Page 7 of 9 – SEC Filing
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer |
This Amendment amends the Original Schedule 13D to add the following immediately before the first paragraph of Item 6 of the Original
Schedule 13D:
On October 16, 2017 (the First Closing), pursuant to a subscription agreement, dated as of
October 2, 2017, between the Issuer and Roivant (the Subscription Agreement), Roivant acquired an aggregate of 500,000 shares (the Initial Preferred Shares) of the Issuers series A participating
convertible preferred shares (the Series A Preferred Shares) from the Issuer. Additionally, pursuant to the Subscription Agreement, Roivant will acquire an additional 664,000 Series A Preferred Shares (together with the Initial
Preferred Shares, the Preferred Shares) from the Issuer, following the requisite approval of the shareholders of the Issuer and the satisfaction of other applicable conditions. The aggregate purchase price of the Preferred Shares
is $116.4 million, representing a price per Preferred Share of $100.00, $50.0 million of which Roivant paid on October 16, 2017 (the Purchase Price). The Preferred Shares will initially be convertible into 22,833,922 Common
Shares which conversion will occur mandatorily four years after issuance (subject to limited exceptions in the event of certain transactions or fundamental changes that would permit earlier conversion at Roivants option).
Pursuant to the Subscription Agreement, on October 16, 2017, the Issuer filed an amendment to the Notice of Articles and the Articles of
the Issuer (the Preferred Shares Articles Amendment). The terms, rights, obligations and preferences of the Preferred Shares are set forth in the Preferred Shares Articles Amendment.
Preferred Share Rights and Restrictions
Dividends
In the event the Issuer
distributes to all or substantially all holders of Common Shares any cash, shares, evidences of the Issuers indebtedness or other assets, securities or property, including rights to acquire assets, securities or property, the holders of
Preferred Shares will be entitled to receive such dividend in cash (the Participating Cash Dividend) or such other distributed items (a Participating In-Kind Dividend) at the same time and in the same manner as
holders of Common Shares would have received if such Preferred Shares had been converted into Common Shares upon the Mandatory Conversion Date (as defined below).
Mandatory Conversion
On the fourth
anniversary of the First Closing (the Mandatory Conversion Date), any Preferred Shares not yet converted will be automatically converted into (i) a number of Common Shares equal to the amount determined by dividing
(A) the Purchase Price plus an amount equal to 8.75% of the Purchase Price per annum, compounded annually (the Liquidation Preference) by (B) the conversion price in effect at the time of conversion; (ii) cash for
any accrued but unpaid Participating Cash Dividends (to the extent not included in the Purchase Price) on the Preferred Shares being converted; and (iii) any accrued and unpaid Participating In-Kind Dividends.
Optional Conversion
Each Preferred Share
is initially convertible based on a conversion price of $7.13, subject to adjustment for certain distributions, recapitalizations, reclassifications and other transactions by the Issuer on or with respect to the Common Shares. In the event of a
transaction that involves (i) a fundamental transfer of value to the Common Shares in which the Preferred Shares do not have the right to participate or (ii) a Fundamental Change (as defined in the Preferred Shares Articles Amendment),
each Preferred Share may be converted prior to such transaction at the option of its holder into (A) a number of Common Shares equal to the amount determined by dividing (x) the Liquidation Preference (calculated giving effect to the
four-year period set forth in Mandatory Conversion above, irrespective of the date of conversion) by (y) the conversion price in effect at the time of conversion; (B) cash for any accrued but unpaid Participating Cash Dividends
(to the extent not included in the Purchase Price) on the Preferred Shares being converted; and (C) any accrued and unpaid Participating In-Kind Dividends.
Liquidation Preference; Ranking
In the
event of any liquidation, dissolution or winding up of the Issuer, the holders of the Preferred Shares will be entitled to receive an amount in cash equal to the amount that the holder of a Preferred Share would have been entitled to receive if such
Preferred Share had been converted into Common Shares upon the Mandatory Conversion Date. Neither the voluntary sale, conveyance, exchange or transfer of all or substantially all of the assets of the Issuer nor the consolidation or merger of
the Issuer with or into another entity will be deemed a liquidation, dissolution or winding up of the Issuer.
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