UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Madrigal Pharmaceuticals, Inc.
(Name of Issuer)
Common Stock, par value $0.0001 per share
(Title of Class of Securities)
558868105
(CUSIP number)
Alexandra A. Toohey
Chief Financial Officer
Baker Bros. Advisors LP
860 Washington Street, 3rd Floor
New York, NY 10014
(212) 339-5690
(Name, address and telephone number of person authorized to receive notices and communications)
October 3, 2023
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. x
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
| CUSIP No. 558868105 | Page 2 of 10 Pages |
1.
|
NAMES OF REPORTING PERSONS
Baker Bros. Advisors LP
| |
2.
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
(a) ¨ (b) ¨ |
3.
|
SEC USE ONLY
| |
4.
|
SOURCE OF FUNDS* OO | |
5.
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
6.
|
CITIZENSHIP OR PLACE OF ORGANIZATION Delaware | |
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7. |
SOLE VOTING POWER 2,015,760 (1) |
8. |
SHARED VOTING POWER: 0 | |
9. |
SOLE DISPOSITIVE POWER: 2,015,760 (1) | |
10. |
SHARED DISPOSITIVE POWER: 0 |
|
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 2,015,760 (1) | |
12.
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
|
¨ |
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.99% (1)(2) | |
14. |
TYPE OF REPORTING PERSON (See Instructions)
IA, PN | |
| (1) | Includes 470,647 shares of common stock (“Common Stock”) of Madrigal Pharmaceuticals, Inc. (the “Issuer”) issuable upon the exercise of 470,647 Pre-Funded Warrants (as defined in Item 4 and subject to a beneficial ownership limitation as described therein). |
| (2) | Based on 19,707,131 shares of Common Stock outstanding as of October 3, 2023, as reported in the Issuer’s Prospectus filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2023. |
| CUSIP No. 558868105 | Page 3 of 10 Pages |
1.
|
NAMES OF REPORTING PERSONS
Baker Bros. Advisors (GP) LLC
| |
2.
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
(a) ¨ (b) ¨ |
3.
|
SEC USE ONLY
| |
4.
|
SOURCE OF FUNDS* OO | |
5.
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
6.
|
CITIZENSHIP OR PLACE OF ORGANIZATION Delaware | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7. |
SOLE VOTING POWER 2,015,760 (1) |
8. |
SHARED VOTING POWER: 0 | |
9. |
SOLE DISPOSITIVE POWER: 2,015,760 (1) | |
10. |
SHARED DISPOSITIVE POWER: 0 |
|
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 2,015,760 (1) | |
12.
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
|
¨ |
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.99% (1)(2) | |
14. |
TYPE OF REPORTING PERSON (See Instructions)
HC, OO | |
| (1) | Includes 470,647 shares of Common Stock issuable upon the exercise of 470,647 Pre-Funded Warrants (as defined in Item 4 and subject to a beneficial ownership limitation as described therein). | |
| (2) | Based on 19,707,131 shares of Common Stock outstanding as of October 3, 2023, as reported in the Issuer’s Prospectus filed with the SEC on October 2, 2023. |
| CUSIP No. 558868105 | Page 4 of 10 Pages |
1.
|
NAMES OF REPORTING PERSONS
Julian C. Baker
| |
2.
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
(a) ¨ (b) ¨ |
3.
|
SEC USE ONLY
| |
4.
|
SOURCE OF FUNDS* OO | |
5.
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
6.
|
CITIZENSHIP OR PLACE OF ORGANIZATION United States | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7. |
SOLE VOTING POWER: 2,015,760 (1) |
8. |
SHARED VOTING POWER: 0 | |
9. |
SOLE DISPOSITIVE POWER: 2,015,760 (1) | |
10. |
SHARED DISPOSITIVE POWER: 0 |
|
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 2,015,760 (1) | |
12.
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
|
¨ |
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.99% (1)(2) | |
14. |
TYPE OF REPORTING PERSON (See Instructions)
IN, HC | |
| (1) | Includes 470,647 shares of Common Stock issuable upon the exercise of 470,647 Pre-Funded Warrants (as defined in Item 4 and subject to a beneficial ownership limitation as described therein). | |
| (2) | Based on 19,707,131 shares of Common Stock outstanding as of October 3, 2023, as reported in the Issuer’s Prospectus filed with the SEC on October 2, 2023. |
| CUSIP No. 558868105 | Page 5 of 10 Pages |
1.
|
NAMES OF REPORTING PERSONS
Felix J. Baker | |
2.
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
(a) ¨ (b) ¨ |
3.
|
SEC USE ONLY
| |
4.
|
SOURCE OF FUNDS (See Instructions) OO | |
5.
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
|
¨ |
6.
|
CITIZENSHIP OR PLACE OF ORGANIZATION United States | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7. |
SOLE VOTING POWER: 2,015,760 (1) |
8. |
SHARED VOTING POWER: 0 | |
9. |
SOLE DISPOSITIVE POWER: 2,015,760 (1) | |
10. |
SHARED DISPOSITIVE POWER: 0 |
|
11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 2,015,760 (1) | |
12.
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
|
¨ |
13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.99% (1)(2) | |
14. |
TYPE OF REPORTING PERSON (See Instructions)
IN, HC | |
| (1) | Includes 470,647 shares of Common Stock issuable upon the exercise of 470,647 Pre-Funded Warrants (as defined in Item 4 and subject to a beneficial ownership limitation as described therein). |
| (2) | Based on 19,707,131 shares of Common Stock outstanding as of October 3, 2023, as reported in the Issuer’s Prospectus filed with the SEC on October 2, 2023. |
Amendment No. 2 to Schedule 13D
This Amendment No.2 to Schedule 13D amends and supplements the previously filed Schedules 13D filed by Baker Bros. Advisors LP (the “Adviser”), Baker Bros. Advisors (GP), LLC (the “Adviser GP”), Julian C. Baker and Felix J. Baker (collectively the “Reporting Persons”). Except as supplemented herein, such statements, as heretofore amended and supplemented, remain in full force and effect.
The Adviser GP is the sole general partner of the Adviser. Pursuant to the management agreements, as amended, among the Adviser, Baker Brothers Life Sciences, L.P. (“Life Sciences”) and 667, L.P. (“667”, and together with Life Sciences, the “Funds”), and their respective general partners, the Funds’ respective general partners relinquished to the Adviser all discretion and authority with respect to the investment and voting power over securities held by the Funds, and thus the Adviser has complete and unlimited discretion and authority with respect to the Funds’ investments and voting power over investments.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of this Schedule 13D is supplemented and amended, as the case may be, as follows:
The disclosure in Item 4 below is incorporated herein by reference.
Item 4. Purpose of the Transaction.
Item 4 of this Amendment No. 2 is supplemented and amended, as the case may be, as follows:
On September 28, 2023, Madrigal Pharmaceuticals, Inc. (the “Issuer”) entered into an underwriting agreement (the “Underwriting Agreement”) with Goldman Sachs & Co. LLC, Jefferies LLC, Cowen and Company, LLC, Evercore Group L.L.C. and Piper Sandler & Co., (the “Underwriters”), related to the public offering (the “Offering”) of 1,248,098 shares of Common Stock at a price to the public of $151.69 per share and prefunded warrants to purchase 2,048,098 shares of Common Stock (the “Prefunded Warrants”) at a price to the public of $151.6899 per warrant. The Prefunded Warrants are exercisable at any time on a 1-for-1 basis at an exercise price of $0.0001 per share into Common Stock, subject to the limitations discussed below and have no expiration date. In addition, the Issuer granted the Underwriters an option exercisable for 30 days from the date of the Underwriting Agreement to purchase, at the public offering price less any underwriting discounts and commissions, up to an additional 494,429 shares of Common Stock to cover overallotments, if any. The Offering closed on October 3, 2023.
Pursuant to the Offering, 667 and Life Sciences purchased 125,447 and 1,522,651 Prefunded Warrants respectively, at the offering price of $151.6899 per warrant, totaling 1,648,098 Prefunded Warrants in the aggregate. Each of 667 and Life Sciences purchased the Prefunded Warrants with their working capital.
The Prefunded Warrants are exercisable on a 1-for-1 basis at any time at the election of the holder into shares of Common Stock subject to beneficial ownership limitations as described below. The Prefunded Warrants are only exercisable to the extent that after giving effect to such exercise the holders thereof, together with their affiliates and any members of a Section 13(d) group with such holders, would beneficially own, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), no more than 9.99% of the outstanding shares of Common Stock (the “Maximum Percentage”). By written notice to the Issuer, the Funds may from time to time increase or decrease the Maximum Percentage applicable to that Fund to any other percentage not in excess of 19.99%. Any such increase will not be effective until the 61st day after such notice is delivered to the Issuer. As a result of this restriction, the number of shares that may be issued upon exercise of the Prefunded Warrants by the above holders may change depending upon changes in the number of outstanding shares of Common Stock.
The Funds hold securities of the Issuer for investment purposes. The Reporting Persons or their affiliates may purchase additional securities or dispose of securities in varying amounts and at varying times depending upon the Reporting Persons’ continuing assessments of pertinent factors, including the availability of shares of Common Stock or other securities for purchase at particular price levels, the business prospects of the Issuer, other business investment opportunities, economic conditions, stock market conditions, money market conditions, the attitudes and actions of the Board and management of the Issuer, the availability and nature of opportunities to dispose of securities of the Issuer and other plans and requirements of the particular entities. The Reporting Persons may discuss items of mutual interest with the Issuer’s management, other members of the Board and other investors, which could include items in subparagraphs (a) through (j) of Item 4 Schedule 13D.
Depending upon their assessments of the above factors, the Reporting Persons or their affiliates may change their present intentions as stated above and they may assess whether to make suggestions to the management of the Issuer regarding financing, and whether to acquire additional securities of the Issuer (by means of open market purchases, privately negotiated purchases, conversion of some or all of the Convertible Preferred (as defined in Item 5), exercise of some or all of the Prefunded Warrants subject to limitations described in Item 4, or otherwise) or to dispose of some or all of the securities of the Issuer under their control.
| Item 5. | Interest in Securities of the Issuer. |
Item 5 of this Schedule 13D is hereby supplemented and amended, as the case may be, as follows:
(a) and (b) Items 7 through 11 and 13 of each of the cover pages of this Amendment No. 2 are incorporated herein by reference.
Set forth below is the aggregate number of shares of Common Stock directly held by each of the Funds, which may be deemed to be indirectly beneficially owned by the Reporting Persons, as well as shares of Common Stock that may be acquired upon conversion of Series A Convertible Preferred Stock (as defined below) and Series B Convertible Preferred Stock (as defined below), subject to the limitations on conversion described below and shares of Common Stock that may be acquired upon exercise of the Prefunded warrants, subject to the limitations on conversion described in Item 4.
| Name | Common Stock | Series A Preferred Stock | Series B Preferred Stock | Prefunded Warrants | ||||||||||||
| 667, L.P. | 148,821 | 200,378 | 39,250 | 125,447 | ||||||||||||
| Baker Brothers Life Sciences, L.P. | 1,396,292 | 1,769,419 | 360,750 | 1,522,651 | ||||||||||||
| Total | 1,545,113 | 1,969,797 | 400,000 | 1,648,098 | ||||||||||||
The Funds hold shares of the Issuer’s Series A convertible preferred stock (“Series A Convertible Preferred Stock”), a common stock equivalent with no voting rights, that is convertible into shares of Common Stock on a 1-for-1 basis. However, the shares of Series A Convertible Preferred Stock are only convertible to the extent that after giving effect to such conversion the holders thereof and their affiliates and any persons who are members of a Section 13(d) group with the holders would beneficially own in the aggregate, for purposes of Rule 13d-3 under the Exchange Act, no more than 4.99% of the outstanding Common Stock of the Issuer (“Series A Beneficial Ownership Limitation”). As a result of the Series A Beneficial Ownership Limitation, the number of shares of Common Stock that may be issued upon conversion of the shares of Series A Convertible Preferred Stock by the above holders may change depending upon changes in the outstanding shares of Common Stock. By notice to the Issuer, the Funds may increase or decrease the Series A Beneficial Ownership Limitation applicable to that Fund to any other percentage; provided that any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Issuer. Due to such Series A Beneficial Ownership Limitation, the Funds cannot presently convert any shares of Series A Convertible Preferred Stock.
In addition, the Funds hold shares of the Issuer’s Series B convertible preferred stock (“Series B Convertible Preferred Stock” and together with Series A Convertible Preferred Stock, “the Convertible Preferred”), a common stock equivalent with no voting rights, that is convertible into shares of Common Stock on a 1-for-1 basis. However, the shares of Series B Convertible Preferred Stock are only convertible to the extent that immediately prior to or after giving effect to such conversion the holders thereof and their affiliates and any persons who are members of a Section 13(d) group with the holders would beneficially own in the aggregate, for purposes of Rule 13d-3 under the Exchange Act, no more than 4.99% of the outstanding Common Stock of the Issuer (“Series B Beneficial Ownership Limitation”). As a result of the Series B Beneficial Ownership Limitation, the number of shares of Common Stock that may be issued upon conversion of the shares of Series B Convertible Preferred Stock by the above holders may change depending upon changes in the outstanding shares of Common Stock. By notice to the Issuer, the Funds may increase or decrease the Series B Beneficial Ownership Limitation applicable to that Fund to any other percentage not in excess of 19.99%; provided that any such increase will not be effective until the 61st day after such notice is delivered to the Issuer.
The Adviser GP is the sole general partner of the Adviser. Pursuant to the management agreements, as amended, among the Adviser, the Funds and their respective general partners, the Funds’ respective general partners relinquished to the Adviser all discretion and authority with respect to the investment and voting power of the securities held by the Funds, and thus the Adviser has complete and unlimited discretion and authority with respect to the Funds’ investments and voting power over investments.
As compensation for their service on the board of directors of the Issuer (the “Board”), each of Julian C. Baker and Dr. Raymond Cheong, a full-time employee of the Adviser, hold 2,396 restricted stock units (each an “RSU”) which vest solely into shares of Common Stock on a 1-for-1 basis on June 15, 2024. The policies of the Funds and the Adviser do not permit managing members of the Adviser GP or full-time employees of the Adviser to receive compensation for serving as directors of the Issuer, and the Funds are instead entitled to the pecuniary interest in any compensation received for Julian C. Baker’s and Dr. Cheong’s service on the Board.
(c) The information set forth in Item 4 is hereby incorporated by reference into this Item 5(c). Except as disclosed herein, none of the Reporting Persons or their affiliates has effected any other transactions in securities of the Issuer during the past 60 days.
(d) Certain securities of the Issuer are held directly by 667, a limited partnership the sole general partner of which is Baker Biotech Capital, L.P., a limited partnership the sole general partner of which is Baker Biotech Capital (GP), LLC. Julian C. Baker and Felix J. Baker are the managing members of Baker Biotech Capital (GP), LLC.
Certain securities of the Issuer are held directly by Life Sciences, a limited partnership the sole general partner of which is Baker Brothers Life Sciences Capital, L.P., a limited partnership the sole general partner of which is Baker Brothers Life Sciences Capital (GP), LLC. Julian C. Baker and Felix J. Baker are the managing members of Baker Brothers Life Sciences Capital (GP), LLC.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to the Securities.
Item 6 of Schedule 13D is supplemented and amended, as the case may be, as follows:
Prefunded Warrants
The disclosure in Item 4 regarding the Prefunded Warrants is incorporated herein by reference. The foregoing description of the Prefunded Warrants does not purport to be complete and is qualified in its entirety by reference to the full text of the form of the Prefunded Warrants, which is incorporated by reference as Exhibit 99.1 hereto and is incorporated herein by reference.
Director Lock-Up Agreements
On September 28, 2023, Julian C. Baker and Raymond Cheong, in their personal capacities, entered into Lock-Up Agreements (the “Director Lock-Up Agreements”) pursuant to which each such signatory agreed, during the period beginning September 28, 2023 and continuing to and including the date 60 days after the date of the final Prospectus covering the Offering, not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, distribution, transfer or otherwise dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock, subject in each case to various typical exceptions.
The foregoing description of the Director Lock-Up Agreements is qualified in its entirety by reference to the full text of the Director Lock-Up Agreements, the form of which is filed as Exhibit 99.2 and is incorporated herein by reference.
Item 7. Materials to be filed as Exhibits.
| Exhibit | Description |
| 99.1 | Form of Prefunded Warrant (incorporated by reference to Exhibit 4.1 to the Issuer’s Current Report on Form 8-K, filed with the SEC on October 2, 2023). |
| 99.2 | Form of Director Lock-Up Agreement. |
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: October 5, 2023
BAKER BROS. ADVISORS LP
By: Baker Bros. Advisors (GP) LLC, its general partner | ||
| By: | /s/ Scott L. Lessing | |
| Name:
Scott L. Lessing Title: President | ||
| BAKER BROS. ADVISORS (GP) LLC | ||
| By: | /s/ Scott L. Lessing | |
| Name:
Scott L. Lessing Title: President | ||
| /s/ Julian C. Baker | |
| Julian C. Baker |
| /s/ Felix J. Baker | |
| Felix J. Baker |
Exhibit 99.2
SCHEDULE B
Madrigal Pharmaceuticals, Inc.
Lock-Up Agreement
September 28, 2023
Goldman Sachs & Co.LLC
200 West Street
New York, NY 10282-2198
Re: Madrigal Pharmaceuticals, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representative of the Underwriters (as defined below) (the “Representative”), propose to enter into an Underwriting Agreement on behalf of the several Underwriters named in Schedule I to such agreement (collectively, the “Underwriters”), with Madrigal Pharmaceuticals, Inc., a Delaware corporation (the “Company”), providing for a public offering of shares of Common Stock and Pre-Funded Warrants (the “Common Stock Offering”) of the Company (the “Shares”) pursuant to a prospectus (the “Prospectus”) to be filed with the Securities and Exchange Commission (the “SEC”). In the event only one underwriter is listed in Schedule 1 to the Underwriting Agreement, any references herein to the “Underwriters” shall be deemed to refer to the sole underwriter in the singular form listed in such Schedule 1.
In consideration of the agreement by the Underwriters to offer and sell the Shares, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date hereof and continuing to and including the date 60 days after the date of the final Prospectus covering the public offering of the Shares (the “Restricted Period”), the undersigned will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, distribution, transfer or otherwise dispose of any shares of Common Stock of the Company, or any options or warrants to purchase any shares of Common Stock of the Company, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock of the Company, whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the “Undersigned’s Shares”).
The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned’s Shares even if such Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any of the Undersigned’s Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such Shares.
1
If the undersigned is not a natural person, the undersigned represents and warrants that no single natural person, entity or “group” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), other than a natural person, entity or “group” (as defined above) that has executed a Lock-Up Agreement in substantially the same form as this Lock-Up Agreement, beneficially owns, directly or indirectly, 50% or more of the common equity interests, or 50% or more of the voting power, in the undersigned.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Shares (i) as a bona fide gift or gifts or by will, other testamentary document or intestate succession, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, (iii) pursuant to any order or settlement agreement approved by any court of competent jurisdiction, (iv) to any corporation, partnership, limited liability company or similar entity of which 100% of the beneficial ownership interests are owned by the undersigned or the immediate family of the undersigned, (v) to the undersigned's affiliates, shareholders, members, partners, subsidiaries or to any investment fund or other entity controlled or managed by the undersigned, (vi) by operation of law, including pursuant to a domestic order or negotiated divorce settlement, provided that (A) in the case of any transfer pursuant to clauses (i), (iii), (iv), (v), and (vi), each transferee agrees in writing to be bound by the restrictions set forth herein, (B) in the case of any transfer pursuant to clauses (iii), (iv), (v), and (vi), no public announcement or filing by any party (the undersigned, transferor or transferee) under the Exchange Act, shall be required or voluntarily made in connection with such transfer, (C) in the case of any transfer pursuant to clauses (i), (iii), (iv), (v), and (vi), any such transfer shall not involve a disposition for value and (D) in the case of any transfer pursuant to clause (i), no filing under the Exchange Act or other public filing, report or announcement shall be voluntarily made, and if any such filing, report or announcement shall be legally required during the Restricted Period, such filing, report or announcement shall clearly indicate in the footnotes thereto the circumstances of such transfer or distribution and that the transferee has agreed to be bound by the restrictions set forth herein, or (vii) with the prior written consent of Goldman Sachs & Co. LLC on behalf of the Underwriters.
In addition, the foregoing restriction shall not apply to (i) the establishment of a new trading plan pursuant to Rule 10b5-1 under the Exchange Act providing for dispositions or sales of the Undersigned’s Shares; provided that such plan does not permit dispositions or sales of the Undersigned’s Shares during the Restricted Period and no public announcement or filing under the Exchange Act regarding the establishment of such plan shall be required or voluntarily made during the Restricted Period, (ii) the exercise of options or other stock-based awards to purchase Common Stock of the Company or the vesting of restricted stock or other stock-based awards outstanding as of the date hereof or granted under equity incentive plans in effect as of the date hereof or described in the Prospectus and expiring during the Restricted Period; provided that the underlying Common Stock of the Company continues to be subject to the terms of this agreement, and provided further that any filing under Section 16(a) of the Exchange Act made in connection with such transfer shall clearly indicate in the footnotes thereto that the filing relates to the circumstances described in this clause (ii), (iii) transfers of the Undersigned’s Shares pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to holders of the Common Stock of the Company involving a Change of Control (as defined below) of the Company; provided that in the event that the tender offer, merger, consolidation or other such transaction is not completed during the Restricted Period, the Undersigned’s Shares shall remain subject to the foregoing restrictions during such period, (iv) the repurchase or forfeiture of the Undersigned’s Shares in connection with termination of the undersigned’s employment with the Company, (v) sales or transfers of the Undersigned’s Shares covered by trading plans adopted pursuant to Rule 10b5- 1 under the Exchange Act, or (vi) the settlement of options, restricted stock or other stock-based awards expiring during the Restricted Period on a “net” or “cashless” basis or any other withholding of shares of Common Stock by the Company upon vesting and/or settlement of options, restricted stock or other stock-based awards expiring during the Restricted Period to satisfy tax obligations; provided that (x) the underlying shares of Common Stock received by the undersigned shall continue to be subject to the restrictions set forth herein, (y) any such settled or withheld shares are surrendered to the Company in the net or cashless exercise and (z) that any filing under Section 16(a) of the Exchange Act made in connection with such transfer or disposition shall clearly indicate in the footnotes thereto the nature of the transfer or disposition.
2
For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. In addition, notwithstanding the foregoing, if the undersigned is a corporation, the corporation may transfer the capital stock of the Company to any wholly-owned subsidiary of such corporation; provided, however, that in any such case, it shall be a condition to the transfer that the transferee execute an agreement stating that the transferee is receiving and holding such capital stock subject to the provisions of this Agreement and there shall be no further transfer of such capital stock except in accordance with this Agreement, and provided further that any such transfer shall not involve a disposition for value. For purposes of this Lock-up Agreement, “Change of Control” means the transfer (whether by tender offer, merger, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an Underwriter pursuant to the Common Stock Offering), of the Company’s voting securities if, after such transfer, such person or group of affiliated persons would hold greater than 50% of the outstanding voting securities of the Company (or the surviving entity) and, for the avoidance of doubt, the Common Stock Offering is not a Change of Control. The undersigned now has, and, except as contemplated by the foregoing paragraph, for the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned’s Shares, free and clear of all liens, encumbrances, and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Undersigned’s Shares except in compliance with the foregoing restrictions.
If the Company notifies you in writing that it does not intend to proceed with the offering, or for any reason the Underwriting Agreement shall be terminated prior to October 31, 2023, this agreement shall be of no further force or effect.
The undersigned understands that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned further understands that this Lock- Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns.
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| Very truly yours, | |
| in his individual capacity and not on behalf of his employer, Baker Bros. Advisors LP, or the fund partnerships which it advises, which are explicitly not subject to this Lock-Up Agreement. | |
| Name: | |
| Title: |