UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )
Juno Therapeutics, Inc.
(Name of Issuer)
Common Stock, par value $0.0001 per share
(Title of Class of Securities)
48205A109
(CUSIP Number)
Joseph P. Whitford
Ryan J. York
Davis Wright Tremaine LLP
1201 Third Avenue, Suite 2200
Seattle, WA 98101
(206) 622-3150
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
December 18, 2014
(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 §§ 240.13d-1(e), 240.13d-1(f), or 240.13d-1(g), check the following box. ¨
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.
* | The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the 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 Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 48205A109 |
1 | Names of reporting persons
Douglas K. Bratton | |||||
2 | Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
| |||||
3 | SEC use only
| |||||
4 | Source of funds (see instructions)
AF | |||||
5 | Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
| |||||
6 | Citizenship or place of organization
United States Citizen | |||||
Number of shares beneficially owned by each reporting person with
|
7 | Sole voting power:
| ||||
8 | Shared voting power:
27,084,525(1) | |||||
9 | Sole dispositive power:
| |||||
10 | Shared dispositive power:
27,084,525(1) | |||||
11 |
Aggregate amount beneficially owned by each reporting person
27,084,525(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
30.0%(2) | |||||
14 | Type of reporting person (see instructions)
IN |
(1) | Consists of (a) 25,766,130 shares held by CL Alaska, L.P. (CLA) and (b) 1,318,395 shares held by JT Line Partners L.P. (JT). As explained more fully in Item 5 herein, Mr. Bratton ultimately controls CLA and JT and has voting and investment power over all of these shares. |
(2) | Based on 90,426,361 shares of Common Stock outstanding as reported in the Issuers Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2014. |
CUSIP No. 48205A109 |
1 | Names of reporting persons
Crestline Investors, Inc. (Crestline) | |||||
2 | Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
| |||||
3 | SEC use only
| |||||
4 | Source of funds (see instructions)
AF | |||||
5 | Check if disclosure of legal proceedings is required pursuant to Items 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:
| ||||
8 | Shared voting power:
25,766,130(1) | |||||
9 | Sole dispositive power:
| |||||
10 | Shared dispositive power:
25,766,130(1) | |||||
11 |
Aggregate amount beneficially owned by each reporting person
25,766,130(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
28.5%(2) | |||||
14 | Type of reporting person (see instructions)
CO |
(1) | Consists of 25,766,130 shares held by CLA. As explained more fully in Item 5 herein, Crestline is the general partner of CLAs investment manager and general partner, and may be deemed to beneficially own these shares held by CLA. |
(2) | Based on 90,426,361 shares of Common Stock outstanding as reported in the Issuers Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2014. |
CUSIP No. 48205A109 |
1 | Names of reporting persons
Crestline SI (GP), L.P. (Crestline SI) | |||||
2 | Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
| |||||
3 | SEC use only
| |||||
4 | Source of funds (see instructions)
AF | |||||
5 | Check if disclosure of legal proceedings is required pursuant to Items 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:
| ||||
8 | Shared voting power:
25,766,130(1) | |||||
9 | Sole dispositive power:
| |||||
10 | Shared dispositive power:
25,766,130(1) | |||||
11 |
Aggregate amount beneficially owned by each reporting person
25,766,130(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
28.5%(2) | |||||
14 | Type of reporting person (see instructions)
PN |
(1) | Consists of 25,766,130 shares held by CLA. As explained more fully in Item 5 herein, Crestline SI is the general partner of CLA, and may be deemed to beneficially own these shares held by CLA. |
(2) | Based on 90,426,361 shares of Common Stock outstanding as reported in the Issuers Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2014. |
CUSIP No. 48205A109 |
1 | Names of reporting persons
Crestline Management, L.P. (Crestline Management) | |||||
2 | Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
| |||||
3 | SEC use only
| |||||
4 | Source of funds (see instructions)
AF | |||||
5 | Check if disclosure of legal proceedings is required pursuant to Items 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:
| ||||
8 | Shared voting power:
25,766,130(1) | |||||
9 | Sole dispositive power:
| |||||
10 | Shared dispositive power:
25,766,130(1) | |||||
11 |
Aggregate amount beneficially owned by each reporting person
25,766,130(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
28.5%(2) | |||||
14 | Type of reporting person (see instructions)
PN |
(1) | Consists of 25,766,130 shares held by CLA. As explained more fully in Item 5 herein, Crestline Management is the investment manager of CLA, and may be deemed to beneficially own these shares held by CLA. |
(2) | Based on 90,426,361 shares of Common Stock outstanding as reported in the Issuers Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2014. |
CUSIP No. 48205A109 |
1 | Names of reporting persons
CL Alaska, L.P. | |||||
2 | Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
| |||||
3 | SEC use only
| |||||
4 | Source of funds (see instructions)
WC | |||||
5 | Check if disclosure of legal proceedings is required pursuant to Items 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:
| ||||
8 | Shared voting power:
25,766,130 | |||||
9 | Sole dispositive power:
| |||||
10 | Shared dispositive power:
25,766,130 | |||||
11 |
Aggregate amount beneficially owned by each reporting person
25,766,130 | |||||
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
28.5%(1) | |||||
14 | Type of reporting person (see instructions)
PN |
(1) | Based on 90,426,361 shares of Common Stock outstanding as reported in the Issuers Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2014. |
Schedule 13D
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the common stock, $0.0001 par value per share (Common Shares) of Juno Therapeutics, Inc., a Delaware corporation (the Issuer). The principal executive office of the Issuer is located at 307 Westlake Avenue North, Suite 300, Seattle, Washington 98109.
ITEM 2. IDENTITY AND BACKGROUND
(a), (b), (c), (f) | The persons and entities filing this Schedule 13D are CL Alaska, L.P., a Delaware limited partnership (CLA), Crestline SI (GP), L.P., a Delaware limited partnership (Crestline SI), Crestline Management, L.P. (Crestline Management), a Delaware limited partnership, Crestline Investors, Inc., a Delaware corporation (Crestline), and Douglas K. Bratton (collectively, the Reporting Persons). A copy of their agreement in writing to file this statement on behalf of each of them is attached hereto as Exhibit A. Crestline SI is the general partner of CLA and Crestline Management is the investment manager of CLA. Crestline is the general partner of Crestline SI and Crestline Management. Mr. Bratton is the sole director of Crestline. Mr. Bratton, Caroline Ann Cooley and John S. Cochran are the executive officers of Crestline. | |
The address of the principal place of business for the Reporting Persons and the executive officers of Crestline is 201 Main Street, Suite 1900, Fort Worth, TX 76102. | ||
The principal business of each of the Reporting Persons is asset management. | ||
The name, citizenship and present principal occupation of each of the director and executive officers of Crestline are set forth below. | ||
Directors | Douglas K. Bratton USA Citizenship President and Chief Executive Officer, Crestline Investors, Inc. | |
Executive Officers | Caroline Ann Cooley USA Citizenship Vice President and Senior Portfolio Manager, Crestline Investors, Inc. | |
John S. Cochran USA Citizenship Vice President and Chief Operating Officer, Crestline Investors, Inc. | ||
(d), (e) | During the last five years, none of the Reporting Persons and none of the other persons identified in response to this Item 2 was convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. |
ITEM 3. | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION |
Prior to the initial public offering of the Issuers common shares (the IPO), CLA acquired 363,398 Common Shares and 24,777,732 shares of preferred stock (Preferred Shares) convertible into Common Shares, and J.T. Line Partners L.P. (JT) acquired 1,318,395 Preferred Shares. In connection with the IPO, CLA acquired 625,000 Common Shares for an aggregate purchase price of $15,000,000 and all of the Preferred Shares were converted into Common Shares on a 1-for-1 basis. CLA and JT used capital contributions from their respective partners to acquire their Preferred Shares and Common Shares. No part of the purchase price was borrowed by any Reporting Person for the purpose of acquiring any securities discussed in this Item 3.
ITEM 4. | PURPOSE OF THE TRANSACTION |
The shares acquired by CLA and JT in the transactions described in Item 3 herein were acquired solely for investment purposes.
Subject to the foregoing, none of the Reporting Persons have a present plan or proposal that relates to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D. However, each of the Reporting Persons reserves the right to propose or participate in future transactions which may result in one or more of such actions, including but not limited to, an extraordinary corporate transaction, such as a merger, reorganization or liquidation, sale of a material amount of assets of the Issuer, or other transactions which might have the effect of causing Common Shares to become eligible for termination of registration under Section 12(g) of the Act. The Reporting Persons also retain the right to change their investment intent at any time, to acquire additional Common Shares or other securities of the Issuer from time to time, or to sell or otherwise dispose of all or part of the Common Shares beneficially owned by them in any manner permitted by law.
ITEM 5. | INTEREST IN SECURITIES OF THE ISSUER |
(a) | CLA directly beneficially owns 25,766,130 Common Shares. The general partner of CLA is Crestline SI and the investment manager of CLA is Crestline Management. Crestline is the general partner of both Crestline SI and Crestline Management. Douglas K. Bratton is the sole director of Crestline. JT directly beneficially owns 1,318,395 Common Shares. The general partner of JT is Bratton Capital Management L.P. (Bratton Capital Management). The general partner of Bratton Capital Management is Bratton Capital Inc. (Bratton Capital). Douglas K. Bratton is the sole director of Bratton Capital. CLA and JT are ultimately controlled by Mr. Bratton and Mr. Bratton has voting and investment power over all Common Shares held by CLA and JT. CLA, Crestline SI, Crestline Management, Crestline and Mr. Bratton may each be deemed to beneficially own all Common Shares held of record by CLA, and JT, Bratton Capital Management, Bratton Capital and Mr. Bratton may each be deemed to beneficially own all Common Shares held of record by JT. Each such entity and Mr. Bratton disclaims beneficial ownership of Common Shares except to the extent of its or his respective pecuniary interest therein. | |
The aggregate of 27,084,525 Common Shares beneficially owned by the Reporting Persons represents approximately 30.0% of the outstanding Common Shares based on 90,426,361 Common Shares outstanding as reported in the Issuers Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2014. | ||
(b) | CLA, Crestline SI, Crestline Management, Crestline and Mr. Bratton share the power to vote and direct the vote and to dispose of and direct the disposition of the 25,766,130 Common Shares owned by CLA. JT, Bratton Capital Management, Bratton Capital and Mr. Bratton share the power to vote and direct the vote and to dispose of and direct the disposition of the 1,318,395 Common Shares owned by JT. | |
(c) | In connection with the IPO, on December 23, 2014, CLA acquired 625,000 Common Shares for an aggregate purchase price of $15,000,000. Other than such acquisition, the Reporting Persons have not effected any transaction in Common Shares during the sixty days preceding the date of this Schedule 13D. | |
(d) | Not applicable. | |
(e) | Not applicable. |
ITEM 6. | CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER |
Investors Rights Agreement
CLA, JT, the Issuer and certain other stockholders of the Issuer have entered into a Fourth Amended and Restated Investors Rights Agreement dated December 5, 2014 (the Investors Rights Agreement). Pursuant to the Investors Rights Agreement, CLA, JT and other stockholders are entitled to rights with respect to the registration of Common Shares held by them under the Securities Act of 1933. These rights include demand registration rights, short-form registration rights and piggyback registration rights. These registration rights will be triggered only if the Issuer determines to register its shares under the Securities Act of 1933 or if a specified percentage of stockholders require such listing after a certain period of time. All fees, costs and expenses of underwritten registrations will be borne by the Issuer (except under limited circumstances in the event that stockholders request a registration be withdrawn) and all selling expenses, including underwriting discounts and selling commissions, will be borne by the Issuer.
Additionally, the Investors Rights Agreement provides CLA with inspection rights, pursuant to which it may visit and inspect the Companys properties, examine its books and records and discuss its affairs with officers.
The Investors Rights Agreement also restricts the Issuers stockholders from making any disposition of Common Shares except pursuant to (i) an effective registration statement under the Securities Act of 1933 covering such disposition, (ii) an opinion of counsel or SEC no-action letter confirming that such registration is unnecessary for the disposition, or (iii) certain other limited exceptions.
Lock-up Agreement
In connection with the IPO, CLA, JT and certain other persons entered into lock-up agreements pursuant to which they agreed that, subject to specified limited exceptions, for a period of 180 days from December 18, 2014, they will not, without the prior written consent of the underwriter representatives, dispose of or hedge any Common Shares or any securities convertible into or exchangeable for Common Shares. The terms of the lock-up are more fully described in the prospectus dated December 18, 2014 filed by the Issuer on December 19, 2014 in respect of the IPO under the captions Shares Eligible for Future Sale and Underwriting.
The foregoing descriptions of the Investors Rights Agreement and Lock-up Agreement are qualified in their entirety by reference to the forms of the Fourth Amended and Restated Investors Rights Agreement and Lock-up Agreement, which are filed as exhibits to this Schedule 13D and are incorporated herein by reference.
ITEM 7. | MATERIAL TO BE FILED AS EXHIBITS |
Exhibit A | Joint Filing Agreement (filed herewith) | |
Exhibit B | Fourth Amended and Restated Investors Rights Agreement by Juno Therapeutics, Inc. and certain of its stockholders, dated December 5, 2014 (incorporated by reference to Exhibit 4.1 to the Issuers Amendment No. 2 to Form S-1 Registration Statement, as filed with the Securities and Exchange Commission on December 9, 2014 (SEC Reg. No. 333-200293)). | |
Exhibit C | Lock-up Agreement (filed herewith). |
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.
CL ALASKA, L.P. | ||||||||
By: | Crestline SI (GP), L.P., its general partner | |||||||
By: | Crestline Investors, Inc., its general partner | |||||||
Date: | 12/29/2014 |
By: | /s/ John S. Cochran | |||||
Name: | John S. Cochran | |||||||
Title: | Vice President | |||||||
CRESTLINE SI (GP), L.P. | ||||||||
By: | Crestline Investors, Inc., its general partner | |||||||
Date: | 12/29/2014 |
By: | /s/ John S. Cochran | |||||
Name: | John S. Cochran | |||||||
Title: | Vice President | |||||||
CRESTLINE MANAGEMENT, L.P. | ||||||||
By: | Crestline Investors, Inc., its general partner | |||||||
Date: | 12/29/2014 |
By: | /s/ John S. Cochran | |||||
Name: | John S. Cochran | |||||||
Title: | Vice President | |||||||
CRESTLINE INVESTORS, INC. | ||||||||
Date: | 12/29/2014 |
By: | /s/ John S. Cochran | |||||
Name: | John S. Cochran | |||||||
Title: | Vice President | |||||||
DOUGLAS K. BRATTON | ||||||||
Date: | 12/29/2014 |
/s/ Douglas K. Bratton |
EXHIBIT INDEX
Exhibit |
Description | |
A | Joint Filing Agreement (filed herewith). | |
B | Fourth Amended and Restated Investors Rights Agreement by Juno Therapeutics, Inc. and certain of its stockholders, dated December 5, 2014 (incorporated by reference to Exhibit 4.1 to the Issuers Amendment No. 2 to Form S-1 Registration Statement, as filed with the Securities and Exchange Commission on December 9, 2014 (SEC Reg. No. 333-200293)). | |
C | Lock-up Agreement (filed herewith). |
Exhibit A
AGREEMENT REGARDING JOINT FILING OF STATEMENT ON SCHEDULE 13D
Each of the undersigned hereby acknowledges and agrees, pursuant to the provisions of Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, that the Schedule 13D to which this Agreement is attached as an Exhibit, and any amendments thereto, with respect to the beneficial ownership of the undersigned of shares Juno Therapeutics, Inc., will be filed with the Securities and Exchange Commission jointly on behalf of the undersigned.
Dated: December 29, 2014 | CL ALASKA, L.P. | |||||
By: | Crestline SI (GP), L.P. | |||||
Its: | General Partner | |||||
By: | Crestline Investors, Inc. | |||||
Its: | General Partner | |||||
/s/ John S. Cochran | ||||||
By: | John S. Cochran | |||||
Title: | Vice President | |||||
CRESTLINE SI (GP), L.P. | ||||||
By: | Crestline Investors, Inc. | |||||
Its: | General Partner | |||||
/s/ John S. Cochran | ||||||
By: | John S. Cochran | |||||
Title: | Vice President | |||||
CRESTLINE MANAGEMENT, L.P. | ||||||
By: | Crestline Investors, Inc. | |||||
Its: | General Partner | |||||
/s/ John S. Cochran | ||||||
By: | John S. Cochran | |||||
Title: | Vice President | |||||
CRESTLINE INVESTORS, INC. | ||||||
/s/ John S. Cochran | ||||||
By: | John S. Cochran | |||||
Title: | Vice President | |||||
DOUGLAS K. BRATTON | ||||||
/s/ Douglas K. Bratton |
Exhibit C
LOCK-UP LETTER
September 11, 2014
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
Goldman, Sachs & Co.
as Representatives of the several Underwriters named in
Schedule I to the Underwriting Agreement referred to below
c/o Morgan Stanley & Co. LLC
1585 Broadway
New York, NY 10036
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
c/o Goldman, Sachs & Co.
200 West Street
New York, NY 10282
Ladies and Gentlemen:
The undersigned understands that Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Goldman, Sachs & Co. (the Representatives) propose to enter into an Underwriting Agreement (the Underwriting Agreement) with Juno Therapeutics, Inc., a Delaware corporation (the Company), providing for the public offering (the Public Offering) by the several Underwriters, including the Representatives (the Underwriters), of shares (the Shares) of the common stock, par value $0.0001 per share of the Company (the Common Stock).
To induce the Underwriters that may participate in the Public Offering to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the period commencing on the date hereof and ending on, and including, the date that is 180 days after the effective date of the registration statement (the Restricted Period) relating to the Public Offering (the Prospectus), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock beneficially owned (as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the Exchange Act)), by the undersigned or any other securities so owned convertible into or exercisable or exchangeable for Common Stock or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing paragraph shall not apply to:
(a) transactions relating to shares of Common Stock or other securities sold or acquired in the Public Offering (other than any issuer-directed shares of Common Stock purchased in the Public Offering by an officer or director of the Company) or acquired in open market transactions after the completion of the Public Offering, provided that no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made in connection with subsequent sales of Common Stock or other securities acquired in such open market transactions;
(b) transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock (i) by will or intestacy, (ii) by bona fide gift or charitable contribution, (iii) to the spouse, domestic partner, parent, sibling, child or grandchild (each, an immediate family member) of the undersigned or to a trust formed for the benefit of one or more immediate family members, (iv) if the undersigned is a corporation, partnership or other business entity (x) to another corporation, partnership or other business entity that controls, is controlled by or is under common control with the undersigned or (y) as part of a disposition, transfer or distribution without consideration by the undersigned to its equity holders, limited partners or members or (v) if the undersigned is a trust, to a trustee or beneficiary of the trust, provided that in the case of any transfer or distribution pursuant to this clause (b), each transferee, donee or distributee shall execute and deliver to the Representatives a lock-up letter substantially in the form of this Letter Agreement, and provided, further, in the case of clauses (ii) through (v), that no filing under Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of shares of Common Stock or other public announcement shall be required or shall be voluntarily made during the Restricted Period (provided, however, that the undersigned shall be permitted to make required filings on a Schedule 13D, Form 13F or Schedule 13G under the Exchange Act, provided that any such filings shall not be made in connection with a transfer, disposition or distribution of Common Stock or any security convertible into or exercisable of exchangeable for Common Stock);
(c) the transfer of shares of Common Stock or any securities convertible into Common Stock to the Company upon a vesting event of the Companys securities or upon the exercise of options or warrants to purchase the Companys securities, in each case on a cashless or net exercise basis or to cover tax withholding obligations of the undersigned in connection with such vesting or exercise, provided that the underlying shares of Common Stock continue to be subject to the restrictions set forth in this Letter Agreement and, provided, further, that no filing under Section 16(a) of the Exchange Act reporting a disposition of shares of Common Stock or other public announcement shall be required or shall be made voluntarily in connection with such vesting or exercise during the Restricted Period;
(d) the exercise of options for cash to purchase shares of Common Stock granted under a stock incentive plan or stock purchase plan described in the Prospectus, or the exercise of warrants for cash to purchase shares of Common Stock described in the Prospectus and outstanding as of the date of the Prospectus, provided, that the underlying shares of Common Stock continue to be subject to the restrictions set forth in this Letter Agreement;
(e) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Common Stock, provided that (i) such plan does not provide for the transfer of Common Stock during the Restricted Period and (ii) to the extent a public announcement or filing under the Exchange Act regarding the establishment of such plan is required of or is voluntarily made by or on behalf of the undersigned or the Company, such announcement or filing shall include a statement to the effect that no transfer of Common Stock may be made under such plan during the Restricted Period;
(f) the conversion of the outstanding preferred stock of the Company into shares of Common Stock, provided that such shares of Common Stock remain subject to the terms of this Letter Agreement;
(g) the transfer of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to the Company, pursuant to agreements under which the Company has the option to repurchase such shares or a right of first refusal with respect to transfers of such shares;
(h) the transfer of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock that occurs by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement; provided that (i) with respect to any transfer in connection with a divorce settlement, each transferee shall execute and deliver to the Representatives a lock-up letter substantially in the form of this Letter Agreement and (ii) to the extent a public announcement or filing under the Exchange Act regarding the transfer is required of or is voluntarily made by or on behalf of the undersigned or the Company, such announcement or filing shall include a statement to the effect that the transfer was made by operation of law and, if applicable, pursuant to a qualified domestic order or in connection with a divorce settlement, as applicable;
(i) the transfer of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of the Common Stock involving a change of control of the Company (including, without limitation, entering into any lock-up, voting or similar agreement pursuant to which the undersigned may agree to transfer, sell, tender or otherwise dispose of Common Stock or such other securities in connection with any such transaction, or vote any securities in favor of any such transaction) that has been approved by the board of directors of the Company, provided that if the tender offer, merger, consolidation or other such transaction is not completed, the Common Stock owned by the undersigned shall remain subject to the restrictions contained in this Letter Agreement; or
(j) the exercise of any right with respect to, or the taking of any other action in preparation for, a registration by the Company of shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, provided that no transfer of the undersigneds Common Stock registered pursuant to the exercise of such rights under this item shall occur, and no registration statement shall be filed, during the Restricted Period.
For the purposes of clause (i), a 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 the Underwriters pursuant to the Public Offering), of shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock if, after such transfer, the stockholders of the Company immediately prior to such transfer do not own a majority of the outstanding voting securities of the Company (or the surviving entity).
In addition, the undersigned agrees that, subject to the exception set forth in paragraph (j) above, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the Restricted Period, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock. The undersigned also agrees and consents to the entry of stop transfer instructions with the Companys transfer agent and registrar against the transfer of the undersigneds shares of Common Stock except in compliance with the foregoing restrictions.
If the undersigned is an officer or director of the Company, the undersigned further agrees that the foregoing provisions shall be equally applicable to any issuer-directed Shares the undersigned may purchase in the Public Offering.
If the undersigned is an officer or director of the Company, (i) the Representatives agree that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of Common Stock, the Representatives will notify the Company of the impending release or waiver, and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representatives hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.
By accepting the obligations of the undersigned contained herein, each of the Representatives, on behalf of the underwriters, agrees that if the Representatives waive or terminate any of the foregoing restrictions in connection with a transfer of capital stock of the Company, with respect to any of the securities of any executive officer or director of the Company or person that held at least 1% of the Common Stock prior to the Public Offering (calculated on an as-converted, fully-diluted basis and as of the close of business on the date set forth on the final prospectus used to sell the Shares) (a Triggering Release), the provisions of this letter agreement shall be waived or terminated, as applicable, to the same extent and on the same terms with respect to the same pro rata percentage of securities of the undersigned as the percentage of Common Stock being released in the Triggering Release represent with respect to the securities held by the applicable executive officer, director or greater-than-1% stockholder. Notwithstanding the foregoing, no waiver or termination will constitute a Triggering Release, if (a) the aggregate fair market value of such releases to such security holders (whether in one or multiple releases) is less than or equal to $1,000,000 in the aggregate (such fair market value to be calculated using the closing or last reported sale price of the Common Stock on the date of each such release) or (b) such waiver or termination, in full or in part, is in connection with any underwritten public offering, whether or not such offering or sale is wholly or partially a secondary offering of the Common Stock during the Restricted Period (a Follow-on Offering); provided that the undersigned, to the extent the undersigned has a contractual right to demand or require the registration of the undersigneds Common Stock or otherwise piggyback on a registration statement filed by the Company for the offer and sale of its Common Stock, (i) shall be offered the opportunity to participate on a pro rata basis consistent with such contractual rights in such Follow-on Offering and on pricing terms that are no less favorable than the terms of the Follow-on Offering or (ii) such contractual rights are waived pursuant to the terms thereof; and in the event the Underwriters make the determination to cut back the number of securities to be sold by stockholders in the Follow-on Offering, such cut back shall be on a basis consistent with such contractual rights.
The undersigned understands that the Company and the Underwriters are relying upon this Letter Agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this Letter Agreement is irrevocable and shall be binding upon the undersigneds heirs, legal representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters.
The undersigned understands that, (i) if either the Representatives, on the one hand, or the Company, on the other hand, informs the other, prior to the execution of the Underwriting Agreement, that it has determined not to proceed with the Public Offering, (ii) if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Securities to be sold thereunder, (iii) if the registration statement related to the Public Offering has been withdrawn prior to the execution of the Underwriting Agreement or
(iv) the Underwriting Agreement is not executed on or before March 31, 2015, the undersigned shall be automatically released from all obligations under this Letter Agreement.
This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
[Signature page to follow]
Very truly yours, | ||
CL Alaska, L.P. | ||
/s/ John S. Cochran | ||
Signature | ||
John S. Cochran | ||
Print name of signatory | ||
Vice President of General Partner | ||
Print title of signatory | ||
Address: | 201 Main Street, Suite 1900 | |
Fort Worth, TX 76102 |
Signature page to Lock-up Letter