prompt written notice of any such sale, assignment, transfer or exclusive
license (provided that, written notice shall not be required in the event of any such sale, assignment, transfer or exclusive
license to an Affiliate of Parent) and shall provide the Rights Agent with a duly executed copy of the assumption agreement executed by
the applicable third party.
ARTICLE 5
AMENDMENTS
Section 5.1 Amendments
without Consent of Holders.
(a) Without
the consent of any Holders or the Rights Agent, Parent, at any time and from time to time, may enter into one or more amendments hereto,
for any of the following purposes:
(i) to
evidence the succession of another Person to Parent and the assumption by any such successor of the covenants of Parent herein as provided
in Section 6.3;
(ii) to
add to the covenants of Parent such further covenants, restrictions, conditions or provisions as Parent and the Rights Agent will consider
to be for the protection or benefit of the Holders; provided that, in each case, such provisions do not adversely affect the interests
of the Holders;
(iii) to
cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising under this Agreement; provided that, in each case,
such provisions do not adversely affect the interests of the Holders;
(iv) as
may be necessary or appropriate to ensure that the CVRs are not subject to registration under the Securities Act or the Exchange Act or
any securities or “blue sky” laws of any state or other jurisdiction;
(v) to
evidence the succession of another Person as a successor Rights Agent and the assumption by any such successor of the covenants and obligations
of the Rights Agent herein in accordance with Section 3.3 or Section 3.4; or
(vi) any
other amendments hereto for the purpose of adding, eliminating or changing any provisions of this Agreement, unless such addition, elimination
or change is adverse to the interests of the Holders.
(b) Without
the consent of any Holders, Parent and the Rights Agent, at any time and from time to time, may enter into one or more amendments hereto,
to reduce the number of CVRs in the event any Holder agrees to renounce such Holder’s rights under this Agreement in accordance
with Section 6.4 or transfer of CVRs to Parent pursuant to Section 2.6.
(c) Promptly
after the execution and delivery by Parent and the Rights Agent of any amendment pursuant to the provisions of this Section 5.1,
Parent will transmit a notice thereof through the facilities of DTC in accordance with DTC’s procedures (in respect of CVRs registered
in the name of Cede & Co. only) or by first class mail to the Holders at their addresses as they appear on the CVR Register,
setting forth such amendment.
Section 5.2 Amendments
with Consent of Holders.
(a) Subject
to Section 5.1 (which amendments pursuant to Section 5.1 may be made without the consent of the Holders), with
the consent of the Acting Holders, whether evidenced in writing or taken at a meeting of the Holders, Parent and the Rights Agent may
enter into one or more amendments hereto for the purpose of adding, eliminating or changing any provisions of this Agreement, even if
such addition, elimination or change is adverse to the interest of the Holders.
(b) Promptly
after the execution and delivery by Parent and the Rights Agent of any amendment pursuant to the provisions of this Section 5.2,
Parent will transmit (or cause the Rights Agent to transmit) a notice thereof through the facilities of DTC in accordance with DTC’s
procedures (in respect of CVRs registered in the name of Cede & Co. only) or by first class mail to the Holders at their addresses
as they appear on the CVR Register, setting forth such amendment.
Section 5.3 Execution
of Amendments. In executing any amendment permitted by this ARTICLE 5, the Rights Agent will be entitled to receive,
and will be fully protected in relying upon, an opinion of counsel selected by Parent stating that the execution of such amendment is
authorized or permitted by this Agreement. The Rights Agent may, but is not obligated to, enter into any such amendment that affects
the Rights Agent’s own rights, privileges, covenants or duties under this Agreement or otherwise.
Section 5.4 Effect
of Amendments. Upon the execution of any amendment under this ARTICLE 5, this Agreement will be modified in accordance
therewith, such amendment will form a part of this Agreement for all purposes and every Holder will be bound thereby.
ARTICLE 6
OTHER PROVISIONS OF GENERAL APPLICATION
Section 6.1 Notices
to Rights Agent and Parent. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall
be given when delivered in person or sent by courier or sent by registered post or sent by electronic mail to the intended recipient
thereof at its address or at its email address set out below (or to such other address or email address as a party may from time to time
notify the other parties). Any such notice, request, claim, demand and other communication shall be deemed to have been duly served (a) if
given personally or sent by courier, upon delivery during normal business hours at the location of delivery or, if later, then on the
next Business Day after the day of delivery; (b) if sent by electronic mail during normal business hours at the location of delivery,
immediately, or, if later, then on the next Business Day after the day of delivery (provided that no “bounce back”
or similar message of non-delivery is received with respect thereto); (c) the third Business Day following the day sent by reputable
international overnight courier (with written confirmation of receipt), and (d) if sent by registered post, five days after posting;
provided that in each case the notice or other communication is sent to the physical address or email address set forth beneath
the name of such party below (or to such other physical address or email address as such party shall have specified in a written notice
given to the other party):
if to the Rights Agent, to it at:
[●]
[Address]
Attention: [●]
Email: [●]
with a copy (which shall not constitute
notice) to:
[●]
[Address]
Attention: [●]
Email: [●]
if to Parent, to it at:
AstraZeneca
Treasury Limited
1800 Concord Pike
Wilmington, Delaware 19850
Attention: Kevin Durning, North America CFO
with a copy (which shall not constitute
notice) to:
| Attention: | Deputy General Counsel, Corporate |
with a copy (which shall not constitute
notice) to:
Freshfields
Bruckhaus Deringer US LLP
601 Lexington Avenue, 31st Floor
New York, NY 10022
| Attention: | Sebastian L. Fain
Zheng Zhou |
| Email: | sebastian.fain@freshfields.com
zheng.zhou@freshfields.com |
Section 6.2 Notice
to Holders. Where this Agreement provides for notice to Holders, such notice will be sufficiently given (unless otherwise herein
expressly provided) if in writing and transmitted through the facilities of DTC in accordance with DTC’s procedures (in respect
of CVRs registered in the name of Cede & Co. only) or mailed, first-class postage prepaid, to each Holder affected by such event,
at the Holder’s address as it appears in the CVR Register, not later than the latest date, and not earlier than the earliest date,
if any, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder will affect the sufficiency of such notice with respect to other
Holders.
Section 6.3 Parent
Successors and Assigns. Parent may assign any or all of its rights, interests and obligations hereunder to (a) in its sole discretion
and without the consent of any other party, any Affiliate of Parent, but only for so long as it remains an Affiliate of Parent, or (b) except
for assignments complying with Section 4.2(c) (for which the foregoing consent shall not be required), with the prior
written consent of the Acting Holders, any other Person (any permitted assignee under clause (a) or (b), an “Assignee”),
in each case, provided that the Assignee agrees in a writing reasonably acceptable to the Rights Agent that is delivered to the
Rights Agent to assume and be bound by all of the terms of this Agreement. Any Assignee may thereafter assign any or all of its rights,
interests and obligations hereunder in the same manner as Parent pursuant to the prior sentence. In connection with any assignment to
an Assignee described in clause (a) above in this Section 6.3, Parent (or the other applicable assignor) shall agree
to remain liable for the performance by each Assignee (and such other assignor, if applicable) of all obligations of Parent hereunder,
with such Assignee substituted for Parent under this Agreement. This Agreement shall be binding upon, and shall be enforceable by and
inure solely to the benefit of, Parent’s successors and each Assignee. Each of Parent’s successors and Assignees shall expressly
assume by an instrument supplemental hereto, executed and delivered to the Rights Agent, the due and punctual payment of all Milestone
Payment Amounts and the due and punctual performance and observance of all of the covenants and obligations of this Agreement to be performed
or observed by Parent. The Rights Agent may not assign this Agreement without Parent’s prior written consent. Any attempted assignment
of this Agreement or any such rights in violation of this Section 6.3 shall be void and of no effect.
Section 6.4 Benefits
of Agreement. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person (other than the Rights
Agent, Parent, Parent’s successors and Assignees, the Holders and the Holders’ successors and assigns pursuant to a Permitted
Transfer) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. The rights of Holders and their
successors and assigns pursuant to Permitted Transfers are limited to those expressly provided in this Agreement and the Merger Agreement.
Notwithstanding anything to the contrary contained herein, any Holder or Holder’s successor or assign pursuant to a Permitted Transfer
may agree to renounce, in whole or in part, its rights under this Agreement by written notice to the Rights Agent and Parent, which notice,
if given, shall be irrevocable. Except for the rights of the Rights Agent set forth herein, the Acting Holders will have the sole right,
on behalf of all Holders, by virtue of or under any provision of this Agreement, to institute any action or proceeding with respect to
this Agreement, and no individual Holder or other group of Holders will be entitled to exercise such rights. Reasonable expenditures
incurred by such Acting Holders in connection with any enforcement action hereunder may be deducted from any damages or settlement obtained
prior to the distribution of any remainder to Holders generally. The Acting Holders acting pursuant to this Section 6.4 on
behalf of all Holders shall have no liability to any other Holders for such actions.
Section 6.5 Applicable
Laws; Jurisdiction.
(a) This
Agreement and the CVRs shall be interpreted, construed and governed by and in accordance with the Laws of the State of Delaware without
regard to the conflicts of law principles thereof that would subject such matter to the Laws of another jurisdiction. Each of the parties
hereto irrevocably and unconditionally agrees that any legal action or proceeding with respect to this Agreement, the CVRS and the rights
and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement, the CVRs and the
rights and obligations arising hereunder brought by the another party or its successors or assigns, shall be brought and determined exclusively
in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, solely if the Delaware Court
of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each
of the parties hereto hereby irrevocably and unconditionally submits with regard to any such action or proceeding for itself and in respect
of its property to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement
or the CVRs in any court other than the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and agrees not to assert,
by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement or the CVRs, (i) any
claim that it is not personally subject to the jurisdiction of the above named courts, (ii) any claim that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest
extent permitted by applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts. To the fullest extent permitted by applicable law, each of the parties hereto hereby consents
to the service of process in accordance with Section 6.1 and Section 6.2; provided, that nothing herein shall
affect the right of any party to serve legal process in any other manner permitted by applicable law.
(b) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER OR RELATING TO THIS AGREEMENT OR THE CVRS IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE CVRS OR THE OTHER
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY,
AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS Section 6.5(b).
Section 6.6 Severability.
If any term or other provision of this Agreement is found by a court of competent jurisdiction 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 Transactions is not affected in any manner materially adverse
to any party hereto. 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 hereto as closely
as possible in an acceptable manner to the end that the CVRs are fulfilled to the fullest extent possible.
Section 6.7 Entire
Agreement; Counterparts. This Agreement, the Merger Agreement and the other agreements, exhibits, annexes and schedules referred to
herein and therein constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among
or between any of the parties, with respect to the subject matter hereof and thereof. If and to the extent any provision of this Agreement
is inconsistent or conflicts with the Merger Agreement, (a) this Agreement shall govern and be controlling with respect to the CVR
matters only, and (b) the Merger Agreement shall govern and be controlling with respect to all matters unrelated to CVRs. This Agreement
may be executed manually or electronically in several counterparts, each of which shall be deemed an original and all of which shall constitute
one and the same instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by email (in PDF format) shall
be sufficient to bind the parties to the terms and conditions of this Agreement.
Section 6.8 Termination.
This Agreement will be terminated and be of no force or effect, the parties hereto will have no liability hereunder (other than with
respect to monies due and owing by Parent to Rights Agent), and no payments will be required to be made, upon the earliest to occur of
(a) the mailing by the Rights Agent to the address of each Holder as reflected in the CVR Register (or payment by wire transfer,
as applicable) the full amount of all Milestone Payment Amounts required to be paid under the terms of this Agreement, and (b) the
delivery of a written notice of termination duly executed by Parent and the Acting Holders, except that this Section 6.8
and Section 6.10 will each survive the termination of this Agreement and shall remain in full force and effect in accordance
with their respective terms. Notwithstanding anything in this Agreement to the contrary, no termination of this Agreement will relieve
any party hereto of any liability for any breach of this Agreement occurring prior to such termination.
Section 6.9 Payments
on Next Business Day. In the event that a Milestone Payment Date or any other date by which any payment in respect of the CVRs shall
be required to be made hereunder shall not be a Business Day, then, notwithstanding any provision of this Agreement to the contrary, any
payment required to be made in respect of the CVRs on such date need not be made on such date, but may be made on the next Business Day
thereafter with the same force and effect as if made on the applicable Milestone Payment Date or other required date, as the case may
be.
Section 6.10 Confidentiality.
The Rights Agent agrees that all books, records, information and data pertaining to the business of Parent or its Affiliates, including
inter alia, personal, non-public Holder information, which are exchanged or received pursuant to the negotiation or the carrying out of
this Agreement shall not be used by the Rights Agent for any purpose other than carrying out its duties under this Agreement and shall
not be voluntarily disclosed by the Rights Agent to any other Person, including any Holder, except as may be required by a valid order
of any Governmental Entity of competent jurisdiction or is otherwise required by applicable law, the rules and regulations of the
Securities and Exchange Commission or any stock exchange on which the securities of the Rights Agent are listed, or pursuant to subpoenas
from state or federal Governmental Bodies (subject to (x) the Rights Agent notifying, to the extent practicable, Parent of such potential
disclosure reasonably in advance of such disclosure (other than disclosure by Rights Agent for stockholder records pursuant to standard
subpoenas from state or federal government authorities (e.g., divorce and criminal actions)), (y) cooperating with Parent, at Parent’s
expense, in any effort to restrict disclosure of such book, records, information or data and (z) the Rights Agent only disclosing
such books, records, information or data that is required to be so disclosed by such valid order, such applicable law, rule or regulation
of the Securities and Exchange Commission or any stock exchange on which the securities of the Rights Agent are listed or such subpoena).
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, each of
the parties has caused this Agreement to be executed as of the day and year first above written.
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ASTRAZENECA TREASURY LIMITED |
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Title: |
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[RIGHTS AGENT] |
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Signature Page to Contingent Value Rights
Agreement
Exhibit A
Fee Schedule
[Rights Agent to provide]
Exhibit 99.1
VOTING AND SUPPORT AGREEMENT
THIS
VOTING AND SUPPORT AGREEMENT (this “Agreement”) is made and entered into as of December 23, 2023,
by and between AstraZeneca Treasury Limited, a private limited company incorporated under the laws of England and Wales (“Parent”),
and the undersigned holder (the “Shareholder”) of ordinary shares of Gracell Biotechnologies Inc., an exempted company
with limited liability incorporated under the Laws of the Cayman Islands (the “Company”). Capitalized terms used herein
and not defined shall have the meanings ascribed to them in the Agreement and Plan of Merger, dated as of December 23, 2023, by
and among Parent, Grey Wolf Merger Sub, an exempted company with limited liability incorporated under the Laws of the Cayman Islands
and a wholly owned subsidiary of Parent (“Merger Sub”), and the Company (as such agreement may be subsequently amended
or modified, the “Merger Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Merger Agreement.
WHEREAS,
Parent, Merger Sub and the Company have entered into the Merger Agreement, providing for, among other things, the merger of Merger Sub
with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent,
upon the terms and subject to the conditions set forth in the Merger Agreement;
WHEREAS,
the Shareholder beneficially owns (as defined in Rule 13d-3 under the Exchange Act), as of the date of this Agreement, the number
of ordinary shares, par value $0.0001 per share, of the Company (the “Company Shares”) (including the Company Shares
represented by ADSs), and holds other rights to acquire beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of
the number of Company Shares indicated opposite the Shareholder’s name on Schedule 1 attached hereto;
WHEREAS,
the Board of Directors has approved, including for purposes of any applicable anti-takeover laws and regulations, and any applicable
provision of the Company’s Memorandum and Articles of Association, the Transactions; and
WHEREAS,
as a condition and material inducement to the willingness of Parent and Merger Sub to enter into the Merger Agreement, Parent
has required that the Shareholder, and the Shareholder has agreed to, enter into and perform this Agreement and vote the Shareholder’s
Company Shares (including the Company Shares represented by ADSs) and any New Shares (as defined below in Section 3) (collectively,
the “Subject Shares”) in accordance with the terms of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants and agreements set forth herein
and in the Merger Agreement, and intending to be legally bound hereby, the Shareholder and Parent agree as follows:
Section 1
Agreement to Vote the Subject Shares. The Shareholder hereby irrevocably and unconditionally agrees that, during the period
commencing on (and including) the date of this Agreement and ending on (and including) the Expiration Date (as defined below) (the “Support
Period”), at any meeting of the shareholders of the Company however called or any adjournment or postponement thereof, or in
any other circumstance or action proposed to be taken in which the vote or other approval of the shareholders of the Company is sought,
with respect to the Merger Agreement, the Merger, the Plan of Merger or any Acquisition Proposal, the Shareholder shall:
(a) if
a meeting is held, appear at such meeting or otherwise cause all of the Subject Shares to be counted as present at such meeting for purposes
of calculating a quorum; and
(b) vote
(or cause to be voted) with respect to all of the Shareholder’s Subject Shares: (i) in favor of the approval and authorization
of the Merger Agreement, the Plan of Merger and the Transactions as to which shareholders of the Company are called upon to vote or consent
in favor of any matter that would be reasonably expected to facilitate the consummation of the Merger, including any proposal to adjourn
or postpone a meeting of the shareholders of the Company to a later date if there are not sufficient votes at the time of the meeting
to approval and authorization the Merger Agreement, the Plan of Merger or the Transactions; (ii) against any action, proposal, transaction
or agreement (including any amendment, waiver, release from or non-enforcement of any agreement) that would reasonably be expected to
(A) result in any of the conditions to the Merger under the Merger Agreement not being fulfilled before the End Date or (B) result
in a breach of any representation, warranty, covenant, agreement or other obligation of such Shareholder under this Agreement or the
Company under the Merger Agreement; (iii) against any Acquisition Proposal or any action, agreement, transaction or other matter
that is intended to (to the actual knowledge of the Shareholder), or would reasonably be expected to, impede, interfere with, delay,
postpone, prevent, discourage or materially and adversely affect the consummation of the Merger and the other Transactions; and (iv) against
any change in or to the Board of Directors that is not recommended or approved by the Board of Directors, or any change in or to the
present capitalization, corporate structure or Memorandum and Articles of Association of the Company that is not consented to by Parent.
During the Support Period, the Shareholder shall not propose, take, commit or agree to take any action inconsistent with the foregoing
in this Section 1. The Shareholder shall retain at all times the right to vote all of the Subject Shares in the Shareholder’s
sole discretion, and without any other limitation, on any matters other than those set forth in this Section 1 that are at
any time or from time to time presented for consideration to the Company’s shareholders generally.
Section 2 Expiration
Date. As used in this Agreement, the term “Expiration Date” shall mean the earliest to occur of (a) the
Effective Time, (b) such date and time as the Merger Agreement shall be validly terminated pursuant to Article VIII thereof,
(c) the mutual written agreement of the parties to terminate this Agreement, or (d) any material modification or
amendment of the Merger Agreement (including any exhibits, annexes or schedules thereto, or any agreement contemplated thereby,
including the CVR Agreement), without the prior written consent of the Shareholder, that, in each case, (x) results in a
decrease in the amount or changes the form of consideration (including any change in the allocation of the form of consideration)
payable to the Shareholder pursuant to the terms of the Merger Agreement (including any exhibits or schedules thereto, such as the
CVR Agreement) as in effect on the date hereof (other than a change in form from CVRs to cash where the price payable in cash is not
less than the Milestone Payment (as defined in the CVR Agreement), (y) is otherwise adverse in any material respect to the
Shareholder or (z) extends the End Date past June 23, 2024 (other than any extension provided for in
Section 8.1(b)(ii) of the Merger Agreement).
Section 3
Additional Purchases. The Shareholder agrees that any Company Shares (including Company Shares represented by ADSs) or
other share capital of the Company that the Shareholder purchases or with respect to which the Shareholder otherwise acquires beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) during the Support Period, including by the exercise of a Company Option,
Company Warrant or the settlement of a Company RSU (collectively, the “New Shares”) shall be subject to the terms
and conditions of this Agreement to the same extent as if they constituted Subject Shares as of the date hereof, and the representation
and warranties in Section 5 shall be true and correct as of the date that beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of such New Shares is first acquired. Notwithstanding anything in this Agreement to the contrary, nothing herein
shall require the Shareholder to exercise any Company Equity Award or require the Shareholder to purchase any Company Shares, and nothing
herein shall prohibit the Shareholder from exercising any Company Equity Award held by the Shareholder.
Section 4
Agreement to Retain the Subject Shares and Other Covenants.
(a) During
the Support Period, the Shareholder shall not Transfer (as defined below in Section 4(c)) (or agree to Transfer or cause
or permit the Transfer of) any of the Subject Shares.
(b) Section 4(a) above
shall not prohibit or otherwise restrict a Transfer of Subject Shares by the Shareholder: (i) by using already-owned Shares (or
effecting a “net exercise” of a Company Option or a “net settlement” of a Company RSU) either to pay the exercise
price upon the exercise of a Company Option or to satisfy the Shareholder’s tax withholding obligation upon the exercise of a Company
Option or settlement of a Company RSU, in each case as permitted pursuant to the terms of any of the Company Share Plans, (ii) transferring
all or a portion of the Subject Shares to any Affiliate, partner, member or equityholder of the Shareholder or by operation of law or
(x) if the Shareholder is an investment fund, to any other investment fund managed by the same manager, managing member, general
partner or management company or by an entity controlling, controlled by or under common control with such manager, managing member,
general partner or management company or (y) if the Shareholder is an individual, to any immediate family members, a trust established
for the benefit of the Shareholder and/or for the benefit of one or more members of the Shareholder’s immediate family or charitable
organizations, including a donor-advised fund, for estate planning purposes or upon the death of the Shareholder; provided that,
as a condition to any such Transfer pursuant to the foregoing clauses (i) and (ii), the recipient agrees to be bound by this Agreement
by executing and delivering to Parent a joinder to this Agreement, in a form reasonably acceptable to Parent as soon as practicable after
such Transfer, or (iii) with Parent’s prior written consent (such exceptions set forth in clauses (i) through (iii),
collectively, “Permitted Transfers”). Any Transfer (other than a Permitted Transfer), or purported Transfer (other
than a Permitted Transfer), of any of the Subject Shares in breach or violation of this Agreement shall be void and of no force or effect.
(c) For
the purposes of this Agreement, a Person shall be deemed to have effected a “Transfer” of a Subject Share if such
Person, directly or indirectly, (i) sells, pledges, encumbers, hypothecates, assigns, grants an option with respect to (or otherwise
enters into a hedging arrangement with respect to), transfers, tenders or disposes (by merger, by testamentary disposition, by the creation
of any Lien (other than as contained herein), by operation of law, by dividend or distribution or otherwise) of such Subject Share or
any interest in or beneficial ownership of such Subject Share, (ii) deposits any Subject Shares into a voting trust or enters into
a voting agreement or arrangement or grant any proxy or power of attorney with respect thereto that is inconsistent with this Agreement,
or (iii) offers, consents, agrees or commits (whether or not in writing) to take any of the actions referred to in the foregoing
clause (i) or (ii).
(d) The
Shareholder shall use commercially reasonable efforts to take, or cause to be taken, all reasonable actions, and to do, or cause to be
done, all things reasonably necessary to fulfill the Shareholder’s obligations under this Agreement, including attending, if applicable,
any meeting of the shareholders of the Company or any adjournment or postponement thereof (or executing valid and effective proxies to
any other attending participant of such meeting in lieu of attending such meeting or any adjournment or postponement thereof).
(e) Subject
to Section 7 below, at all times during the period commencing on the date hereof and continuing until the earlier to occur
of the termination of this Agreement pursuant to Section 12 and the Effective Time, the Shareholder shall not, shall cause
its directors and officers to not, and shall direct its other Representatives to not, directly or indirectly, take any action or omit
to take any action that the Company is not permitted to take or omit to take pursuant to clauses (A) through (E) and clause
(G) of Section 6.3(a)(i) of the Merger Agreement, or approve, authorize, agree or publicly announce any intention to do
any of the foregoing. Nothing in this Section 4(e) shall prohibit the Shareholder or its Representatives from informing
any Person of the existence of the provisions contained in this Section 4(e). The Shareholder acknowledges that any violation
of the restrictions set forth in this Section 4(e) by its Representatives acting on behalf of the Shareholder shall
be deemed to be a breach by the Shareholder.
Section 5
Representations and Warranties of the Shareholder. The Shareholder hereby represents and warrants to Parent as of the date
hereof as follows:
(a) The
Shareholder is a natural person or a legal entity duly organized or incorporated and validly existing and in good standing under the
laws of its jurisdiction of organization or incorporation. The Shareholder has the full power and authority to execute and deliver this
Agreement and to perform the Shareholder’s obligations hereunder and no other proceedings or actions on the part of the Shareholder
are necessary to authorize the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated
hereby.
(b) This
Agreement has been duly executed and delivered by or on behalf of the Shareholder and constitutes a valid and binding agreement with
respect to the Shareholder, enforceable against the Shareholder in accordance with its terms, subject to the Bankruptcy and Equity Exception.
(c) The
Shareholder is the record, legal and beneficial owner of the number of the Subject Shares and the other rights to acquire (whether currently,
upon lapse of time, following the satisfaction of any condition, upon the occurrence of any event or any combination of the foregoing)
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of the number of Company Shares (including Company Shares
represented by ADSs), in each case indicated opposite the Shareholder’s name on Schedule 1, which constitute all of the
securities of the Company owned of record or beneficially by the Shareholder or its Affiliates on the date hereof. The Shareholder does
not beneficially own any Company Shares that it does not hold of record or own any Company Shares through its Affiliates. The Subject
Shares are now, and at all times during the Support Period will be, held by the Shareholder (or a nominee or custodian for its benefit
or a transferee pursuant to a Permitted Transfer), free and clear of any Liens (other than as contained herein). The Shareholder has
sole, and otherwise unrestricted, voting power with respect to such Subject Shares, and none of the Subject Shares are subject to any
voting trust or other agreement, arrangement, or restriction with respect to the voting of the Subject Shares, except as contemplated
by this Agreement.
(d) The
execution and delivery of this Agreement by the Shareholder does not, and the performance by the Shareholder of its obligations hereunder
and the compliance by the Shareholder with any provisions hereof will not, violate or conflict with, result in a material breach of or
constitute a default (or an event that with notice or lapse of time or both would become a material default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any Lien (other than as contained
herein) on any of the Subject Shares pursuant to, any agreement, instrument, note, bond, mortgage, contract, lease, license, permit or
other obligation or any order, arbitration award, judgment or decree to which the Shareholder is a party or by which the Shareholder
is bound, or, to the Shareholder’s knowledge, any law, statute, rule or regulation to which the Shareholder is subject or
any bylaw or other organizational document of the Shareholder.
(e) The
execution and delivery of this Agreement by the Shareholder does not, and the performance of this Agreement by the Shareholder does not
and will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory
authority by the Shareholder except for applicable requirements, if any, of the Exchange Act.
(f) As
of the date hereof, there is no Legal Proceeding pending or, to the knowledge of the Shareholder, threatened against the Shareholder
before or by any Governmental Authority that would reasonably be expected to impair or delay the ability of the Shareholder to perform
its obligations under this Agreement.
(g) No
broker, investment banker, financial advisor, finder, agent or other Person is entitled to any broker’s, finder’s, financial
adviser’s or other similar fee or commission from the Company other than as disclosed in the Merger Agreement in connection with
this Agreement based upon arrangements made by or on behalf of the Shareholder in his, her or its capacity as a shareholder of the Company.
(h) The
Shareholder understands and acknowledges that Parent is entering into the Merger Agreement in reliance upon the Shareholder’s execution
and delivery of this Agreement.
Section 6
Waiver of Actions and Appraisal Rights. The Shareholder agrees that the Shareholder will not, in the Shareholder’s
capacity as a shareholder of the Company, bring, commence, institute, maintain, prosecute or voluntarily aid any action (a) which
(i) challenges the validity of or seeks to enjoin the operation of any provision of this Agreement or the Merger Agreement or (ii) alleges
that the execution and delivery of this Agreement by the Shareholder, either alone or together with any of the other agreements and proxies
to be delivered in connection with the execution of the Merger Agreement, or the approval of the Merger Agreement by the Board of Directors,
breaches any fiduciary duty of the Board of Directors or any member thereof, (b) with respect to any disclosure to the shareholders
of the Company in connection with this Agreement or the Merger Agreement or the transactions contemplated hereby or thereby, or (c) against
Parent, Merger Sub or their respective Representatives in connection with this Agreement or the Merger Agreement or the transactions
contemplated hereby or thereby. During the term of this Agreement, the Shareholder hereby irrevocably and unconditionally waives, and
agrees not to exercise or assert, on its own behalf or on behalf of any other holder of Subject Shares, any rights of appraisal, any
dissenters’ rights or any similar rights relating to the Merger (including any rights under Section 238 of the CICA) that
the Shareholder may have by virtue of, or with respect to, any Subject Shares beneficially owned by the Shareholder.
Section 7
No Limitation on Discretion as Director or Fiduciary. Notwithstanding anything herein to the contrary, the covenants and
agreements set forth herein shall not prevent the Shareholder or any representative of the Shareholder, (a) if the Shareholder or
such representative is serving on the Board of Directors or is a director or officer of the Company, from exercising his or her duties
and obligations as a director or officer of the Company or otherwise taking any action, subject to the applicable provisions of the Merger
Agreement, while acting in such capacity as a director or officer of the Company, or (b) if the Shareholder or such representative
is serving as a trustee or fiduciary of any ERISA plan or trust, from exercising his or her duties and obligations as a trustee or fiduciary
of such ERISA plan or trust. The Shareholder is executing this Agreement solely in its capacity as a shareholder of the Company.
Section 8
Specific Enforcement. The parties hereto hereby agree that irreparable damage would occur in the event that any provision
of this Agreement were not performed in accordance with its specific terms or were otherwise breached, and that money damages or other
legal remedies would not be an adequate remedy for any such damages. Accordingly, the parties hereto acknowledge and hereby agree that
in the event of any breach by either party hereto of any of its respective covenants or obligations set forth in this Agreement, the
other party shall be entitled (without proof of actual damages or otherwise or posting or securing any bond or other security), in addition
to any other remedy to which it is entitled to under law or equity, to an injunction or injunctions to prevent or restrain breaches of
this Agreement, by the other party (as applicable), and to specifically enforce the terms and provisions of this Agreement to prevent
breaches of, or to enforce compliance with, the covenants and obligations of the other under this Agreement. Each party hereto hereby
agrees not to raise any objections to the availability of the equitable remedy of specific performance to prevent or restrain breaches
of this Agreement by such party, and to specifically enforce the terms and provisions of this Agreement to prevent breaches of, or to
enforce compliance with, the covenants and obligations of such party under this Agreement. Any party’s pursuit of any injunction
or specific performance at any time shall not be deemed an election of remedies or waiver of the right to pursue any other right or remedy
to which such party may be entitled.
Section 9
Further Assurances. The Shareholder shall, from time to time and without additional consideration, execute and deliver,
or cause to be executed and delivered such additional or further consents, documents and other instruments as Parent may reasonably request
for the purpose of effectively carrying out the transactions contemplated by this Agreement.
Section 10
Notice. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly delivered
and received hereunder if they are, in accordance with the methods set forth in Section 9.4 of the Merger Agreement: (a) delivered
to Parent at the address set forth in Section 9.4 of the Merger Agreement or (b) delivered to the Shareholder at its address
set forth on the Shareholder’s signature page to this Agreement (or, in each case, to such other recipient or address as designated
in a written notice to the Shareholder or Parent, as applicable, in accordance with this Section 10).
Section 11
No Survival of Representations, Warranties and Agreements. All representations, warranties, covenants and agreements in
this Agreement, and all rights and remedies with respect thereto, shall not survive the Expiration Date.
Section 12
Termination. This Agreement shall automatically terminate and become void and of no further effort or effect on the Expiration
Date; provided, that (i) this Section 12 and the applicable definitional and interpretive provisions of Section 14
through Section 19, Section 21, Section 22, Section 24 and Section 25
shall survive such termination and (ii) no such termination shall relieve or release the Shareholder from any obligations or liabilities
arising out of its breach of this Agreement prior to its termination.
Section 13
Disclosure. The Shareholder shall permit the Company, Parent and Merger Sub to disclose in all documents and schedules
filed with the SEC and the Registrar of Companies pursuant to the CICA that Company or Parent, as applicable, determines to be necessary
in connection with the Merger and any transaction contemplated by the Merger Agreement, the Shareholder’s identity and ownership
of the Subject Shares and the nature of the Shareholder’s commitments, arrangements and understandings under this Agreement; provided,
that the Shareholder shall have a reasonable opportunity to review and comment on such disclosure prior to any such filing. None of the
information relating to the Shareholder provided by or on behalf of the Shareholder in writing for inclusion in such documents and schedules
filed with the SEC or the Registrar of Companies will, at the respective times that such documents and schedules are filed with the SEC
or Registrar of Companies or are first mailed, contain any untrue statement of material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made,
not misleading. The Shareholder shall promptly notify Parent if it becomes aware of any required corrections with respect to any information
provided by or on behalf of the Shareholder for inclusion in any such disclosure document if and to the extent that the Shareholder becomes
aware that any such information shall have become untrue or misleading in any material respect. The Shareholder shall not make any press
release, public announcement or other communication with respect to this Agreement and the Merger Agreement and the transactions contemplated
hereby and thereby, without the prior written consent of the Company and Parent, except (a) as required by applicable federal securities
law (including the filing of a Schedule 13D with the SEC which may include this Agreement as an exhibit thereto), in which case the Company
and Parent shall have a reasonable opportunity to review and comment on such communication, and (b) for any such communication that
is materially consistent with previous public announcements by the Company or Parent.
Section 14
Severability. In the event that any term or other provision of this Agreement, or the application thereof, is 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. 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 in order that the transactions contemplated hereby be effected as originally
contemplated to the fullest extent possible.
Section 15
Assignment. No party may assign (by operation of law or otherwise) either this Agreement or any of its rights, interests,
or obligations hereunder without the prior written approval of the other party, except that Parent may assign, in its sole discretion,
any and all of its rights, interests and obligations under this Agreement to any Affiliate of Parent, but no such assignment shall relieve
the assigning party of its obligations under this Agreement. Subject to the preceding sentence, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Any purported assignment
in violation of this Agreement shall be void ab initio.
Section 16
No Waivers. No waivers of any breach of this Agreement extended by Parent to the Shareholder shall be construed as a waiver
of any rights or remedies of Parent with respect to any other shareholder of the Company who has executed an agreement substantially
in the form of this Agreement with respect to the Company Shares held or subsequently held by such other shareholder or with respect
to any subsequent breach of the Shareholder or any other shareholder of the Company. No waiver of any provisions hereof by either party
hereto shall be deemed a waiver of any other provisions hereof by any such party, nor shall any such waiver be deemed a continuing waiver
of any provision hereof by such party.
Section 17
Governing Law. This Agreement shall be interpreted, construed and governed by and
in accordance with the Laws of the State of Delaware without regard to the conflicts of law principles thereof that would subject such
matter to the Laws of another jurisdiction, except that the following matters arising out of or relating to this Agreement shall be exclusively
interpreted, construed and governed by and in accordance with the Laws of the Cayman Islands, in respect of which the parties hereto
hereby irrevocably submit to the exclusive jurisdiction of the courts of the Cayman Islands: (a) the Merger; (b) the vesting
of the undertaking, property and liabilities of each of the Company and Merger Sub in the Surviving Company; (c) the cancellation
of the Subject Shares (including Shares represented by ADSs); (d) the fiduciary or other duties of the Board of Directors and the
sole director of Merger Sub; (e) the general rights of the respective shareholders of the Company and Merger Sub, including the
rights provided for in Section 238 of the CICA with respect to any Dissenting Shares; and (f) the internal corporate affairs
of the Company and Merger Sub.
Section 18
Jurisdiction and Venue. Except as set forth in Section 17, each of the parties irrevocably and unconditionally agrees
that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition
and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the another
party or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate
court therefrom within the State of Delaware (or, solely if the Delaware Court of Chancery declines to accept jurisdiction over a particular
matter, any state or federal court within the State of Delaware). Each of the parties hereby irrevocably and unconditionally submits
with regard to any such action or proceeding for itself and in respect of its property to the personal jurisdiction of the aforesaid
courts and agrees that, except as set forth in Section 17, it will not bring any action relating to this Agreement or any of the
Transactions (including the Merger) in any court other than the aforesaid courts. Each of the parties hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement,
(a) any claim that it is not personally subject to the jurisdiction of the above named courts, (b) any claim that it or its
property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and
(c) to the fullest extent permitted by applicable Law, any claim that (i) the suit, action or proceeding in such court is brought
in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts. To the fullest extent permitted by applicable Law, each of the parties hereto
hereby consents to the service of process in accordance with Section 18; provided, that nothing herein shall affect the right
of any party to serve legal process in any other manner permitted by applicable Law.
Section 19
Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE MERGER OR THE OTHER TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 19.
Section 20
No Agreement Until Executed. Irrespective of negotiations among the parties hereto
or the exchanging of drafts of this Agreement, this Agreement shall not constitute or be deemed to evidence a contract, agreement, arrangement
or understanding between the parties hereto unless and until (a) the Board of Directors has approved, for purposes of any applicable
anti-takeover laws and regulations, and any applicable provision of the Memorandum and Articles of Association of the Company,
the transactions contemplated by the Merger Agreement, (b) the Merger Agreement is executed by all parties thereto, and (c) this
Agreement is executed by all parties hereto.
Section 21
Certain Events. Notwithstanding anything in this Agreement to the contrary, if, at any time occurring on or after the date
hereof and prior to the Effective Time, any change in the outstanding equity interests of the Company shall occur as a result of any
reorganization, reclassification, recapitalization, share subdivision or consolidation, exchange or readjustment of shares, or any share
dividend or share distribution (including any dividend or other distribution of securities convertible into Company Shares) with a record
date during such period, the type and number of the Subject Shares subject to this Agreement shall be adjusted appropriately, and this
Agreement and the obligations hereunder shall automatically attach to any New Shares or other securities issued to or acquired by the
Shareholder.
Section 22
Entire Agreement; Amendment. This Agreement (including the schedule hereto) and the documents and instruments and other
agreements among the parties hereto as contemplated by or referred to herein, constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
Section 23
Counterparts; Effectiveness; PDF Signature. This Agreement may be executed in one or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that all parties need not sign the same counterpart. Delivery of an executed counterpart
of a signature page to this Agreement by facsimile or other electronic transmission, including by e-mail attachment and DocuSign,
shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 24
Expenses. Except as otherwise expressly provided in this Agreement, all fees and expenses incurred in connection with this
Agreement and the Transactions shall be paid by the party or parties, as applicable, incurring such expenses whether or not the Transactions
contemplated hereby are consummated.
Section 25
Construction.
(a) Unless
otherwise indicated, all references herein to Sections or Schedules, shall be deemed to refer to Sections or Schedules of or to this
Agreement, as applicable, and all references herein to “paragraphs” or “clauses” shall be deemed references to
separate paragraphs or clauses of the section or subsection in which the reference occurs. The words “hereof,” “herein,”
“hereby,” “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(b) Unless
otherwise indicated, the words “include,” “includes” and “including,” when used herein, shall not
be limiting and shall be deemed in each case to be followed by the words “without limitation.”
(c) The
words “or” or “either”, when used herein, shall not be exclusive.
(d) Unless
otherwise indicated, all references herein to the subsidiaries of a Person shall be deemed to include all direct and indirect subsidiaries
of such Person unless otherwise indicated or the context otherwise requires.
(e) If
a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such
as a verb).
(f) Whenever
the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural, and vice versa.
(g) When
used herein, the word “extent” and the phrase “to the extent” shall mean the degree to which a subject or other
thing extends, and such word or phrase shall not simply mean “if.”
(h) The
headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any
way the meaning or interpretation of this Agreement or any term or provision hereof.
(i) References
to “$” and “dollars” are to the currency of the United States of America.
(j) “Writing,”
“written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media)
in a visible form.
(k) Except
as otherwise specified, (i) references to any statute or law shall be deemed to refer to such statute or law as amended from time
to time and to any rules or regulations promulgated thereunder, (ii) references to any Person include the successors and permitted
assigns of that Person, and (iii) references from or through any date mean from and including or through and including, respectively.
(l) Whenever
this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. Whenever any
action must be taken hereunder on or by a day that is not a Business Day, then such action may be validly taken on or by the next day
that is a Business Day. Unless otherwise specified in this Agreement, when calculating the period of time within which, or following
which, any action is to be taken pursuant to this Agreement, the date that is the reference day in calculating such period shall be excluded.
(m) Where
used with respect to information, the phrases “delivered” to a party hereto means that the information referred to has been
physically or electronically delivered to the relevant parties or their respective Representatives.
(n) The
parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any law, holding or rule of construction providing that ambiguities in an agreement or other document shall
be construed against the party drafting such agreement or document.
[Signature Pages Follow]
IN WITNESS WHEREOF, each
party hereto has duly executed and delivered this Agreement, all as of the date first above written.
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[SHAREHOLDER] |
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By:
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Title: |
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E-mail: |
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Address: |
IN WITNESS WHEREOF, each
party hereto has duly executed and delivered this Agreement, all as of the date first above written.
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[PARENT] |
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By:
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Name: |
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Schedule 1
Shareholder (Name): [●]
| Shares |
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Company
Options |
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Company
Warrants |
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Company
RSUs |
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– |
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Exhibit 99.2
Gracell Biotechnologies
to be acquired by AstraZeneca, furthering cell therapy ambition across oncology and autoimmune diseases
Proposed acquisition
will enrich the AstraZeneca cell therapy pipeline with clinical-stage autologous BCMA/CD19 CAR-T therapy targeting haematologic malignancies
and autoimmune diseases, and proprietary cell therapy manufacturing platform
Gracell shareholders
to receive $2.00 per ordinary share (equivalent to $10.00 per American Depositary Share (ADS)) in cash at closing, plus a non-tradable
contingent value right (CVR) for up to $0.30 per ordinary share (equivalent to $1.50 per ADS), representing a total transaction value
of up to $1.2 billion including the CVR
SAN DIEGO, Calif.,
and SUZHOU and SHANGHAI, China, December 26, 2023 -- Gracell Biotechnologies Inc. (“Gracell” or the “Company”,
NASDAQ: GRCL), a global clinical-stage biopharmaceutical company dedicated to developing innovative cell therapies for the treatment
of cancer and autoimmune diseases, today announced it has entered into a definitive agreement to be acquired by AstraZeneca.
The proposed acquisition
will enrich AstraZeneca’s growing pipeline of cell therapies with GC012F, a novel, clinical-stage FasTCAR-enabled BCMA and CD19
dual-targeting autologous chimeric antigen receptor T (CAR-T) cell therapy, a potential new treatment for multiple myeloma, as well as
other haematologic malignancies and autoimmune diseases including systemic lupus erythematosus (SLE).
Autologous
CAR-T is a type of cell therapy created by reprogramming a patient’s immune T cells to target disease-causing cells, and the manufacturing
process for this type of treatment is complex and time-consuming. Gracell’s FasTCAR next-day manufacturing platform significantly
shortens manufacturing time, enhances T cell fitness and will potentially improve the effectiveness of autologous CAR-T treatment in
patients. Future applications of this technology may also include rare diseases.
Dr. William
Cao, founder, Chairman and CEO, Gracell said: “We look forward to working with AstraZeneca to accelerate our shared goal of bringing
transformative cell therapies to more patients living with debilitating diseases. By combining our expertise and resources, we can unlock
new ways to harness the Gracell’s FasTCAR manufacturing platform, which we believe has the potential to optimise the therapeutic
profile of engineered T cells, to pioneer the next generation of autologous cell therapies.”
Susan Galbraith,
Executive Vice President, Oncology R&D, AstraZeneca, said: “The proposed acquisition of Gracell will complement AstraZeneca’s
existing capabilities and previous investments in cell therapy, where we have established our presence in CAR-T and T-cell receptor therapies
(TCR-Ts) in solid tumours. GC012F will accelerate our cell therapy strategy in haematology, with the opportunity to bring a potential
best-in-class treatment to patients living with blood cancers using a differentiated manufacturing process, as well as exploring the
potential for cell therapy to reset the immune response in autoimmune diseases.”
Transaction
Terms
Under
the terms of the definitive agreement, AstraZeneca will acquire all of Gracell’s fully diluted share capital (including shares
represented by ADSs) through a merger for a price of $2.00 per ordinary share in cash at closing (equivalent to $10.00 per ADS of the
Company), plus a non-tradable contingent value right of $0.30 per ordinary share in cash (equivalent to $1.50 per ADS of the Company)
payable upon achievement of a specified regulatory milestone. The upfront cash portion of the consideration represents a transaction
value of approximately $1.0 billion, a 62% premium to Gracell’s closing market price on December 22, 2023 and a 154% premium
to the 60-day volume-weighted average price (VWAP) of $3.94 per ADS before this announcement.
Combined, the upfront and potential contingent value payments represent, if achieved, a transaction value of approximately $1.2 billion,
an 86% premium to Gracell’s closing market price on December 22, 2023 and a 192% premium to the 60-day VWAP. As part of the
proposed transaction, AstraZeneca will acquire the cash, cash equivalents and
short-term investments remaining on Gracell’s balance sheet, which totaled $234.1 million as of September 30, 2023.
The transaction
is expected to close in the first quarter of 2024, subject to customary closing conditions, including regulatory clearances and Gracell
shareholder approval. If completed, the transaction will result in Gracell becoming a privately held company and its ADSs will no longer
be listed on Nasdaq.
Advisors
Centerview Partners
is acting as exclusive financial advisor to Gracell.
Cooley LLP is acting
as legal advisor to Gracell. AllBright Law Offices is acting as PRC legal advisor to Gracell, and Harney Westwood & Riegels
is acting as Cayman Islands legal advisor to Gracell.
Freshfields Bruckhaus
Deringer US LLP is acting as legal advisor to AstraZeneca. RuiMin is acting as PRC legal advisor to AstraZeneca, and Maples Group is
acting as Cayman Islands legal advisor to AstraZeneca.
About GC012F
GC012F
is Gracell’s FasTCAR-enabled BCMA/CD19 dual-targeting autologous CAR-T cell therapy, which aims to transform cancer and autoimmune
disease treatment by seeking to drive deep and durable responses with an improved safety profile. GC012F is currently being evaluated
in clinical studies in multiple hematological cancers as well as autoimmune diseases and has demonstrated a consistently strong efficacy
and safety profile. Gracell has initiated a Phase 1b/2 trial evaluating GC012F for the treatment of RRMM
in the United States and a Phase 1/2 clinical trial in China is to be commenced
imminently. An IIT has also been launched to evaluate GC012F for the treatment of rSLE and the IND applications to study GC012F in rSLE
has been cleared by the U.S. FDA and China NMPA, respectively.
About FasTCAR
Introduced in 2017,
FasTCAR is Gracell’s revolutionary next-day autologous CAR-T cell manufacturing platform. FasTCAR is designed to lead the next
generation of therapy for cancer and autoimmune diseases, and improve outcomes for patients by enhancing effect, reducing costs, and
enabling more patients to access critical CAR-T treatment. FasTCAR drastically shortens cell production from weeks to overnight, potentially
reducing patient wait times and probability for their disease to progress. Furthermore, FasTCAR T-cells appear younger than traditional
CAR-T cells, making them more proliferative and effective at killing cancer cells. In 2022 and 2023, FasTCAR was named the winner of
the Biotech Innovation category of the 2022 Fierce Life Sciences Innovation Awards and the Overall Immunology Solution of 2023 by BioTech
Breakthrough Awards, for its ability to address major industry obstacles.
About Gracell
Gracell
Biotechnologies Inc. (“Gracell”) is a global clinical-stage biopharmaceutical company dedicated to discovering and developing
breakthrough cell therapies for the treatment of cancers and autoimmune diseases. Leveraging its innovative FasTCAR and TruUCAR technology
platforms and SMART CART™ technology module, Gracell is developing a rich clinical-stage pipeline of multiple autologous and allogeneic
product candidates with the potential to overcome major industry challenges that persist with conventional CAR-T therapies, including
lengthy manufacturing time, suboptimal cell quality, high therapy cost, and lack of effective CAR-T therapies for solid tumors and autoimmune
diseases. The lead candidate BCMA/CD19 dual-targeting FasTCAR-T GC012F is currently being evaluated in clinical studies for the treatment
of multiple myeloma, B-NHL and SLE. For more information on Gracell, please visit www.gracellbio.com. Follow
@GracellBio on LinkedIn.
Additional Information
and Where to Find It
In
connection with the proposed transaction, the Company intends to file or furnish relevant materials with the Securities and Exchange
Commission (the “SEC”), including a proxy statement. Promptly after the proxy statement is filed or furnished with the SEC,
the Company will mail or otherwise provide the proxy statement and a proxy card to each of its shareholders entitled to vote at the extraordinary
general meeting relating to the proposed transaction. This communication is not a substitute for the proxy statement or any other document
that the Company may file or furnish with the SEC or send to its shareholders in connection with the proposed transaction. BEFORE MAKING
ANY VOTING DECISION, SHAREHOLDERS OF THE COMPANY ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED TRANSACTION THAT THE COMPANY WILL FILE OR FURNISHED WITH THE SEC WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED
TRANSACTION. The proxy statement and other relevant materials in connection with the proposed transaction (when they become available),
and any other documents filed or furnished with the SEC by the Company, may be obtained free of charge at the SEC’s website at
www.sec.gov or at the Company’s website at www.gracellbio.com.
Participants
in the Solicitation
This announcement
is neither a solicitation of proxy, an offer to purchase nor a solicitation of an offer to sell any securities and it is not a substitute
for any proxy statement or other filings that may be made with the SEC should the transaction proceed. AstraZeneca, the Company and certain
of their respective directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be
“participants” in the solicitation of proxies from the Company’s shareholders with respect to the proposed transaction.
Information regarding the persons who may be considered “participants” in the solicitation of proxies will be set forth in
the proxy statement relating to the transaction when it is filed or furnished with the SEC. Additional information regarding the interests
of such potential participants will be included in the proxy statement and the other relevant documents filed or furnished with the SEC
when they become available.
Cautionary Note
Regarding Forward-Looking Statements
This announcement
contains “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. Statements
that are not historical or current facts, including statements about the beliefs and expectations and statements relating to the proposed
transaction involving Gracell, AstraZeneca and AstraZeneca’s merger subsidiary, are forward-looking statements. The words “anticipate,”
“look forward to,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,”
“target,” “will,” “would” and similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying words. Forward-looking statements involve inherent risks and uncertainties,
and important factors could cause actual results to differ materially from those anticipated, including, but not limited to: the satisfaction
of the conditions precedent to the consummation of the proposed transaction, including, the receipt of shareholder approval and regulatory
clearances; the possibility that the milestone related to the contingent value right will not be achieved, even if the proposed merger
is consummated; unanticipated difficulties or expenditures relating to the proposed transaction; legal proceedings, judgments or settlements,
including those that may be instituted against the Company, the Company’s board of directors and executive officers and others
following the announcement of the proposed transaction; disruptions of current plans and operations caused by the announcement of the
proposed transaction; potential difficulties in employee retention due to the announcement of the proposed transaction; and other risks
and uncertainties and the factors discussed in the section entitled “Risk Factors” in Gracell’s most recent annual
report on Form 20-F, as well as discussions of potential risks, uncertainties, and other important factors in Gracell’s subsequent
filings with the SEC. Any forward-looking statements contained in this press release speak only as of the date hereof. Gracell specifically
disclaims any obligation to update any forward-looking statement, whether due to new information, future events, or otherwise. Readers
should not rely upon the information on this page as current or accurate after its publication date.
Media Contacts
Marvin Tang
marvin.tang@gracellbio.com
Jessica Laub
jessica.laub@westwicke.com
Investor Contacts
Gracie Tong
gracie.tong@gracellbio.com
Stephanie Carrington
stephanie.carrington@westwicke.com
Exhibit 99.3
LETTER TO COMPANY EMPLOYEES
Dear Gracell Team:
Today is a significant day for Gracell Biotechnologies Inc. A few minutes
ago, we announced that our company has entered into a definitive agreement with AstraZeneca, pursuant to which, AstraZeneca will acquire
all of our company’s outstanding shares for a price of $2.00 per ordinary share in cash ($10.00 per ADS), plus a non-tradable contingent
value right (CVR) for $0.30 per ordinary share in cash ($1.50 per ADS) payable upon achievement of a specified regulatory milestone, representing
a total transaction value of up to $1.2 billion including the CVR.
The proposed transaction is a testament to the value you have all
created through your unrelenting dedication and commitment to our company and to the patients we serve, as well as the tremendous potential
of our clinical and preclinical pipeline as well as technology platforms and modules. A copy of the press release announcing the transaction
can be found here.
AstraZeneca is a global, science-led, patient-focused pharmaceutical
company. We look forward to working with AstraZeneca to accelerate our shared goal of bringing transformative cell therapies to more patients
living with debilitating diseases. By combining our expertise and resources, we can unlock new ways to harness the Gracell’s FasTCAR
manufacturing platform, which we believe has the potential to optimize the therapeutic profile of engineered T cells, to pioneer the next
generation of autologous CAR-T therapies.
In terms of next steps, we expect the transaction to close in the first
quarter of 2024, subject to satisfaction of customary conditions and regulatory clearances. In the interim, while we will work with AstraZeneca
on certain high-level transition planning matters, Gracell will continue to operate independently, and we will continue to stay focused
on our daily responsibilities and business as usual. As such, today’s announcement will not impact our day-to-day activities,
and it’s imperative that we all remain focused on our commitments with respect to our clinical development activities and the ongoing
work to further our preclinical pipeline for the benefit of patients.
As you can imagine, this announcement is likely to generate increased
amounts of inquiries regarding our company and the proposed transaction. Since it is important that we speak with one voice, please forward
all investor or media calls related to this transaction to Gracie Tong, Marvin Tang and IR@gracellbio.com.
As always, I want to thank you for your continued commitment to
achieving our vision here at Gracell. Our unwavering commitment to developing next generation cell and gene therapies is what has made
this tremendous opportunity possible.
With gratitude,
William Wei Cao
Chairman of the Board and Chief Executive Officer
Additional Information and Where to Find It
In connection with the proposed transaction, the Company intends to
file or furnish relevant materials with the Securities and Exchange Commission (the “SEC”), including a proxy statement. Promptly
after the proxy statement is filed or furnished with the SEC, the Company will mail or otherwise provide the proxy statement and a proxy
card to each of its shareholders entitled to vote at the extraordinary general meeting relating to the proposed transaction. This communication
is not a substitute for the proxy statement or any other document that the Company may file or furnish with the SEC or send to its shareholders
in connection with the proposed transaction. BEFORE MAKING ANY VOTING DECISION, SHAREHOLDERS OF THE COMPANY ARE URGED TO READ THESE MATERIALS
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED TRANSACTION THAT THE
COMPANY WILL FILE OR FURNISHED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. The proxy statement and other relevant materials in connection with the proposed
transaction (when they become available), and any other documents filed or furnished with the SEC by the Company, may be obtained free
of charge at the SEC’s website at www.sec.gov or at the Company’s website at www.gracellbio.com.
Participants in the Solicitation
This document is neither a solicitation of proxy, an offer to purchase
nor a solicitation of an offer to sell any securities and it is not a substitute for any proxy statement or other filings that may be
made with the SEC should the transaction proceed. The Company and certain of its directors, executive officers and other members of management
and employees may, under SEC rules, be deemed to be “participants” in the solicitation of proxies from the Company’s
shareholders with respect to the proposed transaction. Information regarding the persons who may be considered “participants”
in the solicitation of proxies will be set forth in the proxy statement relating to the transaction when it is filed or furnished with
the SEC. Additional information regarding the interests of such potential participants will be included in the proxy statement and the
other relevant documents filed or furnished with the SEC when they become available.
Cautionary Note Regarding Forward-Looking Statements
This document contains “forward-looking statements” within
the meaning of The Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements
about the beliefs and expectations and statements relating to the proposed transaction involving the Company, AstraZeneca and AstraZeneca’s
merger subsidiary, are forward-looking statements. The words “anticipate,” “look forward to,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “target,” “will,”
“would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements
contain these identifying words. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause
actual results to differ materially from those anticipated, including, but not limited to: the satisfaction of the conditions precedent
to the consummation of the proposed transaction, including, the receipt of shareholder approval and regulatory clearances; the possibility
that the milestone related to the contingent value right will not be achieved, even if the proposed merger is consummated; unanticipated
difficulties or expenditures relating to the proposed transaction; legal proceedings, judgments or settlements, including those that may
be instituted against the Company, the Company’s board of directors and executive officers and others following the announcement
of the proposed transaction; disruptions of current plans and operations caused by the announcement of the proposed transaction; potential
difficulties in employee retention due to the announcement of the proposed transaction; and other risks and uncertainties and the factors
discussed in the section entitled “Risk Factors” in the Company’s most recent annual report on Form 20-F, as well
as discussions of potential risks, uncertainties, and other important factors in the Company’s subsequent filings with the SEC.
Any forward-looking statements contained in this press release speak only as of the date hereof. The Company specifically disclaims any
obligation to update any forward-looking statement, whether due to new information, future events, or otherwise. Readers should not rely
upon the information on this page as current or accurate after its publication date.
Exhibit 99.4
Frequently Asked Questions (FAQ)
Benefits of Our Combination
| 1. | What is the benefit of this acquisition for Gracell and
AstraZeneca, and why was it the best path forward? |
By combining the expertise and resources at AstraZeneca
and Gracell, we can unlock new ways to harness Gracell’s FasTCAR manufacturing platform, which we believe has the potential to
optimize the therapeutic profile of engineered T cells, to pioneer the next generation of autologous CAR-T therapies. The acquisition
will also complement AstraZeneca’s existing capabilities and previous investments in cell therapy, where it has established its
presence in CAR-T and TCR-Ts in solid tumours. GC012F will accelerate AstraZeneca’s cell therapy strategy in haematology, with
the opportunity to bring a potential best-in-class treatment to patients living with blood cancers using a differentiated manufacturing
process, as well as exploring the potential for cell therapy to reset the immune response in autoimmune diseases.
| 2. | How will Gracell and AstraZeneca work with one another? |
Following closing, Gracell will continue to operate as a
wholly owned subsidiary of AstraZeneca.
Following closing, both companies will work together to
identify opportunities for collaboration, with the goal of accelerating our collective ambition to bring cell therapies to more patients
living with cancer and autoimmune diseases.
| 3. | Does this acquisition showcase a change in direction at
Gracell? |
This acquisition strengthens our ability to execute on our
strategy: it will allow us to accelerate the development of GC012F and bring the potential benefits of our novel CAR-T to more patients
around the world living with cancer and autoimmune disease.
Timeline
| 4. | What is the expected timing? What happens between now and
the closing of the acquisition? |
At announcement, the acquisition is not final, and Gracell
and AstraZeneca will continue to operate as two separate companies until the acquisition closes. This transaction is subject to customary
closing conditions including regulatory clerance and shareholder approval.
We expect that the transaction will close in the first quarter
of 2024. Until closing, we will continue to operate on a business as usual basis. In the meantime, we are committed to keeping you informed
on a regular basis as more information becomes available.
| 5. | Is it possible the deal doesn’t close? What happens
if it doesn’t close? |
Both Gracell and AstraZeneca are committed to work towards
a timely close in Q1 2024.
Employee Roles & Responsibilities
There are no planned layoffs due to this transition. AstraZeneca
recognizes the important role of our talented team and how pivotal Gracell will be to realizing the collective ambition of bringing more
cell therapies to patients with cancer and autoimmune disease. AstraZeneca is committed to further advancing Gracell technology and enabling
the acceleration of ongoing clinical programs while maintaining operations in China and the US.
| 7. | What’s changing for me and my day-to-day responsibilities?
Will I report to someone new? |
After closing, Gracell will operate as a wholly owned
subsidiary of AstraZeneca, with operations continuing in China and the US. Until closing, it is important we continue to operate on
a business as usual basis. Our company priorities remain consistent, and we will continue to execute against them moving forward.
After closing, it is expected that roles and responsibilities will not change for most of our employees.
| 8. | What will the transition look like? When and how will we
hear about updates and changes? |
To allow for the necessary regulatory reviews and approvals,
the transaction is expected to close in the first quarter of 2024. Until closing, we will continue to operate on a business as usual
basis. In the meantime, our teams are working through the finer details of transition planning and we are committed to keep you informed
on a regular basis as more information becomes available and we gain more clarity.
| 9. | How is my overall compensation, title and related matters
such as merit programs impacted at this time? |
Until
closing, there will be no changes to our operations, organisational structure or compensation and benefit policies. It is our
expectation that overall compensation and benefits will remain broadly similar after closing. More information regarding future plans
under the AstraZeneca organization will be provided in due course. Please keep in mind that many details remain to be worked out.
| 10. | Are there any changes to the systems I use or how I access
information about my salary, benefits, etc.? |
Until closing, the information portals you rely on today
will remain active and we will continue to operate on a business as usual basis. More information about systems we will use to collaborate
with AstraZeneca colleagues will be provided in due course following closing.
| 11. | Who will lead the Gracell organization – will there
be any changes? |
Following the closing of the transaction, William will continue
to lead Gracell. Gracell’s team of cell therapy experts will be instrumental in continuing to advance the companies’ combined
vision and mission. William will also be a member of the Oncology Cell Therapy Leadership team at AstraZeneca.
| 12. | Will we keep our company name? |
It is anticipated that, as we will become a wholly owned
subsidiary, Gracell will keep its name, logo and company email addresses.
| 13. | Can we reach out to our new colleagues at AstraZeneca? |
Gracell
and AstraZeneca must continue to act as two separate organizations until the deal clears all regulatory reviews and approvals and is
officially closed. Gracell and AstraZeneca cannot exchange competitive or sensitive information, integrate research and development efforts,
or share external messages that state the organizations are one. There will be a small integration planning team put in
place with representatives from both companies who will share information relevant to preparing for the closing. As
we near the completion or “Close” of this acquisition, we will provide you with additional guidance on preparing for our
first day as a combined organization (Day1), including how we will begin to engage with AstraZeneca colleagues.
Additional Information
| 14. | Why weren’t we told about the deal before now? |
These types of transactions are extremely confidential and
sensitive as it may impact the share price of an acquirer or the target company. In addition, there are strict securities regulation
requirements that must be followed with respect to broad dissemination of related information.
External communication
| 15. | What should I do if I’m contacted by the media or
investors? |
If you are contacted by the media or investors, do not respond
in any way. Please forward them to Gracie Tong and Marvin Tang at IR@gracellbio.com.
| 16. | Am I allowed to post about this on social media? |
Due to the sensitive nature of this transaction, we request
that you only share information related to the transaction, if you wish to do so, that is posted directly and publicly by Gracell. You
should refrain from adding any additional commentary to your post.
| 17. | Am I allowed to share the news right away with family
and friends? |
Since this news was shared through a press release with
the public, you may share the information that was in the press release with anyone outside the company, but should refrain from adding
any additional commentary. Importantly, we would like to strongly remind you that you may only share information that is already in the
public domain and not share confidential information such as our programs, and priorities as well as any other matters that are not generally
known to anyone outside the organisation.
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