Common Stock (for consenting accredited stockholders of Ciitizen) and a cash payment (for all stockholders of Ciitizen) as specified in the Merger Agreement, (ii) each outstanding and unexercised Ciitizen stock option will be converted into the right to receive a cash payment as specified in the Merger Agreement, and (iii) each outstanding and unexercised Ciitizen warrant will be converted into the right to receive a cash payment as specified in the Merger Agreement. No fractional shares will be issued in connection with the Merger and any shares issuable to a single holder on a particular date will be aggregated and rounded up to the nearest whole number.
Closing Conditions; Closing Date
The obligations of the parties to consummate the Merger are subject to the satisfaction or waiver of various conditions set forth in the Merger Agreement, including, but not limited to (i) the accuracy of the representations and warranties of each party contained in the Merger Agreement (subject to certain materiality qualifications), (ii) each party’s compliance with or performance of the covenants and agreements in the Merger Agreement in all material respects, and (iii) execution of employment and non-competition agreements with the Company by certain employees of Ciitizen. The Merger is expected to close within the month of September 2021, subject to customary closing conditions.
Representations and Warranties; Covenants
The Merger Agreement contains customary representations and warranties by the Company and Ciitizen. The Merger Agreement also contains customary covenants and agreements, including with respect to the operations of the business of Ciitizen between signing and closing. The Merger Agreement restricts Ciitizen’s ability to participate in any discussions or negotiations with any third party with respect to any alternative transaction.
Termination
The Merger Agreement contains termination rights for the Company and Ciitizen, including if the Merger is not consummated within 60 days after the date of the Merger Agreement, which may be extended by the mutual consent of the Company and Ciitizen.
Registration Rights Agreement
In connection with the Ciitizen Transaction, the Company will enter into a Registration Rights Agreement with certain stockholders of Ciitizen (the “Registration Rights Agreement”), pursuant to which the Company will register for resale on Form S-3 the shares of Common Stock to be issued in the Merger. The Registration Rights Agreement provides that such registration rights will expire at such time as such shares of Common Stock have been disposed of pursuant to the resale registration statement or pursuant to Rule 144, or as to any holder when all of such holder’s shares may be sold pursuant to Rule 144 without limitation as to manner of sale restrictions or volume limitation.
RSU Agreements
In connection with the Ciitizen Transaction, the Company will grant restricted stock units for an aggregate of up to approximately 8,125,000 shares of Common Stock (the “Inducement Awards”), or approximately $225 million in Inducement Awards (based upon a trailing average closing price prior to the date of the Merger Agreement), to certain employees of Ciitizen in connection with and as an inducement to their post-closing employment by the Company (each, a “Continuing Employee”), pursuant to time-based restricted stock unit award agreements (the “RSU Agreements”). Under the RSU Agreements, the Company will issue shares of Common Stock to the Continuing Employees at such times, and upon such conditions (including with respect to the vesting of such shares), as are set forth therein.
The Inducement Awards will be granted as inducement awards in compliance with New York Stock Exchange Rule 303A.08 and pursuant to a pool solely for inducement awards established under the Invitae Corporation 2015 Stock Incentive Plan, which pool is being amended to increase the available shares of Common Stock in connection with the Ciitizen Transaction.
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