CIFR 8-K
Cipher Digital Inc. (CIFR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
Subscription Agreement
On January 30, 2025 (the “Issuance Date”), Cipher Mining Inc. (the “Company” or “Cipher”) entered into a subscription agreement (the “Subscription Agreement”) with Star Beacon LLC, a wholly owned subsidiary of SoftBank Group Corp. (“SoftBank”), pursuant to which, among other things, SoftBank agreed to subscribe for and purchase from the Company, and the Company agreed to issue and sell to SoftBank, an aggregate of approximately 10,438,413 newly issued shares of the Company’s common stock, par value $0.001 (“Common Stock”), at a per share purchase price of $4.79 for an aggregate purchase price of approximately $50 million, on the terms and subject to the conditions set forth therein (the “PIPE Transaction”). The issuance and sale of the Common Stock contemplated by the Subscription Agreement was completed on the Issuance Date. Additionally, the Company agreed that, prior to February 28, 2025, it would not enter into binding definitive documentation with respect to the sale, transfer, divestiture or encumbrance of the Company’s Barber Lake property with any person other than SoftBank and its affiliates (subject to customary exceptions).
The foregoing description of the Subscription Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Subscription Agreement, a copy of which is attached as Exhibit 10.1 hereto and is incorporated by reference herein.
Registration Rights Agreement
In connection with the PIPE Transaction, the Company and SoftBank entered into a registration rights agreement (the “Registration Rights Agreement”) on the Issuance Date in respect of the Common Stock (the “Registrable Securities”) acquired in the PIPE Transaction. Pursuant to the Registration Rights Agreement, the Company will be required to file a shelf registration statement with the Securities and Exchange Commission for the offer and sale of the Registrable Securities no later than the later of (i) the 30th calendar day following the Issuance Date, and (ii) the 5th calendar day following the date the Company files its annual report on Form 10-K for its fiscal year ended December 31, 2024, and will be required to use its reasonable best efforts to cause such registration statement to become and remain effective so long as any Registrable Securities remain outstanding. Furthermore, under the Registration Rights Agreement, SoftBank will have certain customary demand registration rights and piggyback registration rights.
The foregoing description of the Registration Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Registration Rights Agreement, a copy of which is attached as Exhibit 10.2 hereto and is incorporated by reference herein.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The Common Stock to be issued and sold to SoftBank pursuant to the Subscription Agreement will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.
The information set forth above regarding the Subscription Agreement contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
| Item 7.01 | Regulation FD Disclosure. |
On January 30, 2025, the Company issued a press release announcing it had entered into the Subscription Agreement and the Registration Rights Agreement with SoftBank. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1 attached hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly provided by specific reference in such a filing.
Forward Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the federal securities laws of the United States. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this Current Report on Form 8-K that are not statements of historical fact, such as, statements about Cipher’s beliefs and expectations regarding its planned business model and strategy, its HPC data center development, and management plans and objectives, are forward-looking statements and should be evaluated as such. These forward-looking statements generally are identified by the words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “strategy,” “future,” “forecasts,” “opportunity,” “predicts,” “potential,” “would,” “will likely result,” “continue,” and similar expressions (including the negative versions of such words or expressions).
These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Cipher and our management, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this Current Report on Form 8-K, including but not limited to: risks related to entering into exclusive arrangements with respect to the Barber Lake property, volatility in the price of Cipher’s securities due to a variety of factors, including changes in the competitive and regulated industry in which Cipher operates, Cipher’s evolving business model and strategy and efforts we may make to modify aspects of our business model or engage in various strategic initiatives, variations in performance across competitors, changes in laws and regulations affecting Cipher’s business, and the ability to implement business plans, forecasts, and other expectations and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”), as any such factors may be updated from time to time in the Company’s other filings with the SEC, including without limitation, the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Cipher assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description | |
| 10.1^ | Subscription Agreement, dated January 30, 2025, by and between Cipher Mining Inc. and Star Beacon LLC | |
| 10.2 | Registration Rights Agreement, dated January 30, 2025, by and between Cipher Mining Inc. and Star Beacon LLC | |
| 99.1 | Press Release of Cipher Mining Inc., dated January 30, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| ^ | Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant undertakes to provide copies of any of the omitted schedules or exhibits upon request by the Securities and Exchange Commission. |
SIGNATURES
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 hereunto duly authorized.
| Cipher Mining Inc. | ||||||
| Date: January 30, 2025 | By: | /s/ Tyler Page | ||||
| Tyler Page Chief Executive Officer | ||||||
Exhibit 10.1
Execution Version
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (as may be amended from time to time, this “Subscription Agreement”) is entered into as of the 30th day of January, 2025, by and among Cipher Mining Inc., a Delaware corporation (“Cipher”), and Star Beacon LLC, a Delaware limited liability company and wholly owned subsidiary of SoftBank Group Corp., a Japanese Kabushiki kaisha (“SoftBank”).
RECITALS
WHEREAS, SoftBank desires to subscribe for and to purchase from Cipher 10,438,413 shares (the “Acquired Shares”) of common stock, par value $0.001, of Cipher (the “Cipher Common Stock”) for a purchase price of approximately $4.79 per share and an aggregate purchase price of $50,000,000 (the “Purchase Price”), and Cipher desires to issue and sell to SoftBank the Acquired Shares in consideration of the payment of the Purchase Price by SoftBank to Cipher; and
WHEREAS, concurrently with the execution hereof, Cipher and SoftBank are executing a Registration Rights Agreement with respect to the Acquired Shares (the “Registration Rights Agreement”).
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and for good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto do hereby mutually covenant and agree as follows:
1. Subscription. Subject to the terms and conditions hereof, SoftBank hereby agrees to subscribe for and purchase, and Cipher hereby agrees to issue and sell to SoftBank, the Acquired Shares on the date hereof in consideration for the payment of the Purchase Price to Cipher or its designee (such subscription and issuance, the “Subscription”).
2. Subscription Deliveries.
(a) Concurrently with the execution of this Subscription Agreement, SoftBank shall deliver, or cause to be delivered, to Cipher:
(i) the Purchase Price for the Acquired Shares by wire transfer of U.S. dollars in immediately available funds to the account specified by Cipher set forth on Schedule B hereto; and
(ii) a duly completed and executed Internal Revenue Service Form W-9 or appropriate Internal Revenue Service Form W-8.
(b) Concurrently with the execution of this Subscription Agreement, Cipher shall deliver, or cause to be delivered, to SoftBank: the Acquired Shares in book entry form, free and clear of any liens or other restrictions whatsoever (other than those arising under state or federal securities laws), in the name of SoftBank (or its nominee in accordance with its delivery instructions) or to a custodian designated by SoftBank, as applicable.
3. Representations and Warranties of Cipher. Except as disclosed in (i) Cipher’s annual reports on Form 10-K for its fiscal years ended December 31, 2023, (ii) its proxy statements relating to meetings of the stockholders of Cipher since December 31, 2023, and (iii) all of its other reports, statements, schedules and registration statements filed with the Securities and Exchange Commission’s (the “Commission”) since December 31, 2023 (such documents together with all amendments thereto collectively, the “Cipher SEC Documents”) (other than information that is contained (A) in the risk factors sections of such Cipher SEC Documents and (B) in any forward-looking statements disclaimer in such Cipher SEC Documents or in any other section to the extent that they are cautionary or of a nature that they speculate about future developments, except, in each case of clauses (A) and (B) to the extent such information consists solely of factual and/or historical statements), Cipher represents and warrants to SoftBank as of the date hereof that:
(a) Cipher has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with entity power and authority to own, lease and operate its properties and conduct its business as presently conducted and to enter into, deliver and perform its obligations under this Subscription Agreement. Except as would not, individually or in the aggregate, have a Cipher Material Adverse Effect, each subsidiary of Cipher has been duly organized and is validly existing in good standing (to the extent that the concept of “good standing” is recognized by the applicable jurisdiction) under the laws of its jurisdiction of organization, with entity power and authority to own, lease and operate its properties and conduct its business as presently conducted.
(b) The Acquired Shares shall have been duly authorized and, when issued and delivered to SoftBank against full payment for the Acquired Shares in accordance with the terms of this Subscription Agreement, the Acquired Shares will be validly issued, fully paid and non-assessable and will not have been issued in violation of or subject to any preemptive, anti-dilution or similar rights created under Cipher’s Second Amended and Restated Certificate of Incorporation (“Charter”) and Amended and Restated Bylaws (“Bylaws”) or under the laws of the State of Delaware.
(c) This Subscription Agreement has been duly authorized, executed and delivered by Cipher and is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
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(d) The Registration Rights Agreement has been duly authorized, executed and delivered by Cipher and is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
(e) The execution, delivery and performance of this Subscription Agreement and the Registration Rights Agreement, and the consummation of the transactions contemplated hereby and thereby, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the properties or assets of Cipher pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which Cipher is a party or by which Cipher is bound or to which any of its property or assets is subject; (ii) the Charter or Bylaws; or (iii) any statute or any judgment, order, rule or regulation of any court or other federal, state, local or other governmental, regulatory or administrative authority, agency, commission or self-regulatory organization (“Governmental Authority”), having jurisdiction over Cipher or any of its properties except, in the case of clauses (i) and (iii), as would not, individually or in the aggregate, have a Cipher Material Adverse Effect.
(f) Assuming the accuracy of SoftBank’s representations and warranties set forth in Section 4, Cipher is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any Governmental Authority or other person in connection with the execution, delivery and performance by Cipher of this Subscription Agreement (including, without limitation, the issuance of the Acquired Shares), other than (i) filings required by applicable state securities laws, (ii) the filing of a Notice of Exempt Offering of Securities on Form D with the Commission under Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and (iii) other required filings with the Commission and other regulatory authorities relating to the transactions contemplated hereby.
(g) Cipher is authorized to issue two classes of stock: Cipher Common Stock and preferred stock having a par value of $0.001 per share (“Cipher Preferred Stock”). As of January 29, 2025, (i) 351,009,646 shares of Cipher Common Stock are issued and outstanding, (ii) up to 8,613,980 shares of Cipher Common Stock are subject to issuance upon exercise of outstanding warrants (the “Cipher Warrants”) and (iii) no shares of Cipher Preferred Stock are issued and outstanding. All outstanding shares of Cipher Common Stock have been duly authorized and validly issued and are fully paid and nonassessable and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Subscription Agreement or the Registration Rights Agreement, or the consummation of the transactions described herein or therein.
(h) Assuming the accuracy of SoftBank’s representations and warranties set forth in Section 4, no registration under the Securities Act is required for the offer and sale of the Acquired Shares by Cipher to SoftBank.
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(i) Neither Cipher nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection with any offer or sale of the Acquired Shares.
(j) Cipher has not paid, and is not obligated to pay, any brokerage, finder’s or other fee or commission in connection with its issuance and sale of the Acquired Shares, including, for the avoidance of doubt, any fee or commission payable to any equityholder or Affiliate (as defined below) of Cipher. For purposes of this Subscription Agreement, “Affiliate” means, with respect to any person, any other person directly or indirectly controlling, controlled by or under common control with such person, as such terms are used in and construed under Rule 405 under the Securities Act.
(k) Except as provided in this Subscription Agreement, none of Cipher, its subsidiaries or any of their Affiliates, nor any person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the Acquired Shares under the Securities Act.
(l) Cipher has taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, shareholder rights plan (including, without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under its Charter or Bylaws or the laws of the State of Delaware which is or could become applicable to SoftBank as a result of Cipher’s issuance of the Acquired Shares and SoftBank’s ownership of the Acquired Shares.
(m) Neither Cipher nor any of its subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does Cipher or any subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. Cipher and its subsidiaries, individually and on a consolidated basis, are not as of the date hereof Insolvent (as defined below). For purposes hereof, “Insolvent” means, with respect to any person, (i) the present fair saleable value of such person’s assets is less than the amount required to pay such person’s total indebtedness, (ii) such person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) such person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) such person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.
(n) Since January 1, 2024, except as specifically disclosed in the Cipher SEC Documents, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to have a Cipher Material Adverse Effect, and (ii) Cipher has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in Cipher’s financial statements pursuant to GAAP or disclosed in filings made with the Commission.
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(o) Cipher has filed or furnished, as applicable, on a timely basis, all reports, forms, and other statements and documents required to be filed with or furnished to the Commission pursuant to the Exchange Act or the Securities Act by Cipher since January 1, 2023. Each such Cipher SEC Document at the time of its filing or being furnished (or, if amended, as of the date of such amendment), complied in all material respects with the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), in each case including any rules and regulations promulgated thereunder applicable to such Cipher SEC Document. Cipher satisfies the registrant requirements for the use of a registration statement on Form S-3 to register the Acquired Shares for resale by SoftBank under the Securities Act. Except as disclosed in such Cipher SEC Documents, as of their respective filing dates (or, if amended, as of the date of such amendment), the Cipher SEC Documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading. There are no material outstanding or unresolved comments in comment letters from the Commission staff with respect to any of the Cipher SEC Documents.
(p) Except as disclosed in the Cipher SEC Documents, Cipher and its subsidiaries are in material compliance with the applicable requirements of Sarbanes-Oxley Act that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof.
(q) The Cipher Common Stock and Cipher Warrants are registered pursuant to Section 12(b) of the Exchange Act and are listed for trading on the Nasdaq Global Select Market under the symbols “CIFR” and “CIFRW”, respectively. Cipher is in compliance in all material respects with the rules of Nasdaq Stock Market LLC (“Nasdaq”), and there is no action, cause of action, claim, demand, litigation, suit, investigation, arbitration or other similar proceeding (a “Proceeding”) pending or, to the knowledge of Cipher, threatened against Cipher by Nasdaq, Financial Industry Regulatory Authority, Inc. or the Commission with respect to any intention by such entity to deregister the Cipher Common Stock or the Cipher Warrants under the Exchange Act or terminate the listing of the Cipher Common Stock or the Cipher Warrants on the Nasdaq Global Select Market. None of Cipher or its Affiliates has taken any action in an attempt to terminate the registration of the Cipher Common Stock or the Cipher Warrants under the Exchange Act or the listing of the Cipher Common Stock or the Cipher Warrants on the Nasdaq Global Select Market.
(r) Cipher is not a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended (the “Code”).
(s) Cipher Material Adverse Effect shall mean any change, effect, circumstance, condition, event, occurrence or development (collectively, “Effects”) that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (i) the business, properties, condition (financial or otherwise) or results of operations of Cipher and its subsidiaries taken as a whole or (ii) Cipher’s ability to perform its obligations hereunder; provided, however, that, with respect to clause (i) only, in no event will any of the following, alone or in combination, be deemed to constitute, nor shall any of the following
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be taken into account in determining whether there has been or will be, a “Cipher Material Adverse Effect”: (A) actual or proposed changes in law or regulations, regulatory policies or financial accounting standards or, in each case, any interpretation thereof; (B) general economic, political or business conditions or changes therein (including commencement, continuation or escalation of war, armed hostilities or national or international calamity); (C) financial and capital markets conditions (or changes to such conditions), including interest rates and currency exchange rates or any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world; (D) any trend or change generally affecting any of the industries in which Cipher and its subsidiaries operate; (E) the entry into or announcement of this Subscription Agreement, the pendency or consummation of the transactions contemplated hereby or the performance of this Subscription Agreement or the Registration Rights Agreement, including any adverse change in customer, supplier, governmental, landlord or similar relationships resulting therefrom or with respect thereto (including the termination of any contracts with such counterparties) (provided that, this clause (e) shall not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address, as applicable, the consequences resulting from the entry into or announcement of this Subscription Agreement, the pendency or consummation of the transactions contemplated hereby or the performance of this Subscription Agreement or the Registration Rights Agreement); (F) the compliance with the terms of this Subscription Agreement or the Registration Rights Agreement or the taking of any action (or the omission of any action) required by this Subscription Agreement or the Registration Rights Agreement; (G) weather conditions, global health conditions (including any epidemic, pandemic or disease outbreak) or other force majeure events, any act of God or natural disaster, including any material worsening of such conditions; (H) any acts of terrorism or changes in geopolitical conditions; or (i) any failure of Cipher and its subsidiaries to meet any projections, business plans or forecasts (provided that, this clause (I) shall not prevent a determination that any change or effect underlying such failure to meet projections, business plans or forecasts has resulted in a Cipher Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Cipher Material Adverse Effect)); provided, further, that any Effect referred to the foregoing clauses (A), (B), (C), (D), (G) and (H) above may be taken into account in determining if a Cipher Material Adverse Effect has occurred to the extent that such matters materially and disproportionately impact Cipher and its subsidiaries (taken as a whole) relative to other similarly situated Persons in the industries in which Cipher and its Affiliates operate.
4. SoftBank’s Representations and Warranties. SoftBank represents and warrants to Cipher as of the date hereof that:
(a) SoftBank is a wholly owned subsidiary of SoftBank Group Corp., a Japanese Kabushiki kaisha, has been duly formed or incorporated and is validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, with power and authority (or in the case of an individual, the legal capacity) to enter into, deliver and perform its obligations under this Subscription Agreement.
(b) This Subscription Agreement has been duly authorized, executed and delivered by SoftBank and is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
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(c) The Registration Rights Agreement has been duly authorized, executed and delivered by SoftBank and is enforceable against it in accordance with its terms, except as may be limited or otherwise affected by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws relating to or affecting the rights of creditors generally, and (ii) principles of equity, whether considered at law or equity.
(d) The execution, delivery and performance by SoftBank of this Subscription Agreement, including the consummation of the transactions contemplated hereby, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of SoftBank or any of its subsidiaries pursuant to the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease, license or other agreement or instrument to which SoftBank or any of its subsidiaries is a party or by which SoftBank or any of its subsidiaries is bound or to which any of the property or assets of SoftBank or any of its subsidiaries is subject; (ii) the organizational documents of SoftBank; or (iii) any statute or any judgment, order, rule or regulation of any Governmental Authority having jurisdiction over SoftBank or any of its subsidiaries or any of their respective properties that, in the case of clauses (i) and (iii), would reasonably be expected to have a material adverse effect on the legal authority or ability of SoftBank to perform in any material respects its obligations hereunder.
(e) SoftBank (i) is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) satisfying the applicable requirements set forth on Schedule A, (ii) is acquiring the Acquired Shares only for its own account and not for the account of others, or if SoftBank is subscribing for the Acquired Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and SoftBank has full investment discretion with respect to each such account, and the full power and authority to make the acknowledgements, representations and agreements herein on behalf of each owner of each such account, and (iii) is not acquiring the Acquired Shares with a view to, or for offer or sale in connection with, any distribution, resale or other disposition thereof either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence of any predetermined event or circumstance in violation of the Securities Act (and shall provide the requested information on Schedule A following the signature page hereto in addition to certain other customary information reasonably requested by Cipher). SoftBank is not an entity formed for the specific purpose of acquiring the Acquired Shares, unless such newly formed entity is an entity in which all of the equity owners are “accredited investors” (within the meaning of Rule 501(a) under the Securities Act).
(f) SoftBank understands that the Acquired Shares are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the offer and sale of the Acquired Shares have not been registered under the Securities Act. SoftBank understands that the Acquired Shares may not be resold, transferred, pledged or otherwise disposed
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of by SoftBank absent an effective registration statement under the Securities Act, except (i) to Cipher or a subsidiary thereof, (ii) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (iii) pursuant to another applicable exemption from the registration requirements of the Securities Act, or (iv) to a Permitted Transferee in accordance with Section 5, and, in each of cases (i) and (iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or book entries representing the Acquired Shares shall contain a legend to such effect. SoftBank acknowledges that the Acquired Shares will not be eligible for resale pursuant to Rule 144A promulgated under the Securities Act. SoftBank understands that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the Acquired Shares.
(g) SoftBank understands and agrees that SoftBank is purchasing the Acquired Shares directly from Cipher. SoftBank further acknowledges that there have been no representations, warranties, covenants and agreements made to SoftBank by Cipher or any of its officers, managers or representatives, expressly or by implication, other than those representations, warranties, covenants and agreements included in this Subscription Agreement.
(h) In making its decision to purchase the Acquired Shares, SoftBank represents that it has relied solely upon independent investigation made by SoftBank. SoftBank acknowledges and agrees that SoftBank has received such information as SoftBank deems necessary in order to make an investment decision with respect to the Acquired Shares. SoftBank represents and agrees that SoftBank and SoftBank’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as SoftBank and SoftBank’s professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the Acquired Shares.
(i) SoftBank became aware of this offering of the Acquired Shares solely by means of direct contact between SoftBank and Cipher and the Acquired Shares were offered to SoftBank solely by direct contact between SoftBank and Cipher. SoftBank did not become aware of this offering of the Acquired Shares, nor were the Acquired Shares offered to SoftBank, by any other means. SoftBank acknowledges that the Acquired Shares (i) were not offered to it in any form of general solicitation or general advertising, including methods described in Rule 502(c) of Regulation D under the Securities Act, and (ii) are not being offered to it in a manner involving a public offering under, or, to its knowledge, in a distribution in violation of, the Securities Act or any other applicable securities laws.
(j) SoftBank acknowledges that it is aware that there are substantial risks incident to the purchase and ownership of the Acquired Shares. SoftBank is a sophisticated investor, has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Acquired Shares, and SoftBank has sought such accounting, legal, business and tax advice as SoftBank has considered necessary to make an informed investment decision. SoftBank acknowledges that neither Cipher nor any of its agents or Affiliates have provided any tax advice or any other representation or guarantee, whether written or oral, regarding the tax consequences of the transactions contemplated by this Subscription Agreement. SoftBank is relying solely on SoftBank’s separate legal and tax advisors and not on any statements or representations of Cipher (or any of Cipher’s advisors, Affiliates, agents or representatives) for any legal or tax advice with respect to an investment in the Acquired Shares.
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(k) SoftBank has adequately analyzed and fully considered the risks of an investment in the Acquired Shares and determined that the Acquired Shares are a suitable investment for SoftBank, and SoftBank is able at this time and in the foreseeable future to bear the economic risk of a total loss of SoftBank’s investment in Cipher. SoftBank acknowledges specifically that a possibility of total loss exists.
(l) SoftBank understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the Acquired Shares or made any findings or determination as to the fairness of this investment.
(m) SoftBank is not (i) a person or entity named on any of the OFAC Lists, (ii) owned or controlled by, or acting on behalf of, a person, that is named on an OFAC List; (iii) organized, incorporated, established, located, resident or born in, or a citizen, national, or the government, including any political subdivision, agency, or instrumentality thereof, of, Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, or any other country or territory embargoed or subject to substantial trade restrictions by the United States, (iv) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (v) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. SoftBank agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that SoftBank is permitted to do so under applicable law. SoftBank represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. section 5311 et seq.) (the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and its implementing regulations (collectively, the “BSA/PATRIOT Act”), that SoftBank maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act. SoftBank also represents that, to the extent required, it maintains policies and procedures reasonably designed to ensure compliance with OFAC-administered sanctions programs, including for the screening of its investors against the OFAC Lists. SoftBank further represents and warrants that, to the extent required, it maintains policies and procedures reasonably designed to ensure that the funds held by SoftBank and used to purchase the Acquired Shares were legally derived.
(n) If SoftBank is an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section 4975 of the Code or an employee benefit plan that is a governmental plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section 4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), or an entity whose underlying assets are considered to include “plan assets” of any such plan, account or arrangement (each, a “Plan”) subject to the fiduciary or prohibited transaction provisions of ERISA or section 4975 of the Code or to any Similar Law, SoftBank represents and warrants that (i) neither Cipher, nor any of its Affiliates (the “Transaction Parties”), has acted as the Plan’s fiduciary, or has been relied on for
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advice, with respect to its decision to acquire and hold the Acquired Shares, and none of the Transaction Parties shall at any time be relied upon as the Plan’s fiduciary with respect to any decision to acquire, continue to hold or transfer the Acquired Shares; (ii) the decision to invest in the Acquired Shares has been made at the recommendation or direction of a person or entity who is (A) independent of the Transaction Parties; (B) is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies; (C) is a fiduciary (under ERISA and/or section 4975 of the Code or, if applicable, a Similar Law) with respect to SoftBank’s investment in the Acquired Shares and is responsible for exercising independent judgment in evaluating the investment in the Acquired Shares; and (D) is aware of and acknowledges that none of the Transaction Parties is undertaking to provide investment advice, or to give advice in a fiduciary capacity, in connection with the purchaser’s or transferee’s investment in the Acquired Shares; and (iii) the investment in and holding of the Acquired Shares is in accordance with the terms of SoftBank’s governing instruments and complies with all applicable requirements of ERISA, the Code and all applicable Similar Laws, and does not constitute a non-exempt prohibited transaction under ERISA or Section 4975 of the Code or a similar violation under any applicable Similar Law.
(o) SoftBank has sufficient funds to pay the Purchase Price.
5. Restrictions on Transfer.
(a) Transfer of Acquired Shares During Lock-Up Period.
(i) For a period of thirty (30) days from the date of this Subscription Agreement (the “Lock-Up Period”), each Subscriber Party (as defined below) shall not Transfer any Acquired Share, except as otherwise permitted pursuant to Section 5(a)(ii) and, in the case of SoftBank, Section 5(a)(iii) and in each case, in compliance with the Charter and Bylaws.
(ii) Notwithstanding anything to the contrary in Section 5(a)(i), each Subscriber Party shall be permitted to Transfer all or any portion of such Subscriber Party’s Acquired Shares, at any time and from time to time, to any Permitted Transferee, but only if such Permitted Transferee, agrees in writing for the benefit of Cipher (in form and substance reasonably satisfactory to Cipher and with a copy thereof to be furnished to Cipher) to be bound by the terms of this Section 5 and Section 9 and delivers to Cipher a duly executed, valid and properly completed Internal Revenue Service Form W-9 or appropriate Internal Revenue Service Form W-8 evidencing that such Permitted Transferee is not subject to backup withholding.
(iii) SoftBank (or its Permitted Transferees) shall be permitted to Transfer up to $35,000,000 of SoftBank’s Acquired Shares (in the aggregate) at any time and from time to time in privately negotiated transactions with up to three Persons and their Affiliates (each a “Subsequent Transferee”); provided, that, (A) such Transfer shall not be made to a Competitor (as defined below), (B) such Subsequent Transferee shall be a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) satisfying the applicable requirements set forth on Schedule A, and (C) such Subsequent Transferee agrees in writing for the benefit of Cipher (in form and substance reasonably satisfactory to Cipher and with a copy thereof to be furnished to Cipher) to be bound by the terms of this Section 5 (other than this clause (iii)) and Section 9 and delivers to Cipher a duly executed, valid and properly completed Internal Revenue Service Form W-9 or appropriate Internal Revenue Service Form W-8 evidencing that such Permitted Transferee is not subject to backup withholding.
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(b) Orderly Sale of Acquired Shares.
(i) Notwithstanding anything to the contrary in this Subscription Agreement, the Registration Rights Agreement, the Charter or the Bylaws, following the Lock-Up Period, at any time SoftBank, a Subsequent Transferee or any Permitted Transferee thereof (each, a “Subscriber Party”) determines to sell any Acquired Shares other than, in the case of SoftBank, any Acquired Shares transferred pursuant to Section 5(a)(iii), (A) Cipher shall use its commercially reasonable efforts to assist the Subscriber Party in promptly disposing of such Subscriber Party’s Acquired Shares pursuant to an Orderly Sale Arrangement (as defined below), including complying with all applicable covenants in the Registration Rights Agreement, and (B) the Subscriber Party shall comply with the applicable provisions of the Orderly Sale Arrangement, including complying with all covenants in the Registration Rights Agreement.
(ii) The term “Orderly Sale Arrangement” means sales pursuant to any of the following methods:
(1) the sale of Cipher Common Stock in a sale of Acquired Shares to an underwriter or underwriters for reoffering to the public (an “Underwritten Offering”) pursuant to the Registration Rights Agreement;
(2) the sale of Cipher Common Stock by a Subscriber Party in compliance with Rule 144(f) promulgated under the Securities Act, as if such sales were effected pursuant to such rule; provided, that under this clause (2), (A) on a daily basis on any Trading Day, sales pursuant to this Section 5(b)(ii)(2) by such Subscriber Party together with such Subscriber Party’s Permitted Transferees, on an aggregate basis, may be made at any price with respect to a number of shares in an amount not to exceed (I) ten percent (10%) of an average daily trading volume of Cipher Common Stock for the four-week period immediately preceding the week during which such Trading Day occurs, as reported on Bloomberg Financial L.P. (or any successor thereof) using the HP function (or any equivalent thereof), or (II) if greater, ten percent (10%) of the daily trading volume of Cipher Common Stock for that particular Trading Day and (B) any additional sales made based on this Section 5(b)(ii)(2) on any particular Trading Day must be made at a price above the volume weighted average price for the immediately preceding Trading Day; provided, however, that “ten percent (10%)” in each of clauses (I) and (II) above shall be adjusted proportionally for the number of transferees in Transfers pursuant to Section 5(a)(iii) (for example, if there were three transferees in Transfers pursuant to Section 5(a)(iii), the percentage for clauses (I) and (II) above would be two and one-half percent (2.5%));
(3) a block sale of Cipher Common Stock, at a price per share no less than ninety percent (90%) of the volume weighted average price of Cipher’s Common Stock on an Approved Market on the immediately preceding Trading Day, to a transferee that would not violate the restrictions set forth in Section 5(c) below, such sale not to exceed at any
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one time with respect to such Subscriber Party together with its Permitted Transferees, in the aggregate, that number of shares equal to the lesser of (A) the average daily trading volume of Cipher Common Stock for the four-week period immediately preceding the week during which such sale occurs, as reported on Bloomberg Financial L.P. (or any successor thereof) using the HP function (or any equivalent thereof), or (B) two and one-half percent (2.5%) of Cipher Common Stock outstanding at such time and, in either case, to be executed through a broker dealer; provided, that each Subscriber Party and its Permitted Transferees, in the aggregate, shall not be permitted to undertake more than one block sale of Cipher Common Stock in any three-month period; provided, further, that such Subscriber Party and its applicable Permitted Transferees deliver a certification to Cipher stating that to the knowledge of such Subscriber Party or Permitted Transferee, after due inquiry, such sale will not violate the Transfer restrictions set forth in Section 5(c); or
(4) any other method of sale mutually agreed by Cipher and the Subscriber Party, acting reasonably and in good faith.
(c) No Transfer to Competitors; Block Transfers. Each Subscriber Party shall not, with respect to the Acquired Shares referred to in Section 5(b), directly or indirectly:
(i) in a transaction or a series of transactions, knowingly Transfer any Acquired Shares to any Person set forth on Schedule C hereto or an Affiliate of such Persons (each such person, and each Affiliate of such person, a “Competitor”); provided, that, if requested by Cipher, Cipher and the Subscriber Parties shall discuss in good faith amendments to Schedule C hereto and the Subscriber Parties shall not unreasonably withhold condition or delay its consent to any such amendment proposed by Cipher if Schedule C has not been amended in the preceding twelve (12) months; provided, further, that Schedule C may not contain more than fifteen (15) Competitors at any time; or
(ii) individually or acting together with any other Person, at any time Transfer any Acquired Shares to any Person (except as permitted under Section 5(a)) that has filed a Schedule 13D with respect to Cipher’s Common Stock that has not been terminated, or to the knowledge of such Subscriber Party, would be required to file a Schedule 13D as a result of the purchase of Cipher Common Stock from such Transfer; provided, that this Section 5(c)(ii) shall not apply to any open market sale of Cipher Common Stock through a brokerage transaction effected over a United States national securities exchange or any bona fide Underwritten Offering; provided, further, that the Subscriber Parties shall have no obligation of inquiry, other than to (A) review the Schedule 13D and Schedule 13G filings made with respect to the Cipher Common Stock and (B) to obtain a written representation from the purchaser to the effect that such purchaser will not be required to file and does not currently intend to file a Schedule 13D).
(d) Restriction on Hedging, Etc. The Subscriber Parties shall not enter into any swap, hedge, forward contract or other arrangement or transaction or series of transactions that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of the Acquired Shares. No Subscriber Party shall directly or indirectly sell any Acquired Shares that such Subscriber Party does not at the time of sale own. The restrictions in this Section 5(d) (i) shall not apply to any pledge of Acquired Shares as collateral for any financing facility of a Subscriber Party or its Affiliates, provided, that such financing facility is secured by a portfolio of assets or equity interests issued by multiple issuers and (ii) shall terminate with respect to a Subscriber Party when such Subscriber Party no longer owns any Acquired Shares referred to in Section 5(b).
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(e) Any attempted Transfer in violation of this Section 5 shall be null and void ab initio and Cipher shall not be required to give any effect thereto.
(f) For the purposes of this Section 5:
(i) “Approved Market” means, if Cipher Common Stock is then listed or quoted thereon, the New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market and the Nasdaq Capital Market.
(ii) “Permitted Transferee” means, with respect to any Person, (A) any Affiliate of such Person (provided that, for the avoidance of doubt, such Affiliate may not be a Competitor) and (B) any successor entity of such Person, in each case of clauses (A) and (B), that shall be a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) satisfying the applicable requirements set forth on Schedule A.
(iii) “Person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization, other entity or group (as defined in Section 13(d) of the Exchange Act), including a governmental entity.
(iv) “Trading Day” means any day on which shares of Cipher’s equity securities are traded, or able to be traded, on the Approved Market on which shares of Cipher’s equity securities are listed or traded.
(v) “Transfer” by any Person means, directly or indirectly, to (A) offer, sell, contract to sell, transfer, assign, pledge, encumber, hypothecate, or dispose of, either voluntarily or involuntarily, any securities owned by such Person or of any interest (including any voting interest) in any securities owned by such Person, or (B) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any subject securities, for cash or otherwise; provided, however, that, notwithstanding anything to the contrary in this Subscription Agreement, a Transfer shall not include the redemption or other acquisition of Acquired Shares by Cipher.
6. Legend.
(i) SoftBank agrees that all certificates or other instruments, if any, representing the Acquired Shares subject to this Subscription Agreement will bear a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SAID LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF.
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(ii) Following the Lock-Up Period and upon request of a Subscriber Party, following receipt by Cipher of an opinion of counsel reasonably satisfactory to Cipher to the effect that such legend is no longer required under the Securities Act and applicable state laws, Cipher shall cause the legend to be removed from any certificate (if applicable) or book entry to be transferred in accordance with the terms hereof.
7. Tax Matters.
(a) SoftBank shall pay any and all documentary, stamp and similar issue or transfer tax due on the issuance of the Acquired Shares.
(b) Cipher shall be entitled to deduct and withhold any amounts that are required to be deducted or withheld in respect of the Acquired Shares or payments thereon, and any amounts so deducted or withheld shall be remitted to the applicable taxing authority and shall be treated for all purposes of this Subscription Agreement as having been paid to SoftBank in respect of which such deduction or withholding was made. SoftBank shall be responsible for, and shall indemnify, severally and not jointly, and hold Cipher and its Affiliates harmless from, any withholding or other taxes (including any interest, penalties or additions to tax relating thereto) imposed on or with respect to SoftBank or any of its Affiliates to the extent such taxes are not deducted and withheld from payments made by Cipher to SoftBank in respect of the Acquired Shares.
8. Termination. This Subscription Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the mutual written agreement of each of the parties hereto to terminate this Subscription Agreement; provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach.
9. SoftBank’s Covenants.
(a) Each Subscriber Party and each of its controlled Affiliates, with respect to all of the Cipher Common Stock beneficially owned by each such Person, hereby agrees: at each annual and special meeting of Cipher’s stockholders (“Cipher Stockholders”) held prior to the expiration of the Voting Period (as defined below) (each such meeting, a “Cipher Stockholder Meeting”), and in each written consent or resolutions of any of the Cipher Stockholders in which any such Person is entitled to vote or consent, such Person will (A) appear at such Cipher Stockholder Meeting or otherwise cause all Cipher Common Stock beneficially owned by such Person and its controlled Affiliates to be counted as present for purposes of establishing a quorum, (B) vote, or cause to be voted, all Cipher Common Stock beneficially owned by such Person and its controlled Affiliates on Cipher’s proxy card or voting instruction form (i) in favor of each of the directors nominated by the Board of Directors of Cipher (the “Cipher Board”) and
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recommended by the Cipher Board in the election of directors and against any proposals to remove any such members of the Cipher Board, (ii) against any nominees to serve on the Cipher Board that have not been recommended by the Cipher Board and (iii) with respect to all other matters in accordance with the Cipher Board’s recommendations as identified in Cipher’s proxy statement, and (C) not execute any proxy card or voting instruction form in respect of such Cipher Stockholder Meeting other than the proxy card and related voting instruction form being solicited by or on behalf of the Cipher Board; provided, that with respect to any Voting Exempt Matter (as defined below), such Person shall have the ability to vote freely so long as such Person does not publicly disclose such vote.
(b) From the date of this Subscription Agreement until the expiration of the Voting Period, each Subscriber Party and its controlled Affiliates, shall not, and shall cause its controlled Affiliates, principals, directors, general partners, officers, employees and, to the extent acting on its behalf or at its direction, agents and other representatives not to, directly or indirectly:
(i) make any announcement or proposal with respect to, or offer, seek, propose or indicate an interest in (A) any form of business combination or acquisition or other transaction relating to a majority of the assets or securities of Cipher or any of its subsidiaries, (B) any form of restructuring, recapitalization or similar transaction with respect to Cipher or any of its subsidiaries or (C) any form of tender or exchange offer with respect to Cipher Common Stock;
(ii) engage in any solicitation of proxies or written consents to vote (or withhold the vote of) any voting securities of Cipher, or conduct any binding or nonbinding referendum with respect to any voting securities of Cipher, or assist or participate in any other way, directly or indirectly, in any solicitation of proxies (or written consents) with respect to any voting securities of Cipher, or otherwise become a “participant” in a “solicitation,” as such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-1 of Regulation 14A, respectively, under the Exchange Act, to vote (or withhold the vote of) any securities of Cipher;
(iii) purchase or otherwise acquire, or offer, seek, propose or agree to acquire, ownership (including beneficial ownership as defined in Rule 13d-3 under the Exchange Act) of any equity securities of Cipher, any direct or indirect rights or options to acquire any such securities, any derivative securities or contracts or instruments exercisable for or convertible into shares of Cipher Common Stock, in each case, resulting in such Subscriber Party and its controlled Affiliates owning more than 4.99% of the Cipher Common Stock; provided, that, with the Cipher Boards’ prior written consent, any such Person shall be allowed to acquire additional Cipher Common Stock based on such Person’s pro rata portion of the amount funded hereunder;
(iv) act, seek, facilitate or encourage any person to submit nominations or proposals, whether in furtherance of a “contested solicitation” or otherwise, for the appointment, election or removal of directors or otherwise with respect to Cipher or seek, facilitate, encourage or take any other action with respect to the appointment, election or removal of any directors; or
(v) form, join or in any other way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act or otherwise) with respect to Cipher or its securities; provided, however, that nothing in this Subscription Agreement shall limit the ability of an Affiliate of any Subscriber Party and its controlled Affiliates, to join the “group” following the execution of this Subscription Agreement upon notice to Cipher, so long as any such Affiliate first agrees to be bound in writing by the terms and conditions of Section 9(b) this Subscription Agreement.
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(c) Notwithstanding the foregoing, nothing in Section 9(b) or elsewhere in this Subscription Agreement shall prohibit or restrict any Subscriber Party or its controlled Affiliates, from communicating privately with the Cipher Board or any executive officer or director of Cipher, regarding any matter, so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure of such communications and subject to the confidentiality obligations to Cipher of any such director or officer. No Subscriber Party or its controlled Affiliates shall seek to do directly or indirectly through any director of Cipher or other individual anything that would be prohibited under this Subscription Agreement if done by such Person or any of its Affiliates or their agents and representatives.
(d) Notwithstanding anything set forth herein to the contrary, upon the public announcement by Cipher of entry into a definitive agreement for a transaction that would constitute a Change of Control (as defined below), Section 9(b) of this Subscription Agreement shall immediately and automatically terminate in its entirety with respect to such Subscriber Party and no party hereunder shall have any further obligations under Section 9(b) of this Subscription Agreement; provided, however, no party shall be released from any breach of this Subscription Agreement that occurred prior to the Change of Control.
(e) For the purposes of this Section 9:
(i) “Change of Control” shall be deemed to have taken place if (A) any person is or becomes a beneficial owner, directly or indirectly, of securities of Cipher representing more than fifty percent (50%) of the equity interests and voting power of Cipher’s then outstanding equity securities, (B) Cipher effects a merger or a stock-for-stock transaction with a third party whereby immediately after the consummation of the transaction Cipher’s Stockholders retain less than fifty percent (50%) of the equity interests and voting power of the surviving entity’s then outstanding equity securities or (C) Cipher sells all or substantially all of Cipher’s assets to a third party.
(ii) “Voting Exempt Matter” means, with respect to Cipher: any merger, acquisition, recapitalization, restructuring, financing, share issuances, disposition, distribution, spin-off, sale or transfer of all or substantially all of Cipher’s and its subsidiaries’ assets in one or a series of transactions, joint venture or other business combination of Cipher and its subsidiaries with a third party and related matters in connection with such transactions, including the composition of the Cipher Board or the board of directors, board of trustees or other similar body of its successor following such transactions.
(iii) “Voting Period” means the earlier of (A) one year from the date of this Subscription Agreement and (B) the date on which the Acquired Shares then held by the applicable Subscriber Party together with its Permitted Transferees represents less than 50% of the Acquired Shares acquired by such Subscriber Party pursuant to: (i) in the case of SoftBank, this Subscription Agreement; provided, that, for purposes of this Section 9(e)(iii), the Acquired Shares acquired by SoftBank shall be decreased by the aggregate number of any Acquired Shares
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transferred to a Subsequent Transferee pursuant to Section 5(a)(iii) within 180 days of the date hereof, or (ii) in the case of a Subsequent Transferee, the number of Acquired Shares such Subsequent Transferee and its Affiliates received pursuant to a Transfer under Section 5(a)(iii).
10. Miscellaneous.
(a) Each party hereto acknowledges that the other party and others will rely on the acknowledgments, understandings, agreements, representations and warranties contained in this Subscription Agreement.
(b) Each party hereto agrees that the terms of this Subscription Agreement shall not be disclosed or otherwise made available to the public, that copies of this Subscription Agreement shall not be publicly filed or otherwise made available to the public and that no party shall make any public announcement regarding this Subscription Agreement or the transactions contemplated hereby, except as mutually agreed in writing by the parties; provided, that the parties shall be entitled to make such disclosures and filings in respect of entry into the definitive agreements as required by applicable laws and regulations (including as required by any stock exchange rules). In the event that such disclosures or filings are required by applicable law, Cipher and SoftBank shall, prior to such disclosure or filing, notify the other parties of the legal requirement and use its commercially reasonable efforts to obtain “confidential treatment” of this Subscription Agreement with such Governmental Authority.
(c) Other than as provided in Section 5(a), SoftBank may not assign this Subscription Agreement or any of SoftBank’s rights and obligations hereunder without the prior consent of Cipher. Neither this Subscription Agreement nor any rights that may accrue to Cipher hereunder or any of Cipher’s respective obligations may be transferred or assigned.
(d) The agreements and covenants made by each party hereto in this Subscription Agreement shall survive the date hereof. The representations and warranties made by each party hereto in this Subscription Agreement shall not survive the date hereof.
(e) Cipher may request from any Subscriber Party such additional information as Cipher may deem reasonably necessary to evaluate the eligibility of such Subscriber Party to acquire the Acquired Shares and to cause the Acquired Shares to be issued and delivered to such Subscriber Party, and such Subscriber Party shall provide such information as may be reasonably requested; provided, that, that upon receipt of such additional information, Cipher shall be allowed to convey such information to its representatives and such representatives shall keep the information confidential, except as may be required by applicable law, rule, regulation or in connection with any legal proceeding or regulatory request.
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(f) This Subscription Agreement may not be modified, waived or terminated except by an instrument in writing, signed by the party against whom enforcement of such modification, waiver, or termination is sought.
(g) This Subscription Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. This Subscription Agreement shall not confer any rights or remedies upon any person other than the parties hereto and their respective successor and assigns.
(h) Except as otherwise provided herein, this Subscription Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives, and permitted assigns, and the agreements, representations, warranties, covenants and acknowledgments contained herein shall be deemed to be made by, and be binding upon, such heirs, executors, administrators, successors, legal representatives and permitted assigns.
(i) If any provision of this Subscription Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Subscription Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
(j) This Subscription Agreement may be executed in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
(k) Each Subscriber Party shall pay all of its own expenses in connection with this Subscription Agreement and the transactions contemplated by this Subscription Agreement.
(l) Any notice or communication required or permitted hereunder shall be in writing and either delivered personally, or emailed, sent by overnight mail via a reputable overnight carrier, or sent by certified or registered mail, postage prepaid, and shall be deemed to be given and received (i) when so delivered personally, (ii) when sent, with no mail undeliverable or other rejection notice, if sent by email, or (iii) five (5) business days after the date of mailing to the address below or to such other address or addresses as such person may hereafter designate by notice given hereunder:
if to SoftBank, to such address set forth on the signature pages hereto; and
if to Cipher, to:
Cipher Mining Inc.
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1 Vanderbilt Avenue, Floor 54
New York, New York 10017
Attention: Chief Legal Officer
Email:
with a copy to:
Latham & Watkins LLP
99 Bishopsgate
London EC2M 3XF United Kingdom
Attention: David Stewart; Christopher R. Drewry; Ann Buckingham; Sean Parish
Email:
(m) The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Subscription Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Subscription Agreement and to enforce specifically the terms and provisions of this Subscription Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise.
(n) This Subscription Agreement, and any claim or cause of action hereunder based upon, arising out of or related to this Subscription Agreement (whether based on law, in equity, in contract, in tort or any other theory) or the negotiation, execution, performance or enforcement of this Subscription Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflicts of laws thereof.
THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND, IF SUCH FEDERAL COURT DOES NOT HAVE JURISDICTION, THE COURTS OF THE STATE OF DELAWARE SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS SUBSCRIPTION AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS SUBSCRIPTION AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY SUCH DOCUMENT THAT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS SUBSCRIPTION AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED BY SUCH FEDERAL OR DELAWARE STATE COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES
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AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 10(l) OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY 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 SUBSCRIPTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, FINANCIAL ADVISOR, 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) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS SUBSCRIPTION AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 10(n).
(o) From the date hereof until February 28, 2025 (the “Exclusivity End Date”), without SoftBank’s prior written consent, Cipher, on behalf of itself and its subsidiaries, shall not enter into binding definitive documentation to sell, transfer or otherwise divest or encumber, directly or indirectly, Cipher Barber Lake LLC (“Propco”) or the 250 acre Barber Lake site owned by Propco located near Colorado City, TX (32°23’43.8”N 100°55’11.2”W) approximately 3 miles west of Colorado City, TX and situated north of I-20 (the “Property”), in each case, other than in connection with any transaction (i) with SoftBank or its Affiliates or (ii) involving all or substantially all of the consolidated assets of Cipher. Notwithstanding the foregoing, prior to the Exclusivity End Date, Cipher and its subsidiaries and their respective representatives may discuss and negotiate with any third party regarding any commercial, collaboration or partnership arrangement or direct or indirect transfer, sale, divestiture or encumbrance, in each case, involving Propco or the Property so long as Cipher does not (A) enter into binding definitive documentation with respect thereto (other than a customary non-disclosure agreement) prior to the Exclusivity End Date (other than with respect to an Excluded Transaction)) or (B) breach that certain Non-Disclosure Agreement (the “Non-Disclosure Agreement”) by and between Cipher and SoftBank dated as of October 14, 2024 (including, for the avoidance of doubt, by disclosing any information regarding any potential transactions by and between Cipher and SoftBank and any discussions related thereto).
(p) EFFECTIVE UPON AND SUBJECT TO THE DATE HEREOF, CIPHER, ON BEHALF OF ITSELF, ITS AFFILIATES, ITS SUBSIDIARIES AND EACH OF ITS AND THEIR RESPECTIVE OFFICERS, EMPLOYEES, DIRECTORS, DIRECT OR INDIRECT EQUITY HOLDERS, AGENTS, REPRESENTATIVES, OWNERS, MEMBERS, MANAGERS, ASSIGNS, SUCCESSORS AND PREDECESSORS, (EACH, SOLELY IN EACH SUCH CAPACITY, A “CIPHER RELEASOR”), TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY FOREVER, FULLY, IRREVOCABLY, CONCLUSIVELY, ABSOLUTELY AND UNCONDITIONALLY RELEASES, DISCHARGES AND ACQUITS SOFTBANK, ITS AFFILIATES, ITS SUBSIDIARIES AND EACH OF ITS AND THEIR RESPECTIVE FORMER, CURRENT OR FUTURE OFFICERS, EMPLOYEES, DIRECTORS, DIRECT OR INDIRECT EQUITY HOLDERS, AFFILIATED INVESTMENT FUNDS, AFFILIATED INVESTMENT VEHICLES, MANAGED ACCOUNTS, MANAGED FUNDS, AGENTS, REPRESENTATIVES, OWNERS, MEMBERS, PARTNERS, FINANCIAL ADVISORS, LEGAL ADVISORS, INVESTMENT ADVISORS, FUND ADVISORS, PRINCIPALS, SHAREHOLDERS, MANAGERS, CONSULTANTS, ACCOUNTANTS, ATTORNEYS, AFFILIATES, ASSIGNS, SUCCESSORS, SUCCESSORS IN INTEREST, PREDECESSORS AND PREDECESSORS IN INTEREST (COLLECTIVELY, SOLELY IN SUCH CAPACITY, THE “SOFTBANK RELEASEES”) FROM AND AGAINST ANY AND ALL CLAIMS, COUNTERCLAIMS, SET-OFFS, DEFENSES, CONTROVERSIES, CHARGES,
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CLAIMS FOR RELIEF, DEMANDS, SUITS, ACTIONS, PROCEEDINGS OR CAUSES OF ACTION WHICH SUCH CIPHER RELEASOR HAS OR HAD, AT LAW, IN EQUITY OR UNDER ANY CONTRACT, AGREEMENT, STATUTE, RULE, REGULATION OR ORDER, WHETHER LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, MATURED OR UNMATURED, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING AS OF THE DATE HEREOF, AGAINST THE SOFTBANK RELEASEES WITH RESPECT TO ANY EVENT, MATTER, CLAIM, OCCURRENCE, DAMAGE, LOSS, EXPENSE, FEE, PENALTY, SANCTION, LIABILITY, OBLIGATION, ACT, OMISSION OR INJURY, DIRECTLY OR INDIRECTLY ARISING OUT OF, IN CONNECTION WITH OR RELATED TO, IN ANY MANNER, IN WHOLE OR IN PART, THE NON-DISCLOSURE AGREEMENT OR ANY RELATED TRANSACTIONS OR DOCUMENTS, THE NEGOTIATION, FORMULATION OR PREPARATION OF THE FOREGOING, OR ANY PRIOR NEGOTIATIONS OR DISCUSSIONS BETWEEN THE PARTIES HERETO AND/OR THEIR AFFILIATES IN RESPECT OF ANY RELATED TRANSACTIONS, AND ALL EVENTS, MATTERS, CLAIMS, OCCURRENCES, DAMAGES, LOSSES, EXPENSES, FEES, PENALTIES, SANCTIONS, LIABILITIES, OBLIGATIONS, ACTS, OMISSIONS OR INJURIES, DIRECTLY OR INDIRECTLY ARISING THEREFROM, IN CONNECTION THEREWITH OR RELATED THERETO, IN ANY MANNER, IN WHOLE OR IN PART, IN EACH CASE ON OR PRIOR TO THE DATE HEREOF (COLLECTIVELY, THE “SOFTBANK RELEASED CLAIMS”); PROVIDED, THAT, THE FOREGOING SHALL NOT (I) WAIVE OR RELEASE, AND THE SOFTBANK RELEASED CLAIMS SHALL NOT INCLUDE, CLAIMS OR LIABILITIES TO THE EXTENT ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, DIRECTLY OR INDIRECTLY, ANY MANNER, ANY ACT OR OMISSION OF A RELEASEE THAT CONSTITUTES INTENTIONAL FRAUD AS DETERMINED BY A FINAL, NON-APPEALABLE ORDER OF A COURT OF COMPETENT JURISDICTION, OR (II) RELEASE, ALTER, WAIVE OR AMEND ANY OF THE RIGHTS OR OBLIGATIONS GRANTED TO OR IMPOSED UPON ANY PARTY HERETO OR ANY OF ITS RESPECTIVE AFFILIATES UNDER THIS SUBSCRIPTION AGREEMENT OR THE REGISTRATION RIGHTS AGREEMENT, AND THE SOFTBANK RELEASED CLAIMS SHALL NOT INCLUDE ANY SUCH RIGHTS OF ANY PARTY HERETO UNDER SUCH AGREEMENTS.
(q) EFFECTIVE UPON AND SUBJECT TO THE DATE HEREOF, SOFTBANK, ON BEHALF OF ITSELF, ITS AFFILIATES, ITS SUBSIDIARIES AND EACH OF ITS AND THEIR RESPECTIVE OFFICERS, EMPLOYEES, DIRECTORS, DIRECT OR INDIRECT EQUITY HOLDERS, AGENTS, REPRESENTATIVES, OWNERS, MEMBERS, MANAGERS, ASSIGNS, SUCCESSORS AND PREDECESSORS, (EACH, SOLELY IN EACH SUCH CAPACITY, A “SOFBANK RELEASOR”), TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY FOREVER, FULLY, IRREVOCABLY, CONCLUSIVELY, ABSOLUTELY AND UNCONDITIONALLY RELEASES, DISCHARGES AND ACQUITS CIPHER, ITS AFFILIATES, ITS SUBSIDIARIES AND EACH OF ITS AND THEIR RESPECTIVE FORMER, CURRENT OR FUTURE OFFICERS, EMPLOYEES, DIRECTORS, DIRECT OR INDIRECT EQUITY HOLDERS, AFFILIATED INVESTMENT FUNDS, AFFILIATED INVESTMENT VEHICLES, MANAGED ACCOUNTS, MANAGED FUNDS, AGENTS, REPRESENTATIVES, OWNERS, MEMBERS, PARTNERS, FINANCIAL ADVISORS,
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LEGAL ADVISORS, INVESTMENT ADVISORS, FUND ADVISORS, PRINCIPALS, SHAREHOLDERS, MANAGERS, CONSULTANTS, ACCOUNTANTS, ATTORNEYS, AFFILIATES, ASSIGNS, SUCCESSORS, SUCCESSORS IN INTEREST, PREDECESSORS AND PREDECESSORS IN INTEREST (COLLECTIVELY, SOLELY IN SUCH CAPACITY, THE “CIPHER RELEASEES”) FROM AND AGAINST ANY AND ALL CLAIMS, COUNTERCLAIMS, SET-OFFS, DEFENSES, CONTROVERSIES, CHARGES, CLAIMS FOR RELIEF, DEMANDS, SUITS, ACTIONS, PROCEEDINGS OR CAUSES OF ACTION WHICH SUCH SOFTBANK RELEASOR HAS OR HAD, AT LAW, IN EQUITY OR UNDER ANY CONTRACT, AGREEMENT, STATUTE, RULE, REGULATION OR ORDER, WHETHER LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, MATURED OR UNMATURED, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING AS OF THE DATE HEREOF, AGAINST THE CIPHER RELEASEES WITH RESPECT TO ANY EVENT, MATTER, CLAIM, OCCURRENCE, DAMAGE, LOSS, EXPENSE, FEE, PENALTY, SANCTION, LIABILITY, OBLIGATION, ACT, OMISSION OR INJURY, DIRECTLY OR INDIRECTLY ARISING OUT OF, IN CONNECTION WITH OR RELATED TO, IN ANY MANNER, IN WHOLE OR IN PART, THE NON-DISCLOSURE AGREEMENT OR ANY RELATED TRANSACTIONS OR DOCUMENTS, THE NEGOTIATION, FORMULATION OR PREPARATION OF THE FOREGOING, OR ANY PRIOR NEGOTIATIONS OR DISCUSSIONS BETWEEN THE PARTIES HERETO AND/OR THEIR AFFILIATES IN RESPECT OF ANY RELATED TRANSACTIONS, AND ALL EVENTS, MATTERS, CLAIMS, OCCURRENCES, DAMAGES, LOSSES, EXPENSES, FEES, PENALTIES, SANCTIONS, LIABILITIES, OBLIGATIONS, ACTS, OMISSIONS OR INJURIES, DIRECTLY OR INDIRECTLY ARISING THEREFROM, IN CONNECTION THEREWITH OR RELATED THERETO, IN ANY MANNER, IN WHOLE OR IN PART, IN EACH CASE ON OR PRIOR TO THE DATE HEREOF (COLLECTIVELY, THE “CIPHER RELEASED CLAIMS”); PROVIDED, THAT, THE FOREGOING SHALL NOT (I) WAIVE OR RELEASE, AND THE CIPHER RELEASED CLAIMS SHALL NOT INCLUDE, CLAIMS OR LIABILITIES TO THE EXTENT ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, DIRECTLY OR INDIRECTLY, ANY MANNER, ANY ACT OR OMISSION OF A RELEASEE THAT CONSTITUTES INTENTIONAL FRAUD AS DETERMINED BY A FINAL, NON-APPEALABLE ORDER OF A COURT OF COMPETENT JURISDICTION, OR (II) RELEASE, ALTER, WAIVE OR AMEND ANY OF THE RIGHTS OR OBLIGATIONS GRANTED TO OR IMPOSED UPON ANY PARTY HERETO OR ANY OF ITS RESPECTIVE AFFILIATES UNDER THIS SUBSCRIPTION AGREEMENT OR THE REGISTRATION RIGHTS AGREEMENT, AND THE CIPHER RELEASED CLAIMS SHALL NOT INCLUDE ANY SUCH RIGHTS OF ANY PARTY HERETO UNDER SUCH AGREEMENTS.
(r) EACH OF CIPHER AND SOFTBANK INTENDS THE RELEASES SET FORTH HEREIN TO APPLY FULLY TO CLAIMS THAT CIPHER OR SOFTBANK DOES NOT PRESENTLY KNOW OR SUSPECT TO EXIST AT THIS TIME. EACH OF CIPHER AND SOFTBANK UNDERSTANDS THAT THE FACTS WITH RESPECT TO WHICH THIS RELEASE IS GIVEN MAY HEREAFTER PROVE TO BE DIFFERENT FROM THE FACTS NOW KNOWN OR BELIEVED BY CIPHER OR SOFTBANK, AND EACH OF CIPHER AND SOFTBANK HEREBY ACCEPTS AND ASSUMES THE RISK THEREOF AND AGREES THAT THIS RELEASE SHALL BE AND SHALL REMAIN, IN
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ALL RESPECTS, EFFECTIVE AND NOT SUBJECT TO TERMINATION OR RESCISSION BY REASON OF ANY SUCH DIFFERENCE IN FACTS. THE SOTBANK RELEASED CLAIMS AND THE CIPHER RELEASED CLAIMS HEREIN SHALL BE CONSTRUED BROADLY AS GENERAL RELEASES, AND EACH OF CIPHER AND SOFTBANK HEREBY EXPRESSLY, KNOWINGLY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS, BENEFITS AND PROTECTIONS OF ANY STATE OR FEDERAL STATUTE OR COMMON LAW PRINCIPLE LIMITING THE SCOPE OF A GENERAL RELEASE. EACH OF CIPHER AND SOFTBANK EXPRESSLY WAIVES, RELINQUISHES AND RELEASES ANY AND ALL PROVISIONS, RIGHTS AND BENEFITS CONFERRED BY OR UNDER CAL. CIV. CODE § 1542 OR ANY LAW OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES OR TERRITORY OF THE UNITED STATES, OR PRINCIPLE OF COMMON LAW OR ANY LAW OF ANY FOREIGN JURISDICTION, WHICH IS SIMILAR, COMPARABLE OR EQUIVALENT TO CAL. CIV. CODE § 1542, WHICH PROVIDES:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION HEREOF OR RELEASE CONTAINED HEREIN SHALL IN NO WAY AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OR RELEASE.
[Signature Pages Immediately Follow]
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IN WITNESS WHEREOF, Cipher and SoftBank has executed or caused this Subscription Agreement to be executed by its duly authorized representative as of the date set forth below.
| CIPHER MINING INC. | ||||
| By: | /s/ William Iwaschuk | |||
| Name: | William Iwaschuk | |||
| Title: | Co-President, Chief Legal Officer and Corporate Secretary | |||
Signature Page to Subscription Agreement
| SUBSCRIBER: | JOINT SUBSCRIBER, if applicable: | |||
| Star Beacon LLC |
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| Signature of Subscriber: | Signature of Joint Subscriber, if applicable: | |||
| By: /s/ Kiran Kazmi | By: | |||
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| Name: Kiran Kazmi | Name: | |||
| Title: Manager | Title: | |||
| Date: , 202[•] | ||||
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| Name in which securities are to be registered (if different) |
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| Email Address: _______________________ | ||||
| If there are joint investors, please check one: | ||||
| ☐ Joint Tenants with Rights of Survivorship | ||||
| ☐ Tenants-in-Common | ||||
| ☐ Community Property | ||||
| Subscriber’s EIN: | Joint Subscriber’s EIN: | |||
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| Business Address-Street: | Mailing Address-Street (if different): | |||
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| City, State, Zip: | City, State, Zip: | |||
| Attn: | Attn: | |||
| Telephone No.: ______________________ | Telephone No.: ______________________ | |||
| Facsimile No.: _______________________ | Facsimile No.: _______________________ | |||
You must pay the Purchase Price by wire transfer of United States dollars in immediately available funds to the account specified by Cipher.
Signature Page to Subscription Agreement
Index of Schedules:
| • | Schedule A: Eligibility Representations of Subscriber |
| • | Schedule B: Cipher Wire Instructions |
| • | Schedule C: Competitors |
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of January 30, 2025, is made and entered into by and between Cipher Mining Inc., a Delaware corporation (“Cipher”), and Star Beacon LLC (“SoftBank” and, together with any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, a “Subscriber” and collectively, the “Subscribers”).
RECITALS
WHEREAS, on January 30, 2025, Cipher entered into a subscription agreement (the “Subscription Agreement”) with SoftBank, pursuant to which SoftBank agreed to subscribe for and purchase from Cipher, and Cipher agreed to issue and sell to the Subscribers, an aggregate of 10,438,413 shares (the “Acquired Shares”) of Cipher’s newly issued common stock, par value $0.001 per share (the “Cipher Common Stock”), for an aggregate purchase price of $50,000,000;
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Capitalized terms used but not otherwise defined in this Article I or elsewhere in this Agreement shall have the meanings ascribed to such terms in the Subscription Agreement.
“Acquired Shares” shall have the meaning given in the Recitals hereto.
“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or principal financial officer of Cipher, after consultation with counsel to Cipher, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, and (iii) Cipher has a bona fide business purpose for not making such information public.
“Agreement” shall have the meaning given in the Preamble.
“Board” shall mean the Board of Directors of Cipher.
“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in the Borough of Manhattan, The City of New York or Tokyo, Japan are authorized or obligated by law or executive order to close.
“Cipher” shall have the meaning given in the Preamble.
“Cipher Common Stock” shall have the meaning given in the Recitals hereto.
“Commission” shall mean the Securities and Exchange Commission.
“Demand Registration” shall have the meaning given in subsection 2.1.1.
“Demand Requesting Holder” shall have the meaning given in subsection 2.2.1.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Filing Deadline” shall have the meaning given in subsection 2.1.1.
“Form S-3” shall have the meaning given in subsection 2.3.
“Maximum Number of Securities” shall have the meaning given in subsection 2.1.3.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the light of the circumstances under which they were made) not misleading.
“Piggyback Registration” shall have the meaning given in subsection 2.2.1.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security” shall mean: (a) the Acquired Shares; (b) any capital stock of Cipher issued or issuable with respect to any Acquired Shares by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; and (c) any securities into which the shares described in clauses (a) or (b) may be converted or exchanged pursuant to any merger, consolidation, sale of assets, corporate conversion or other extraordinary transaction; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by Cipher and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) with respect to Registrable Securities held by any Subscriber, together with its Affiliates, the later to occur of (A) the three (3) year anniversary of the date of this Agreement and (B) the date on which such Subscriber, together with its Affiliates, is permitted to sell such securities without registration pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no volume, manner of sale or other restrictions or limitations and without compliance with the current public reporting requirements set forth under Rule 144(i)(2)); or (v) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(a) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Cipher Common Stock is then listed;
(b) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);
(c) printing, messenger, telephone and delivery expenses;
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(d) reasonable fees and disbursements of counsel for Cipher;
(e) reasonable fees and disbursements of all independent registered public accountants of Cipher incurred specifically in connection with such Registration; and
(f) reasonable fees and expenses of one (1) legal counsel selected by the Subscribers initiating a Takedown Request or a Demand Registration to be registered for offer and sale in the applicable Registration.
“Registration Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.
“Shelf Requesting Holder” shall have the meaning given in subsection 2.1.1.
“Subscriber” or “Subscribers” shall have the meaning given in the Preamble.
“Subscription Agreement” shall have the meaning given in the Recitals.
“Takedown Prospectus Supplement” shall have the meaning given in subsection 2.1.1.
“Takedown Request” shall have the meaning given in subsection 2.1.1.
“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“Underwritten Registration” or “Underwritten Offering” shall mean a Registration (including pursuant to Takedown Prospectus Supplement) in which securities of Cipher are sold to one or more Underwriters for reoffering to the public, including, but not limited to, through a “block trade,” “bought deal,” or “overnight transaction” or other block sale to a financial institution conducted as an underwritten public offering.
ARTICLE II
REGISTRATIONS
2.1 Shelf Registration.
2.1.1 General. As soon as reasonably practicable following the date hereof, and in any event no later than the later of (i) the 30th calendar day following the date hereof (or if such day is not a Business Day, the next following Business Day) and (ii) the 5th calendar day following the date the Company files its annual report on Form 10-K for its fiscal year ended December 31, 2024 (or if such day is not a Business Day, the next following Business Day) (the “Filing Deadline”), Cipher shall file, and shall thereafter use its reasonable best efforts to make and keep effective (including by renewing or refiling upon expiration), a Registration Statement permitting the resale from time to time on a delayed or continuous basis pursuant to Rule 415 by the Subscribers of the Registrable Securities. Thereafter, Cipher shall, as promptly as reasonably practicable following the written request of any Subscriber or group of Subscribers (each, a “Shelf Requesting Holder” and, collectively, the “Shelf Requesting Holders”) for a resale of Registrable Securities (a “Takedown Request”), file a prospectus supplement (a “Takedown Prospectus Supplement”) to such Registration Statement filed under Rule 424 with respect to resales of the Registrable Securities pursuant to the intended method of distribution thereof by the Shelf Requesting Holder(s), and to the extent such Takedown Prospectus Supplement is not automatically effective upon filing, shall use its reasonable best efforts to cause such Takedown Prospectus Supplement to be declared effective under the Securities Act promptly after the filing
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thereof. Notwithstanding anything to the contrary herein, under no circumstances shall Cipher be obligated (i) to file a Takedown Prospectus Supplement in respect of the resale of Registrable Securities involving gross proceeds of less than $15,000,000 or (ii) to file more than one (1) Takedown Prospectus Supplement under this Section 2.1 with respect to any or all Registrable Securities. The Takedown Request shall specify the kind and aggregate amount of Registrable Securities to be registered and the intended methods of distribution.
2.1.2 Underwritten Takedown. Subject to the provisions of subsection 2.1.3 and Section 2.4 hereof, if the Shelf Requesting Holder(s) so advise Cipher as part of their Takedown Request that the offering of the Registrable Securities pursuant to such Takedown Prospectus Supplement shall be in the form of an Underwritten Offering, then the right of the Shelf Requesting Holder(s) to include their Registrable Securities in such Takedown Request shall be conditioned upon the Shelf Requesting Holders’ participation in such Underwritten Offering and the inclusion of the Registrable Securities in such Underwritten Offering to the extent provided herein. In such event, the Shelf Requesting Holders holding the majority of the Registrable Securities to be included in such Underwritten Offering will have the right to select one or more managing Underwriters for such Underwritten Offering, provided that such Underwriter is reasonably satisfactory to Cipher. Cipher and the Shelf Requesting Holders shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering.
2.1.3 Reduction of Underwritten Takedown. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Takedown Request, in good faith, advises Cipher and the Shelf Requesting Holders in writing that the dollar amount or number of Registrable Securities that the Shelf Requesting Holders desire to sell, taken together with all other shares of Cipher Common Stock or other equity securities that Cipher desires to sell and shares of Cipher Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then Cipher shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities that the Shelf Requesting Holders have requested be included in such Underwritten Registration that can be sold without exceeding the Maximum Number of Securities and, if such Registrable Securities exceed the Maximum Number of Securities, pro rata based on the relative number of Registrable Securities then held by each Shelf Requesting Holder (provided that any securities thereby allocated to a Shelf Requesting Holder that exceed such participating Shelf Requesting Holder’s request shall be reallocated among the remaining participating Shelf Requesting Holders in like manner); (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), shares of Cipher Common Stock or other equity securities that Cipher desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), shares of Cipher Common Stock or other equity securities of other persons or entities that Cipher is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.
2.1.4 Takedown Withdrawal. Each Shelf Requesting Holder shall have the right to withdraw from a Takedown Request for any or no reason whatsoever upon written notification to Cipher and the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration at least three (3) Business Days prior to the filing of a Takedown Prospectus Supplement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to such Takedown Request.
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2.2 Demand Registration.
2.2.1 Request for Registration. At any time that the Registration Statement required pursuant to Section 2.1 shall not be available for the resale of the Registrable Securities (excluding the period between the date hereof and the Filing Deadline), including if for any reason Cipher shall be ineligible to maintain or use such Registration Statement, any Subscriber or group of Subscribers, subject to the other provisions hereof, including subsection 2.1.4 and Section 2.4 hereof, may make a written demand for Registration of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such written demand a “Demand Registration”). Promptly upon receipt of any Demand Registration (but in no event more than five (5) Business Days thereafter), Cipher shall notify, in writing, all other Subscribers of such Demand Registration, and each Subscriber who thereafter wishes to include all or a portion of such Subscriber’s Registrable Securities in a Registration pursuant to the Demand Registration (each such Subscriber that includes all or a portion of such Subscriber’s Registrable Securities in such Registration, a “Demand Requesting Holder”) shall so notify Cipher, in writing, within five (5) Business Days after the receipt by the Subscriber of the notice from Cipher. Upon receipt by Cipher of any such written notification from a Demand Requesting Holder to Cipher, such Demand Requesting Holder shall be entitled to have their Registrable Securities included in a Registration pursuant to the Demand Registration. Cipher shall file, as soon thereafter as practicable, but not more than thirty (30) days immediately after Cipher’s receipt of the Demand Registration, the Registration of all Registrable Securities requested by the Subscribers pursuant to such Demand Registration. Under no circumstances shall Cipher be obligated to effect more than one (1) Registration pursuant to a Demand Registration in any six (6) month period under this Section 2.2.1 with respect to any or all Registrable Securities.
2.2.2 Effective Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) Cipher has complied with all of its obligations under this Agreement with respect thereto; provided, further, that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective, unless and until, (A) such stop order or injunction is removed, rescinded or otherwise terminated, and (B) the Subscribers holding the majority of the Registrable Securities included in such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly notify Cipher in writing, but in no event later than five (5) days after such stop order or injunction is removed, rescinded or otherwise terminated, of such election; and provided, further, that Cipher shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.
2.2.3 Underwritten Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if the Subscribers so advise Cipher as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of the Subscribers to include their Registrable Securities in such Registration shall be conditioned upon the Subscribers’ participation in such Underwritten Offering and the inclusion of the Registrable Securities in such Underwritten Offering to the extent provided herein. In such event, the Subscribers holding the majority of the Registrable Securities to be included in such Underwritten Offering will have the right to select one or more managing Underwriters for such Underwritten Offering, provided that such Underwriter is reasonably satisfactory to Cipher. Cipher and the Subscribers shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering.
2.2.4 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises Cipher and the Subscribers in writing that the dollar amount or number of Registrable Securities that the Subscribers desire to sell, taken together with all other shares of Cipher Common Stock or other equity securities that Cipher desires to sell and shares of Cipher Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights
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held by any other stockholders who desire to sell, exceeds the Maximum Number of Securities, then Cipher shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities that the Subscribers have requested be included in such Underwritten Registration that can be sold without exceeding the Maximum Number of Securities and, if such Registrable Securities exceed the Maximum Number of Securities, pro rata based on the relative number of Registrable Securities then held by each participating Subscriber (provided that any securities thereby allocated to a participating Subscriber that exceed such participating Subscriber’s request shall be reallocated among the remaining participating Subscribers in like manner); (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), shares of Cipher Common Stock or other equity securities that Cipher desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), shares of Cipher Common Stock or other equity securities of other persons or entities that Cipher is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.
2.2.5 Demand Registration Withdrawal. Each Demand Requesting Holder shall have the right to withdraw from a Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to Cipher and the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration at least three (3) Business Days prior to the effectiveness of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to such Demand Registration.
2.3 Piggyback Registration.
2.3.1 Piggyback Rights. If, at any time on or after the date hereof, Cipher proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of persons other than the Subscribers, other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to Cipher’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of Cipher, (iv) for a “registered direct” offering (whether or not underwritten), (v) for an “at the market” or similar registered offering through a broker, sales agent or distribution agent, whether as agent or principal, or (v) for a dividend reinvestment plan, then Cipher shall give written notice of such proposed filing to the Subscribers as soon as reasonably practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to the Subscribers the opportunity to register the sale of such number of Registrable Securities as the Subscribers may request in writing within five (5) Business Days after receipt of such written notice (such Registration a “Piggyback Registration”). Cipher shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Subscribers pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of Cipher included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. The Subscribers shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by Cipher. Cipher shall have the right to terminate or withdraw any Registration initiated by it under this Section 2.2.1 before the effective date of such Registration Statement, whether or not the Subscribers have elected to include Registrable Securities in such Registration.
2.3.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback Registration, in good faith, advises Cipher and the Subscribers participating in the Piggyback Registration in writing that the dollar amount or number of shares of Cipher Common Stock that Cipher desires to sell, taken together with
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(i) the shares of Cipher Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Subscribers, (ii) the Registrable Securities as to which registration has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Cipher Common Stock, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of Cipher, exceeds the Maximum Number of Securities, then:
(a) If the Registration is undertaken for Cipher’s account, Cipher shall include in any such Registration (i) first, the shares of Cipher Common Stock or other equity securities that Cipher desires to sell, which can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of the Subscribers exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, which can be sold without exceeding the Maximum Number of Securities, and, if such Registrable Securities exceed the Maximum Number of Securities, pro rata based on the relative number of Registrable Securities then held by each participating Subscriber (provided that any securities thereby allocated to a participating Subscriber that exceed such participating Subscriber’s request shall be reallocated among the remaining participating Subscribers in like manner); and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Cipher Common Stock, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of Cipher, which can be sold without exceeding the Maximum Number of Securities;
(b) If the Registration is as a result of a demand pursuant to a contractual right of persons or entities other than the Subscribers, then Cipher shall include in any such Registration (i) first, the shares of Cipher Common Stock or other equity securities, if any, of such demanding persons or entities, which can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Subscribers exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, which can be sold without exceeding the Maximum Number of Securities, and, if such Registrable Securities exceed the Maximum Number of Securities, pro rata based on the relative number of Registrable Securities then held by each participating Subscriber (provided that any securities thereby allocated to a participating Subscriber that exceed such participating Subscriber’s request shall be reallocated among the remaining participating Subscribers in like manner); (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Cipher Common Stock or other equity securities for the account of other persons or entities that Cipher is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities, solely to the extent that such written contractual arrangements provide that such securities shall be sold prior to the shares of Cipher Common Stock or other equity securities that Cipher desires to sell; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the shares of Cipher Common Stock or other equity securities that Cipher desires to sell, which can be sold without exceeding the Maximum Number of Securities.
2.3.3 Piggyback Registration Withdrawal. The Subscribers shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to Cipher and the Underwriter or Underwriters (if any) of their intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration (or in the case of an Underwritten Registration pursuant to Rule 415, at least two (2) Business Days prior to the time of pricing of the applicable offering). Cipher (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, Cipher shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
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2.4 Registration Statement Form. Any Registration Statement filed pursuant to Section 2.1 or Section 2.2 shall be filed on (a) Form S-3, if Cipher is then eligible to file a Registration Statement on Form S-3 with respect to the registration of the Registrable Securities (pursuant to the General Instructions to Form S-3) (“S-3 Eligible”), which Form S-3 shall be filed as an automatically effective Registration Statement if Cipher is eligible for such filing, or (b) any other appropriate form under the Securities Act for the type of offering contemplated by a Subscriber, if Cipher is not then S-3 Eligible. If any Registration Statement filed pursuant to Section 2.1 or Section 2.2 is not filed on a Form S-3 because Cipher is not S-3 Eligible, then Cipher shall use reasonable best efforts to convert any such filed Registration Statement to a Form S-3 Registration Statement as soon as reasonably practicable after Cipher is eligible to use Form S-3; provided that Cipher shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the Commission.
2.5 Restrictions on Registration Rights. If (i) during the period starting with the date thirty (30) days prior to Cipher’s good faith estimate of the date of the filing of, and ending on a date sixty (60) days after the effective date of, a Cipher initiated Registration and provided that Cipher has delivered written notice to the Subscribers prior to receipt of a Takedown Request pursuant to subsection 2.1.1 or Demand Registration pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all reasonable efforts to cause the applicable Registration Statement to become effective; (ii) the Subscribers have requested an Underwritten Registration and Cipher and the Subscribers are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (iii) in the good faith judgment of the Board such Registration would be seriously detrimental to Cipher and the Board concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case Cipher shall furnish to the Subscribers a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board it would be seriously detrimental to Cipher for such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration Statement. In such event, Cipher shall have the right to defer such filing for a period of not more than thirty (30) days; provided, however, that Cipher shall not defer its obligation in this manner more than once in any 12-month period.
2.6 Waiver and Extensions. Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
ARTICLE III
COMPANY PROCEDURES
3.1 General Procedures. If at any time on or after the date the date hereof Cipher is required to effect the Registration of Registrable Securities, Cipher shall use commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto Cipher shall, as expeditiously as reasonably possible:
3.1.1 prepare and file with the Commission as soon as reasonably practicable a Registration Statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold;
3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by the majority in interest of the Subscribers with Registrable Securities, or any Underwriter of Registrable Securities, the sale of which is registered on such Registration Statement or
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as may be required by the rules, regulations or instructions applicable to the registration form used by Cipher or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior to filing a Registration Statement or Prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, the Subscribers with Registrable Securities covered by the Registration Statement and their respective legal counsels, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters, the Subscribers and their legal counsel may request in order to facilitate the disposition of the Registrable Securities owned by the Subscribers;
3.1.4 prior to any public offering of Registrable Securities, use commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Subscribers of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence satisfactory to the Subscribers that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of Cipher and do any and all other acts and things that may be necessary or advisable to enable the Subscribers of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that Cipher shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by Cipher are then listed;
3.1.6 provide a transfer agent and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise the Subscribers with Registrable Securities covered by a Registration Statement, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;
3.1.8 at least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus, furnish a copy thereof to the Subscribers with Registrable Securities covered by such Registration Statement or Prospectus and their counsel;
3.1.9 promptly notify the Subscribers at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit a representative of the participating Subscribers (such representative to be selected by a majority-in-interest of the participating Subscribers), the Underwriters, if any, and any attorney or accountant retained by the participating Subscribers or Underwriters to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause Cipher’s officers, directors and employees to supply all information reasonably requested by any such
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representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representative or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to Cipher, prior to the release or disclosure of any such information and provided further, Cipher may not include the name of any Subscriber or Underwriter or any information regarding any Subscriber or Underwriter in any Registration Statement or Prospectus, any amendment or supplement to such Registration Statement or Prospectus, any document that is to be incorporated by reference into such Registration Statement or Prospectus, or any response to any comment letter, without the prior written consent of such Subscriber or Underwriter and providing such Subscriber or Underwriter a reasonable amount of time to review and comment on such applicable document, which comments Cipher shall include unless contrary to applicable law;
3.1.11 obtain a “cold comfort” letter from Cipher’s independent registered public accountants in the event of an Underwritten Registration which the participating Subscribers may rely on, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably request, and reasonably satisfactory to the participating Subscribers;
3.1.12 on the date the Registrable Securities are delivered for sale pursuant to such Registration, in the event of an Underwritten Registration, obtain an opinion, dated such date, of counsel representing Cipher for the purposes of such Registration, addressed to the Underwriters, the placement agent or sales agent, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Underwriters may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to the Underwriters, placement agent or sales agent;
3.1.13 in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;
3.1.14 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of Cipher’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission); and
3.1.15 if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $15,000,000, use its reasonable efforts to make available customary management presentations that may be reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Subscribers, in connection with such Registration.
3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by Cipher; provided, however, that, in any twelve (12) month period, Cipher shall not be required to pay for more than one (1) registration proceeding begun pursuant to Section 2.2 or more than one Takedown Prospectus Supplement pursuant to subsection 2.1.1 by the Subscribers if the registration request is subsequently withdrawn at the request of the Subscribers. Any Registration Expenses of Registrations not borne by Cipher pursuant to the immediately preceding sentence shall be borne by the Subscribers pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration. It is acknowledged by the Subscribers that the Subscribers shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Subscribers.
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3.3 Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of Cipher pursuant to a Registration initiated by Cipher hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by Cipher and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.
3.4 Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from Cipher that a Registration Statement or Prospectus contains a Misstatement, the Subscribers shall forthwith discontinue disposition of Registrable Securities until they have received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that Cipher hereby covenants to prepare and file such supplement or amendment as soon as reasonably practicable after the time of such notice), or until they are advised in writing by Cipher that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would require Cipher to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to Cipher for reasons beyond Cipher’s control, Cipher may, upon giving prompt written notice of such action to the Subscribers, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than thirty (30) consecutive days, determined in good faith by Cipher to be necessary for such purpose; provided, however, that Cipher may not invoke this right more than once in any 12-month period. In the event Cipher exercises its rights under the preceding sentence, the Subscribers agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. Cipher shall immediately notify the Subscribers of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5 Reporting Obligations. As long as any Subscriber shall own Registrable Securities, Cipher, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by Cipher after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Subscribers with true and complete copies of all such filings. Cipher further covenants that it shall take such further action as the Subscribers may reasonably request, all to the extent required from time to time to enable the Subscribers to sell shares of Cipher Common Stock held by such Subscriber without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission, to the extent such rule or such successor rule is available to Cipher), including providing any customary legal opinions. Upon the request of the Subscribers, Cipher shall deliver to the Subscribers a written certification of a duly authorized officer as to whether it has complied with such requirements.
3.6 Subsequent Registration Rights. From and after the date of this Agreement, Cipher shall not, without the prior written consent of the Subscribers then holding a majority of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of Cipher that (i) would allow such holder or prospective holder to include such securities in any Registration Statement unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such Registration Statement only to the extent that the inclusion of such securities will not reduce the number of the Registrable Securities of the Subscribers that are included in such Registration Statement; or (ii) otherwise provide any such holder or prospective holder of securities of Cipher with rights which conflict with or impair the registration rights granted to the Subscribers hereunder.
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ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 In the event any Registrable Securities are included in any Registration Statement under this Agreement, Cipher agrees to indemnify, to the extent permitted by law, each Subscriber, each of its officers and directors and persons who control such Subscriber (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including reasonable attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading, except insofar as the same are caused by or contained in any information furnished in writing to Cipher by such Subscriber expressly for use therein. Cipher shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Subscribers. Notwithstanding the foregoing, the indemnity agreement contained in this Section 4.1.1 shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of Cipher, which consent shall not be unreasonably withheld, conditioned, or delayed.
4.1.2 In connection with any Registration Statement in which a Subscriber is participating, such Subscriber shall furnish to Cipher in writing such information and affidavits as Cipher reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify Cipher, its directors and officers and agents and each person who controls Cipher (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Subscriber expressly for use therein. Each Subscriber of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of Cipher. For the avoidance of doubt, the obligation to indemnify pursuant to this Section 4.1.2 shall be several, not joint and several, among the Subscribers, and the total indemnification liability of each Subscriber under this Section 4.1.2 shall be in proportion to and limited to the net proceeds received by such Subscriber from the sale of Registrable Securities pursuant to the applicable Registration Statement.
4.1.3 Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party’s ability to defend such action) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld conditioned, or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement (a) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation or (b) includes an admission of fault, culpability or a failure to act by or on behalf of the indemnified party.
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4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. Cipher and each Subscriber of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event Cipher’s or the Subscribers’ indemnification is unavailable for any reason.
4.1.5 If the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Subscriber under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by the Subscribers in such offering giving rise to such liability except in the case of fraud or wilful misconduct by the Subscribers. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
ARTICLE V
MISCELLANEOUS
5.1 Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement shall be given in accordance with Section 8(m) of the Subscription Agreement.
5.2 Assignment; No Third Party Beneficiaries.
5.2.1 This Agreement and the rights, duties and obligations of Cipher hereunder may not be assigned or delegated by Cipher in whole or in part, other than to any successor of Cipher, whether by merger, acquisition, reorganization or otherwise. In the event Cipher engages in a merger or consolidation in which the Cipher Common Stock is converted into securities of another company, Cipher will use its reasonable best effort to make appropriate arrangements so that the registration rights provided under this Agreement continue to be provided to the Subscribers by the issuer of such securities. To the extent such new issuer, or any other company acquired by Cipher in a merger or consolidation, was bound by registration rights that would conflict with the provisions of this Agreement, Cipher will use its reasonable best efforts to modify any such “inherited” registration rights so as not to interfere in any material respects with the rights provided under this Agreement, unless otherwise agreed by the Subscribers then holding a majority of the Registrable Securities.
5.2.2 No Subscriber may assign or delegate rights, duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such Subscriber, which, prior to the expiration of the Lock-Up Period (as defined in the Subscription Agreement), may only be to a Subsequent Transferee (as defined in the Subscription Agreement) in accordance with Section 5.1(a) of the Subscription Agreement, but only if such transferee assumes such Subscriber’s rights and
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obligations under this Agreement upon its, his or her execution and delivery of a joinder agreement, in form and substance reasonably acceptable to Cipher agreeing to be bound by the terms and conditions of this Agreement as if such person were a Subscriber party hereto; whereupon such person will be treated for all purposes of this Agreement, with the same rights, benefits and obligations hereunder as the Subscribers with respect to the transferred Registrable Securities.
5.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Subscribers, which shall include Subsequent Transferees.
5.2.4 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2 hereof.
5.2.5 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate Cipher unless and until Cipher shall have received (i) written notice of such assignment as provided in Section 5.1 hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to Cipher, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
5.3 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.
5.4 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
5.5 Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law, provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of Delaware. Each party hereto (i) irrevocably consents to the service of the summons and complaint and any other process in any action or proceeding relating to the transactions contemplated by this Agreement, for and on behalf of itself or any of its properties or assets, in accordance with this Section 5.5 or in such other manner as may be permitted by applicable law, that such process may be served in the manner of giving notices in Section 5.1 and that nothing in this Section 5.5 shall affect the right of any party to serve legal process in any other manner permitted by applicable law, (ii) irrevocably and unconditionally consents and submits itself and its properties and assets in any action or proceeding to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware (the “Chancery Court”) and any state appellate court therefrom located within the State of Delaware (or, only if the Chancery Court declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware) in the event any dispute or controversy arises out of this Agreement or the transactions contemplated hereby, or for recognition and enforcement of any order in respect thereof, (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iv) agrees that any actions or proceedings arising in connection with this Agreement or the transactions contemplated hereby shall be brought, tried and determined only in the Chancery Court and any state appellate court therefrom located within the State of Delaware (or, only if the Chancery Court declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware), (v) waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same, and (vi) agrees that it will not bring any action or proceeding relating to this Agreement or the transactions contemplated hereby in any court other than the aforesaid courts. Each party hereto agrees that a final order in any action or proceeding in such courts as provided above shall be conclusive and may be enforced in other jurisdictions by suit on the order or in any other manner provided by applicable law.
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5.6 Waiver of Trial by Jury. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, COUNTERCLAIM OR OTHER PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF EACH SUBSCRIBER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
5.7 Entire Agreement. This Agreement and the Subscription Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.
5.8 Amendments and Modifications. Upon the written consent of Cipher and the Subscribers then holding a majority of the Registrable Securities, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified. No failure or delay on the part of the Subscribers or Cipher in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of the Subscribers or Cipher. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party. Any amendment, termination, or waiver effected in accordance with this Section 5.8 shall be binding on each party hereto and all of such party’s successors and permitted assigns, regardless of whether or not any such party, successor or assignee entered into or approved such amendment, termination, or waiver.
5.9 Term. This Agreement shall terminate upon the earlier of (i) the sixth (6th) anniversary of the date of this Agreement or (ii) as to any Subscriber, the date as of which such Subscriber ceases to hold any Registrable Securities (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission). The provisions of Section 3.5 and Article IV shall survive any termination.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.
| CIPHER MINING INC. | ||
| By: | /s/ William Iwaschuk | |
| Name: William Iwaschuk | ||
| Title: Co-President, Chief Legal Officer and Corporate Secretary | ||
[Signature Page to Registration Rights Agreement]
| SOFTBANK: | ||
| STAR BEACON LLC | ||
| By: | /s/ Kiran Kazmi | |
| Name: Kiran Kazmi | ||
| Title: Manager | ||
[Signature Page to Registration Rights Agreement]
Exhibit 99.1
Cipher Mining Announces $50 Million PIPE Investment from SoftBank Group
SoftBank to purchase approximately 10.4 million shares of Cipher common stock for $50 million
NEW YORK – January 30, 2025 – Cipher Mining Inc. (NASDAQ:CIFR) (“Cipher” or the “Company”) today announced a $50 million investment from SoftBank Group Corp. (TSE: 9984, “SoftBank”), one of the world’s most prominent investment holding companies. The $50 million PIPE investment will support Cipher’s HPC data center development business and establish SoftBank as a significant primary investor in Cipher.
“We are thrilled to welcome SoftBank as an important investor in Cipher. This investment comes at a pivotal moment in Cipher’s growth trajectory, as the Company continues to attract attention for its pipeline of sites and innovative solutions in industrial-scale data centers. SoftBank’s focus on innovation in technology and AI development aligns with our vision to establish ourselves as a leader in HPC data center development,” said Tyler Page, Cipher’s CEO.
Keefe, Bruyette, & Woods Inc. acted as financial advisor to the Company, and Latham & Watkins LLP acted as legal counsel to the Company.
About Cipher
Cipher is focused on the development and operation of industrial-scale data centers for bitcoin mining and HPC hosting. Cipher aims to be a market leader in innovation, including in bitcoin mining growth, data center construction, and as a hosting partner to the world’s largest HPC companies. To learn more about Cipher, please visit https://www.ciphermining.com/.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws of the United States. Cipher intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this press release that are not statements of historical fact, such as, statements about Cipher’s beliefs and expectations regarding its planned business model and strategy, its HPC data center development and management plans and objectives, are forward-looking statements and should be evaluated as such. These forward-looking statements generally are identified by the words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “strategy,” “future,” “forecasts,” “opportunity,” “predicts,” “potential,” “would,” “will likely result,” “continue,” and similar expressions (including the negative versions of such words or expressions).
These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Cipher and its management, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: volatility in the price of Cipher’s securities due to a variety of factors, including changes in the competitive and regulated industry in which Cipher operates, Cipher’s evolving business model and strategy and efforts we may make to modify aspects of its business model or engage in various strategic initiatives, variations in performance across competitors, changes in laws and regulations affecting Cipher’s business, and the ability to implement business plans, forecasts, and other expectations and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of Cipher’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”), as any such factors may be updated from time to time in Cipher’s other filings with the SEC, including without limitation, Cipher’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Cipher assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Contacts:
Investor Contact:
Courtney Knight
Head of Investor Relations at Cipher Mining
Media Contact:
Ryan Dicovitsky / Kendal Till
Dukas Linden Public Relations