Sequans Communications F-3, filed May 12, 2023
Sequans Communications (SQNS)
F-3
2023-05-12
View Original
Added on
October 21, 2026
As filed with the Securities and Exchange Commission on May 12, 2023
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SEQUANS COMMUNICATIONS S.A.
(Exact name of registrant as specified in its charter)
French Republic | Not Applicable | ||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
15-55 boulevard Charles de Gaulle
92700 Colombes, France
Telephone: +33 1 70 72 16 00
(Address and telephone number of Registrant’s principal executive offices)
GKL Corporate/Search, Inc.
One Capitol Mall, Suite 660
Sacramento, California 95814
Telephone: +1 916 442 7652
(Name, address, and telephone number of agent for service)
Copies to:
Brett Cooper, Esq.
Orrick, Herrington & Sutcliffe LLP
The Orrick Building
405 Howard Street
San Francisco, California 94105
Telephone: +1 415 773-5700
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☑
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities or accept any offer to buy these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MAY 12, 2023
PROSPECTUS
46,733,972 Ordinary Shares
SEQUANS COMMUNICATIONS S.A.
Represented by up to 11,683,493 American Depositary Shares
This prospectus relates to the proposed resale or other disposition of up to 46,733,972 of our ordinary shares, which may be represented by up to 11,683,493 American Depositary Shares, or ADSs, by the Selling Securityholders identified in the “Selling Securityholders” section of this prospectus, or any of their transferees or other successors-in-interest. The ordinary shares underlying the ADSs are being registered pursuant to the requirements of that certain Registration Rights Agreement, dated as of April 12, 2023, by and between us and certain of the Selling Securityholders (the “Registration Rights Agreement”) and that certain Registration Rights Agreement, dated as of January 11, 2022, by and between us and Renesas Electronics Corporation (“Renesas”), a Selling Securityholder (the “Renesas Registration Rights Agreement” and, collectively, with the Registration Rights Agreement, the “Registration Rights Agreements”) to permit the Selling Securityholders to sell ADSs representing the ordinary shares from time to time in the public market.
We are not selling any ADSs or ordinary shares under this prospectus, and we will not receive any proceeds from the sales or other dispositions of the ordinary shares (or ADSs representing such shares) held by the Selling Securityholders.
The Selling Securityholders or their respective pledgees, assignees or successors-in-interest may offer and sell or otherwise dispose of the ordinary shares (or ADSs representing such shares) described in this prospectus from time to time through public or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. The Selling Securityholders will bear all commissions and discounts, if any, attributable to the sales of ordinary shares (or ADSs representing such shares). We will bear all other costs, expenses and fees in connection with the registration of the shares. See “Plan of Distribution” beginning on page 32 for more information about how the Selling Securityholders may sell or dispose of their ordinary shares (or ADSs representing such shares).
Our ordinary shares, in the form of ADSs are listed on the New York Stock Exchange, or NYSE, under the symbol “SQNS.” Each ADS will represent four ordinary shares, nominal value €0.01 per share. On May 11, 2023, the last reported sale price of our shares on the NYSE was $2.30 per ADS.
Investing in our ordinary shares or ADSs involves a high degree of risk. Before deciding whether to invest in our ordinary shares or the ADSs, you should consider carefully the risks and uncertainties incorporated by reference under the heading “Risk Factors” beginning on page 7 of this prospectus and under similar headings in the other documents that are filed after the date hereof and incorporated by reference into this prospectus.
Owning our securities may subject you to tax consequences both in France and in the United States. This prospectus and any applicable prospectus supplement may not describe these consequences fully. You should read the tax discussion in this prospectus and any applicable prospectus supplement. In addition, your ability to enforce civil liberties under U.S. federal securities law may be affected adversely by the fact that we are incorporated under the laws of France, many of our officers and directors and experts named in this prospectus are residents of France or elsewhere outside the United States, and a substantial portion of our assets and the assets of such persons are located outside the United States. See “Enforcement of Civil Liabilities.”
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
This prospectus is dated , 2023
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus relates to the proposed resale or other disposition of up to 46,733,972 of our ordinary shares, which may be represented by up to 11,683,493 American Depositary Shares, or ADSs, by the Selling Securityholders. Such ADSs representing ordinary shares were issued by our company to the Selling Securityholders (i) on April 13, 2023, pursuant to the Securities Purchase Agreement, dated April 3, 2023, by and between us and the purchasers set forth therein (the “Securities Purchase Agreement”) and (ii) on January 11, 2022, pursuant to the Securities Purchase Agreement, dated December 22, 2021 by and between us and Renesas Electronics Corporation (the “Renesas Securities Purchase Agreement” and, collectively with the Securities Purchase Agreement, the “Securities Purchase Agreements”). The Selling Securityholders acquired the ordinary shares from us in private placements pursuant to the Securities Purchase Agreements. The ordinary shares underlying the ADSs are being registered pursuant to the requirements of the Registration Rights Agreements to permit the Selling Securityholders to sell ADSs representing the ordinary shares from time to time in the public market.
We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of shares. This prospectus, together with applicable prospectus supplements and the documents incorporated by reference in this prospectus and any prospectus supplements, includes all material information relating to this offering. Please carefully read both this prospectus and any prospectus supplement together with additional information described below under “Risk Factors,” “Where You Can Find More Information About Us” and “Incorporation of Documents by Reference.”
We have not authorized anyone to give any information or to make any representation other than those contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus (as supplemented or amended). The Selling Securityholders are offering to sell, and seeking offers to buy, ordinary shares (or ADSs representing such shares) only in jurisdictions where it is lawful to do so. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any ordinary shares (or ADSs representing such shares) other than the registered shares to which they relate, nor does this prospectus constitute an offer to sell or the solicitation of an offer to buy shares in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities described in this prospectus. You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously filed with the SEC and incorporated by reference, is accurate as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates.
In this prospectus, except where the context otherwise requires and for purposes of this prospectus only:
•“we,” “us,” “our company,” “the Company,” “the registrant,” “our,” “SQNS” and similar phrases refer to Sequans Communications S.A. and its subsidiaries;
•“Selling Securityholders” refers to each of the entities set forth in the table in the “Selling Securityholders” section herein, collectively with any of their respective transferees or other successors-in-interest.
•“shares” refer to our ordinary shares;
•all references to the “Euro” or “€” are to the euro currency of the European Union and references to “U.S. dollars,” “dollars” or “$” are to Unites States dollars; and
•discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.
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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement, and the documents incorporated herein by reference, may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Forward-looking statements provide our current expectations or forecasts of future events and include, but are not limited to, statements regarding future events and our future financial performance. All statements other than present and historical facts and conditions contained herein, including any statements regarding our future results of operations and financial positions, business strategy, plans, including the ability to enter into new 5G strategic agreements, the exploration of strategic options, expectations for Massive IoT sales, our ability to convert our pipeline to revenue, and our objectives for future operations, are forward-looking statements. These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.
When used in this prospective, the words “anticipate,” “objective,” “may,” “might,” “should,” “could,” “can,” “intend,” “expect,” “believe,” “will,” “estimate,” “predict,” “potential,” “continue,” “plan,” “is designed to” or the negative of these and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
•the contraction or lack of growth of markets in which we compete and in which our products are sold;
•unexpected increases in our expenses resulting from inflationary pressures and rising interest rates, including manufacturing and operating expenses and interest expense;
•our inability to adjust spending quickly enough to offset any unexpected revenue shortfall;
•delays or cancellations in spending by our customers;
•unexpected average selling price reductions;
•the significant fluctuations to which our quarterly revenue and operating results are subject due to cyclicality in the wireless communications industry and transitions to new process technologies;
•our inability to anticipate the future market demands and future needs of our customers;
•our inability to achieve new design wins or for design wins to result in shipments of our products at levels and in the timeframes we currently expect;
•our inability to enter into and execute on strategic alliances;
•our ability to meet performance milestones under strategic license agreements;
•the impact of natural disasters on our sourcing operations and supply chain;
•the impact of the Ukraine-Russia conflict on our independent contractors located in Ukraine;
•our ability to raise debt and equity financing; and
•other factors detailed in documents we file from time to time with the Securities and Exchange Commission.
These statements reflect our current views with respect to future events, are based on assumptions and are subject to risks, uncertainties and other important factors. Our actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this prospectus, our Form 20-F and our Form 6-K submissions furnished with the SEC, which can be obtained on the SEC’s website at www.sec.gov. All forward-looking statements attributable to us or persons acting on our behalf are
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expressly qualified in their entirety by the cautionary statements set forth in this annual report. Also, these forward-looking statements represent our estimates and assumptions only as of the date such forward-looking statements are made. Except as required by law, we assume no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Readers are urged, however, to review the factors set forth in reports that we file and furnish from time to time with the SEC.
Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made under the caption “Risk Factors” in this prospectus, any accompanying prospectus supplement and in our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the SEC, or Form 20-F, and our other submissions to the SEC, including any Form 6-K submissions furnished by us.
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PROSPECTUS SUMMARY
This summary highlights certain information about us, this offering and selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in the securities covered by this prospectus. This summary is qualified in its entirety by the more detailed information included in or incorporated by reference into this prospectus and any applicable prospectus supplement. For a more complete understanding of the Company and our securities, we encourage you to read in their entirety and consider carefully the more detailed information in this prospectus and any related prospectus supplement, including the documents referred to in “Where You Can Find More Information About Us” and “Incorporation of Documents by Reference,” before making an investment decision. Some of the statements in this prospectus constitute, and certain statements in any prospectus supplement or the documents incorporated by reference herein and therein may be, forward-looking statements that involve assumptions, risks and uncertainties as further described in “Information Regarding Forward-Looking Statements.”
Overview
We are a fabless designer, developer and supplier of cellular semiconductor solutions for the massive and broadband Internet of Things (IoT) markets. We offer a comprehensive set of 5G/4G chips and modules fully optimized for non-smartphone devices. Massive IoT refers to applications with lower data transmission needs but where the technology must be extremely optimized in power consumption and cost to enable massive deployment. It covers applications such as smart mobility and logistics, smart cities, e-health and wellness, and smart homes, to name few. On the other side, for broadband IoT applications, the technology is optimized to provide to homes, enterprises and industrial sites the highest possible throughput and the lowest latency. While this requirement is similar to what we can see in a smartphone, our solutions focus on providing better trade-off in cost and performance optimized for broadband IoT devices such as enterprise routers and home gateways. Our product portfolio is composed of chips, or integrated circuits (IC) of baseband processors and radio frequency (RF) transceivers, as well as machine-to-machine (M2M) modules that incorporate these chips along with radio front end subsystem, and rich software that includes advanced modem and signal processing code as well as protocol stack and higher-layer applications. Our goal is to deliver an advanced set of features with technology optimized to address the IoT requirements: power, cost and size for massive IoT, and throughput, cost and latency for broadband and critical IoT. And for both, to deliver high reliability with advanced security algorithms at a competitive price.
Risk Factors
Investing in our securities entails a high degree of risk as discussed in the “Risk Factors” section beginning on page 7 of this prospectus and in the documents incorporated by reference in this prospectus. You should carefully consider such risks before deciding to invest in our securities.
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THE OFFERING
Ordinary Shares offered by the Selling Securityholders: | 46,733,972 ordinary shares | ||||
ADSs offered by the Selling Securityholders: | 11,683,493 ADSs | ||||
Ordinary Shares outstanding as of May 11, 2023: | 233,262,394 | ||||
ADSs outstanding as of May 11, 2023: | 58,315,598 | ||||
NYSE Symbol: | Our ordinary shares, in the form of ADSs are listed on the New York Stock Exchange, or NYSE, under the symbol “SQNS”. | ||||
Use of Proceeds: | We will not receive any of the proceeds from the sale of ordinary shares (or ADSs representing such shares) in this offering. The Selling Securityholders will receive all of the proceeds from this offering. | ||||
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OUR COMPANY
We are a fabless designer, developer and supplier of cellular semiconductor solutions for the massive and broadband Internet of Things (IoT) markets. We offer a comprehensive set of 5G/4G chips and modules fully optimized for non-smartphone devices. Massive IoT refers to applications with lower data transmission needs but where the technology must be extremely optimized in power consumption and cost to enable massive deployment. It covers applications such as smart mobility and logistics, smart cities, e-health and wellness, and smart homes, to name few. On the other side, for broadband IoT applications, the technology is optimized to provide to homes, enterprises and industrial sites the highest possible throughput and the lowest latency. While this requirement is similar to what we can see in a smartphone, our solutions focus on providing better trade-off in cost and performance optimized for broadband IoT devices such as enterprise routers and home gateways. Our product portfolio is composed of chips, or integrated circuits (IC) of baseband processors and radio frequency (RF) transceivers, as well as machine-to-machine (M2M) modules that incorporate these chips along with radio front end subsystem, and rich software that includes advanced modem and signal processing code as well as protocol stack and higher-layer applications. Our goal is to deliver an advanced set of features with technology optimized to address the IoT requirements: power, cost and size for massive IoT, and throughput, cost and latency for broadband and critical IoT. And for both, to deliver high reliability with advanced security algorithms at a competitive price.
We were incorporated as a société anonyme under the laws of the French Republic on October 7, 2003, for a period of 99 years. We are registered at the Nanterre Commerce and Companies Register under the number 450 249 677. Our principal executive offices are located at 15-55 boulevard Charles de Gaulle, 92700 Colombes, France, and our telephone number is +33 1 70 72 16 00. Our agent for service of process in the U.S. is GKL Corporate/Search, Inc., One Capitol Mall, Suite 660, Sacramento, California 95814.
Our website is www.sequans.com. Information contained on, or that can be accessed through, our website, does not constitute part of this prospectus and inclusions of our website address, in this prospectus are inactive textual references only. The information that can be accessed through our website is not part of this prospectus, and investors should not rely on any such information in deciding whether to purchase our securities.
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RISK FACTORS
Investing in our securities involves certain risks. In addition to the risks highlighted below, you should read the risks and uncertainties set forth in the section entitled “Risk Factors” in our most recently filed Form 20-F, as updated by any Form 6-K furnished with the SEC, which are incorporated by reference in this prospectus, and the “Risk Factors” section in any relevant prospectus supplement, before investing in any securities that may be offered pursuant to this prospectus. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also adversely affect us. If any of those risks occur, our business, financial condition or results of operations could be materially harmed. In such case, the value of our securities could decline.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of ordinary shares (or ADSs representing such shares) in this offering. The Selling Securityholders will receive all of the proceeds from this offering.
The Selling Securityholders will pay any fees, discounts and commissions, stock transfer taxes and fees and expenses of any counsel to the Selling Securityholders incurred by the Selling Securityholders in connection with registering or disposing of the ordinary shares (or ADSs representing such shares). We will bear all other fees and expenses incurred in effecting the registration of the ordinary shares (or ADSs representing such shares) covered by this prospectus or in the filing of any amendments or supplements to the registration statement or this prospectus and all other expenses incident to the registration of the ordinary shares (or ADSs representing such shares).
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CAPITALIZATION
The following table sets forth capitalization as of March 31, 2023:
•on an actual basis; and
•on an as adjusted basis to give effect to the sale of 9,708,738 ADSs (representing 38,834,952 ordinary shares) at an issue price of $2.06 per ADS, excluding estimated transaction costs of $0.1 million pursuant to the Securities Purchase Agreement;
You should read this table in conjunction with other sections of this prospectus and any documents incorporated by reference, including our consolidated financial statements and the related notes.
| At March 31, 2023 | |||||||||||
| Actual | As Adjusted | ||||||||||
| (In thousands) | |||||||||||
| Cash and cash equivalents | $ | 5,344 | $ | 25,289 | |||||||
| Equity | |||||||||||
| Issued capital | $ | 2,315 | $ | 2,738 | |||||||
| Share premium | 2,409 | 21,931 | |||||||||
| Other capital reserves | 64,651 | 64,651 | |||||||||
| Accumulated deficit | (70,139) | (70,139) | |||||||||
| Accumulated other comprehensive income (loss) | $ | (498) | $ | (498) | |||||||
| Total equity | $ | (1,262) | $ | 18,683 | |||||||
| Long-term liabilities (current and non-current) | |||||||||||
| Convertible debt and accrued interest | $ | 45,472 | $ | 45,472 | |||||||
| Convertible debt embedded derivative | 901 | 901 | |||||||||
| Government grant advances and interest-free loans | 9,580 | 9,580 | |||||||||
| Interest-bearing receivables financing (secured) | 6,528 | 6,528 | |||||||||
| Lease liabilities | 3,421 | 3,421 | |||||||||
| Total capitalization | $ | 64,640 | $ | 84,585 | |||||||
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THE OFFERING AND PLACEMENT OF ORDINARY SHARES
We are registering for resale 11,683,493 ADSs, representing 46,733,972 ordinary shares. Such ADSs representing ordinary shares were issued by our company to the Selling Securityholders (i) on April 13, 2023, pursuant to the Securities Purchase Agreement and (ii) on January 11, 2022, pursuant to the Renesas Securities Purchase Agreement. The securities were issued without registration under the U.S. Securities Act of 1933, as amended, or the Securities Act, pursuant to the exemption from registration under the Securities Act for transactions not involving any public offering. Pursuant to the Securities Purchase Agreement, we received gross proceeds of approximately $20.0 million, which will be used for general corporate purposes. Pursuant to the Renesas Securities Purchase Agreement, we received gross proceeds of approximately $9.3 million, which was used to fund general corporate purposes. We and the Selling Securityholders entered into the Registration Rights Agreements pursuant to which we are filing the registration statement which includes this prospectus.
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DESCRIPTION OF SHARE CAPITAL
As of March 31, 2023, our share capital consisted of 194,258,298 issued ordinary shares, fully paid, and with a par value of €0.01 each, and total authorized capital of 361,503,285 ordinary shares. Each ADS represents four ordinary shares. We have no preferred shares authorized or outstanding.
Under French law, our by-laws set forth only our issued and outstanding share capital as of the date of the by-laws. Our authorized share capital represents all issued and outstanding shares, as well as all potential shares which may be issued upon acquisition of restricted free shares or upon exercise of outstanding stock options, founders warrants, other warrants and convertible notes, as approved by our shareholders and our board of directors.
At the Shareholders’ Ordinary General Meeting and Extraordinary Meeting of Sequans Communications S.A. held on June 24, 2022, our shareholders delegated authority to the Board of Directors to carry out a capital increase up to a maximum nominal amount of €2,000,000 by issuing shares and/or securities that grant access to our equity and/or to securities that confer the right to an allotment of debt securities, reserved to a specific class of persons and revocation of preemptive subscription rights in favor of such class. The authorization is valid through December 12, 2023.
Reconciliation of the number of ordinary shares outstanding on December 31, 2022 and on May 11, 2023
Number of ordinary shares as of December 31, 2022 | 193,426,478 | |||||||
| Issuance of ordinary shares from December 31, 2022 to May 11, 2023 | 39,835,916 | (1) | ||||||
Number of ordinary shares as of May 11, 2023 | 233,262,394 | |||||||
__________________
(1)Reflects 38,834,952 issued in the private placement on April 12, 2023 and 1,000,964 issued following vesting of restricted free shares.
Dividends and Liquidation Rights
We may make dividend distributions to our shareholders from our net income in each fiscal year (after deductions for depreciation and reserves pursuant to French law and our by-laws), as increased or decreased by any profit or loss carried forward from prior years, and less any contributions to reserves that may be decided by the shareholders under the conditions described below. These distributions are also subject to the requirements of French law and our by-laws.
Pursuant to French law, we must allocate 5% of our net profits for each fiscal year to a legal reserve fund until the amount in that fund is equal to 10% of the nominal amount of our share capital. The legal reserve may not be distributed to shareholders and may not be used to repurchase or reimburse our shares.
Upon recommendation of our board of directors, our shareholders may decide to allocate all or part of any distributable profits among special or general reserves, to carry them forward to the next fiscal year as retained earnings or to allocate them to the shareholders as dividends. However, except in case of a capital decrease, we may not distribute dividends to shareholders when our net assets are or would become as a result of the distribution lower than the amount of share capital including reserves which, under French law, may not be distributed to shareholders.
Our by-laws provide that reserves which are available for distribution under French law and our by-laws may be distributed as dividends, subject to shareholder approval and other limitations under French law. Dividends or interim dividends may be paid in cash or shares.
If our interim income statement shows that, since the end of the preceding fiscal year, we have made distributable profits, our board of directors may, subject to French law and regulations, distribute interim dividends without the approval of our shareholders. An interim dividend may not exceed distributable profits.
Under French law, subject to the preferred dividends rights that may be attached to our preferred shares set forth in our by-laws, as the case may be, if we distribute dividends, they must be distributed to our shareholders pro rata according to their shareholdings. Holders of shares outstanding on the date of the shareholders’ meeting approving the distribution of dividends or, in the case of interim dividends, on the date our board of directors meets and
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approves the distribution of interim dividends are eligible to receive the dividend payment. The actual dividend payment date is decided by our shareholders at an ordinary general meeting, or by our board of directors, if no decision is taken by our shareholders. The payment of the dividends must occur within nine months of the end of our fiscal year. Under French law, dividends not claimed within five years of the date of payment revert to the French State.
In the event that we are liquidated, our assets remaining after payment of our debts, liquidation expenses and all of our other remaining obligations will be distributed first to repay the nominal value of our shares. After these payments have been made, subject to the preferred liquidation rights that may be attached to our preferred shares set forth in our by-laws, as the case may be, any surplus will be distributed pro rata among our shareholders based on the nominal value of their shareholdings.
To date, we have never declared or paid any cash dividends on our ordinary shares or preferred shares. We do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future and intend to retain all available funds and any future earnings for use in the operation and expansion of our business.
Changes in Share Capital
We may increase our share capital only with approval of our shareholders at an extraordinary general meeting. The shareholders can authorize the board of directors to carry out the capital increase for a specified period of time. There are two methods to increase our share capital: (i) the issuance of additional shares, including the creation of a new class of shares, and (ii) the increase in the nominal value of existing shares. We may issue additional shares for cash or for assets contributed in kind, upon the conversion of debt securities, by capitalization of our reserves or, subject to certain conditions, in satisfaction of our indebtedness. Although, currently, we have only one class of shares, French law permits us to issue different classes of shares that may have different liquidation, voting and dividend rights.
We may decrease our share capital only with the approval of our shareholders at an extraordinary general meeting. The shareholders can authorize the board of directors to carry out the capital decrease for a specified period of time. There are two methods to decrease our share capital: (i) decreasing the number of shares outstanding and (ii) decreasing the nominal value of our shares. The conditions under which the share capital may be decreased vary depending upon whether the decrease is attributable to losses. We may, under certain conditions, decrease the number of outstanding shares either by a reverse stock split or by the repurchase and cancellation of our shares. Any decrease must meet the requirements of French law, which states that all the holders of shares in each class of shares must be treated equally unless each affected shareholder otherwise agrees.
Attendance and Voting at Shareholders’ Meetings
French companies may hold either ordinary or extraordinary shareholders’ general meetings. Ordinary general meetings are required for matters that are not specifically reserved by law to the extraordinary general meetings and include the election and dismissal of the members of the board of directors, the appointment of statutory auditors, the approval of the annual accounts, the approval of agreements entered into between the company and its officers, directors and shareholders holding more than 10% of the voting rights, the declaration of dividends, the payment of dividends in shares, the repurchase by the company of its shares in connection, inter alia, with employee profit-sharing or share option plans, and the issue of bonds. Extraordinary general meetings are required for approval of amendments to our by-laws, modification of shareholders’ rights, mergers, increases or decreases in share capital (including a waiver of preferential subscription rights), the creation of a new class of shares, the authorization of the issue of securities convertible or exchangeable into shares and for the sale or transfer of substantially all of our assets that would result in a change of our corporate purpose.
Our board of directors is required to convene an annual general meeting of shareholders for approval of the annual accounts. This meeting must be held within six months of the end of our fiscal year. However, the president of the tribunal de commerce, the French commercial court, may order an extension of this six-month period. We may convene other ordinary and extraordinary meetings at any time during the year as necessary. Meetings of shareholders may be convened by our board of directors or, if it fails to call a meeting, by our statutory auditors or by a court-appointed agent. Shareholders holding individually or in the aggregate at least 5% of our share capital, or
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another interested party under certain circumstances, may petition the court to appoint such an agent. The notice convening of a shareholders’ general meeting must state the agenda for the meeting.
Notice of a shareholders’ general meeting must be sent by regular or electronic mail, or registered letter if the shareholder so asks, at least 15 days before the meeting to all holders of registered shares. However, in the case where quorum was not met at the original meeting and was therefore adjourned, the general meeting can be reconvened under the same agenda within a reduced six-day time period. The notice must include the agenda of the meeting and a draft of the resolutions that will be submitted to the shareholders.
Attendance and the exercise of voting rights at both ordinary and extraordinary general meetings of shareholders are subject to certain conditions pursuant to French law. Under our by-laws, in order to participate in any general meeting, a holder of registered shares must have his shares fully paid-in and registered in its name in a shareholder account maintained by or on behalf of us at least three days prior to the meeting.
Subject to the above restrictions, all of our shareholders have the right to participate in our general meetings, either in person or by proxy. Shareholders may vote, either in person, by proxy or by mail (by use of a form), and their votes are counted in proportion to the number of shares they hold. A shareholder may grant a proxy to his or her spouse, to another shareholder or, if the shareholder is a corporation, to a legal representative. A shareholder may grant a proxy to us by returning a blank proxy form. In this last case, the chairman of the shareholders’ meeting will vote the shares in favor of all resolutions proposed by the board of directors and against all others. Proxy forms will be sent to shareholders upon request. In order to be counted, proxies must be received prior to the shareholders’ general meeting at our registered office or at another address indicated in the notice convening the meeting. If requested by a shareholder at least six days prior to the meeting, we must send such shareholder a form to vote by mail and this form must be received by us at least two days prior to the date of a meeting in order to be valid. Under French law, our shares held by entities controlled directly or indirectly by us are not entitled to voting rights. There is no requirement that a shareholder have a minimum number of shares in order to be able to attend or be represented at a general meeting.
Under French law, a quorum requires the presence, in person or by proxy (including those voting by mail) of shareholders having at least (1) 20% of the shares entitled to vote in the case of an ordinary shareholders’ general meeting or at an extraordinary shareholders’ general meeting where shareholders are voting on a capital increase by capitalization of reserves, profits or share premium, or (2) 25% of the shares entitled to vote in the case of any other extraordinary shareholders’ general meeting. If a quorum is not present, the meeting is adjourned. There is no quorum requirement when an ordinary general meeting is reconvened, but the reconvened meeting may consider only questions which were on the agenda of the adjourned meeting. When an extraordinary general meeting is reconvened, the quorum required is 20% of the shares entitled to vote, except where the reconvened meeting is considering capital increases through capitalization of reserves, profits or share premium. For these matters, no quorum is required at the reconvened meeting. If a quorum is not present at a reconvened meeting requiring a quorum, then the meeting may be postponed for a maximum of two months.
At an ordinary shareholders’ general meeting, approval of any resolution requires the affirmative vote of a simple majority of the votes of the shareholders present or represented. The approval of any resolution at an extraordinary shareholders’ general meeting requires the affirmative vote of a two-thirds majority of the votes of shareholders present or represented, except that any resolution to approve a capital increase by capitalization of reserves only requires the affirmative vote of a simple majority of the votes of shareholders present or represented. Notwithstanding these rules, a unanimous vote is required to increase shareholders’ liabilities. Abstention from voting by those present or represented by proxy is counted as a vote against any resolution submitted to a vote.
In addition to the right to obtain certain information regarding us at any time, any shareholder may, from the date on which a shareholders’ meeting is convened until the fourth business day preceding the date of the shareholders’ meeting, submit written questions relating to the agenda for the meeting to our board of directors. Our board of directors is required to respond to these questions during the meeting.
As set forth in our by-laws, shareholders’ meetings are held at our registered office or at any other location specified in the written notice.
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Preferential Subscription Rights
Holders of shares have preferential rights to subscribe on a pro rata basis for additional shares and securities convertible or exchangeable into shares. This right is only reserved to holders of ordinary shares or preferred shares. Shareholders may waive their preferential rights on an individual basis. During the subscription period relating to a particular offering of shares, shareholders may transfer their preferential subscription rights that they have not previously waived. To the extent permitted under French law, we intend to seek shareholder approval to waive preferential subscription rights at any extraordinary meeting where shareholders are asked to approve an increase in our capital by issuing additional shares and securities convertible or exchangeable into shares.
Form and Holding of Shares
Our by-laws provide that our ordinary shares shall be held in registered form. In accordance with French law concerning the “dematerialization” of securities, the ownership rights of shareholders are represented by book entries instead of share certificates. Registered shares are entered into an account maintained by us or by a representative that we have nominated. We maintain accounts in the name of each shareholder either directly or, at a shareholder’s request, through such shareholder’s accredited intermediary. Each shareholder’s account shows the name and number of shares held.
Repurchase and Redemption of Shares
Under French law, we may acquire our own shares for the following purposes only:
•to decrease our share capital, provided that such a decision is not driven by losses and that a purchase offer is made to all shareholders on a pro rata basis, with the approval of the shareholders at an extraordinary general meeting. In this case, the repurchased shares must be cancelled within one month from their repurchase date;
•to provide shares for distribution to employees or managers under a profit-sharing or share option plan; and
•to facilitate an issue of additional shares or securities convertible or exchangeable into shares, a merger or a spin-off, approved by the shareholders at an ordinary general meeting.
The amounts repurchased under this section cannot result in us holding more than 10% of our own shares. In the event that such repurchases result in us holding more than 10% of our issued shares, we are required to transfer any shares in excess of the 10% threshold within one year. French law requires that we cancel any shares in excess of this 10% limit that have not been transferred within the one-year period.
When we purchase our own shares, they must be held in registered form and be fully paid. These shares are deemed to be outstanding under French law, but are not entitled to any dividends or voting rights, and we may not exercise preferential subscription rights. The shareholders, at an extraordinary general meeting, may decide not to take such shares into account in determining the preferential subscription rights attached to the other shares. In the absence of such a decision, the rights attached to any shares held by us must either be sold on the market before the end of the subscription period or distributed to other shareholders on a pro rata basis.
Cross Shareholdings and Holding of Our Shares by Our Subsidiaries
French law prohibits a company from holding our shares if we hold more than 10% of that company’s share capital and we may not own any interest in a French company holding more than 10% of our share capital. In the event of a cross shareholding that violates this rule, the company owning the smaller percentage of shares in the other company must sell its interest. Until sold, these shares are deprived of their voting rights. Failure by the officers and directors of a company to sell these shares is a criminal offense.
In the event that one of our subsidiaries holds our shares, these shares are deprived of their voting rights. However, French law does not require the subsidiary to sell the shares.
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General Description of our By-laws
The following summarizes certain terms and provisions contained in our by-laws. This summary is not complete, and you should read our by-laws (statuts), which were filed as an exhibit 1.1 to our Annual Report on Form 20-F for the fiscal year ended December 31, 2022.
Corporate Purposes (Article 3)
Our company is engaged in the business of researching, developing and commercializing silicon and software solutions in the areas of broadband wireless access, specifically compliant with LTE standards or other similar broadband wireless standards.
Our corporate purpose in France and in all countries includes the following:
•The study, development and marketing of all products and/or services relating to radio fixed and/or optical-type communication networks systems;
•Advising and training, by all means and technical media, relating to the aforementioned fields of operations;
•The participation, directly or indirectly, in all transaction that may be related to any of the purposes defined above, through the creation of new companies or legal entities, the contribution, subscription, or purchase of securities or corporate rights, acquisition of interests, mergers, partnerships, or any other methods;
•And, more generally, all industrial, commercial, and financial transactions, or transactions involving movable or fixed assets, that may be related directly or indirectly, in whole or in part, to any of the aforementioned corporate purposes, or to any similar or related purposes, or to any and all purposes that may enhance or develop the company’s business.
Directors’ Voting Powers
Under French law, agreements entered into directly or indirectly between us and our directors are subject to a prior approval of the board of directors and must be ratified by our ordinary shareholders’ general meeting on the basis of a specific report issued by our statutory auditors on such agreements. The director who is interested in the agreement cannot vote on the proposal at the board meeting.
As compensation, directors receive attendance fees set annually by the shareholders upon recommendation of the board of directors. The directors may take part in the vote on the resolution deliberating on their attendance fees. Attendance fees must be differentiated from any other sum a director may receive as a compensation for a particular service provided (i.e., employment contract, chairman of the board). In addition, the directors may be granted warrants by the shareholders’ general meeting.
Director participation at board of directors meetings is not mandatory. Directors may therefore be represented by another director at meetings. In such case, a written power of attorney can be given to another director. Each director may only represent one other director.
Rights, Preferences and Restrictions Attaching to Each Class of Shares
Our shareholders are not required to subscribe to any of our further capital calls.
At this time, we have only one class of shares. Each share gives the right to one vote on all matters submitted to our shareholders. Each share also gives the right to share in the profits and corporate assets, pro rata the amount of our share capital which it represents. Our shareholders only bear losses for up to the amount of their investment. However, in the event we declare bankruptcy, one or several shareholders who could be considered as either (i) having become our de facto manager and, as such, taken decisions that contributed to our insolvency or failed to take decisions that would have prevented such insolvency, or (ii) having in such capacity comingled vis-à-vis third parties between his or her own assets and our own assets may be liable for losses greater than his/her investment. In
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the event of a capital increase, a majority of shareholders may decide to suppress the preferential subscription rights of all shareholders in favor of a beneficiary or a category of beneficiaries, including existing shareholders who are nevertheless excluded from such vote.
We cannot increase the commitments or liabilities of our shareholders; such a change can only be agreed to by each shareholder individually.
Under our by-laws, our extraordinary general meeting may decide to issue preferred shares bearing preferred voting and financial rights.
Provisions Having the Effect of Delaying, Deferring or Preventing a Change in Control of our Company
The sections of the by-laws relating to the number of directors, election and removal of a director from office may be modified only by a resolution adopted by 66⅔% of our shareholders present or represented. These provisions, and other procedural provisions contained in our by-laws, may have the effect or delaying or deferring a change in control.
Ownership of ADSs or Shares by Non-French Residents
Neither the French Commercial Code nor our by-laws presently impose any restrictions on the right of non-French residents or non-French shareholders to own and vote shares. However, residents outside of France, as well as a French entity controlled by non-French residents, must file an administrative notice with French authorities in connection with the acquisition of a controlling interest, or leading non-French residents to hold a controlling interest, in our company or the acquisition of a controlling interest in any foreign entity holding a controlling interest in our company. Under existing administrative rulings, ownership of 33⅓% (25% when at least one of the members of the investor’s “chain of control” is non-European Union/European Economic Area) or more of our share capital or voting rights is regarded as a controlling interest, but a lower percentage may be held to be a controlling interest in certain circumstances, depending upon such factors as:
•the acquiring party’s option to buy additional shares;
•loans and guarantees granted by the acquiring party to our company in amounts evidencing control over our financing; and
•patent licenses granted by an acquiring party or management or technical assistance agreements with such acquiring party that place us in a dependent position vis-à-vis such party or its group.
Foreign Exchange Controls
Under current French foreign exchange control regulations there are no limitations on the amount of cash payments that we may remit to residents of foreign countries. Laws and regulations concerning foreign exchange controls do, however, require that all payments or transfers of funds made by a French resident to a non-resident be handled by an accredited intermediary. All registered banks and substantially all credit institutions in France are accredited intermediaries.
Availability of Preferential Subscription Rights
Our shareholders have preferential subscription rights as described above under “Description of Share Capital—Preferential Subscription Rights.” Under French law, shareholders have preferential rights to subscribe for cash issues of new shares or other securities giving rights to acquire additional shares on a pro rata basis. Holders of our securities in the U.S. (which may be in the form of shares or ADSs) may not be able to exercise preferential subscription rights for their securities unless a registration statement under the Securities Act is effective with respect to such rights or an exemption from the registration requirements imposed by the Securities Act is available. We may, from time to time, issue new shares or other securities giving rights to acquire additional shares (such as warrants) at a time when no registration statement is in effect and no Securities Act exemption is available. If so, holders of our securities in the U.S. will be unable to exercise any preferential subscription rights and their interests will be diluted. We are under no obligation to file any registration statement in connection with any issuance of new
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shares or other securities. We intend to evaluate at the time of any rights offering the costs and potential liabilities associated with registering the rights, as well as the indirect benefits to us of enabling the exercise by holders of shares and holders of ADSs in the U.S. to exercise the rights, and any other factors we consider appropriate at the time, and then to make a decision as to whether to register the rights. We cannot assure you that we will file a registration statement.
For holders of our shares in the form of ADSs, the Depositary may make these rights or other distributions available to holders after we instruct it to do so in the United States. If we fail to do this and the Depositary determines that it is impractical to sell the rights, it may allow these rights to lapse. In that case the holders will receive no value for them. The section entitled “Description of American Depositary Receipts—Dividends, Other Distributions and Rights” explains in detail the depositary’s responsibility in connection with a rights offering.
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DESCRIPTION OF AMERICAN DEPOSITARY SHARES
American Depositary Shares
The Bank of New York Mellon, as depositary, registers and delivers our ADSs. Each ADS represents four ordinary shares (or a right to receive four ordinary shares) deposited with the principal Paris office of Société Générale or any successor, as custodian for the depositary. Each ADS will also represent any other securities, cash or other property which may be held by the depositary in respect of the depositary facility. A copy of our amended and restated deposit agreement (the “Deposit Agreement”), dated May 14, 2018, among us, the depositary, owners and holders of ADSs is filed with the SEC as Exhibit 2.2. to our Form 20-F for the fiscal year ended December 31, 2022.
Any ordinary shares that may be issued pursuant to this prospectus and the applicable prospectus supplement, whether directly or upon conversion of the Convertible Note, will be delivered in the form of ADSs. The ADSs may be uncertificated securities or certificated securities evidenced by American Depositary Receipts, or ADRs. Each ADS will represent four shares (or a right to receive four shares) deposited with the principal Paris office of Société Générale or any successor, as custodian for the depositary. Each ADS will also represent any other securities, cash or other property which may be held by the depositary. The depositary’s corporate trust office at which the ADSs will be administered is located at 240 Greenwich Street, Floor 8W, New York, New York 10286.
You may hold ADSs either (A) directly (i) by having an ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (ii) by having ADSs registered in your name in the Direct Registration System, or (B) indirectly by holding a security entitlement in ADSs through your broker or other financial institution. If you hold ADSs directly, you are a registered ADS holder, also referred to as an ADS holder. This description assumes you are an ADS holder. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.
As an ADS holder, we will not treat you as one of our shareholders and you will not have shareholder rights. French law governs shareholder rights. The depositary will be the holder of the shares underlying your ADSs. As a holder of ADSs, you will have ADS holder rights. A Deposit Agreement among us, the depositary and you, as an ADS holder, and the beneficial owners of ADSs set out ADR holder rights as well as the rights and obligations of the depositary. New York law governs the Deposit Agreement and the ADRs.
We refer to the shares that are at any time deposited or deemed deposited under the Deposit Agreement and any and all other securities, cash and property received by the depositary or the custodian in respect thereof and at such time held under the Deposit Agreement as “Deposited Securities.”
The following is a summary of the material provisions of the Deposit Agreement. For more complete information, you should read the entire Deposit Agreement and the form of ADR, which is included in the Deposit Agreement. Directions on how to obtain copies of those documents are provided under “Where You Can Find More Information About Us.”
Deposit, Transfer and Withdrawal
French law provides that ownership of shares generally be evidenced only by an inscription in an account in the name of the holder maintained by either the issuer or an authorized intermediary such as a bank. Thus, all references to the deposit, surrender and delivery of our shares refer only to book-entry transfers and do not contemplate the physical transfers of certificates representing the shares in France.
The depositary has agreed, subject to the terms and conditions of the Deposit Agreement, that upon deposit with the custodian of our shares, or evidence of rights to receive our shares, and pursuant to appropriate instruments of transfer, it will deliver through its Corporate Trust Office to the person or persons specified by the depositor, ADSs registered in the name or names of such person or persons for the number of ADSs issuable in respect of such deposit, upon payment to the depositary of its fees and expenses and of any taxes or charges.
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Upon surrender of an ADS at the Corporate Trust Office of the depositary for the purpose of withdrawal of the Deposited Securities represented by the ADSs, payment of the fees, governmental charges and taxes provided in the Deposit Agreement and payment of all taxes and governmental charges payable in connection with such surrender and withdrawal, and subject to the provisions of the Deposit Agreement, our by-laws and the Deposited Securities, ADS owners are entitled to delivery to it or upon its order of the shares and any other Deposited Securities at the time represented by the ADSs at the Corporate Trust Office of the depositary or at the office of the custodian in Paris. The forwarding for delivery at the Corporate Trust Office of the depositary of cash, other property and documents of title for such delivery will be at the risk and expense of the ADS holder.
Subject to the terms and conditions of the Deposit Agreement and any limitations established by the depositary, unless requested by us to cease doing so, the depositary may deliver ADSs before deposit of the underlying ordinary shares. This is called a pre-release of the ADSs. The depositary may also deliver ordinary shares upon cancellation of pre-released ADSs (even if the ADSs are canceled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying ordinary shares are delivered to the depositary. The depositary may receive ADSs instead of ordinary shares to close out a pre-release. The depositary may pre-release ADSs only under the following conditions: (1) before or at the time of the pre-release, the person to whom the pre-release is being made represents to the depositary in writing that it or its customer owns the ordinary shares or ADSs to be deposited; (2) the pre-release is fully collateralized with cash or other collateral that the depositary considers appropriate; and (3) the depositary must be able to close out the pre-release on not more than five business days’ notice. In addition, the depositary will limit the number of ADSs that may be outstanding at any time as a result of pre-release, although the depositary may disregard the limit from time to time, if it thinks it is appropriate to do so.
Dividends, Other Distributions and Rights
The depositary has agreed to pay to ADS holders the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities in the depositary facility, after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent.
While we do not expect to declare or pay any cash dividends or cash distributions on our ordinary shares for the foreseeable future, if and when we do pay any cash dividend or other cash distribution on the ordinary shares, the depositary will convert, as promptly as practicable, any cash dividend or other cash distribution into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained with reasonable efforts, the Deposit Agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest. Before making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. See “– Liability of Owner for Taxes” and “Certain Income Tax Considerations” below. It will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution.
Ordinary Shares
The depositary may distribute additional ADSs representing any ordinary shares we distribute as a dividend or free distribution upon our request or after consulting with us. The depositary will only distribute whole ADSs. It will sell ordinary shares which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new ordinary shares; however, the depositary may sell a portion of the distributed ordinary shares sufficient to pay its fees and expenses in connection with that distribution.
Rights to Purchase Additional Ordinary Shares
If we offer holders of our securities any rights to subscribe for additional ordinary shares or any other rights, the depositary may make these rights available to ADS holders. If the depositary decides it is not legal or practical to make the rights available but that it is practical to sell the rights, the depositary will use reasonable efforts to sell the
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rights and distribute the proceeds in the same way as it does with cash. The depositary will allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.
If the depositary makes rights available to ADS holders, it will exercise the rights and purchase the ordinary shares on your behalf and in accordance with your instructions. The depositary will then deposit the ordinary shares and deliver ADSs to the persons entitled to them. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay and comply with other applicable instructions.
U.S. securities laws may restrict transfers and cancellation of the ADSs representing ordinary shares purchased upon exercise of rights. For example, you may not be able to trade these ADSs freely in the United States. In this case, the depositary may deliver restricted depositary shares that have the same terms as the ADSs described in this section except for changes needed to put the necessary restrictions in place.
Other Distributions
The depositary will send to ADS holders anything else we distribute on deposited securities by any means it determines is equitable and practicable after consulting with us, to the extent practicable. If it cannot make the distribution proportionally among the owners, the depositary may adopt another equitable and practical method subject to consulting with us, to the extent practicable. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from us that it is legal to make that distribution. In addition, the depositary may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.
The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, ordinary shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to ADS holders. This means that you may not receive the distributions we make on our ordinary shares or any value for them if it is illegal or impractical for us to make them available to you.
Record Dates
Whenever any cash dividend or other cash distribution becomes payable or any distribution other than cash is made, or whenever rights shall be issued with respect to the Deposited Securities, or whenever for any reason the depositary gives effect to a change in the number of our shares that are represented by each ADS, or whenever the depositary shall receive notice of any meeting of holders of shares or other Deposited Securities, or whenever the depositary shall find it necessary or convenient, the depositary will fix a record date, which shall be the same date as for the represented ordinary share or a date fixed after consultation with us and as close thereto as practicable (i) for the determination of the owners of ADRs who shall be (a) entitled to receive such dividend, distribution or rights, or the net proceeds of the sale thereof, or (b) entitled to give instructions for the exercise of voting rights at any such meeting, (ii) for fixing the date on or after which each ADS will represent the changed number of shares, all subject to the provisions of the Deposit Agreement or (iii) to facilitate any other matter for which the record date was set.
Voting of Deposited Securities
ADS holders may instruct the depositary to vote the number of deposited ordinary shares their ADSs represent. The depositary will notify ADS holders of shareholders’ meetings and arrange to deliver our voting materials to them if we ask it to. Those materials will describe the matters to be voted on and explain how ADS holders may instruct the depositary how to vote. For instructions to be valid, they must reach the depositary by a date set by the depositary.
The depositary will try, as far as practical, and subject to the laws of France and to our by-laws, to vote or to have its agents vote the ordinary shares or other deposited securities as instructed by ADS holders. The depositary will only vote or attempt to vote as instructed.
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We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your ordinary shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions provided that any such failure is without negligence and in good faith. This means that you may not be able to exercise your right to vote and there may be nothing you can do if your ordinary shares are not voted as you requested.
In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to deposited securities, if we request the depositary to act, we agree to give the depositary notice of any such meeting and details concerning the matters to be voted upon at least 45 days in advance of the meeting date.
Except as described above, you will not be able to exercise your right to vote unless you withdraw the ordinary shares. However, you may not know about the shareholder meeting enough in advance to withdraw the ordinary shares.
Amendment and Termination of the Deposit Agreement
We may agree with the depositary to amend the Deposit Agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADS holders, it will not become effective for outstanding ADSs until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the Deposit Agreement as amended.
The depositary will terminate the Deposit Agreement at our direction, if given, by mailing notice of termination to the ADS holders then outstanding at least 30 days prior to the date fixed in such notice for such termination. The depositary may also terminate the Deposit Agreement by mailing notice of termination to us and the ADS holders if 60 days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment.
After termination, the depositary and its agents will do the following under the Deposit Agreement but nothing else: collect distributions on the deposited securities, sell rights and other property, and deliver ordinary shares and other deposited securities upon cancellation of ADSs. Four months after termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the Deposit Agreement for the pro rata benefit of the ADS holders that have not surrendered their ADSs. It will not invest the money and has no liability for interest. The depositary’s only obligations will be to account for the money and other cash. After termination our only obligations under the Deposit Agreement will be to indemnify the depositary and to pay fees and expenses of the depositary that we agreed to pay and we will not have any obligations thereunder to current or former ADS holders.
Charges of Depositary
See Item 12, “Description of Securities Other than Equity Securities – D. American Depositary Shares – Fees and Expenses” in our Form 20-F, which is incorporated by reference into this prospectus.
Liability of Owner for Taxes
If any tax or other governmental charge shall become payable by the custodian or the depositary with respect to any ADS or any Deposited Securities represented by the ADSs evidenced by such ADS, such tax or other governmental charge will be payable by the owner of such ADS to the depositary. The depositary may refuse to effect any transfer of such ADS or any withdrawal of Deposited Securities underlying such ADS and may apply such dividends, distributions or the proceeds of any such sale to pay any such tax or other governmental charge and the owner of such ADS will remain liable for any deficiency.
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CERTAIN INCOME TAX CONSIDERATIONS
This description is based in part upon the representation of the custodian and the assumption that each obligation in the Depositary Agreement with the depositary relating to your ADSs and any related agreement will be performed in accordance with their terms.
Material United States Federal Income Tax Consequences
The following is a description of the material United States federal income tax consequences of the acquisition, ownership and disposition of the ADSs. This description addresses only the United States federal income tax consequences to holders that are purchasers of the ADSs and hold such ADSs as capital assets (generally property held for investment). This description does not address tax considerations applicable to holders that may be subject to special tax rules, including:
•financial institutions or insurance companies;
•real estate investment trusts, regulated investment companies or grantor trusts;
•dealers or traders in securities or currencies;
•tax-exempt entities;
•certain former citizens or former long-term residents of the United States;
•persons that received the ADSs as compensation for or in connection with the performance of services;
•persons that will hold the ADSs as part of a “hedging” or “conversion” transaction or as a position in a “straddle” for United States federal income tax purposes;
•holders that will hold the ADSs through a partnership or other pass-through entity;
•U.S. Holders, as defined below, whose “functional currency” is not the United States dollar; or
•holders that own, directly, indirectly or through attribution, 10.0% or more of the voting power or value of our shares.
Moreover, this description does not address the United States federal estate and gift or alternative minimum tax, or foreign, state or local tax, consequences of the acquisition, ownership and disposition of the ADSs.
This description is based on the United States Internal Revenue Code of 1986, as amended, or the “Code,” existing, proposed and temporary United States Treasury Regulations and judicial and administrative interpretations thereof, in each case as in effect and available on the date hereof. All of the foregoing is subject to change, which change could apply retroactively and could affect the tax consequences described below. For example, President Biden has set forth several tax proposals that would, if enacted, make significant changes to U.S. tax laws. Such proposals include, but are not limited to, an increase in the U.S. federal income tax rate for long term capital gain for certain taxpayers with income in excess of a threshold amount. Congress may consider, and could include, some or all of these proposals in connection with tax reform to be undertaken by the current administration. It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect.
For purposes of this description, a “U.S. Holder” is a beneficial owner of the ADSs that, for United States federal income tax purposes, is:
•a citizen or resident of the United States;
•a corporation or other entity treated as a corporation for United States federal income tax purposes, created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;
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•an estate the income of which is subject to United States federal income taxation regardless of its source; or
•a trust if such trust has validly elected to be treated as a United States person for United States federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust.
A “Non-U.S. Holder” is a beneficial owner of the ADSs that is neither a U.S. Holder nor a partnership, or other entity or arrangement treated as a partnership, for United States federal income tax purposes.
If a partnership or any other entity or arrangement treated as a partnership for United States federal income tax purposes holds the ADSs, the tax treatment of such partnership, or a partner in such partnership will depend on the status of the partner and the activities of the partnership. Such a partner or partnership is encouraged to consult its tax advisor as to its tax consequences.
You are encouraged to consult your tax advisor with respect to United States federal, state, local and foreign tax consequences of acquiring, owning and disposing of the ADSs.
For United States federal income tax purposes, you will be treated as the owner of our ordinary shares represented by your ADSs. Exchanges of ordinary shares for ADSs, and ADSs for ordinary shares, will not be subject to United States federal income tax.
Distributions with Respect to ADSs
If you are a U.S. Holder, for United States federal income tax purposes, the gross amount of any distribution made to you with respect to your ADSs (other than certain distributions, if any, of the ADSs or ordinary shares distributed pro rata to all our shareholders), before reduction for any French taxes withheld therefrom, will be includible in your income as dividend income to the extent such distribution is paid out of our current or accumulated earnings and profits as determined under United States federal income tax principles. Subject to the discussion below under “Passive Foreign Investment Company Considerations,” non-corporate U.S. Holders may qualify for the lower rates of taxation with respect to dividends on ADSs applicable to long-term capital gains (i.e., gains from the sale of capital assets held for more than one year), provided that certain conditions are met, including certain holding period requirements and the absence of certain risk reduction transactions. However, such dividends will not be eligible for the dividends received deduction generally allowed to corporate U.S. Holders. Subject to the discussion below under “Passive Foreign Investment Company Considerations,” to the extent, if any, that the amount of any distribution by us exceeds our current and accumulated earnings and profits as determined under United States federal income tax principles, such excess amount will be treated first as a tax-free return of your adjusted tax basis in your ADSs and thereafter as capital gain. We do not expect to maintain calculations of our earnings and profits under United States federal income tax principles and, therefore, if you are a U.S. Holder you should expect that the entire amount of any distribution generally will be reported as dividend income to you.
Dividends, if any, paid to U.S. Holders in euros or currency other than the U.S. dollar (“Other Foreign Currency”) will be includible in income in a U.S. dollar amount based on the prevailing spot market exchange rate in effect on the date of actual or constructive receipt, whether or not converted into U.S. dollars at that time. Assuming dividends received in euros (or Other Foreign Currency) are converted into U.S. dollars on the day they are received, the U.S. Holder will not be required to recognize foreign currency gain or loss in respect of the dividend income. If, however, the payment is not converted at that time, a U.S. Holder will have a tax basis in euros (or Other Foreign Currency) equal to the U.S. dollar amount of the dividend included in income, which will be used to measure gain or loss from subsequent changes in exchange rates. Any gain or loss that a U.S. Holder recognizes on a subsequent conversion of euros (or Other Foreign Currency) into U.S. dollars (or on other disposition) generally will be U.S. source ordinary income or loss. U.S. Holders should consult their own tax advisors regarding the tax consequences to them if the dividends are paid in euros (or Other Foreign Currency).
Subject to certain conditions and limitations, French tax withheld on dividends may be deducted from your United States federal taxable income or credited against your United States federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For
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this purpose, dividends, if any, that we distribute will constitute “passive category income,” or, in the case of certain U.S. Holders, “general category income.” A foreign tax credit for foreign taxes imposed on distributions may be denied if you do not satisfy certain minimum holding period requirements or if you engage in certain risk reduction transactions. If you are a U.S. Holder, dividends, if any, paid to you with respect to your ADSs will be treated as foreign source income, which may be relevant in calculating your foreign tax credit limitation. The rules relating to the determination of the foreign tax credit are complex, and you are encouraged to consult your tax advisor to determine whether and to what extent you will be entitled to this credit.
Subject to the discussion below under “Backup Withholding Tax and Information Reporting Requirements,” if you are a Non-U.S. Holder, you should not be subject to United States federal income or withholding tax on dividends received by you on your ADSs unless such income is effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base).
Sale, Exchange or Other Disposition of ADSs
Subject to the discussion below under “Passive Foreign Investment Company Considerations,” if you are a U.S. Holder, you will recognize capital gain or loss on the sale, exchange or other disposition of your ADSs equal to the difference between the amount realized on such sale, exchange or other disposition and your adjusted tax basis in your ADSs. If you are a non-corporate U.S. Holder, capital gain from the sale, exchange or other disposition of ADSs will be eligible for the preferential rate of taxation applicable to long-term capital gains if your holding period for such ADSs exceeds one year (i.e., such gain is long-term capital gain). Gain or loss, if any, recognized by a U.S. Holder generally will be treated as U.S. source gain or loss, as the case may be, for foreign tax credit limitation purposes. The deductibility of capital losses for United States federal income tax purposes is subject to limitations.
Subject to the discussion below under “Backup Withholding Tax and Information Reporting Requirements,” if you are a Non-U.S. Holder, you will not be subject to United States federal income, or withholding, tax on any gain realized on the sale or exchange of your ADSs unless:
•such gain is effectively connected with your conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base); or
•you are an individual and have been present in the United States for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met.
Passive Foreign Investment Company Considerations
A non-U.S. corporation will be classified as a “passive foreign investment company,” or a PFIC, for United States federal income tax purposes for any taxable year in which, after applying certain look-through rules, either
•at least 75% of its gross income is “passive income;” or
•at least 50% of the average value of its gross assets is attributable to assets that produce “passive income” or are held for the production of passive income.
Passive income for this purpose includes dividends, interest, royalties, rents, gains from commodities and securities transactions and the excess of gains over losses from the disposition of assets which produce passive income, including amounts derived by reason of the investment of funds raised in offerings of the ADSs. If a non-U.S. corporation owns at least 25% by value of the stock of another corporation, the non-U.S. corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other corporation’s income.
Based on the character of our gross income and the average value of our passive assets relative to the gross value of our assets for the taxable year ended December 31, 2022, we do not believe we were a PFIC for 2022. Because PFIC status is determined annually based on our income, assets and activities for the entire taxable year, it is not possible to determine whether we will be characterized as a PFIC for 2023 or any other future year until after the close of that year. While we intend to manage our business so as to avoid PFIC status, to the extent consistent
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with our other business goals, we cannot predict whether our business plans will allow us to avoid PFIC status. In addition, because the market price of the ADSs has fluctuated and is likely to fluctuate in the future and because that market price may affect the determination of whether we are a PFIC, there can be no assurance that we will not be a PFIC for any taxable year.
If we are a PFIC for a given year, and you are a U.S. Holder, then unless you make one of the elections described below, a special tax regime will apply to both (a) any “excess distribution” by us to you for the year (defined as your ratable portion of distributions in the year which are greater than 125% of the average annual distribution received by you in the shorter of the three preceding years or your holding period for the ADSs) and (b) any gain realized on the sale or other disposition (including a pledge) of the ADSs. Under this regime, any excess distribution and realized gain will be treated as ordinary income and will be subject to tax as if (i) the excess distribution or gain had been realized ratably over your holding period, (ii) the amount deemed realized in each year had been subject to tax in each year of that holding period at the highest marginal rate for such year (other than income allocated to the current period or any taxable period before we became a PFIC, which would be subject to tax at the U.S. Holder’s regular ordinary income rate for the current year and would not be subject to the interest charge discussed below), and (iii) the interest charge applicable to underpayments of tax had been imposed on the taxes deemed to have been payable in those years. In addition, the tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and dividend distributions made to you will not qualify for the lower rates of taxation applicable to long-term capital gains discussed above under “Distributions with Respect to ADSs.”
Certain elections are available to U.S. Holders of shares that may serve to alleviate some of the adverse tax consequences of PFIC status described above. One such election is a qualified electing fund, or a QEF, election, under which you would be required to include in income on a current basis your pro rata share of our ordinary earnings as ordinary income and your pro rata share of our net capital gains as capital gain. However, we do not expect to provide to U.S. Holders the information needed to report income and gain pursuant to a QEF election, and we make no undertaking to provide such information in the event that we are a PFIC.
Under an alternative tax regime, you may also avoid certain adverse tax consequences relating to PFIC status discussed above by making a mark-to-market election with respect to your ADSs, provided that the ADSs are “marketable.” The ADSs will be marketable if they are regularly traded on certain U.S. stock exchanges, including the NYSE, or on certain non-U.S. stock exchanges. For these purposes, the ADSs will be considered regularly traded during any calendar year during which they are traded, other than in negligible quantities, on at least 15 days during each calendar quarter. U.S. Holders should be aware, however, that if we are determined to be a PFIC, the interest charge regime described above could be applied to indirect distributions or gains deemed to be attributable to U.S. Holders in respect of any of our subsidiaries that also may be determined to be a PFIC, and the mark-to-market election would not be effective for such subsidiaries.
If you choose to make a mark-to-market election, you would recognize as ordinary income or loss each year in which we are a PFIC an amount equal to the difference as of the close of the taxable year between the fair market value of your ADSs and your adjusted tax basis in your ADSs. Losses would be allowed only to the extent of net mark-to-market gain previously included by you under the election for prior taxable years. If the mark-to-market election were made, then the PFIC rules described above relating to excess distributions and realized gains would not apply for periods covered by the election. If you do not make a mark-to-market election for the first taxable year in which we are a PFIC during your holding period of the ADSs, you would be subject to interest charges with respect to the inclusion of ordinary income attributable to each taxable year in which we were a PFIC during your holding period before the effective date of such election.
A U.S. Holder who is a direct or “indirect” holder of stock of a PFIC must file United States Internal Revenue Service Form 8621 in respect of such PFIC for a taxable year in the circumstances described in the United States Treasury Regulations. If we are a PFIC for a given taxable year, you are encouraged to consult your tax advisor concerning the availability and consequences of making any of the elections mentioned above, as well as concerning your annual filing requirements.
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Medicare Tax
A United States person that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on net investment income in excess of certain amounts. In the case of an individual, the tax is imposed on the lesser of (1) the United States person’s “net investment income” for the relevant taxable year and (2) the excess of the United States person’s modified adjusted gross income for the taxable year over $250,000 (in the case of a taxpayer filing a joint return or a surviving spouse), $125,000 (in the case of a married taxpayer filing a separate return) or $200,000 (in any other case). In the case of an estate or trust, the tax is imposed on the lesser of (1) the entity’s “undistributed net investment income” for the taxable year and (2) the excess (if any) of the entity’s “adjusted gross income” over the dollar amount at which the highest tax bracket begins for such entity. A holder’s net investment income will include its gross dividend income and its net gains from the disposition of ADSs, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a United States person that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of the Medicare tax to your income and gains in respect of your investment in the ADSs.
Information with Respect to Foreign Financial Assets
Individuals who are U.S. citizens or resident aliens, certain nonresident aliens of the United States and “specified domestic entities” that own “specified foreign financial assets” with an aggregate value in excess of certain threshold amounts are required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities, including ADSs issued by non-U.S. persons, (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties and (iii) interests in foreign entities. In addition, under a law known as the “Bank Secrecy Act” U.S. citizens, green card holders and resident aliens, as well as domestic entities must file a FinCEN Form 114 with the Financial Crimes Enforcement Network if the aggregate value of all “foreign financial accounts” held by such person exceeds $10,000 at any time during a particular calendar year. Holders of ADSs are encouraged to consult their tax advisors regarding the application of these reporting requirements as they relate to their ownership of ADSs.
Backup Withholding Tax and Information Reporting Requirements
United States backup withholding tax and information reporting requirements apply to certain payments to certain non-corporate holders of stock. Information reporting will apply to payments of dividends on, and to proceeds from the sale or redemption of, the ADSs made within the United States, or by a United States payor or United States middleman, to a holder of the ADSs, other than an exempt recipient, including a corporation, a payee that is not a United States person that provides an appropriate certification and certain other persons. A payor will be required to withhold backup withholding tax from any payments of dividends on, or the proceeds from the sale or redemption of, ADSs within the United States, or by a United States payor or United States middleman, to a holder, other than an exempt recipient, if such holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements. Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against the beneficial owner’s United States federal income tax liability, if any, provided that the required information is timely furnished to the IRS.
Material French Tax Consequences
The following is a description of the material French tax consequences of the acquisition, ownership and disposition of the ADSs by a U.S. Holder. This description is based on applicable tax laws, regulations and judicial decisions as of the date of this prospectus, and, where applicable, the Convention between the United States of America and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, dated August 31, 1994, as amended from time to time (the “U.S. Treaty”).
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This description is based in part upon the representation of the custodian and the assumption that each obligation in the Depositary Agreement with the depositary relating to your ADRs and any related agreement will be performed in accordance with their terms.
The following is a description of the principal tax effect on U.S. Holders for the purposes of French tax if, all of the following points apply:
•the U.S. Holder owns, directly, indirectly or constructively, less than 10% of the Company capital and dividend rights;
•the U.S. Holder is entitled to the benefits of the U.S. Treaty (including under the “limitation on benefits” article of the U.S. Treaty);
•the U.S. Holder does not hold the ADSs through a permanent establishment or a fixed base in France;
•the U.S. Holder is not multi-resident;
•the U.S. Holder does not hold the ADSs through a non-U.S. based pass-through entity; and
•the U.S. Holder does not receive dividend, capital gains or other payments on the ADSs on an account located in a Non-cooperative State as defined in Article 238-0 A of the French General Tax Code and as mentioned in a list published by the French tax authorities as amended from time to time (on January 1st of each year).
A U.S. Holder to whom all the above requirements apply will be hereafter defined as a Qualifying U.S. Holder.
This description is relevant only to holders of ADSs who are Qualifying U.S. Holders.
For purposes of the U.S. Treaty Qualifying U.S. Holders of ADSs will be treated as the owners of Company’s ordinary shares represented by such ADSs.
Special rules apply to U.S. expatriates, insurance companies, pass-through entities and investors in such entities, tax-exempt organizations, financial institutions, persons subject to the alternative minimum tax and securities broker-dealers, among others. Those special rules are not discussed in this prospectus.
Holders of Company ADSs are encouraged to consult their own tax advisors as to the particular tax consequences to them of owning the ADS, including their eligibility for benefits under the U.S. Treaty, the application and effect of state, local, foreign and other tax laws and possible changes in tax laws or in their interpretation.
Taxation of Dividends
Dividends paid by a French company to corporate non-French holders are subject to a withholding tax at a rate equal to the standard corporate income tax rate (i.e., 25% as from 2023). Such withholding tax rates can be increased to 75% if the dividend is paid towards Non-cooperative States or territories (as mentioned above) irrespective of the tax residence of the beneficiary of the dividends. Such withholding tax rates may, however, be reduced or eliminated by application of a tax treaty with France.
Dividends paid by a French company to individual non-French holders are generally subject to a 12.8% withholding tax. Such withholding tax rate can be increased to 75% if the dividend is paid towards Non-cooperative States or territories (as mentioned above) irrespective of the tax residence of the beneficiary of the dividends. Such withholding tax rates may, however, be reduced or eliminated by application of a tax treaty with France.
Taxation of Capital Gains
A Qualifying U.S. Holder will not be subject to any French income or withholding tax on any capital gain realized upon the sale or exchange of ADSs of the Company.
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Estate and Gift Taxes
Under the Convention between the United States of America and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritance and Gifts, dated November 24, 1978 (as amended from time to time), if a U.S. Holder transfers his or her shares by gift or by reason of the U.S. Holder’s death, that transfer will not be subject to French gift or inheritance tax unless the U.S. Holder is domiciled in France at the time of making the gift or at the time of his or her death or if the shares are held for use in the conduct of a business or profession through a permanent establishment or a fixed base in France.
Wealth Tax
As of January 1, 2018, the French wealth tax namely the Impôt de Solidarité sur la Fortune (“ISF”) is replaced by the Impôt sur la Fortune Immobilière (“IFI”). The IFI generally applies to real estate assets to the extent that their net value exceeds €1,300,000. Therefore, all other movable assets (tangible assets, shares, life insurance, cash, etc.) are excluded from the tax base, unless their underlying assets (direct or indirect) consist of real estate assets or rights.
However, a general exclusion applies to real estate assets owned by companies pursuing a commercial, industrial, craft, agricultural or liberal activity when the taxpayer (together with the members of its tax household) holds directly or indirectly less than 10% of the share capital or the voting rights of the company.
As a result, Qualifying U.S. Holders will not be subject to French IFI in respect of their ownership of ADSs.
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ENFORCEMENT OF CIVIL LIABILITIES
We are a société anonyme, or limited liability corporation, organized under the laws of France. The majority of our directors and executive officers reside in France and other countries outside the U.S. All or a substantial portion of our assets and of such persons’ assets are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or such persons or to enforce, either inside or outside the United States, judgments against us or such persons obtained in U.S. courts or to enforce in U.S. courts judgments obtained against such persons in courts in jurisdictions outside the United States, in each case, in any action predicated upon the civil liability provisions of the federal securities laws of the United States. In an original action brought in France predicated solely upon the U.S. federal securities laws, French courts may not have the requisite jurisdiction to grant the remedies sought. In addition, actions in the United States under the U.S. federal securities laws could be affected under certain circumstances by the French law of July 16, 1980, which may preclude or restrict the obtaining of evidence in France or from French persons in connection with such actions.
We have designated GKL Corporate/Search, Inc., One Capitol Mall, Suite 660, Sacramento, California 95814, as our agent for service of process in the United States with respect to any action brought against us in the U.S. District Court for the Southern District of New York under the federal securities laws of the United States or of any State in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.
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SELLING SECURITYHOLDERS
We are registering 46,733,972 ordinary shares (represented by up to 11,683,493 ADSs, each of which represents four ordinary shares), that were issued to the Selling Securityholders to permit the Selling Securityholders and their respective pledgees, donees, transferees or other successors-in-interest that receive their shares after the date of this prospectus to resell or otherwise dispose of the ordinary shares (or ADSs representing such ordinary shares) in the manner contemplated under “Plan of Distribution” below.
We entered into the Registration Rights Agreements with the Selling Securityholders pursuant to which we agreed to file with the SEC a registration statement on Form F-3 covering the resale of such ordinary shares (from time to time). We are registering the ordinary shares issued pursuant to the Securities Purchase Agreements in accordance with the Registration Rights Agreements in order to permit the Selling Securityholders to offer ordinary shares in the form of ADSs for resale from time to time. The Securities Purchase Agreements contain customary representations and warranties.
The foregoing descriptions of the Securities Purchase Agreements and the Registration Rights Agreements do not purport to be complete descriptions of the terms of the documents, and are qualified in their entirety by the terms of the definitive documents or forms thereof which have been filed with the SEC.
Wesley Cummins has served as a director of the Company since June 2018. Mr. Cummins is the president of B. Riley Asset Management (“BRAM”), which acquired his firm 272 Capital L.P. in August 2021. 272 Capital L.P. is the parent company of 272 Capital Master Fund LTD. As the president of BRAM, Mr. Cummins exercises ultimate voting and dispositive power over the ADSs held by 272 Master Fund LTD.
Sailesh Chittipeddi has served as a director of the Company since June 2022. Mr. Chittipeddi is Executive Vice President and General Manager of the IoT and Infrastructure Business Unit of Renesas Electronics Corporation. In January 2022, the Company and Renesas entered into licensing agreements pursuant to which Renesas was issued ADSs and Mr. Chittipeddi was appointed to the board of directors.
Except for 272 Master Fund LTD and Renesas, ownership of the ordinary shares (or ADSs representing such shares) issued pursuant to the Securities Purchase Agreement, their respective rights to require registration of our ordinary shares under the Registration Rights Agreement, their other respective rights under the Securities Purchase Agreement and as otherwise disclosed in the footnotes below, the Selling Securityholders do not have, or within the past three years has not had, any position, office or other material relationship with us. The following table sets forth the names of the Selling Securityholders, the number of ADSs beneficially owned by the Selling Securityholder as of May 11, 2023, the number of ADSs that may be offered under this prospectus and the number of ADSs beneficially owned by the Selling Securityholders assuming all of the ADSs covered hereby are sold. The number of ADSs in the column “Number of ADSs Being Offered” represents all of the ADSs that the Selling Securityholders may offer under this prospectus. The Selling Securityholders may sell some, all or none of their ADSs. We do not know how long the Selling Securityholders will hold the ADSs before selling them, and we currently have no agreements, arrangements or understandings with the Selling Securityholders regarding the sale or other disposition of any of the ADSs. The ADSs covered hereby may be offered from time to time by the Selling Securityholders.
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The information set forth below is based upon information obtained from the Selling Securityholders and upon information in our possession regarding the original issuance of the ordinary shares. The percentages of shares owned after the offering are based on 58,315,598 ADSs outstanding as of May 11, 2023.
| Name of Selling Securityholder | ADSs Beneficial Owned Prior to Offering(1) | Number of ADSs Being Offered | ADSs Beneficial Owned After Offering(2) | ||||||||||||||||||||||||||
| Number | Percent | Number | Percent | ||||||||||||||||||||||||||
272 Capital Master Fund LTD(3) | 6,277,858 | 10.8 | % | 1,310,221 | 4,967,637 | 8.5 | % | ||||||||||||||||||||||
Boothbay Diversified Alpha Master Fund LP(4) | 1,310,221 | 2.3 | % | 1,310,221 | — | — | |||||||||||||||||||||||
Boothbay Absolute Return Strategies LP(4) | 1,310,221 | 2.3 | % | 1,310,221 | — | — | |||||||||||||||||||||||
Divisar Partners QP, L.P.(5) | 4,401,267 | 7.6 | % | 786,133 | 3,615,134 | 6.2 | % | ||||||||||||||||||||||
Lynrock Lake LP(6) | 8,677,913 | 14.9 | % | 3,930,663 | 5,945,426 | 9.99 | % | ||||||||||||||||||||||
Marlin Fund, LP(7) | 899,968 | 1.5 | % | 391,475 | 508,493 | * | |||||||||||||||||||||||
Marlin Fund II, LP(7) | 724,662 | 1.2 | % | 307,133 | 417,529 | * | |||||||||||||||||||||||
Marlin Fund III, LP(7) | 64,257 | * | 28,644 | 35,613 | * | ||||||||||||||||||||||||
Marlin Master Fund Offshore II, LP(7) | 133,296 | * | 58,881 | 74,415 | * | ||||||||||||||||||||||||
Potomac Capital Partners V, LP(8) | 1,141,157 | 2.0 | % | 78,613 | 1,062,544 | 1.8 | % | ||||||||||||||||||||||
Renesas Electronics Corporation(9) | 1,974,755 | 3.4 | % | 1,974,755 | — | — | |||||||||||||||||||||||
Sidus Investment Partners, LP(10) | 37,321 | * | 37,321 | — | — | ||||||||||||||||||||||||
Sidus Double Alpha Fund, LP(10) | 98,955 | * | 98,955 | — | — | ||||||||||||||||||||||||
Sidus Double Alpha Fund LTD(10) | 60,257 | * | 60,257 | — | — | ||||||||||||||||||||||||
__________________
*Represents beneficial ownership of less than 1%.
(1)“Beneficial ownership” is a term broadly defined by the SEC in Rule 13d-3 under the Exchange Act, and includes more than the typical form of share ownership, that is, shares held in the person’s name. The term also includes what is referred to as “indirect ownership,” meaning ownership of shares as to which a person has or shares voting or investment power. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any securities that such person or group has a right to acquire currently or within 60 days of May 11, 2023.
(2)Assumes that the Selling Securityholder sells to third parties all ordinary shares (or ADSs representing such shares) registered under this prospectus that it holds.
(3)B. Riley Asset Management LLC (“BRAM”) is the investment manager of 272 Capital Master Fund LTD (“272 Fund”), which was acquired by BRAM in August 2021. B Riley Capital Management LLC (“BRCM”) is the majority owner of BRAM. Wesley Cummins is the managing member of 272 Fund. BRCM is controlled by Bryant Riley. Accordingly, because of Mr. Riley’s and Mr. Cummins’s shared voting and investment control over the shares held by 272 Fund, each may be deemed to have beneficial ownership of the securities held by 272 Fund. The principal business address of 272 Fund, BRAM, and Mr. Cummins is 3811 Turtle Creek Blvd., Dallas, Texas 75219. The principal business address of BRCM and Mr. Riley is 11000 Santa Monica Blvd., Suite 800, Los Angeles, California 90025.
(4)BRAM is the investment manager of both Boothbay Diversified Alpha Master Fund, LP, a Cayman Islands limited partnership (the “BDAMF Fund”) and Boothbay Absolute Return Strategies, LP (“BARS Fund”). As the investment manager, BRAM has the power to vote and the power to direct the disposition of all securities held by BDAMF Fund and BARS Fund. BCRM is the majority owner of BRAM. BCRM is controlled by Bryan Riley and Wesley Cummins serves as the President of BRAM. Accordingly, each may be deemed to have beneficial ownership of the securities held by BDAMF Fund and BARS Fund. The principal business address of BDAMF Fund and BARS Fund is 140 E. 45th Street, 14th Floor, New York, NY 10017. The principal business address of BRAM, and Mr. Cummins is 3811 Turtle Creek Blvd., Dallas, Texas 75219. The principal business address of BRCM and Mr. Riley is 11000 Santa Monica Blvd., Suite 800, Los Angeles, California 90025.
(5)Divisar Capital Management, LLC, is the general partner of Divisar Partners QP, L.P. Mr. Steven Baughman, as CEO of Divisar Capital Management, LLC, with the power to exercise investment and voting discretion, may be deemed to be the beneficial owner of all shares held by Divisar Partners QP, L.P. The principal business address for Divisar Partners QP, L.P. is 275 Sacramento Street, 8th Floor, San Francisco, CA.
(6) ADSs are directly held by Lynrock Lake Master Fund LP (“Lynrock Fund”). ADSs Beneficial Owned Prior to Offering excludes ADSs representing ordinary shares underlying a convertible note of the Company that is directly held by Lynrock Fund but is not presently convertible due to a 9.99% beneficial ownership limitation. ADSs Beneficial Owned After Offering includes 1,198,176 ADSs that would be issuable upon conversion of a portion of the convertible note after giving effect to the 9.99% beneficial ownership limitation. Lynrock Lake LP is the investment manager of Lynrock Fund and pursuant to an investment management agreement, Lynrock Lake LP has been delegated full voting and investment power over securities of the Company held by Lynrock Fund. Cynthia Paul, the Chief Investment Officer of Lynrock Lake LP and Sole Member of Lynrock Lake Partners LLC, the general partner of Lynrock Lake LP, may be deemed to
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exercise voting and investment power over securities of the Company held by Lynrock Fund. The address of the foregoing entities is c/o Lynrock Lake LP, 2 International Drive, Suite 130, Rye Brook, New York 10573.
(7)Masters Capital Management, LLC is the general partner of each of (i) Marlin Fund, LP (“Marlin I”), (ii) Marlin Fund II, LP (“Marlin II”), (iii) Marlin Fund III, LP (“Marlin III”), and (iv) Marlin Master Fund Offshore II, LP (“Marlin Offshore,” and collectively with Marlin I, Marlin II, and Marlin III, the “Marlin Entities”). Michael W. Masters serves as managing member of Masters Capital Management, LLC. Mr. Masters, as managing member of Masters Capital Management, LLC, with the power to exercise investment and voting discretion, may be deemed to be the beneficial owner of all shares held by the Marlin Entities. The principal business address of each of the Marlin Entities and of Masters Capital Management, LLC is 3060 Peachtree Road NW, Suite 1425, Atlanta, GA 3035.
(8)Potomac Capital Management serves as investment manager of Potomac Capital Partners V, LP. Paul J. Solit has the power to exercise investment and voting discretion of the shares held by Potomac Capital Partners V, LP and may be deemed to be the beneficial owner of such shares. The principal business address of Potomac Capital Partners V, LP is 299 Park Avenue, 21st Floor, New York, NY 10171.
(9)The principal business address of Renesas Electronics Corporation is 3-2-24 Toyosu, Koto-ku, Tokyo 135-0061, Japan.
(10)Sidus Investment Management, LLC serves as the investment manager for each of (i) Sidus Double Alpha Fund, LP (“Sidus Alpha LP”), (ii) Sidus Double Alpha Fund LTD (“Sidus Alpha LTD”), and (iii) Sidus Investment Partners, LP (“Sidus Investment,” and collectively with Sidus Alpha LP and Sidus Alpha LTD, the “Sidus Entities”). Michael Barone has the power to exercise investment and voting discretion of the shares held by the Sidus Entities and may be deemed to be the beneficial owner of such shares. The principal business address of the Sidus Entities is 767 3rd Avenue, 15th Floor, New York, NY 10017.
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PLAN OF DISTRIBUTION
We are registering 46,733,972 ordinary shares issued to the Selling Securityholders and which may be represented by up to 11,683,493 ADSs, each of which represents four ordinary shares, to permit the Selling Securityholders and their respective pledgees, donees, transferees or other successors-in-interest that receive their shares (or ADSs representing such shares) after the date of this prospectus to resell or otherwise dispose of the shares (or ADSs representing such shares) in the manner contemplated in this section. We will not receive any of the proceeds from the sale of ordinary shares (or ADSs representing such shares) in this offering. We will bear all fees and expenses incident to our obligation to register the shares (and ADSs representing such shares). In connection with this transaction, we entered into Registration Rights Agreements with the Selling Securityholders pursuant to which we agreed to file with the SEC a registration statement on Form F-3 covering the resale of such ordinary shares from time to time. We are registering the ordinary shares issued or issuable pursuant to the Securities Purchase Agreements in accordance with the Registration Rights Agreements in order to permit the Selling Securityholders to offer ordinary shares in the form of ADSs for resale from time to time.
The Selling Securityholders and any of their respective pledgees, donees, transferees, assignees or other successors-in-interest may, from time to time, sell, transfer or otherwise dispose of any or all of their ordinary shares (or ADSs representing such shares) or interests in any such shares on any stock exchange, market or trading facility on which the ordinary shares or ADSs are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. Each of the Selling Securityholders may use one or more of the following methods when disposing of the shares represented by ADSs or interests therein:
•on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
•in the over-the-counter market;
•ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
•block trades in which the broker-dealer will attempt to sell ordinary shares (or ADSs representing such shares) as agent but may position and resell a portion of the block as principal to facilitate the transaction;
•through brokers, dealers or underwriters that may act solely as agents;
•purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
•an exchange distribution in accordance with the rules of the applicable exchange;
•privately negotiated transactions;
•delivery of shares (or ADSs representing such shares) in settlement of short sales;
•through the writing or settlement of options or other hedging transactions entered into after the effective date of the registration statement of which this prospectus is a part, whether through an options exchange or otherwise;
•broker-dealers may agree with such Selling Securityholder to sell a specified number of ordinary shares (or ADSs representing such shares) or interests in such shares at a stipulated price per share;
•a combination of any such methods of disposition; and
•any other method permitted pursuant to applicable law.
The Selling Securityholders may also sell shares under Rule 144 under the Securities Act or other exemption from registration under the Securities Act, if available, rather than under this prospectus.
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Broker-dealers engaged by the Selling Securityholders may arrange for other broker-dealers to participate in sales. Broker-dealers, underwriters and other agents may receive commissions or discounts from the Selling Securityholders (or, if any broker-dealer acts as agent for the purchaser of ordinary shares (or ADSs representing such shares), from the purchaser) in amounts to be negotiated. The Selling Securityholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved but any such discounts or commissions might exceed those customary in the types of transactions involved.
The Selling Securityholders may from time to time pledge or grant a security interest in some or all of the ordinary shares (or ADSs representing such shares) by them and the pledgee or other secured party, transferee or other successor in interest may sell ordinary shares (or ADSs representing such shares) from time to time under this prospectus, or under a supplement or amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of Selling Securityholders to include the pledgee, secured party, transferee or other successors in interest as Selling Securityholders under this prospectus. The Selling Securityholders also may transfer the ordinary shares (or ADSs representing such shares) in other circumstances in which case the transferees, donees, pledgees or other successors-in-interest may be the selling beneficial owners for purposes of this prospectus and may sell such ordinary shares (or ADSs representing such shares) from time to time under this prospectus after an amendment or supplement has been filed under Rule 424(b)(3) under, or another applicable provision of, the Securities Act, amending, if necessary, the list of Selling Securityholders to include the transferees, donees, pledgees or other successors-in-interest as a Selling Securityholder under this prospectus. The Registration Rights Agreements provide that certain transferees of the Selling Securityholders are entitled to the benefits of such agreement, subject to the terms and conditions set forth in such agreement.
Upon being notified in writing by a Selling Securityholder that any material arrangement has been entered into with a broker-dealer for the sale of ordinary shares (or ADSs representing such shares) through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus, if required, pursuant to Rule 424(b) under the Securities Act will be filed, disclosing (i) the name of each such Selling Securityholder and of the participating broker-dealer(s), (ii) the number of ordinary shares (or ADSs representing such shares) involved, (iii) the price at which such ordinary shares (or ADSs representing such shares) were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, if applicable, and (vi) other facts material to the transaction.
The Selling Securityholders also may transfer the ordinary shares (or ADSs representing such shares) in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
In connection with the sale of the ordinary shares (or ADSs representing such shares) or interests in such shares, the Selling Securityholders may enter into hedging transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers, other financial institutions and other third parties, which may in turn engage in short sales in the course of hedging the positions they assume. The Selling Securityholders may also sell ordinary shares (or ADSs representing such shares) short after the effective date of the registration statement of which this prospectus is a part and deliver these securities to close out its short positions, or loan or pledge the common stock to broker-dealers or other third parties that in turn may sell these securities. The Selling Securityholders may also enter into option or other transactions after the effective date of the registration statement of which this prospectus is a part with broker-dealers, other financial institutions and other third parties or create one or more derivative securities which require the delivery to such broker-dealer, other financial institution and other third parties of ordinary shares (or ADSs representing such shares) offered by this prospectus, which ordinary shares (or ADSs representing such shares) such broker-dealer or other financial institution or third party may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction if required), including in short sale transactions. Third parties may use securities pledged by the Selling Securityholders or borrowed from the Selling Securityholders or others to settle sales or to close out any related open borrowings of securities, and may use securities received from the Selling Securityholders in settlement of those derivatives to close out any related open borrowings of securities.
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The Selling Securityholders and any broker-dealers or agents that are involved in selling the ordinary shares (or ADSs representing such shares) may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The maximum commission or discount to be received by any member of the Financial Industry Regulatory Authority, or FINRA, or independent broker-dealer will not be greater than 8% of the initial gross proceeds from the sale of any security being sold.
There can be no assurance that any Selling Securityholders will sell any or all of the ordinary shares (or ADSs representing such shares) registered pursuant to the registration statement, of which this prospectus forms a part.
We have advised the Selling Securityholders that they are required to comply with Regulation M promulgated under the Exchange Act during such time as they may be engaged in a distribution of the ordinary shares (or ADSs representing such shares). The foregoing may affect the marketability of ordinary shares and the ADSs representing such ordinary shares. The Selling Securityholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder, including, without limitation, Regulation M under the Exchange Act, which may limit the timing of purchases and sales of any of the ADSs by the Selling Securityholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the ADSs to engage in market-making activities with respect to the ADSs. All of the foregoing may affect the marketability of the ADSs and the ability of any person or entity to engage in market-making activities with respect to the ADSs.
The aggregate proceeds to the Selling Securityholders from the sale of ordinary shares (or ADSs representing such shares) offered by them will be the purchase price of the shares less discounts or commissions, if any. The Selling Securityholders reserve the right to accept and, together with its agents from time to time, to reject, in whole or in part, any proposed purchase to be made directly or through agents. We will not receive any of the proceeds from this offering.
We are required to pay all fees and expenses incident to the registration of the shares, other than any underwriting fees, discounts and selling commissions, stock transfer taxes and fees and disbursements of counsel. We have agreed to indemnify each Selling Securityholder, each person who controls such Selling Securityholder and their respective officers, directors, employees, stockholders, members, representatives and affiliates in certain circumstances against certain losses, claims, damages or liabilities to which they may become subject, including certain liabilities under the Securities Act.
We have agreed with the Selling Securityholders under the Registration Rights Agreements to use our commercially reasonable efforts to ensure that the ordinary shares constituting registrable shares (and any ADSs in respect of such shares) under the Registration Rights Agreements are registered for sale under the Securities Act as contemplated by the Registration Rights Agreements. Such obligations shall cease and terminate, with respect to such registrable shares (and any ADSs in respect of such shares), upon the earliest to occur of (a) such time when there are no registrable shares outstanding, (b) such time such registrable shares (and any ADSs in respect of such shares) have been resold pursuant to a registration statement or Rule 144 under the Securities Act (or any similar provisions then in force), (c) such time that all such registrable shares (and any ADSs in respect of such shares) are freely transferable without limitation and without restrictions or conditions, or (d) the mutual written agreement of the Selling Securityholders and us.
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EXPENSES RELATED TO REGISTRATION
The following is a statement of expenses in connection with the registration of the ordinary shares represented by ADSs pursuant to the Registration Rights Agreements. With the exception of the SEC registration fee, all amounts are estimates. The estimates do not include expenses related to offerings of ADSs by the Selling Securityholders. Each prospectus supplement describing an offering of ADSs will reflect the estimated expenses related to the offering of ADSs under that prospectus supplement.
SEC Registration Fee | $ | 2,968 | |||
Printing Expenses | 7,000 | ||||
Legal Fees and Expenses | 50,000 | ||||
Accounting Fees and Expenses | 10,000 | ||||
Miscellaneous | 32 | ||||
Total | $ | 70,000 | |||
LEGAL MATTERS
The validity of the ordinary shares underlying the ADSs offered by this prospectus and legal matters will be passed upon by Orrick Rambaud Martel.
EXPERTS
The consolidated financial statements of Sequans Communications S.A appearing in Sequans Communications S.A.’s Annual Report (Form 20-F) for the year ended December 31, 2022 and the effectiveness of Sequans Communications S.A.’s internal control over financial reporting as of December 31, 2022 have been audited by Ernst & Young Audit, independent registered public accounting firm, as set forth in their reports thereon (which contain an explanatory paragraph describing conditions that raise substantial doubt about the Company’s ability to continue as a going concern as described in Note 2.1 to the consolidated financial statements), included therein, and incorporated herein by reference. Such consolidated financial statements have been incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” information into this document, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this document, except for any information superseded by information in this document. This prospectus incorporates by reference the following documents that we have previously filed with the SEC:
•our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the SEC on March 31, 2023; and
•our Reports of Foreign Issuer on Form 6-K furnished with the SEC on April 4, 2023 and May 3, 2023 (limited to the financial statements on pages 4-6 in Exhibit 99.1).
The documents listed above contain important information about us and our finances. The more detailed information contained in the Form 6-K and Form 20-F qualify this entire prospectus. Statements in this prospectus may modify or supersede statements in the Form 6-K and Form 20-F and therefore the modified or superseded part of the original statement is not part of this prospectus.
We incorporate by reference into this prospectus all subsequent annual reports on Form 20-F after the date of this prospectus and before we terminate this offering. We also may incorporate by reference into this prospectus our reports on Form 6-K furnished after the date of this prospectus and before we terminate this offering that we identify in the Form 6-K as being incorporated into this registration statement. We may modify or supersede any statement in
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this prospectus by statements in documents we incorporate by reference after the date of this prospectus. When that happens, the modified or superseded part of the original statement is not part of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We will provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of any or all of the information that has been incorporated by reference in this prospectus but that is not delivered with the prospectus at no cost, upon written or oral request to us. We will not include exhibits to the documents that you request unless the exhibits are specifically incorporated by reference into those documents. You may make your request for any of the documents incorporated by reference in this prospectus by writing or telephoning us at the following address: 15-55 boulevard Charles de Gaulle, 92700 Colombes, France. The telephone number at this address is +33 1 70 72 16 00.
We are a foreign private issuer (as such term is defined in the Exchange Act). We are subject to the informational requirements of the Exchange Act, file our annual reports on Form 20-F, and furnish reports on Form 6-K and other information with the SEC. We have filed with the SEC a registration statement on Form F-3 to register the securities offered in this prospectus. This prospectus, which forms a part of the registration statement, does not contain all of the information included in the registration statement and its exhibits and schedules. References in this prospectus to any contract or other document are not necessarily complete and, if we filed the contract or document as an exhibit to the registration statement, you should refer to the exhibit for more information.
Our corporate Internet address is www.sequans.com. We make available free of charge on or through our website our annual reports, current reports, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We may from time to time provide important disclosures to investors by posting them in the investor relations section of our website, as allowed by the SEC, rules. Information contained on our website is not part of this report or any other report filed with the SEC. The SEC also maintains an Internet site http://www.sec.gov that contains reports, proxy and information statements, and other information that we filed electronically.
As a foreign private issuer, we are exempt from the rules under the Exchange Act that prescribe the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. We are not currently required under the Exchange Act to publish financial statements as frequently or as promptly as are United States companies subject to, among others, Rules 13a-11, 13a-13, 15d-11 and 15d-13 promulgated under the Exchange Act. Moreover, while we have and expect to continue to submit quarterly interim consolidated financial data to the SEC under cover of the SEC’s Form 6-K, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies and are not required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act. Furthermore, our ordinary shares are not listed and we do not currently intend to list our ordinary shares on any market in France, our home country. As a result, we are not subject to the reporting and other requirements of listed companies in France. For instance, we are not required to publish quarterly or semi-annual financial statements. Accordingly, there is less publicly available information concerning our company than there would be if we were a U.S. public company.
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Ordinary Shares
Represented by American Depositary Shares
| PROSPECTUS | ||
, 2023
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
We maintain liability insurance for our directors and officers, including insurance against liabilities under the Securities Act.
Item 9. Exhibits
Exhibit Number | Description of Exhibit | |||||||
| 3.1* | ||||||||
| 4.1 | ||||||||
| 4.2 | ||||||||
| 4.3* | ||||||||
| 4.4* | ||||||||
| 4.5* | ||||||||
| 4.6* | ||||||||
| 5.1* | ||||||||
| 8.1* | ||||||||
| 23.1* | ||||||||
| 23.2* | ||||||||
| 23.3* | ||||||||
| 24.1* | ||||||||
| 107* | ||||||||
__________________
*Filed herewith.
Item 10. Undertakings
(a)The undersigned registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)To include any prospectus required by section 10(a)(3) of the Securities;
(ii)To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§ 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
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(iii)To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the information otherwise required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of the registration statement.
(2)That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering; provided, however, that a post-effective amendment need not be filed to include financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act, or Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
(5)That, for the purpose of determining liability under the Securities Act to any purchaser:
(i)Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii)Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
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(6)That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; (ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; (iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and (iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b)The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Paris, Republic of France, on the 12 of May, 2023.
| SEQUANS COMMUNICATIONS S.A. | ||||||||
By: | /s/ Dr. Georges Karam | |||||||
Name: Dr. Georges Karam | ||||||||
| Title: Chief Executive Officer and Chairman | ||||||||
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Dr. Georges Karam and Deborah Choate and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement (or any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute, may lawfully do or cause to be done by virtue hereof.
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Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Name | Title | Date | ||||||||||||
| /s/ Dr. Georges Karam | Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) | May 12, 2023 | ||||||||||||
| Dr. Georges Karam | ||||||||||||||
| /s/ Deborah Choate | Chief Financial Officer (Principal Financial Officer and Accounting Officer) | May 12, 2023 | ||||||||||||
| Deborah Choate | ||||||||||||||
| /s/ Wesley Cummins | Director | May 12, 2023 | ||||||||||||
| Wesley Cummins | ||||||||||||||
| /s/ Mailys Ferrere | Director | May 12, 2023 | ||||||||||||
| Mailys Ferrere | ||||||||||||||
| /s/ Yves Maitre | Director | May 12, 2023 | ||||||||||||
| Yves Maitre | ||||||||||||||
| /s/ Richard Nottenburg | Director | May 12, 2023 | ||||||||||||
| Richard Nottenburg | ||||||||||||||
| /s/ Hubert de Pesquidoux | Director | May 12, 2023 | ||||||||||||
| Hubert de Pesquidoux | ||||||||||||||
| /s/ Dominique Pitteloud | Director | May 12, 2023 | ||||||||||||
| Dominique Pitteloud | ||||||||||||||
| /s/ Zvi Slonimsky | Director | May 12, 2023 | ||||||||||||
| Zvi Slonimsky | ||||||||||||||
SIGNATURE OF AUTHORIZED U.S. REPRESENTATIVE OF THE REGISTRANT
Pursuant to the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of Sequans Communications S.A. has signed this registration statement or amendment thereto in the City of Dallas, State of Texas, on May 12, 2023.
By: | /s/ Nikhil Taluja | ||||
| Name: Nikhil Taluja | |||||
| Title: Authorized Representative in the United States | |||||
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Exhibit 3.1
Société Anonyme
with a share capital of € 2,330,932.50
Registered office : 15-55 boulevard Charles de Gaulle – 92700 COLOMBES
Trade Register N°: 450 249 677 RCS Nanterre
B Y L A W S
As amended on April 11, 2023
Article 1 – Legal Form
The company is a “société anonyme” (French corporation) governed by corporate law, subject to specific laws governing the company and to these by-laws.
Article 2 – Company name
The company’s name is:
« SEQUANS COMMUNICATIONS ».
Article 3 – Corporate purpose
The company’s corporate purpose, in France and abroad is:
• The study, development and marketing of all products and/or services relating to radio fixed and/or optical-type communication networks systems;
• Advising and training, by all means and technical media, relating to the aforementioned fields of operations;
• The participation, directly or indirectly, in all transaction that may be related to any of the purposes defined above, through the creation of new companies or legal entities, the contribution, subscription, or purchase of securities or corporate rights, acquisition of interests, mergers, partnerships, or any other methods;
• And, more generally, all industrial, commercial, and financial transactions, or transactions involving movable or fixed assets, that may be related directly or indirectly, in whole or in part, to any of the aforementioned corporate purposes, or to any similar or related purposes, or to any and all purposes that may enhance or develop the company’s business.
Article 4 – Registered office
The registered office is located at:
15-55 boulevard Charles de Gaulle – 92700 COLOMBES.
The board of directors is empowered to transfer the company’s registered office, within the applicable legal and regulatory provisions.
Article 5 –Term
The company was incorporated for a term of ninety-nine years starting the day of its registration with the trade and company register, except in the cases of extension or early dissolution.
Article 6 – Share capital
The share capital is set at the amount of two million three hundred and thirty thousand nine hundred and thirty-two euros and fifty cents (EUR 2,330,932.50).
It is divided into two hundred and thirty-three million ninety-three thousand two hundred and fifty (233,093,250) shares of a par value of one Euro cent (EUR 0.01), fully paid up.
Article 7 – Changes to the capital
The share capital may be increased, decreased or amortized in accordance with applicable legal and regulatory provisions.
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Article 8 – Subscription for shares
In the event of a share capital increase, shares subscribed for cash, when applied for, shall be paid up in the minimum proportion provided for by legal and regulatory provisions. Partly paid up shares shall be registered shares until fully paid up. Payment of the remainder shall be made in one or several installments pursuant to a decision by the board of directors, within a maximum time limit of five years as of the date of the final capital increase.
Subscribers will be informed of calls for funds by certified mail with acknowledgement of receipt within fifteen days at least before the date set for each payment. Payments shall be made either at the registered office, or at any other place designated for this purpose.
Should the shareholder fail to pay by the date set by the board of directors, any amounts due shall bear interest, ipso jure, at the legal rate of interest, as of the due date for payment, without prejudice to other statutory proceeding and penalties. In particular, the company may force the sale of the securities that have not been paid up.
Article 9 – Legal forms of the shares
Shares are in registered form and shall be registered in an individual share account as provided by legal and regulatory provisions.
Article 10 – Indivisibility of the shares
Shares shall be indivisible with respect to the company. Joint owners of indivisible shares shall be represented at shareholders’ general meetings by one of them or by a joint agent of their choice. Failing their agreement on the choice of an agent, such an agent is appointed by the courts of justice ruling in interim proceedings at the request of the co-owner who is in the greatest hardship.
The voting rights attached to the share shall belong to the beneficial-owner at ordinary shareholders’ meetings, and to the bare-owner at extraordinary shareholders’ general meetings.
Article 11 – Transfer and passing of the shares
Shares are freely negotiable.
They shall be transferred by means of a transfer order from account to account in accordance with the legal and regulatory provisions.
The shares can be leased out or lent with respect to the applicable legal and regulatory provisions.
Article 12 – Rights and obligations of the shares
Each share shall entitle its holder to a portion of the corporate profits and assets pro rata with respect to the amount of capital it represents.
Furthermore, each share shall entitle its holder to vote and be represented in the shareholders’ general meetings in accordance with legal rules and the provisions of these by-laws. Ownership of one share implies, ipso jure, adherence to the by-laws and the decisions of the shareholders’ general meeting.
Shareholders shall be liable for losses within the limits of their contributions to the company’s capital.
The heirs, creditors, legal beneficiaries and other representatives of a shareholder may not place liens on the property or securities of the company, nor request the division or the public sale, nor interfere in the administration of the company. For the proper exercise of their right, they shall refer to the corporate records and to the decisions of the shareholders’ meetings.
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At times when the ownership of several shares is necessary in order to exercise any right as in an exchange, grouping or allocation of shares, or as a consequence of a capital increase or decrease, merger or other corporate operation, the owner of isolated shares, or fewer shares than the required amount, may only exercise the particular right on condition that the shareholder personally takes the required steps to group or, if applicable, purchase or sell the number of requisite shares.
Article 13 – Organization and functioning of the board of directors
1 – Composition
The company is managed by a board of directors comprised of no more than 9 members, appointed by the shareholders’ meeting and that may be individuals or legal entities.
Directors that are legal entities shall designate a permanent legal representative when nominated. This legal representative will be subject to the same conditions and obligations and will be subject to the same civil and criminal liability as if he were director under his own name, without prejudice of the liability in solidum of the legal entity he represents. His mandate as director is for the same term as the mandate given to the legal entity he represents and must be renewed at each renewal of the legal entity’s mandate.
When the legal entity dismisses its representative, it must notify this dismissal to the company without delay, by certified mail and appoints, following the same procedure, a new permanent legal representative; the same rule applies in case of the death or resignation of the permanent legal representative.
2 – Term of office – renewal and rotation
The term of office for directors shall be three years, expiring at the end of the shareholders’ general meeting approving the accounts of the last fiscal years and held on the year of expiration of the mandate.
Directors can always be re-elected.
3 – Vacancy – Cooptation
In the event of vacancy, as a result of death or by resignation, of one or more seats of directors, the board of directors may, between two general meetings, make appointments on a provisional basis.
However, if the number of directors in function is less than the minimum required by legal and regulatory provisions, a general meeting will be convened with respect to applicable legal and regulatory provisions in order to complete the number of directors.
The provisional elections made by the board of directors will be subject to ratification by the next general meeting. In case of failure of ratification, the resolutions adopted and the acts accomplished by the board of directors will remain valid.
The director appointed as a replacement of another remains in the office only for the remaining time of his predecessor’s mandate.
4 – Remuneration
The shareholders’ meeting shall set the directors’ attendance fees. The board of directors, after express deliberation, shall be free to distribute this remuneration among the directors, subject to applicable legal and regulatory provisions.
Costs incurred by directors during their terms of office shall be reimbursed by the company against documentary evidence.
5 – Observers
The board of directors may appoint one or more observers chosen from among the shareholders, whether individuals or legal entities, or from outside their number.
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Their terms of office shall be set by the board of directors, but shall not exceed two years and shall expire at the next general meeting approving the accounts of the last fiscal year and held on the year of expiration of the mandate. Observers can always be re-elected.
The board of directors may terminate their appointment at any time without cause nor indemnity.
In the event of an observer’s death, dismissal or surrender of office for any other reason, the board of directors may appoint a replacement for the remainder of said observer’s term office.
Observers are called to assist as observers at board of directors’ meetings and may be consulted by it or its chairman. They may not vote on the board of directors’ resolutions.
Article 14 – Chairman of the board of directors
The board of directors shall elect its chairman from among its members who are individuals. The chairman shall be elected for the entire duration of his office as director and may be re-elected.
The chairman of the board of directors is subject to the age limit set out by legal and regulatory provisions. If this limit is reached during office, the chairman of the board of directors shall be considered as having resigned from office at the end of the general meeting approving the accounts of the last fiscal year when the age limit was reached.
The board of directors determines the chairman’s remuneration.
Article 15 – Board meetings
1 – The board of directors shall convene as often as the company’s interest so require, pursuant to notice from the chairman.
The notice to convene must be given at least three days in advance by letter, telegram, telex or fax. It must contain the agenda. In the event of an emergency meeting, the notice may be given immediately and by any means, including orally.
The meeting shall take place at the company’s registered office or at any other place indicated in the notice to convene.
2 – The board may not validly deliberate unless a quorum of at least half of its members are present, or, as the case may be, deemed to be present as provided for under the internal charter of the board of directors set in accordance with applicable legal and regulatory provisions.
Any director may give, by letter, telegram, telex or fax, a proxy to one of his colleagues in order to represent him at a meeting of the board of directors, but each director may only represent one of his colleagues.
Decisions will be taken by a majority of members present, deemed to be present, or represented. In the event of a tie vote, the chairman of the meeting shall cast the deciding vote.
3 – An attendance sheet shall be kept which must be signed by the directors at the board meeting and record, as the case may be, the participation of directors by means of videoconferencing or telecommunications.
4 – Board decisions shall be recorded in minutes drawn up in compliance with applicable legal provisions and signed by the chairman of the meeting and one director or, if the chairman of the meeting is unable to attend, by two directors. Copies or extracts of the minutes may be certified by the chairman of the board of directors, the chief executive officer, the delegated managing director, the director temporarily delegated to the duties of chairman or the holder of a power of attorney duly authorized for this purpose.
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Article 16 – Powers of the board of directors
The board of directors shall determine the strategy of the company’s activities and shall ensure its implementation. Subject to the powers expressly granted to the shareholders’ meetings, and within the scope of the company’s corporate purpose, the board shall take up all questions related to the management of the company and shall settle all related business through its deliberations.
The company shall be bound also by actions of the board of directors which do not fall within the corporate purpose, unless it proves that the third party knew such action was outside the limits of this purpose, or that the third party could not fail to be aware of this in view of the circumstances.
The board of directors carries out the controls and verifications it considers appropriate. All directors must receive all the necessary information in order to accomplish their task and may review all documents they consider useful.
Article 17 – Powers of the chairman of the board of directors
The chairman of the board of directors shall organize and direct the board’s work, which he shall report on to the general meeting. He shall ensure the proper functioning of the company’s governing bodies and shall ensure, in particular, that the directors are able to carry out their duties.
In case of a temporary unavailability or death of the chairman, the board of directors may delegate the powers of the chairman to a director. In case of a temporary unavailability, this delegation is granted for a limited duration and is renewable. In case of death, it is granted until the appointment of the new chairman.
Article 18 – General management
1 – Choice between two methods of conducting General Management
General management of the company shall be assumed under the responsibility of either the chairman of the board of directors or by another person appointed by the board and with the title of chief executive officer. The board of directors shall decide between these two methods of conducting general management, and shall duly inform the shareholders and third parties according to the applicable regulatory conditions.
When the general management of the company is assumed by the chairman of the board of directors, the provisions set forth above relating to the chief executive officer shall apply to him.
2 – Chief executive officer
The chief executive officer shall be nominated amongst the directors or from outside their number. The board of directors shall set his term of office and his remuneration. The chief executive officer is subject to the age limit set out by the applicable legal and regulatory provisions. If the age limit is reached during office, the chief executive officer shall be considered as having resigned from office at the next general meeting approving the accounts of the last fiscal year and held the year the limit was reached.
The chief executive officer may be dismissed at any time by the board of directors. If the dismissal is decided without fair grounds, it may give rise to damages, except if the chief executive officer is the chairman of the board of directors.
The chief executive officer shall be granted the widest powers to act in any manner on behalf of the company in all circumstances. He shall exercise his powers within the limits of the corporate purpose subject to the powers expressly attributed by legal and regulatory provisions to shareholders’ meetings and to the board of directors.
The chief executive officer shall represent the company in its relations with third parties. The company shall be bound also by actions of the chief executive officer which do not fall within the scope of the corporate purpose, unless its proves that the third party knew such action was outside of the limits of
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this purpose, or that the third party could not fail to be aware of this in view of the circumstances, it being specified that the mere publication of the by-laws does not constitute such proof.
The provisions of the by-laws or the resolutions of the board of directors limiting the powers of the chief executive officer are unenforceable against third parties.
3 – Deputy chief executive officer
Upon proposal of by the chief executive officer, the board of directors may appoint one or more individuals with the title of deputy chief executive officer and determine his remuneration in order to assist the chief executive officer.
The maximum number of deputy chief executives may not exceed five.
Deputy chief executives may be dismissed at any time by the board of directors upon proposal of the chief executive officer. If the dismissal is decided without fair grounds, it may give rise to damages.
If the chief executive officer ceases to exercise, or is prevented from carrying out his duties, the deputy chief executive officers shall, except when otherwise decided by the board of directors, remain in office and retain their duties until appointment of the new chief executive officer.
In agreement with the chief executive officer, the board of directors shall determine the scope and term of the powers granted to the deputy chief executive officers. With respect to third parties, the deputy chief executives shall have the same powers as the chief executive officer.
The age limit applicable to the chief executive officer also applies to the deputy chief executive officers.
Article 19 – Statutory auditors
The company’s account shall be audited by one or several statutory auditors appointed in accordance with legal and regulatory provisions and carrying out their duties in accordance therewith.
Article 20 – Shareholders’ meetings
1 – Shareholders’ meetings are convened and deliberate in accordance with legal and regulatory provisions and carry out their duties in accordance therewith.
Meetings are held at the company’s registered offices or at any other location indicated in the notice to convene.
2 – Any shareholder has the right to attend general meetings and to participate to the resolutions personally or through a proxy, by simple justification of his identity and no matter how many shares he owns as soon as the shares are paid up in accordance with applicable legal and regulatory provisions and that the shareholder justifies his shares are registered within the company’s books at least three days before the meeting.
Shareholders may only be represented by their spouse or another shareholder and for this purpose, the proxy must prove his mandate.
Shareholders may participate in general meetings by means of videoconferences or telecommunications in accordance with legal and regulatory requirements. The means of telecommunications authorized will be mentioned in the notice to convene.
3 – Shareholders’ general meeting shall be chaired by the chairman of the board of directors or, in his absence, by a director appointed for this purpose by the board of directors, failing which the shareholders’ general meeting itself shall elect its chairman.
4 – The minutes shall be prepared, and copies or excerpts of the deliberations shall be issued and certified as required by legal and regulatory provisions.
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Article 21 – Financial year
The financial year is twelve months, beginning January 1 ending December 31 of each year.
Article 22 – Annual accounts – Allocation of results
The board of directors shall keep proper accounts of corporate activities and draw up annual and consolidated accounts, in accordance with applicable legal and regulatory provisions, regulations and standards.
The income statement, which summarizes the income and expenses for the financial year, shows, after deduction of amortization and provisions, the profit or loss for the year.
5% is set aside from the earnings for the financial year minus previous losses, if any, to fund the legal reserve. This withdrawal ceases to be mandatory when the reserve reaches one-tenth of the share capital and resumes when, for any reason, the legal reserve falls below the one tenth figure.
Distributable profits consist of the profits for the year, less prior losses, plus the amounts to be placed in reserves as required by legal and regulatory provisions or by the by-laws, plus retained earnings. The shareholders’ meeting may withdraw from these earnings any sum it deems appropriate to allocate any optional reserves or to carry forward to the next financial year.
Moreover the shareholders’ general meeting may decide to distribute sums taken from reserves at its disposal, expressly indicating the reserve items from which such withdrawals are made. Dividends shall however first be taken from the distributable earnings for the year.
Except in the case of a capital decrease, no distribution may be made to shareholders when shareholders’ equity is or would, as a result of such distribution, be less than the amount of capital plus reserves which legal and regulatory provisions or the by-laws prohibit from being distributed. The re-evaluation variance may not be distributed and may be incorporated, in whole or in part, into the capital.
Article 23 – Payment of dividends
The terms and conditions for the payment of the dividends approved by the shareholders’ general meeting are determined by the shareholders’ meeting, or in lieu, by the board of directors. However, cash dividends must be paid within a maximum of nine months after the close of the financial year, unless extended by court order.
The ordinary shareholders’ general meeting may grant each shareholder, for all or part of the dividends to be distributed, an option between payment of the dividends in cash or in shares, subject to legal requirements.
Interim dividends may be distributed before the approval of the financial statements for the year when the balance sheet established during or at the end of a financial year and certified by an auditor, shows that the company has made a profit since the close of the last financial year, after recognizing the necessary depreciation and provisions and after deducting prior losses, if any, and the sums to be allocated to reserves, as required by legal and regulatory provisions or the by-laws, and including any retaining earnings. The amount of such interim dividends may not exceed the amount of the profit so defined.
Dividends not claimed within five years after the payment date shall be deemed to expire.
Article 24 – Liquidation
Subject to the applicable legal provisions, the company shall be in liquidation from the time of its winding-up, however brought about. The general meeting of shareholders shall then decide on the method of liquidation and appoint the liquidators. The legal entity of the company shall continue for the purposes of liquidation, until its definitive closure.
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Article 25 – Disputes
All disputes which may arise during the company’s existence or its liquidation either between the shareholders and the company or among the shareholders themselves, concerning the business of the company or the interpretation or implementation of these by-laws will be submitted to the jurisdiction of the relevant courts located in the jurisdiction where the company’s registered office is located.
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Exhibit 4.3
SEQUANS COMMUNICATIONS S.A.
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of April 3, 2023, by and between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “Company”), and the purchasers listed on Exhibit A hereto (each, a “Purchaser” and together, the “Purchasers”). The Company and each Purchaser are referred to hereinafter each as a “Party” and collectively as the “Parties”.
RECITALS
WHEREAS, the Purchasers desire to subscribe from the Company and the Company desires to issue Ordinary Shares (as defined below) represented by ADSs (the “Shares”). As used herein, “Ordinary Shares” means the ordinary shares, nominal value €0.01 per share, of the Company, “ADS” means an American Depositary Share each representing the number of Ordinary Shares specified pursuant to the Deposit Agreement (as defined below), “ADR” means an American Depositary Receipt evidencing the ADSs and “Underlying Shares” means the Ordinary Shares underlying the ADSs;
WHEREAS, on the Closing Date (as defined below), the Company and the Purchasers will enter into a registration rights agreement in the form attached as Exhibit B hereto (the “Registration Rights Agreement”), which provides certain rights to Purchasers relating to the Company and the Shares;
NOW THEREFORE, on and subject to the terms hereof, the Parties agree as follows:
ARTICLE I
DEFINED TERMS
The terms defined in this Article I (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Agreement shall have the respective meanings specified in this Article I. The terms defined in this Article I include the plural as well as the singular.
“ADR” shall have the meaning specified in the recitals.
“ADS” shall have the meaning specified in the recitals.
“Affiliates” shall have the meaning specified in Section 3.4.
“Agreement” shall have the meaning specified in the preamble.
“Business Day” shall mean any day other than a Saturday, a Sunday, or any other day on which banks in New York City or Paris are authorized or required by law or other governmental action to be closed.
“Closing” shall have the meaning specified in Section 2.2.
“Closing Date” shall have the meaning specified in Section 2.2.
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“Company” shall have the meaning specified in the preamble.
“Company Reports” shall have the meaning specified in Section 4.1.
“Deposit Agreement” shall have the meaning specified in Section 5.1.
“Depositary” shall have the meaning specified in Section 5.1.
“EY” shall have the meaning specified in Section 4.9.
“Enforceability Exceptions” shall have the meaning specified in Section 3.2.
“Environmental Laws” shall have the meaning specified in Section 4.20.
“Evaluation Date” shall have the meaning specified in Section 4.24.
“Exchange Act” shall have the meaning specified in Section 3.4.
“IFRS” shall have the meaning specified in Section 4.10.
“Intellectual Property Rights” shall have the meaning specified in Section 4.21.
“Issue Price” shall have the meaning specified in Section 2.1(a).
“Knowledge” shall have the meaning specified in Section 4.12.
“Material Adverse Effect” shall have the meaning specified in Section 4.2.
“Material Contract” shall have the meaning specified in Section 4.14.
“Material Permits” shall have the meaning specified in Section 4.13.
“OFAC” shall have the meaning specified in Section 4.23.
“Ordinary Shares” shall have the meaning specified in the recitals.
“Party” or “Parties” shall have the meaning specified in the preamble.
“Person” shall have the meaning specified in Section 4.23.
“Purchase” shall have the meaning specified in Section 2.2.
“Purchaser” shall have the meaning specified in the preamble.
“Registration Rights Agreement” shall have the meaning specified in the recitals.
“Regulation D” shall have the meaning specified in Section 3.3.
“Sanctions” shall have the meaning specified in Section 4.23.
“SEC” shall have the meaning specified in Section 3.8.
“Securities Act” shall have the meaning specified in Section 3.3.
“Shares” shall have the meaning specified in the recitals.
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“Short Sales” shall have the meaning specified in Section 3.7.
“Subsidiary” shall have the meaning specified in Section 4.2.
“Transaction Documents” shall mean collectively, this Agreement, the Registration Rights Agreement and the other documents and agreements entered into in connection with the transactions contemplated hereby and thereby.
“Underlying Shares” shall have the meaning specified in the recitals.
ARTICLE II
SUBSCRIPTION AND PURCHASE OF SECURITIES
Section 2.1 Issuance and Purchase of ADSs.
(a) Subject to the terms set forth in this Agreement, at the Closing (as defined herein), the Company agrees to issue an aggregate of 9,708,738 ADSs at an issue price of $2.06 per ADS, and each Purchaser agrees to subscribe for and purchase the number of Shares at the aggregate issue price (the “Issue Price”) set forth opposite its name on Exhibit A.
(b) Under the terms of its fifteenth resolution, the general meeting of shareholders of the Company approved, on June 24, 2022, a delegation of authority to the board of directors of the Company in order to effect one (or several) share capital increase(s) up to a maximum nominal amount of €2,000,000 through the issuance, inter alia, of shares and/or securities giving access to the share capital with subscriptions reserved to a specified class of investors including Qualified Institutional Buyers or Institutional Accredited Investors within the meaning of US securities laws.
Section 2.2 Closing; Delivery of Shares.
(a) Subject to Section 6.1 and Section 6.2, the closing (the “Closing”) of the issuance and subscription of the Shares (the “Purchase”) shall occur on a date no later than five (5) Business Days after the date of this Agreement, or at such other time as the Company and Purchasers mutually agree upon, orally or in writing (the “Closing Date”), upon the physical or electronic exchange among the Parties and their counsel of all documents and deliverables required under this Agreement.
(b) At the Closing, each Purchaser shall deliver or cause to be delivered to the Company:
(1) a duly completed and signed subscription form for the Shares in the form attached as Exhibit C hereto; and
(2) the Issue Price for such Purchaser.
(c) At the Closing, the Company shall do the following:
(1) Issue an aggregate of 38,834,952 Underlying Shares and deposit such Underlying Shares with the Depositary, in the name and on behalf of each Purchaser in the amounts set forth in Exhibit A; and
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(2) cause the Depositary to issue and deliver to each Purchaser a book-entry transfer for the Shares to which such Purchaser shall be entitled against deposit of the Underlying Shares, pursuant to the Deposit Agreement.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF PURCHASER
Each Purchaser hereby makes (severally and not jointly) the following representations and warranties, each of which is and shall be true and correct on the date hereof and at the Closing, to the Company, and all such representations and warranties shall survive the Closing:
Section 3.1 Power and Authorization. Purchaser is duly organized, validly existing and in good standing, and has the power, authority and capacity to execute this Agreement, to perform its obligations hereunder, and to consummate the Purchase.
Section 3.2 Valid and Enforceable Agreement; No Violations. This Agreement has been duly executed and delivered by Purchaser and constitutes a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (b) general principles of equity, whether such enforceability is considered in a proceeding at law or in equity (such qualifications in clauses (a) and (b) being the “Enforceability Exceptions”). This Agreement and consummation of the Purchase will not violate, conflict with or result in a breach of or default under (i) Purchaser’s organizational documents, (ii) any agreement or instrument to which Purchaser is a party or by which Purchaser or any of its assets are bound or (iii) any laws, regulations or governmental or judicial decrees, injunctions or orders applicable to Purchaser.
Section 3.3 Accredited Investor/Qualified Institutional Buyer. Purchaser is an “accredited investor” within the meaning of Rule 501(a) of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The information Purchaser has provided in writing to the Company as set forth on Purchaser’s signature page hereto is true, correct and complete, as of the date hereof and as of the Closing Date, in all material respects.
Section 3.4 5% Shareholder Status. If Purchaser and its affiliates (as that term is defined in Rule 501(b) of Regulation D under the Securities Act, “Affiliates”) will beneficially own after the Closing Date 5% or more of the Company’s outstanding Ordinary Shares represented by ADSs, Purchaser acknowledges and agrees that it will comply in all material respects with all applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as a result of such holdings.
Section 3.5 Restricted Stock. Purchaser (a) acknowledges (i) that the issuance of the Shares pursuant to this Agreement has not been registered under the Securities Act or any state securities laws, (ii) the Shares are being offered and sold in reliance upon exemptions provided
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in the Securities Act and state securities laws for transactions not involving any public offering and, therefore, cannot be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless they are subsequently registered and qualified under the Securities Act and applicable state securities laws or unless an exemption from such registration and qualification is available and (iii) the Shares are “restricted securities” as that term is defined in Rule 144 promulgated under the Securities Act and (b) is purchasing the Shares for investment purposes only for the account of Purchaser and not with any view toward a distribution thereof or with any intention of selling, distributing or otherwise disposing of the Shares in a manner that would violate the registration requirements of the Securities Act. Purchaser is able to bear the economic risk of holding the Shares for an indefinite period and has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment in the Shares.
Section 3.6 Legends. Purchaser understands and agrees that any certificate or book-entry representing the Shares shall bear the restrictive legend set forth in Section 7.2 below.
Section 3.7 No Illegal Transactions. Purchaser has not, directly or indirectly, and no person acting on behalf of or pursuant to any understanding with it has, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as defined below) involving any of the Company’s securities) since the time the Company began negotiating the transactions contemplated by this Agreement with Purchaser. Purchaser covenants that neither it nor any person acting on its behalf or pursuant to any understanding with it will engage, directly or indirectly, in any transactions in the securities of the Company (including Short Sales) prior to the time the transactions contemplated by this Agreement are publicly disclosed. “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO promulgated under the Exchange Act, and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, derivatives and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker-dealers or foreign regulated brokers.
Section 3.8 Adequate Information; No Reliance. Purchaser acknowledges and agrees that (a) Purchaser has been furnished with all materials it considers relevant to making an investment decision to enter into the Purchase and has had the opportunity to review the Company’s filings and submissions with the Securities and Exchange Commission (the “SEC”), including, without limitation, all information filed or furnished pursuant to the Exchange Act and all information incorporated into such filings and submissions, (b) Purchaser has sufficient knowledge and expertise to make an investment decision with respect to the transactions contemplated hereby, (c) Purchaser has had a full opportunity to speak directly with directors, officers and Affiliates of the Company and to ask questions of the Company and such directors, officers and Affiliates of the Company concerning the Company, its business, operations, financial performance, financial condition and prospects, and the terms and conditions of the Purchase, and to obtain such additional information as it deems necessary to verify the accuracy of the information furnished to it and has asked such questions, received such answers and obtained such information as it deems necessary, (d) Purchaser has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to evaluate the risks involved in the Purchase and to make an informed investment decision with respect to the Purchase and (e)
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Purchaser is not relying, and has not relied, upon any statement, advice (whether accounting, tax, financial, legal or other), representation or warranty made by the Company or any of its Affiliates or representatives, except for (i) the publicly available filings and submissions made by the Company with the SEC under the Exchange Act and (ii) the representations and warranties made by the Company in this Agreement.
Section 3.9 Purchaser’s Reporting Requirement. The Company has made no representations to Purchaser regarding Purchaser’s reporting requirements with the SEC related to Purchaser’s present or future ownership in the Company, and Purchaser acknowledges and agrees that it is the responsibility of Purchaser to ensure that Purchaser complies with any disclosure and reporting requirements of the SEC applicable to Purchaser as a result of the Purchase.
Section 3.10 No General Solicitation or Advertising. The offer to enter into the Purchase was directly communicated to Purchaser, and Purchaser was able to ask questions and receive answers concerning the terms of this transaction. At no time was Purchaser presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.
Section 3.11 Legal Opinions. Purchaser acknowledges and understands that a legal opinion is being delivered by counsel to the Company in reliance on, and assuming the accuracy of, the foregoing representations and warranties of Purchaser.
Section 3.12 Disqualification. Purchaser represents that neither Purchaser, nor any person or entity with whom Purchaser shares beneficial ownership of Company securities, is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act; provided that the facts and circumstances of any Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act have been disclosed to the Company.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby makes the following representations and warranties, each of which is and shall be true and correct on the date hereof and at the Closing, to Purchasers, and all such representations and warranties shall survive the Closing.
Section 4.1 Exchange Act Filings. The Company has filed or furnished, as applicable, on a timely basis all forms, statements, certifications, reports and documents required to be filed or furnished by it with the SEC pursuant to the Exchange Act or the Securities Act since December 31, 2021 (the “Company Reports”). The Company Reports, when they became effective or were filed with or furnished to the SEC, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations thereunder and none of such documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed or furnished after the date hereof and on or prior to the Closing, when such documents become effective or are filed with the SEC, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the SEC thereunder and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
Section 4.2 Due Incorporation. Each of the Company and each of its Subsidiaries has been duly organized and is validly existing as a corporation or other legal entity in good standing (or the foreign equivalent thereof) under the laws of its jurisdiction of incorporation or organization. Each of the Company and its Subsidiaries is duly qualified to do business and is in good standing (or the foreign equivalent thereof) as a foreign corporation or other legal entity in each jurisdiction in which its ownership or lease of its properties or the conduct of its business requires such qualification and has all power and authority (corporate or other) necessary to own or hold its properties and to conduct the businesses in which each is engaged, except where the failure to so qualify or have such power or authority (i) would not have and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the condition (financial or otherwise), results of operations, assets or business of the Company and its Subsidiaries, taken as a whole, or (ii) impair in any material respect the ability of the Company to perform its obligations under the Transaction Documents or to consummate any transactions contemplated hereby or thereby (any such effect as described in clauses (i) or (ii), a “Material Adverse Effect”). As used in this Agreement, “Subsidiary” shall have the meaning set forth in Rule 1-02 of Regulation S-X of the SEC.
Section 4.3 Subsidiaries. The membership interests or capital stock (or the foreign equivalent thereof), as applicable, of each Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable and, except to the extent set forth in the Company Reports, are owned by the Company directly, free and clear of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party.
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Section 4.4 Due Authorization. The Company has the full right, power and authority to enter into this Agreement and to perform and discharge its obligations hereunder; and this Agreement and the performance by the Company of its obligations hereunder have been duly authorized, and this Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity.
Section 4.5 The Shares. The Ordinary Shares to be issued by the Company upon subscription to the Shares pursuant to Section 2.1(a) have been duly authorized for issuance. Upon subscription by Purchasers for the Ordinary Shares issuable in connection with the issuance of the Shares pursuant to Section 2.1(a), such Ordinary Shares shall be deposited with the Depositary for the issuance of ADSs in the form of ADRs. When issued in accordance with the terms of this Agreement, the Ordinary Shares and the ADSs issued in connection with the issuance of the Shares pursuant to Section 2.1(a), will be validly issued, fully paid and nonassessable and free of any preemptive or similar rights, and Purchasers will be entitled to the rights specified in the Deposit Agreement; no preemptive right, resale right, right of first refusal or similar rights exist with respect to any of the Ordinary Shares issued in connection with the issuance of the Shares pursuant to Section 2.1(a) and the issuance thereof will be free of any restriction upon the voting or transfer thereof pursuant to the laws of the French Republic or the Company’s statuts or any agreement or other instrument to which the Company is a party. Each Share will be issued in compliance with all U.S. federal and state securities laws and the securities laws of any other applicable jurisdiction.
Section 4.6 Capitalization; Indebtedness. As of the date hereof, the share capital of the Company consists of 194,258,298 issued Ordinary Shares, fully paid, and with a par value of €0.01 each. All of the outstanding shares of capital stock of the Company have been duly authorized, validly issued and are fully paid and nonassessable and were issued in compliance with all applicable securities laws and were not issued in violation of any preemptive right, resale right, right of first refusal or similar right. Other than 1,625,932 Ordinary Shares reserved for future issuance under the Company’s equity plans, 22,108,176 Ordinary Shares issuable upon the exercise of outstanding stock options and warrants and upon vesting of restricted free shares granted pursuant to the Company’s equity plans, and a maximum of 44,872,846 shares reserved for issuance under outstanding convertible notes and warrants, the Company has no shares of capital stock reserved for issuance. Except as set forth above or pursuant to this Agreement, the Company does not have outstanding any options to purchase, or any rights or warrants to subscribe for, any securities or obligations convertible into, or any contracts or commitments to issue or sell, any shares of capital stock, or any such warrants, convertible securities or obligations. Except as previously disclosed in the Company’s public filings, the Company has no indebtedness as of the date of this Agreement.
Section 4.7 No Default, Termination or Lien. The execution, delivery and performance of this Agreement by the Company, the issuance and delivery of the Shares by the Company, the consummation of the transactions contemplated hereby and thereby, and compliance by the Company with the terms of this Agreement will not (with or without notice or lapse of time or both) conflict with or result in a breach or violation of any of the terms or
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provisions of, constitute a default under, give rise to any right of termination or other right or the cancellation or acceleration of any right or obligation or loss of a benefit under, or give rise to the creation or imposition of any lien, encumbrance, security interest, claim or charge upon any property or assets of the Company or any Subsidiary pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, nor will such actions result in any violation of the provisions of the organizational documents of the Company or any of its Subsidiaries or any law, statute, rule, regulation, judgment, order or decree of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its Subsidiaries or any of their properties or assets; provided that an investor in the Company has the right to purchase a warrant providing for the right to acquire ADSs to maintain its proportionate interest in the Company.
Section 4.8 No Consents. No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, except such as may be required by the New York Stock Exchange in connection with the listing of the Shares.
Section 4.9 Independent Accountants. Ernst & Young Audit (“EY”), who has certified certain financial statements and related schedules included or incorporated by reference in the Company Reports, is an independent registered public accounting firm as required by the Securities Act and the Exchange Act and the rules and regulations thereunder and the Public Company Accounting Oversight Board (United States). Except as pre-approved in accordance with the requirements set forth in Section 10A of the Exchange Act, EY has not been engaged by the Company to perform any “prohibited activities” (as defined in Section 10A of the Exchange Act).
Section 4.10 Financial Statements. The financial statements, together with the related notes and schedules, included in the Company Reports present fairly in all material respects the financial condition of the Company and its consolidated Subsidiaries as of the respective dates thereof and the results of operations and cash flows of the Company and its consolidated Subsidiaries for the respective periods covered thereby, all in conformity with International Financial Reporting Standards (“IFRS”) applied on a consistent basis throughout the entire period involved, except as otherwise disclosed in the Company Reports. Such financial statements, together with the related notes and schedules, comply in all material respects with the Securities Act, the Exchange Act and the rules and regulations thereunder. No other financial statements or supporting schedules or exhibits are required by the Exchange Act or the rules and regulations thereunder to be filed with the SEC.
Section 4.11 No Material Adverse Effect. There has not occurred any Material Adverse Effect, or any development involving a prospective Material Adverse Effect, in the condition, financial or otherwise, or in the earnings, assets, business or operations of the Company and its Subsidiaries, taken as a whole, from that set forth or contemplated in the Company Reports filed prior to the date hereof.
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Section 4.12 Legal Proceedings. There are no legal or governmental proceedings, actions, suits or claims pending or, to the Company’s Knowledge, threatened to which the Company or any of its Subsidiaries is a party or to which any of the properties or assets of the Company or any of its Subsidiaries is subject (i) other than proceedings accurately described in all material respects in the Company Reports and proceedings that would not have and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or (ii) that are required to be described in the Company Reports and are not so described; and there are no statutes, regulations, contracts or other documents to which the Company or any of its Subsidiaries is subject or by which the Company or any of its Subsidiaries is bound that are required to be described in the Company Reports or to be filed as exhibits to the Company Reports that are not described therein or filed as required. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any legal or governmental proceedings, actions, suits or claims of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. For purposes of this Agreement, “Knowledge” means the actual knowledge (after due inquiry) of the executive officers (as defined in Exchange Act Rule 3b-7) of the Company or its Subsidiaries, as applicable.
Section 4.13 Regulatory Permits. Each of the Company and its Subsidiaries possesses or has applied for all certificates, authorizations, licenses, franchises, permits, orders and approvals issued or granted by the appropriate governmental or regulatory authorities, agencies, courts, commissions or other entities, whether federal, state, local or foreign, or applicable self-regulatory organizations necessary to conduct its business as currently conducted, except (i) where the failure to possess such certificates, authorizations, licenses, franchises, permits, orders and approval, individually or in the aggregate, has not and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (“Material Permits”) and (ii) as accurately described in all material respects in the Company Reports, and neither the Company nor any of its Subsidiaries has received any written notice of proceedings relating to the revocation or material adverse modification of any such Material Permits (except as accurately described in all material respects in the Company Reports), and to the Company’s Knowledge, there are no facts or circumstances that would give rise to the revocation, termination or material adverse modifications of any Material Permits.
Section 4.14 Material Contracts. Except for the Material Contracts, the Company and its Subsidiaries are not party to any agreements, contracts or commitments that are material to the business, financial condition, assets or operations of the Company and its Subsidiaries or that would be required to be filed pursuant to Item 19 and the Instructions as to Exhibits of Form 20-F. Neither the Company nor any of its Subsidiaries is in material default under, or in material violation of, nor has received written notice of termination or default under any Material Contract. For purposes of this Agreement, “Material Contract” means any contract of the Company that was filed as an exhibit to the Company Reports pursuant to Item 19 and the Instructions as to Exhibits of Form 20-F.
Section 4.15 Investment Company Act. Neither the Company nor any of its Subsidiaries is or, after giving effect to the Purchase and the application of the proceeds thereof, will become an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.
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Section 4.16 No Price Stabilization. Neither the Company, its Subsidiaries nor any of the Company’s or its Subsidiaries’ officers, directors or Affiliates has taken or will take, directly or indirectly, any action designed or intended to stabilize or manipulate the price of any security of the Company, or which caused or resulted in, or which would in the future reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company.
Section 4.17 Title to Property. The Company and its Subsidiaries have good and marketable title to all real and personal property owned by them which is material to the business of the Company and its Subsidiaries, taken as a whole, in each case free and clear of all liens, encumbrances and defects of title except such as are described in the Company Reports or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries; and any real property and buildings held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries, in each case except as described in the Company Reports.
Section 4.18 No Labor Disputes. Neither the Company nor any of the Subsidiaries is engaged in any unfair labor practice; except for matters which would not, individually or in the aggregate, have a Material Adverse Effect, (i) there is (A) no discrimination complaint or unfair labor practice complaint pending or, to the Knowledge of the Company or the Subsidiaries, threatened against the Company or any of the Subsidiaries before the National Labor Relations Board or any other governmental body, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements is pending or, to the Knowledge of the Company or the Subsidiaries, threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the Knowledge of the Company or the Subsidiaries, threatened against the Company or any of the Subsidiaries and (C) no union representation dispute currently existing concerning the employees of the Company or any of the Subsidiaries, (ii) to the Knowledge of the Company or the Subsidiaries, no union organizing activities are currently taking place concerning the employees of the Company or any of the Subsidiaries and (iii) there has been no violation of any federal, state, local or foreign law or collective bargaining agreement relating to discrimination in the hiring, promotion or pay of employees, any applicable wage or hour laws or retirement benefits, or any provision of the Employee Retirement Income Security Act of 1974, as amended, or the rules and regulations promulgated thereunder concerning the employees of the Company or any of the Subsidiaries.
Section 4.19 Taxes. The Company (i) has timely filed all necessary federal, state, local and foreign income and franchise tax returns (or timely filed applicable extensions therefore) that have been required to be filed and (ii) is not in default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect thereto, other than any which the Company is contesting in good faith and for which adequate reserves have been provided and reflected in the financial statements included in the Company Reports. The Company does not have any tax deficiency that has been or, to the Company’s Knowledge, is reasonably likely to be asserted or threatened against it.
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Section 4.20 Compliance with Environmental Laws. Except as disclosed in the Company Reports, neither the Company nor any of its Subsidiaries is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), or, to the Company’s Knowledge, operates any real property contaminated with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws or is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or claim would or would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.
Section 4.21 Intellectual Property Rights. The Company and its Subsidiaries own or possess, or have the right to use, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, “Intellectual Property Rights”) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any Intellectual Property Rights, except as disclosed in the Company’s Form 20-F for the year ended December 31, 2022 or such as would not and would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
Section 4.22 Foreign Corrupt Practices Act. Neither the Company nor any of its Subsidiaries, nor to the Company’s Knowledge, any director, officer, employee or other person associated with or acting on behalf of the Company or any of its Subsidiaries, has (i) used any Company funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from Company funds, (iii) caused the Company or any of its Subsidiaries to be in violation of any provision of the United States Foreign Corrupt Practices Act of 1977, as amended, or any similar laws, including without limitation French law no. 2016-1691 of December 9, 2016 relating to the prevention of corruption, (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment from Company funds.
Section 4.23 OFAC and Similar Laws. None of the Company, any of its Subsidiaries or, to the Company’s Knowledge, any director, officer, agent, employee, affiliate or representative of the Company or any of its Subsidiaries is an individual or entity (“Person”) currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any of its Subsidiaries located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the issuance of any Shares, or lend, contribute or otherwise make available such proceeds to any Subsidiaries, joint venture partners or other Person, to knowingly fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the
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subject of Sanctions or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
Section 4.24 Disclosure Controls and Procedures. Except as disclosed in the Company Reports, the Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are effective in all material respects to ensure that material information relating to the Company, including any consolidated Subsidiaries, is made known to its chief executive officer and chief financial officer by others within those entities. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the end of the period covered by the most recently filed annual report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed annual report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date and except as disclosed in the Company Reports, there have been no material changes in the Company’s internal controls (as such term is defined in the rules of the SEC under the Exchange Act) or, to the Company’s Knowledge, in other factors that could affect the Company’s internal controls.
Section 4.25 Accounting Controls. The Company and its Subsidiaries maintain a system of internal accounting and other controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Company Reports, since the end of the Company’s most recent audited fiscal year, there has been (A) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Section 4.26 Absence of Material Changes. Subsequent to the respective dates as of which information is given in the Company Reports, and except as may be otherwise disclosed in such Company Reports, there has not been (i) any Material Adverse Effect, (ii) any transaction which is material to the Company, (iii) any obligation, direct or contingent (including any off-balance sheet obligations), incurred by the Company, which is material to the Company, (iv) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company, (v) any change in the capital stock (other than a change in the number of outstanding Ordinary Shares or ADSs due to grants of stock under the Company’s stock incentive plans existing on the date hereof or the issuance of shares upon the exercise of outstanding options or warrants) or (vi) any issuance of options, warrants, convertible securities or other rights to purchase the capital stock (other than grants of stock options under the Company’s stock option plans existing on the date hereof) of the Company.
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Section 4.27 Brokers Fees. Neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company for a brokerage commission, finder’s fee or like payment in connection with any transaction contemplated by this Agreement.
Section 4.28 Listing and Maintenance Requirements. The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act, as applicable. The ADSs are registered pursuant to Section 12(b) of the Exchange Act and are listed on the New York Stock Exchange, and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the ADSs under the Exchange Act or delisting the ADSs from the New York Stock Exchange, nor has the Company received any notification that either the SEC or the New York Stock Exchange is contemplating terminating such registration or listing.
Section 4.29 Sarbanes-Oxley Act. The Company is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 and all applicable rules and regulations promulgated thereunder or implementing provisions thereof that are then in effect.
Section 4.30 New York Stock Exchange Approval Rules. No further approval of the stockholders of the Company under the rules and regulations of the New York Stock Exchange is required for the Company to issue and deliver the Shares to Purchasers.
ARTICLE V
OTHER AGREEMENTS
Section 5.1 Depositary. Upon issuance of the Shares, the Company will cause the Depositary to deliver the relevant number of ADSs to each Purchaser against deposit of the Underlying Shares, pursuant to the Amended and Restated Deposit Agreement dated as of May 14, 2018 (the “Deposit Agreement”) among the Company, The Bank of New York Mellon, as depositary (the “Depositary”), and the owners and holders from time to time of the ADSs issued thereunder, and Purchasers shall cooperate with the Company and the Depositary in connection therewith.
Section 5.2 Supplemental Listing Application. Within two (2) Business Days following the Closing Date, the Company shall file with the New York Stock Exchange a supplemental listing application reflecting the transactions contemplated hereby.
Section 5.3 Listing of Shares; Certificates. The Company covenants that all Shares issued pursuant to Section 2.1(a) will be duly approved for listing subject to official notice of issuance on the New York Stock Exchange. The Company covenants that the certificates, if any, representing the ADRs to be issued to evidence any ADSs issued pursuant to Section 2.1(a) will comply with applicable law.
Section 5.4 Use of Proceeds. The proceeds of the Purchase shall be used by the Company for general corporate purposes.
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Section 5.5 Protective Rights. For two (2) years from the date of this Agreement, if the Company contemplates the issuance of shares (whether ordinary or preferred) or securities giving access to the share capital of the Company with cancellation of shareholders’ preferential subscription right (avec suppression du droit préférentiel de souscription des actionnaires) or reserved to the beneficiary(ies) of such issuance (including issuances made pursuant to Article L.225-147 of the French Commercial Code in the context of a contribution in kind) (a “Dilutive Action”), the Company shall (i) provide any Purchaser who holds at least 5% of the outstanding ADSs with no less than two (2) Business Days’ prior written notice in advance of the opening of the subscription period of such issuance and (ii) assuming valid delegations from the Company’s general meeting of shareholders are in force, it being agreed that the Company shall use its best efforts to ensure that such valid delegations are in force at all times, in order to allow Purchasers to maintain the same percentage in the share capital of the Company (on a non-diluted basis) immediately before and immediately after such Dilutive Action, the Company shall, at the option of each Purchaser, upon notice to the Company no more than seven (7) Business Days following the consummation of any such Dilutive Action proceed with an issuance reserved to each Purchaser, allowing such Purchaser to subscribe for such number of shares or securities so as to allow Purchaser to maintain its percentage in the share capital as in effect prior to giving effect to the Dilutive Action, at the same price and/or conditions, as those offered to the beneficiary(ies) of the Dilutive Action.
ARTICLE VI
CONDITIONS TO CLOSING
Section 6.1 Purchaser’s Conditions Precedent. The obligation of each Purchaser to complete the Purchase is subject to the satisfaction of each of the following conditions precedent:
(a) each of the representations and warranties of the Company contained in this Agreement shall be true and correct as of the Closing Date, with the same effect as though those representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty need only be true and correct as of such date;
(b) the Company shall have duly performed and complied in all material respects with all covenants and agreements contained in this Agreement that are required to be performed or complied with by it at or before the Closing;
(c) no court or other governmental or regulatory authorities, agencies, commissions or other entities, whether federal, state, local or foreign, shall have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the transactions contemplated by this Agreement, and there shall not be pending by or before any such entity any suit, action or proceeding in respect thereof;
(d) Orrick, Herrington & Sutcliffe LLP, U.S. counsel to the Company and Orrick, Herrington & Sutcliffe (Europe) LLP, French counsel to the Company, shall have furnished to Purchaser opinions in the form attached as Exhibits D-1 and D-2 to Purchaser and addressed to Purchaser;
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(e) the Chief Executive Officer and Chief Financial Officer of the Company shall have delivered to Purchasers a certificate, dated as of the Closing Date, certifying to their knowledge, after reasonable inquiry, as to the matters set forth in paragraphs (a) and (b) of this Section 6.1; and
(f) the Company shall have executed and delivered to Purchasers each of the other Transaction Documents.
Section 6.2 Company’s Conditions Precedent. The obligation of the Company to complete the issuance of the Shares to each Purchaser contemplated by this Agreement is subject to the satisfaction of each of the following conditions precedent:
(a) each of the representations and warranties of such Purchaser contained in this Agreement shall be true and correct as of the Closing Date, with the same effect as though those representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty need only be true and correct as of such date;
(b) Such Purchaser shall have duly performed and complied in all material respects with all covenants and agreements contained in this Agreement that are required to be performed or complied with by it at or before the Closing;
(c) no court or other governmental or regulatory authorities, agencies, commissions or other entities, whether federal, state, local or foreign, shall have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the transactions contemplated by this Agreement, and there shall not be pending by or before any such entity any suit, action or proceeding in respect thereof;
(d) Such Purchaser shall have delivered to the Company a certificate, dated as of the Closing Date, certifying to his or her knowledge, after reasonable inquiry, as to the matters set forth in paragraphs (a) and (b) of this Section 6.2; and
(e) Such Purchaser shall have executed and delivered to the Company each of the other Transaction Documents.
ARTICLE VII
CERTAIN COVENANTS
Section 7.1 Certain Actions. The Company and each Purchaser shall reasonably cooperate with each other and use (and shall cause their respective Affiliates to use) reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on its part under this Agreement, applicable law and stock exchange listing standards to consummate the transactions contemplated by this Agreement as soon as practicable.
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Section 7.2 Legends. To the extent reasonably necessary under applicable law, any certificate, book-entry or ADR issued under this Agreement shall have endorsed, to the extent appropriate, upon its face the following words:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY JURISDICTION. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM REGISTRATION UNDER SUCH ACT, OR APPLICABLE STATE SECURITIES LAW, RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING RULE 144.
Section 7.3 Legend Removal. Upon the request of any Purchaser or any transferee or proposed transferee thereof, the Company shall instruct the Depositary to remove the legend contemplated by Section 7.2 (and shall revoke any related stop transfer or similar instructions to its registrar and transfer agent), if the Shares issued pursuant to Section 2.1(a) are covered by an effective registration statement under the Securities Act or if such person provides reasonable evidence and an opinion of counsel to the effect that a sale, transfer or assignment of such Shares may be made without registration under the Securities Act or that such Shares are eligible for resale pursuant to Rule 144 under the Securities Act.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. All expenses incurred by the Parties in connection with the negotiation, execution and delivery of this Agreement will be borne solely and entirely by the Party incurring such expenses.
(a) No later than three (3) days after the Closing Date, at 9:00 a.m. (New York Time), to the extent not already publicly disclosed, the Company shall issue a publicly available press release or file with the SEC a Report on Form 6-K disclosing (i) the material terms of the transactions contemplated by the Transaction Documents and (ii) any other information (or an appropriate summary that, at a minimum, includes the material portions thereof), in each case that constitutes material non-public information under applicable United States federal and state securities laws that was provided by the Company or any of its representatives to Purchasers or their Affiliates.
(b) The Company will consult with Purchasers before issuing any press release or making any public statement or filing with respect to the Transaction Documents and the transactions contemplated hereby and will provide Purchasers and their counsel with a draft of any press release or other public statement or filing at least one (1) day prior to such disclosure, except where advance notice is not permitted by applicable Law. The Company will in good faith consider comments to or other modifications of such disclosure. Notwithstanding anything herein to the contrary, the Company shall not use any Purchaser’s name without such
17
Purchaser’s prior written approval, except as required by applicable law; provided, that if the Company has received the requisite approval for any disclosures as required hereunder, the Company or its Affiliates shall be entitled to make disclosures substantially similar (as to form and content) to those prior disclosures that have been so approved.
Section 8.2 Notices. Except as may otherwise be provided herein, all notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be conclusively deemed to have been duly given when sent by electronic mail to the address set forth below if sent between 8:00 am and 5:00 pm recipient’s local time on a Business Day, or on the next Business Day if sent by electronic mail other than between 8:00 am and 5:00 pm recipient’s local time.
| If to the Company: | |||||
| Sequans Communications S.A. | |||||
| 15-55 boulevard Charles de Gaulle | |||||
| Les Portes de la Défense | |||||
| 92700 Colombes | |||||
| Republic of France | |||||
| Email: | |||||
| Attention: Chief Financial Officer | |||||
| With a copy (which shall not constitute notice) to: | |||||
| Orrick, Herrington & Sutcliffe LLP | |||||
| 405 Howard Street | |||||
| San Francisco, CA 94105 | |||||
| Email: | |||||
| Attention: Brett Cooper | |||||
| If to Purchasers (as applicable): | |||||
| If to: | |||||
| Boothbay Diversified Alpha Master Fund, LP | |||||
| Boothbay Absolute Return Strategies, LP | |||||
| Email: | |||||
| Attention: | |||||
| If to: | |||||
| 272 Capital Master Fund, Ltd | |||||
| Email: | |||||
| Attention: | |||||
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| If to: | |||||
| Lynrock Lake Master Fund LP | |||||
| Email: | |||||
| Attention: | |||||
| If to: | |||||
| Divisar Partners QP, LP | |||||
| Email: | |||||
| Attention: | |||||
| Email: | |||||
| Attention: | |||||
| If to: | |||||
| Marlin Fund, LP | |||||
| Marlin Fund II, LP | |||||
| Marlin Fund III, LP | |||||
| Marlin Master Fund Offshore II, LP | |||||
| Email: | |||||
| Attention: | |||||
| Email: | |||||
| Attention: | |||||
| If to: | |||||
| Potomac Capital Partners V, LP | |||||
| Email: | |||||
| Attention: | |||||
| If to: | |||||
| Sidus Investment Partners, LP | |||||
| Sidus Double Alpha Fund, LP | |||||
| Sidus Double Alpha Fund, Ltd | |||||
| Email: | |||||
| Attention: | |||||
| Email: | |||||
| Attention: | |||||
Section 8.3 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement or any other Transaction Document are not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being
19
enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that such transactions be consummated as originally contemplated to the fullest extent possible.
Section 8.4 Entire Agreement. The Transaction Documents (including the schedules and exhibits hereto and thereto) constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to the subject matter hereof. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.
Section 8.5 Assignment; No Third Party Beneficiaries. Except for the Shares, which (subject to applicable securities laws) shall at all times be freely transferable, and except as otherwise expressly provided herein, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party, in whole or in part (whether pursuant to a merger, by operation of law or otherwise), without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed); provided that, notwithstanding anything to the contrary in the preceding language, a Purchaser can assign, convey or transfer, in whole or in part, this Agreement to its limited partners, members, Affiliates and any investment fund that is controlled by or is under common control with Purchaser. Subject to the immediately preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 8.6 Construction. References in the singular shall include the plural, and vice versa, unless the context otherwise requires. References in the masculine shall include the feminine and neuter, and vice versa, unless the context otherwise requires. Headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meanings of the provisions hereof. Neither Party, nor its respective counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions of this Agreement, and all language in all parts of this Agreement shall be construed in accordance with its fair meaning, and not strictly for or against either party.
Section 8.7 Governing Law; Jurisdiction. This Agreement shall in all respects be construed in accordance with, and governed by, the substantive laws of the State of New York, without reference to its choice of law rules. Any dispute arising out of or in connection with this Agreement shall be submitted to the exclusive jurisdiction of the state and federal courts within the Southern District of New York.
Section 8.8 Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or other means of electronic transmission, such as by electronic mail in “pdf” form or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) in counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
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Section 8.9 Certain Definitional Provisions. Unless the express context otherwise requires, the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; any references herein to a specific Section, Schedule or Annex shall refer, respectively, to Sections, Schedules or Annexes of this Agreement; wherever the word “include”, “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; and references herein to any gender includes each other gender.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed as of the date first above written.
| THE COMPANY | |||||
| SEQUANS COMMUNICATIONS S.A. | |||||
| By: | /s/ Georges Karam | ||||
| Name: | Georges Karam | ||||
| Title: | Chief Executive Officer | ||||
[Signature page to Securities Purchase Agreement]
| PURCHASER | |||||
| BOOTHBAY DIVERSIFIED ALPHA MASTER FUND, LP | |||||
| By: | /s/ Charles Garber | ||||
| Name: | Charles Garber | ||||
| Duly authorized | |||||
| BOOTHBAY ABSOLUTE RETURN STRATEGIES, LP | |||||
| By: | /s/ Charles Garber | ||||
| Name: | Charles Garber | ||||
| Duly authorized | |||||
[Signature page to Securities Purchase Agreement]
| PURCHASER | ||||||||
| 272 CAPITAL MASTER FUND, LTD | ||||||||
| By: B. Riley Asset Management LLC, its investment manager | ||||||||
| By: | /s/ Wesley Cummins | |||||||
| Name: | Wesley Cummins | |||||||
| Duly authorized | ||||||||
[Signature page to Securities Purchase Agreement]
| PURCHASER | |||||
| LYNROCK LAKE MASTER FUND, LP | |||||
| by: Lynrock Lake Partners LLC, its general partner | |||||
| By: | /s/ Cynthia L. Paul | ||||
| Name: | Cynthia L. Paul | ||||
| Title: | Member | ||||
[Signature page to Securities Purchase Agreement]
| PURCHASER | |||||
| DIVISAR PARTNERS QP, LP | |||||
| by: Divisar Capital Management LLC, its general partner | |||||
| By: | /s/ Steven R. Baughman | ||||
| Name: | Steven R. Baughman | ||||
| Duly authorized | |||||
[Signature page to Securities Purchase Agreement]
| PURCHASER | |||||
| MARLIN FUND, LP | |||||
| By: | Masters Capital Management LLC | ||||
| By: | /s/ Michael W. Masters | ||||
| Name: | Michael W. Masters | ||||
| Duly authorized | |||||
| MARLIN FUND II, LP | |||||
| By: | Masters Capital Management LLC | ||||
| By: | /s/ Michael W. Masters | ||||
| Name: | Michael W. Masters | ||||
| Duly authorized | |||||
| MARLIN FUND III, LP | |||||
| By: | Masters Capital Management LLC | ||||
| By: | /s/ Michael W. Masters | ||||
| Name: | Michael W. Masters | ||||
| Duly authorized | |||||
| MARLIN MASTER FUND OFFSHORE II, LP | |||||
| By: | Masters Capital Management LLC | ||||
| By: | /s/ Michael W. Masters | ||||
| Name: | Michael W. Masters | ||||
| Duly authorized | |||||
[Signature page to Securities Purchase Agreement]
| PURCHASER | |||||
| POTOMAC CAPITAL PARTNERS V, LP | |||||
| By: | /s/ Paul Jon Solit | ||||
| Name: | Paul Jon Solit | ||||
| Duly authorized | |||||
[Signature page to Securities Purchase Agreement]
| PURCHASER | |||||
| SIDUS INVESTMENT PARTNERS LP | |||||
| By: | Sidus Investment Management LLC | ||||
| By: | /s/ Mark Schalles | ||||
| Name: | Mark Schalles | ||||
| Duly authorized | |||||
| SIDUS DOUBLE ALPHA FUND, LP | |||||
| By: | Sidus Investment Management LLC | ||||
| By: | /s/ Mark Schalles | ||||
| Name: | Mark Schalles | ||||
| Duly authorized | |||||
| SIDUS DOUBLE ALPHA FUND, LTD | |||||
| By: | Sidus Investment Management LLC | ||||
| By: | /s/ Mark Schalles | ||||
| Name: | Mark Schalles | ||||
| Duly authorized | |||||
[Signature page to Securities Purchase Agreement]
G-1-1
Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
between
SEQUANS COMMUNICATIONS SA
and
BOOTHBAY DIVERSIFIED ALPHA MASTER FUND, LP, BOOTHBAY ABSOLUTE RETURN STRATEGIES, LP
272 CAPITAL MASTER FUND, LTD
LYNROCK LAKE MASTER FUND LP
DIVISAR PARTNERS QP, LP
MARLIN FUND, LP, MARLIN FUND II, LP, MARLIN FUND III, LP, AND MARLIN MASTER FUND OFFSHORE II, LP
POTOMAC CAPITAL PARTNERS V, LP
SIDUS INVESTMENT PARTNERS, LP, SIDUS DOUBLE ALPHA FUND, LP, SIDUS DOUBLE ALPHA FUND, LTD
Dated April 12, 2023
TABLE OF CONTENTS
| Page | ||||||||
| Article I REGISTRATION RIGHTS | 1 | |||||||
| Section 1.1 | Resale Shelf Registration | 1 | ||||||
| Section 1.2 | Expenses | 2 | ||||||
| Section 1.3 | Suspensions | 2 | ||||||
| Section 1.4 | Registration Procedures | 3 | ||||||
| Section 1.5 | Effectiveness Period | 7 | ||||||
| Section 1.6 | Indemnification | 8 | ||||||
| Section 1.7 | Free Writing Prospectuses | 12 | ||||||
| Section 1.8 | Information from and Obligations of the Investor | 13 | ||||||
| Section 1.9 | Rule 144 Reporting | 13 | ||||||
| Section 1.10 | Termination of Registration Rights | 14 | ||||||
| Section 1.11 | Transfer of Registration Rights | 14 | ||||||
| Article II TERMINATION | 14 | |||||||
| Section 2.1 | Termination | 14 | ||||||
| Section 2.2 | Effect of Termination; Survival | 15 | ||||||
| Article III GENERAL PROVISIONS | 15 | |||||||
| Section 3.1 | Confidential Information | 15 | ||||||
| Section 3.2 | Fees and Expenses | 15 | ||||||
| Section 3.3 | Notices | 15 | ||||||
| Section 3.4 | Definitions | 17 | ||||||
| Section 3.5 | Interpretation; Headings | 21 | ||||||
| Section 3.6 | Severability | 22 | ||||||
| Section 3.7 | Entire Agreement; Amendments | 22 | ||||||
| Section 3.8 | Assignment; No Third Party Beneficiaries | 22 | ||||||
| Section 3.9 | Further Assurances | 22 | ||||||
| Section 3.10 | Governing Law; Consent to Jurisdiction; Waiver of Jury Trial | 23 | ||||||
| Section 3.11 | Counterparts | 24 | ||||||
| Section 3.12 | Specific Performance | 24 | ||||||
| Section 3.13 | Waiver | 24 | ||||||
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of April 12, 2023 (this “Agreement”), is made between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “Company”), and the purchasers listed on Exhibit A hereto (each, an “Investor” and together the “Investors”). The Company and each Investor are referred to hereinafter each as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, pursuant to a Securities Purchase Agreement dated as of April 3, 2023 between the Company and the Investors (the “Purchase Agreement”), the Investors subscribed from the Company 38,834,952 Ordinary Shares represented by 9,708,738 ADSs (the “Shares”);
WHEREAS, the Parties are entering into this Agreement to set forth certain rights of the Investors relating to the registration of the Shares;
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
REGISTRATION RIGHTS
Section 1.1 Resale Shelf Registration.
(a) Within ninety (90) days following the date of this Agreement, the Company shall (i) file with the SEC a Shelf Registration Statement on Form F-3 (such Shelf Registration Statement shall be an ASRS to the extent that the Company is then ASR Eligible and, if the Company is not then eligible to register the resale of the Registrable Securities on Form F-3, such registration shall be on another appropriate form) or (ii) prepare an amendment to an existing and effective Registration Statement (the “Transaction Shelf Registration Statement”), in each case, with respect to the registration under the Securities Act of the resale of all of the Registrable Securities, in each case, which shall include a prospectus with a plan of distribution approved in advance by the Investors and shall be sufficient to permit the resale of all Registrable Securities pursuant to the Investor’s intended method of disposition (including the resale of Registrable Securities into an existing trading market at other than a fixed price as permitted by Rule 415(a)(4); provided that, in the event the SEC does not permit such number of Registrable Securities to be registered under the Transaction Shelf Registration Statement, the number of Registrable Securities that shall be registered under the Transaction Shelf Registration Statement shall be the maximum number of Registrable Securities permitted by the SEC. Notwithstanding any other provision of this Agreement if the SEC sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement, unless otherwise directed in writing by an Investor as to its Registrable Securities, the Company shall first reduce or eliminate any securities to be included other than Registrable Securities. In the event of a cutback hereunder, the Company shall give each Investor at least five
1
(5) Business Days prior written notice along with the number of excluded Registrable Securities. In the event the Company amends the Transaction Registration Statement or otherwise excludes Registrable Securities in accordance with the foregoing, the Company shall use its commercially reasonable efforts to file with the SEC, as promptly as possible, one or more Registration Statements on Form F-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Transaction Registration Statement, as amended, which shall also be deemed a Transaction Shelf Registration Statement hereunder. The Company shall use its commercially reasonable efforts to cause such Transaction Shelf Registration Statement to become effective as promptly as practicable (but in no event later than one hundred twenty (120) days following the date of this Agreement) and to keep the Transaction Shelf Registration Statement continuously effective subject to the Securities Act and the provisions of Section 1.3. The Company hereby represents that, as of the date hereof, it is eligible to use Form F-3 for primary offerings under General Instruction I.B(1) of Form F-3.
(b) Notwithstanding anything to the contrary herein, unless the Company has previously caused the Ordinary Shares to be listed on a national securities exchange or trading system (it being acknowledged that the Company shall have no obligation to so list the Ordinary Shares) and a market exists for the Ordinary Shares not held in the form of ADSs, in any registration pursuant to this Section 1.1, any Registrable Securities sold pursuant thereto shall be in the form of ADSs.
(c) If the Transaction Shelf Registration Statement filed under Section 1.1(a) or any Registration Statement filed under this Section 1.1(c) ceases to be effective for any reason at any time during the Effectiveness Period, the Company shall use its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such cessation of effectiveness amend such Registration Statement in a manner designed to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement covering all of the Registrable Securities covered by and not sold under the Transaction Shelf Registration Statement. If such a Registration Statement is filed, the Company shall use its commercially reasonable efforts to cause such Registration Statement to be declared effective as soon as practicable after such filing and to keep such Registration Statement continuously effective during the Effectiveness Period, and such Registration Statement shall be deemed a Transaction Shelf Registration Statement hereunder.
Section 1.2 Expenses. Except as specifically provided herein, all Registration Expenses incurred in connection with the registration or offering and sale of the Registrable Securities shall be borne by the Company and all Selling Expenses shall be borne by the Investor; provided that, notwithstanding anything herein to the contrary, in no event shall any of the Investors bear or be responsible for any fees or expenses of the Company’s legal counsel in connection with the registration or offering and sale of Registrable Securities.
Section 1.3 Suspensions.
(a) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, by providing written notice (a “Notice of Suspension”) to any of the
2
Investors (provided that in no event shall such notice contain any material, non-public information unless notice is also being provided pursuant to Section 5.5 of the Purchase Agreement), to delay the filing or effectiveness of a Registration Statement or require any of the Investors to suspend the use of the Prospectus for sales of Registrable Securities under an effective Registration Statement for a reasonable period of time not to exceed, combined with any other suspensions under this Agreement, sixty (60) consecutive days or ninety (90) days in the aggregate in any twelve (12)-month period (a “Suspension Period”) if the Board determines in good faith that such filing, effectiveness or use would (i) require the public disclosure of material non-public information concerning any material transaction or negotiations involving the Company that would interfere with such material transaction or negotiations or (ii) otherwise materially interfere with material financing plans, acquisition activities or business activities of the Company; provided, that if at the time of receipt of such notice by an Investor, such Investor shall have sold all or a portion of the Registrable Securities pursuant to an effective Registration Statement and the reason for the Suspension Period is not of a nature that would require a post-effective amendment to the Registration Statement, then the Company shall use its commercially reasonable efforts to take such action as to eliminate any restriction imposed by federal securities Laws by the time such Registrable Securities are scheduled to be delivered. Immediately upon receipt of a Notice of Suspension, an Investor shall discontinue the disposition of Registrable Securities under an effective Registration Statement and Prospectus relating thereto until the Suspension Period is terminated.
(b) The Company agrees that it will terminate any Suspension Period as promptly as reasonably practicable and will promptly notify in writing an Investor, to the extent it still beneficially owns Registrable Securities, of such termination (provided that in no event shall such notice contain any material, non-public information). After the expiration of any Suspension Period in the case of an effective Registration Statement, and without the need for any further request from the Investors, the Company shall, as applicable and as promptly as reasonably practicable, prepare a post-effective amendment or supplement to such Registration Statement, the relevant Prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Registration Statement or the Prospectus, as applicable, will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Section 1.4 Registration Procedures. The Company will use its commercially reasonable efforts to effect the registration and the offer and sale of Registrable Securities in accordance with the intended method of disposition thereof as soon as reasonably practicable, and shall, in connection therewith:
(a) prepare and promptly file with the SEC a Registration Statement (or a prospectus supplement, as applicable) with respect to such securities and use its commercially reasonable efforts to cause such Registration Statement to become effective as soon as practicable thereafter;
3
(b) (i) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith and such Free Writing Prospectuses and Exchange Act reports as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement, (ii) cause any Prospectus or supplement thereto to be filed pursuant to Rule 424 under the Securities Act when so required and (iii) provide reasonable notice to the Investors to the extent that the Company determines that a post-effective amendment to a Registration Statement would be appropriate (provided that in no event shall such notice contain any material, non-public information);
(c) (i) furnish to each of the Investors as far in advance as reasonably practicable before filing any Registration Statement contemplated by this Agreement or any Prospectus to be used in connection therewith or any supplement or amendment thereto, only upon request of the Investor, copies (or such requested portions of copies) of reasonably complete drafts of all such documents proposed to be filed (including furnishing or making available exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the SEC), and provide each of the Investors the opportunity to object to any information pertaining to such Investors and its plan of distribution that is contained therein and make the corrections reasonably requested by such Investors with respect to such information prior to filing a Registration Statement or any Prospectus to be used in connection therewith or supplement or amendment thereto, and (ii) furnish to each of the Investors, without charge, such number of copies of the Registration Statement, each amendment and supplement thereto, the Prospectus included therein (including each preliminary prospectus) and any other prospectuses filed under Rule 424 and each Free Writing Prospectus as such Persons reasonably may request in order to facilitate the sale of the Registrable Securities covered by such Registration Statement;
(d) use its commercially reasonable efforts to register or qualify the Registrable Securities covered by such Registration Statement under the securities or “blue sky” Laws of such jurisdictions as any of the Investors reasonably shall request and do any and all other acts and things which may be reasonably necessary or advisable to enable such Investor to consummate the disposition in such jurisdictions; provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction;
(e) enter into customary agreements and take such other actions as are reasonably requested by an Investor in order to expedite or facilitate the disposition of Registrable Securities;
(f) if an Investor could reasonably be deemed to be an “underwriter,” as defined in Section 2(a)(11) of the Securities Act, in connection with a Registration Statement and any amendment or supplement thereof (an “Investor Underwriter Registration Statement”), then, at the Investor’s request, the Company will furnish to the Investor, on the date of the
4
effectiveness of the Investor Underwriter Registration Statement and thereafter from time to time on such dates as the Investor may reasonably request (provided that such request shall not be more frequently than on an annual basis unless the Investor is offering Registrable Securities pursuant to an Investor Underwriter Registration Statement), (i) a “comfort letter”, dated such date, from the Company’s independent certified public accountants in form and substance as has been customarily given by independent certified public accountants to underwriters in underwritten offerings of securities by the Company, addressed to the Investor, (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of the Investor Underwriter Registration Statement, in form, scope and substance as has been customarily given in underwritten offerings of securities by the Company, including standard “10b-5” negative assurance for such offerings, addressed to the Investor and (iii) a standard officer’s certificate from the chief executive officer or chief financial officer, or other officers serving such functions, of the Company addressed to the Investor, as has been customarily given by such officers in underwritten offerings of securities by the Company. Notwithstanding anything to the contrary in this Agreement, the Company will not name the Investor as an underwriter (as defined in Section 2(a)(11) of the Securities Act) in any Registration Statement or Investor Underwriter Registration Statement, as applicable, without the Investor’s consent. If the staff of the SEC requires the Company to name the Investor as an underwriter (as defined in Section 2(a)(11) of the Securities Act), and the Investor does not consent thereto, then the Investor’s Registrable Securities shall not be included on the applicable Registration Statement, and the Company shall have no further obligations hereunder with respect to Registrable Securities held by the Investor, unless the Investor has not had an opportunity to conduct customary underwriter’s due diligence with respect to the Company at the time the Investor’s consent is sought;
(g) promptly notify the Investor: (i) when the Registration Statement, any pre-effective amendment, the Prospectus or any prospectus supplement related thereto, any post-effective amendment to the Registration Statement or any Free Writing Prospectus has been filed with the SEC and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or state securities authority for amendments or supplements to the Registration Statement or the Prospectus related thereto or for additional information, including copies of any and all transmittal letters and other correspondence with the SEC and all correspondence (including comment letters and a copy of the Company’s draft responses thereto), from the SEC to the Company relating to such Registration Statement or any Prospectus or any amendment or supplement thereto (but not, for the avoidance of doubt, any documents incorporated by reference therein); (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; or (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or state “blue sky” Laws of any jurisdiction or the initiation of any proceeding for such purpose (provided that in no event shall such notices under clauses (ii) or (iii) contain any material, non-public information unless consented to in advance by the Investor).
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(h) if at any time (i) any event or development shall occur or condition shall exist as a result of which the Disclosure Package, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (ii) it is necessary to amend or supplement the Disclosure Package to comply with Law, the Company will promptly notify the Investors and promptly prepare and file with the SEC (to the extent required) and furnish to the Investors such amendments or supplements to the Disclosure Package as may be necessary so that the statements in the Disclosure Package, as so amended or supplemented, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, be misleading, or so that the Disclosure Package will comply with Law;
(i) use its commercially reasonable efforts to make generally available to the Investor, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of a Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158;
(j) use its commercially reasonable efforts to list the Registrable Securities covered by such Registration Statement on the New York Stock Exchange (the “NYSE”) or, if not the NYSE, the primary trading market or any other national securities exchange on which the Ordinary Shares or Ordinary Shares represented by ADSs are listed;
(k) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement;
(l) immediately notify the Investors, at any time when a Prospectus is required to be delivered under the Securities Act, of the occurrence or happening of any event as a result of which the Prospectus contained in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing (provided that in no event shall such notice contain any material, non-public information unless notice is also being provided pursuant to Section 5.5 of the Purchase Agreement), and, as promptly as reasonably practicable prepare and furnish to such Investors a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;
(m) use its commercially reasonable efforts to cooperate with each of the Investors in the disposition of the Registrable Securities covered by such Registration Statement;
(n) in connection with the preparation and filing of each Registration Statement registering Registrable Securities under the Securities Act, and before filing any such Registration Statement or any other document in connection therewith, give reasonable
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consideration to the inclusion in such documents of any comments reasonably and timely made by the Investor or its legal counsel;
(o) use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to use its commercially reasonable efforts to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the concerned Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose (provided that in no event shall such notices under this clause (o) contain any material, non-public information unless consented to in advance by the Investor);
(p) otherwise use its commercially reasonable efforts to comply with the Securities Act, the Exchange Act and any other applicable rules and regulations of the SEC and reasonably cooperate with each of the Investors in the disposition of its Registrable Securities in accordance with the method of distribution described in the Prospectus included in any Registration Statement, such cooperation to include the endorsement and transfer of any certificates representing Registrable Securities (or a book-entry transfer to similar effect) transferred in accordance with this Agreement and delivery of any necessary instructions or opinions to the Company’s transfer agent in order to cause the transfer agent to allow Registrable Securities to be sold from time to time as permitted by Law;
(q) use its commercially reasonable efforts to cooperate with each of the Investors and its counsels in connection with the preparation and filing of any applications, notices, registrations and responses to requests for additional information with FINRA, the NYSE or any other national securities exchange on which the Registrable Securities are listed;
(r) pay the applicable filing fees covering the Registrable Securities in compliance with the SEC rules and to file such amendments or subsequent registration statements as may be required to maintain an effective registration statement for the relevant Effectiveness Period; and
(s) if a Registration Statement is an ASRS that has been outstanding for at least three (3) years, at or prior to the end of the third (3rd) year, the Company shall refile a new ASRS covering the Registrable Securities which remain outstanding. If at any time when the Company is required to re-evaluate its ASR Eligible status or eligibility to use Form F-3 the Company determines that it is not ASR Eligible or eligible to use Form F-3, the Company shall use its commercially reasonable efforts to refile the Transaction Shelf Registration Statement on Form F-3 and, if such form is not available, Form F-1 (or other appropriate form) and keep the Transaction Shelf Registration Statement continuously effective subject to Section 1.3.
Section 1.5 Effectiveness Period. For purposes of this Article I, the period of distribution of Registrable Securities pursuant to a Registration Statement shall be deemed to extend until the sale of all Registrable Securities covered thereby (such period, the “Effectiveness Period”).
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Section 1.6 Indemnification.
(a) Indemnification Rights.
(i) In the event of any registration or other offer and sale of any securities of the Company under the Securities Act pursuant to this Article I, the Company shall indemnify and hold harmless the Investors and each Person, if any, that controls the Investors within the meaning of Section 15 of the Securities Act (each a “controlling person”), their respective officers, directors, employees, stockholders, members, Representatives and Affiliates, and each controlling person of each Affiliate of any of the foregoing Persons (each, a “Investor Registration Rights Indemnitee”), to the fullest extent lawful, from and against any and all Damages caused by (A) any untrue statement of material fact (or alleged untrue statement of a material fact) contained in any Disclosure Package, any Registration Statement, any Prospectus (including any preliminary Prospectus), any Free Writing Prospectus, or in any amendment or supplement thereto, (B) any omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (C) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any foreign or state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any foreign or state securities laws; provided that the Company shall not be liable to an Investor Registration Rights Indemnitee to the extent that any such Damages are directly caused by any untrue statement or omission (or alleged untrue statement or omission) made in such Disclosure Package, Registration Statement, Prospectus (including any preliminary Prospectus), Free Writing Prospectus, or any amendment or supplement thereto, in strict reliance upon and strictly in conformity with written information about the Investors furnished to the Company by or on behalf of the Investors expressly for use therein. This indemnity shall be in addition to any liability which the Company may otherwise have. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of any Investor Registration Rights Indemnitee and shall survive the Transfer of securities by the Investor.
(ii) Each of the Investors shall indemnify and hold harmless the Company and each of its officers who execute any of the Company’s filings with the SEC pursuant to the Exchange Act or the Securities Act, its directors, officers and employees (each, a “Company Registration Rights Indemnitee”), to the fullest extent lawful, from and against any and all Damages directly caused by (A) any untrue statement of material fact (or alleged untrue statement of a material fact) contained in any Disclosure Package, any Registration Statement, any Prospectus (including any preliminary Prospectus), any Free Writing Prospectus or in any amendment or supplement thereto, (B) any omission (or alleged omission) to state therein any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case, to the extent that such untrue statement or omission was made in reliance upon and in conformity with written information
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furnished to the Company by or on behalf of such Investor expressly for use therein or (C) any violation or alleged violation by the Investors of the Securities Act, the Exchange Act, any foreign or state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any foreign or state securities laws; provided, however, that in no event shall the obligations of such Investor hereunder exceed the net proceeds received by it from the sale of its Registrable Securities related to the matter in which Damages are sought. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of a Company Registration Rights Indemnitee and shall survive the Transfer of such securities by such Investor.
(iii) If the indemnification provided for in Section 1.6(a)(i) or Section 1.6(a)(ii) is unavailable to an Investor Registration Rights Indemnitee or a Company Registration Rights Indemnitee, as applicable, with respect to any Damages referred to therein or is unenforceable or insufficient to hold an Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, harmless as contemplated therein, then the Company or the Investor, as applicable, in lieu of indemnifying such Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, shall contribute to the amount paid or payable by such Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, as a result of such Damages in such proportion as is appropriate to reflect the relative fault of such Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, on the one hand, and the Company or the Investor, as applicable, on the other hand, in connection with the statements or omissions which resulted in such Damages as well as any other relevant equitable considerations. The relative fault of the Company or the Investor, as applicable, on the one hand, and of an Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, on the other hand, shall be determined by reference to, among other factors, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by or on behalf of the Company or the Investor, as applicable, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; the Company and the Investors agree that it would not be just and equitable if contribution pursuant to this Section 1.6(a)(iii) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 1.6(a)(iii). No Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from the Company or the Investor, as applicable, if the Company or the Investor, as applicable, was not guilty of such fraudulent misrepresentation. Notwithstanding anything herein to the contrary, in no event shall the liability of an InvestorSection 1.6(a)(iii) be greater in amount than the amount of net proceeds received by it from the sale of such Registrable Securities related to the matter in which indemnification or contribution for Damages are sought.
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(b) Notice of Reg Rights Claim.
(i) As used in this Agreement, the term “Reg Rights Claim” means a claim for indemnification or contribution by or on behalf of any Company Registration Rights Indemnitee or Investor Registration Rights Indemnitee, as the case may be, for Damages under Section 1.6(a) (such Person making a Reg Rights Claim, a “Reg Rights Indemnified Person”). The Company (for its own Damages or for the Damages incurred by any other Company Registration Rights Indemnitee) or any of the Investors (for its own Damages or for the Damages incurred by any other Investor Registration Rights Indemnitee), as applicable, shall give notice of a Reg Rights Claim under this Agreement pursuant to a written notice of such Reg Rights Claim executed by the Company or the Investor, as applicable (a “Notice of Reg Rights Claim”), and delivered to the Company or the Investor, as applicable (such receiving party, the “Reg Rights Indemnifying Person”), promptly after such Reg Rights Indemnified Person becomes aware of the existence of any potential claim by such Reg Rights Indemnified Person for indemnification arising out of or resulting from any item indemnified pursuant to the terms of Section 1.6(a)(i) or Section 1.6(a)(ii) as applicable; provided that the failure to timely give such notice shall not limit or reduce the Reg Rights Indemnified Person’s right to indemnification hereunder unless (and then only to the extent that) the Reg Rights Indemnifying Person’s defense of such Reg Rights Claim is actually materially and adversely prejudiced thereby.
(ii) Each Notice of Reg Rights Claim shall: (A) state the aggregate amount (where practicable) that the Reg Rights Indemnified Person has incurred or paid in Damages arising from such Reg Rights Claim (which amount may include the amount of Damages claimed by a third party in an action (a “Third-Party Reg Rights Claim”) brought against such Reg Rights Indemnified Person based on alleged facts, which if true, would give rise to liability for Damages to such Reg Rights Indemnified Person); and (B) contain a brief description, in reasonable detail (to the extent reasonably available to the Reg Rights Indemnified Person) of the facts, circumstances or events giving rise to the alleged Damages based on the Reg Rights Indemnified Person’s good faith belief and knowledge thereof, including the identity and address of any third party claimant (to the extent reasonably available to the Reg Rights Indemnified Person).
(c) Defense of Third-Party Reg Rights Claims.
(i) Subject to the provisions hereof, the applicable Reg Rights Indemnifying Person shall have the right (at its own expense) to elect to defend and assume control of the defense of any Third-Party Reg Rights Claim on behalf of a Reg Rights Indemnified Person, utilizing legal counsel reasonably acceptable to such Reg Rights Indemnified Person. In the event such election is made, the Reg Rights Indemnified Person (unless itself controlling the Third-Party Reg Rights Claim in accordance with this Section 1.6(c)) may participate, through counsel of its own choice and, except as provided herein, at its own expense, in the defense of any Third-Party Reg Rights Claim. The reasonable and documented costs and expenses incurred by the Reg
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Rights Indemnifying Person in connection with such defense (including reasonable attorneys’ fees, other professionals’ and experts’ fees and court or arbitration costs) shall be paid by the Reg Rights Indemnifying Person.
(ii) A Reg Rights Indemnifying Person shall not be entitled to assume control of such defense, and the applicable Reg Rights Indemnified Person may assume the control and defense thereof, at the sole expense of the applicable Reg Rights Indemnifying Person, if (A) the Reg Rights Claim relates to, or arises in connection with, any criminal or governmental proceeding, action, indictment, allegation or investigation, (B) the Reg Rights Claim seeks an injunction against the Reg Rights Indemnified Person, to the extent that such defense relates to the claim for such injunction, (C) a conflict of interest between the Reg Rights Indemnifying Person and the Reg Rights Indemnified Person exists with respect to the Reg Rights Claim or the Reg Rights Indemnifying Person and the Reg Rights Indemnified Person have one or more conflicting defenses, in the reasonable view of their respective counsel, or (D) the Reg Rights Indemnifying Person has elected to have the Reg Rights Indemnified Person defend, or assume the control and defense of, a Third-Party Reg Rights Claim in accordance with this Section 1.6(c); provided that in no event shall the Reg Rights Indemnifying Person be liable for the fees and expenses of more than one separate counsel for all Reg Rights Indemnified Persons, which counsel shall be selected by the Investor (in the case of the Investor Registration Rights Indemnitees) or by the Company (in the case of the Company Registration Rights Indemnitees).
(iii) Any party controlling the defense of any Third-Party Reg Rights Claim pursuant hereto shall: (A) conduct the defense of such Third-Party Reg Rights Claim with reasonable diligence and keep the other parties reasonably informed of material developments in the Third-Party Reg Rights Claim at all stages thereof, (B) as promptly as reasonably practicable, submit to the other parties copies of all pleadings, responsive pleadings, motions and other similar legal documents and papers received or filed in connection therewith, (C) permit the other parties and their counsel to confer on the conduct of the defense thereof, and (D) permit the other parties and their counsel an opportunity to review all legal papers to be submitted prior to their submission. The parties not controlling the defense will render to the party controlling the defense such assistance as may be reasonably required in order to insure the proper and adequate defense thereof and shall furnish such records, information and testimony and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested by the party controlling the defense in connection therewith. The Reg Rights Indemnifying Person shall reimburse the parties not controlling the defense for any reasonable and documented costs and expenses incurred in connection with providing such assistance. Notwithstanding anything to the contrary in this Agreement, no Party shall be required to disclose any information to the other Party or its Representatives, if doing so would be reasonably expected to violate any Law to which such Party is subject or could jeopardize (in the reasonable discretion of the disclosing Party) any attorney-client privilege available with respect to such information.
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(iv) If the Reg Rights Indemnifying Person controls the defense of and defends any Third-Party Reg Rights Claim under this Section 1.6(c), the Reg Rights Indemnifying Person shall have the right to effect a settlement of such Third-Party Reg Rights Claim on the Reg Rights Indemnified Person’s behalf and without the consent of the Reg Rights Indemnified Person; provided that (A) such settlement shall not involve any injunctive relief binding upon the Reg Rights Indemnified Person or any of its Affiliates, (B) such settlement expressly and unconditionally releases the Reg Rights Indemnified Person and the other applicable Reg Rights Indemnified Persons (that is, each of the Company Registration Rights Indemnitees, if the Reg Rights Indemnified Person is a Company Registration Rights Indemnitee, and each of the Investor Registration Rights Indemnitees, if the Reg Rights Indemnified Person is an Investor Registration Rights Indemnitee) from any and all liabilities with respect to such Third-Party Reg Rights Claim, with prejudice and (C) the Reg Rights Indemnifying Person unconditionally acknowledges in writing to the Reg Rights Indemnified Person its obligation to pay all Damages of the Reg Rights Indemnified Person with respect to such Third-Party Reg Rights Claim. In all other events, the consent of the Reg Rights Indemnified Person shall be required to effect such a settlement (which consent shall not be unreasonably withheld, conditioned or delayed). If the Reg Rights Indemnified Person controls the defense of and defends any Third-Party Reg Rights Claim under this Section 1.6(c), the Reg Rights Indemnified Person shall have the right to effect a settlement of such Third-Party Reg Rights Claim only with the consent of the Reg Rights Indemnifying Person (which consent shall not be unreasonably withheld, conditioned or delayed). No settlement by the Reg Rights Indemnified Person of such Third-Party Reg Rights Claim effected in accordance with this Section 1.6(c) shall limit or reduce the right of any Reg Rights Indemnified Person to indemnity hereunder for all Damages they may incur arising out of or resulting from the Third-Party Reg Rights Claim, to the extent such Damages are indemnifiable hereunder. As used in this Section 1.6(c)(iv), the term “settlement” refers to any consensual resolution of the claim in question, including by consent decree or by permitting any judgment or other resolution of a claim to occur without disputing the same, and the term “settle” has a corresponding meaning.
Section 1.7 Free Writing Prospectuses. Except for a Prospectus relating to Registrable Securities included in a Registration Statement, an “issuer free writing prospectus” (as defined in Rule 433 under the Securities Act) prepared by the Company or other materials prepared by Company, each of the Investors represents and agrees that it (a) will not make any offer relating to the Registrable Securities that would constitute an issuer free writing prospectus or that would otherwise constitute a Free Writing Prospectus, and (b) will not distribute any written materials in connection with the offer or sale pursuant to a Registration Statement of Registrable Securities, in each case, without the prior written consent of the Company.
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Section 1.8 Information from and Obligations of the Investor. The Company’s obligation to include the Investor’s Registrable Securities in any Registration Statement or Prospectus is contingent upon each of the Investors:
(a) furnishing to the Company in writing information with respect to its ownership of Registrable Securities and the intended method of disposition of its Registrable Securities as may be required by the Company and as required by Law for use in connection with a Registration Statement or Prospectus (or any amendment or supplement thereto) and all information required to be disclosed in order to make the information the Investor previously furnished to the Company not contain a material misstatement of fact or necessary to cause such Registration Statement or Prospectus (or amendment or supplement thereto) not to omit a material fact with respect to the Investor necessary in order to make the statements therein not misleading;
(b) complying in all material respects with (i) the Securities Act and the Exchange Act, (ii) all applicable state securities Laws, (iii) the rules of any securities exchange or trading market on which the Ordinary Shares or Ordinary Shares represented by ADSs are listed or traded, and (iv) all other applicable regulations, in each case, in connection with, and only to the extent applicable to, the registration and the disposition of Registrable Securities by the Investor;
(c) following its actual knowledge thereof, notifying the Company of the occurrence of any event that makes any statement made in a Registration Statement, Prospectus, issuer free writing prospectus or other Free Writing Prospectus regarding the Investor untrue in any material respect or that requires the making of any changes in a Registration Statement, Prospectus, issuer free writing prospectus or other Free Writing Prospectus so that, in such regard, it will not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements not misleading;
(d) providing the Company with such information related to the Investor as may be required to enable the Company to prepare a supplement or post-effective amendment to any such Registration Statement or a supplement to such Prospectus or Free Writing Prospectus;
(e) using commercially reasonable efforts to cooperate with the Company in preparing the applicable Registration Statement and any related Prospectus; and
(f) furnishing the Company with all information required to be included in such Registration Statement or Prospectus by applicable securities Laws in connection with the disposition of such Registrable Securities as the Company reasonably requests.
Section 1.9 Rule 144 Reporting.
(a) With a view to making available to the Investors the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to make and keep available adequate current public information, as defined in Rule 144(c),
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including all periodic and annual reports and other documents (other than Form 6-K reports) required of the Company under Sections 13 or 15(d) of the Exchange Act, and so long as an Investor beneficially owns any Registrable Securities or securities convertible into or exercisable for Registrable Securities, furnish to such Investor forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Exchange Act; a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as such Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any Registrable Securities without registration.
(b) For the avoidance of doubt, each of the Investors may sell any Registrable Securities in compliance with Rule 144, regardless of whether a Registration Statement has been filed with the SEC or is effective. The Company agrees to (i) make and keep public information available as those terms are understood and defined in Rule 144, (ii) use its commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act, and (iii) so long as an Investor owns any Registrable Securities, furnish to such Investor upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Securities Act and the Exchange Act.
Section 1.10 Termination of Registration Rights. Notwithstanding anything to the contrary contained herein and subject to Section 1.11, the registration rights granted under this Article I terminate and are of no further force and effect (other than Section 1.2 and Section 1.6), on the date on which there cease to be any Registrable Securities.
Section 1.11 Transfer of Registration Rights. Each of the Investors shall have the right to Transfer to any Person (such Person, a “Transferee Investor”), directly or indirectly, by written agreement, all of its related rights and obligations granted under this Article I in connection with a Transfer of all of its Registrable Securities to such Person; provided, that in the case of Transfers to limited partners, members or Affiliates of the Investor, the Investor shall have the right to transfer its related rights and obligations under this Article I in connection with the Transfer of all or any portion of its Registrable Securities. Such Transferee Investor shall, following such Transfer, become responsible for all obligations applicable to the Investor under this Article I with respect to the Registrable Securities Transferred to such Transferee Investor.
ARTICLE II
TERMINATION
Section 2.1 Termination. This Agreement shall terminate upon the earlier of (i) the time when there are no Registrable Securities outstanding, (ii) the time when all of the Registrable Securities (a) are freely transferable under Rule 144 and the securities laws of any other applicable jurisdiction without limitation, or any volume, manner-of-sale or other restrictions or conditions, without registration and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144(c) (or any similar rule then in force), as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Company’s transfer agent and the Investor, and (B) do not and/or shall not when issued bear a restrictive legend relating to the Securities Act or the securities laws
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of any other applicable jurisdiction or a restricted CUSIP, and (iii) the mutual written agreement of the Investor and the Company.
Section 2.2 Effect of Termination; Survival. In the event of any termination of this Agreement pursuant to Section 2.1, this Agreement shall be terminated, and there shall be no further liability or obligation hereunder on the part of any Party, other than Section 1.6, Section 1.9, this Section 2.2 and Article III, which provisions shall survive such termination; provided, however, that nothing contained in this Agreement (including this Section 2.2) shall relieve a Party from liability for any breach of any of its representations, warranties, covenants or agreements set forth in this Agreement to the extent occurring prior to such termination.
ARTICLE III
GENERAL PROVISIONS
Section 3.1 No Confidential Information. In no event shall the Company or its Representatives provide any non-public records, books, Contracts, instruments, computer data or other data or information concerning the Company or its subsidiaries to the Investor unless the Investor has agreed to accept such information.
Section 3.2 Fees and Expenses. All expenses incurred by the Parties in connection with the negotiation, execution and delivery of this Agreement will be borne solely and entirely by the Party incurring such expenses.
Section 3.3 Notices. Except as may otherwise be provided herein, all notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be conclusively deemed to have been duly given when sent by electronic mail to the address set forth below if sent between 8:00 am and 5:00 pm recipient’s local time on a Business Day, or on the next Business Day if sent by electronic mail other than between 8:00 am and 5:00 pm recipient’s local time.
If to the Company, addressed to it at:
Sequans Communications SA
15-55 boulevard Charles de Gaulle
Les Portes de la Défense
92700 Colombes
Republic of France
Email:
Attention:
With a copy (which shall not constitute notice) to:
Orrick, Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105
Email:
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Attention:
If to the Investor (as applicable), addressed to it at:
- If to:
Boothbay Diversified Alpha Master Fund, LP
Boothbay Absolute Return Strategies, LP
140 E 45th Street, 14th Floor, New York, NY 10017
Email:
Attention:
- If to:
272 Capital Master Fund, Ltd
c/o B. Riley Asset Management LLC
3811 Turtle Creek Boulevard, Suite 2100
Dallas, TX 75219
Attention:
Email:
- If to:
Lynrock Lake Master Fund LP
c/o Lynrock Lake LP
2 International Dr, Suite 130
Rye Brook, NY 10573
Attention:
Email:
- If to:
Divisar Partners QP, LP
c/o Divisar Capital Management LLC
275 Sacramento St., 8th Fl
San Francisco, CA 94111
Attention:
Email:
Attention:
Email:
- If to:
Marlin Fund, LP
Marlin Fund II, LP
Marlin Fund III, LP
Marlin Master Fund Offshore II, LP
c/o Masters Capital Management LLC
3060 Peachtree Road, NW, Ste 1425
Atlanta, GA 30305
Attention:
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Email:
Attention:
Email:
- If to:
Potomac Capital Partners V, LP
299 Park Avenue
New York, NY 10171
Attention:
Email:
- If to:
Sidus Investment Partners, LP
Sidus Double Alpha Fund, LP
Sidus Double Alpha Fund, Ltd
c/o Sidus Investment Management LLC
767 3rd Avenue
New York, NY 10017
Attention:
Email:
Attention:
Email:
Section 3.4 Definitions. For purposes of this Agreement, the following terms have the meanings indicated:
“Action” means any litigation, suit, claim, action, proceeding, arbitration, mediation, hearing, inquiry or investigation (in each case, whether civil, criminal or investigative).
“Affiliate” of a specified Person means any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise; provided that no portfolio company of an Investor shall be deemed to be an “Affiliate” of the Investor.
“American Depositary Shares” or “ADSs” means those certain American Depositary Shares issued pursuant to a deposit agreement by and among the Company, Bank of New York Mellon (or any successor thereto), as depositary, and the owners and holders of American Depositary Shares, as such agreement may from time to time be amended.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“ASR Eligible” means the Company meets or is deemed to meet the eligibility requirements to file an ASRS as set forth in the General Instruction to Form F-3.
“ASRS” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the Securities Act.
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“Board” or “Board of Directors” means the board of directors of the Company, or any duly authorized committee thereof.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States, a legal holiday in the Republic of France or any day on which banking institutions in the State of California or in the Republic of France are authorized or required by law or other governmental action to close.
“Company” has the meaning set forth in the preamble to this Agreement.
“Company Registration Rights Indemnitee” has the meaning set forth in Section 1.6(a)(ii).
“Contract” means any oral or written binding contract, subcontract, agreement, note, bond, mortgage, indenture, lease, sublease, license, sublicense, permit, franchise or other instrument, obligation, commitment or arrangement or understanding of any kind or character.
“control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by Contract or credit arrangement or otherwise.
“controlling person” has the meaning set forth in Section 1.6(a)(i).
“Damages” means any and all claims, demands, suits, actions, causes of actions, losses, costs, damages, liabilities, judgments, and reasonable and documented out-of-pocket expenses incurred or paid, including reasonable attorneys’ fees, costs of investigation or settlement, other professionals’ and experts’ fees, court or arbitration costs.
“Disclosure Package” means, with respect to any offering of Registrable Securities, (a) the preliminary Prospectus or Prospectus, as applicable, (b) each Free Writing Prospectus, and (c) all other information, in each case, that is deemed, under Rule 159 under the Securities Act, to have been conveyed to purchasers of Registrable Securities at the time of sale of such securities.
“Effectiveness Period” has the meaning set forth in Section 1.5.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.
“FINRA” means the Financial Industry Regulatory Authority, Inc. or any successor regulatory organization.
“Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405 promulgated under the Securities Act relating to the Registrable Securities included in the applicable Registration Statement that has been approved for use by the Company.
“Governmental Entity” means any federal, national, foreign, supranational, state, provincial, county, local or other government, governmental, regulatory or administrative authority, agency,
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instrumentality or commission or any court, tribunal, or judicial or arbitral body of competent jurisdiction.
“Investor” or “Investors” has the meaning set forth in the preamble to this Agreement.
“Investor Underwriter Registration Statement” shall have the meaning set forth in Section 1.4(f).
“Investor Registration Rights Indemnitee” has the meaning set forth in Section 1.6(a)(i).
“issuer free writing prospectus” has the meaning set forth in Section 1.7.
“Law” any U.S. or non-U.S. federal, state, local, national, supranational, foreign or administrative law (including common law), statute, ordinance, regulation, requirement, regulatory interpretation, rule, code or Order.
“Notice of Reg Rights Claim” has the meaning set forth in Section 1.6(b)(i).
“Notice of Suspension” has the meaning set forth in Section 1.3(a).
“NYSE” has the meaning set forth in Section 1.4(j).
“Order” means any order (temporary or otherwise), judgment, injunction, award, decision, determination, stipulation, ruling, subpoena, writ, decree or verdict entered by or with any Governmental Entity.
“Ordinary Shares” means ordinary shares, nominal value €0.01 per share, of the Company.
“Party” and “Parties” have the meanings set forth in the preamble to this Agreement.
“Person” means an individual, company, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.
“Prospectus” means the prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference, or deemed to be incorporated by reference, into such prospectus.
“Purchase Agreement” has the meaning set forth in the recitals to this Agreement.
“Reg Rights Claim” has the meaning set forth in Section 1.6(b)(i).
“Reg Rights Indemnified Person” has the meaning set forth in Section 1.6(b)(i).
“Reg Rights Indemnifying Person” has the meaning set forth in Section 1.6(b)(i).
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“Registrable Securities” means (i) the Shares and (ii) any Ordinary Shares or Ordinary Shares represented by ADSs issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) as a result of any stock split, recapitalization, exchange, dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares; provided, that any such securities will cease to be Registrable Securities when (a) they are sold pursuant to a Registration Statement or (b) they are sold pursuant to Rule 144 (or any similar provisions then in force).
“Registration Expenses” means (whether or not any Registration Statement is declared effective or any of the transactions described herein is consummated) all expenses incurred by the Company in filing a Registration Statement, including, all registration and filing fees, fees and disbursements of counsel for the Company, SEC or FINRA registration and filing fees, all applicable ratings agency fees, expenses of the Company’s independent accountants in connection with any regular or special reviews or audits incident to or required by any such registration, fees and expenses of compliance with securities or “blue sky” Laws, costs of any comfort letters required by any underwriter, listing fees, printing, transfer agent’s and registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, the Company’s internal expenses, the expense of any annual audit or quarterly review, the expenses and fees for listing the securities to be registered on the NYSE or any other securities exchange, roadshow expenses, all other expenses incident to the registration of the Registrable Securities; provided, that the term “Registration Expenses” does not include, and the Company shall not be responsible for, Selling Expenses.
“Registration Statement” means a registration statement of the Company on an appropriate form under the Securities Act filed with the SEC covering the resale of Registrable Securities, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference or deemed to be incorporated by reference in such Registration Statement.
“Representatives” means a Person’s officers, directors, employees, accountants, consultants, legal counsel, investment bankers, other advisors, authorized agents and other representatives.
“Rule 144” means Rule 144 under the Securities Act or any replacement or successor rule promulgated under the Securities Act.
“Rule 415” means Rule 415 under the Securities Act or any replacement or successor rule promulgated under the Securities Act.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.
“Selling Expenses” means, in connection with the registration or offering and sale of the Registrable Securities, (a) all underwriting fees, discounts and selling commissions fees, (b) stock transfer taxes applicable to the sale of the Registrable Securities, and (c) fees and expenses
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of any counsel to any of the Investors other than the counsel referred to in the definition of Registration Expenses.
“settlement” and “settle” have the meanings set forth in Section 1.6(c)(iv).
“Shares” has the meaning set forth in the recitals to this Agreement.
“Shelf Registration Statement” means a registration statement filed with the SEC for the sale of Registrable Securities pursuant to Rule 415 under the Securities Act.
“Suspension Period” has the meaning set forth in Section 1.3(a).
“Third-Party Reg Rights Claim” has the meaning set forth in Section 1.6(b)(ii).
“Transaction Documents” means collectively, this Agreement, the Purchase Agreement and the other documents and agreements entered into in connection with the transactions contemplated hereby and thereby.
“Transaction Shelf Registration Statement” has the meaning set forth in Section 1.1(a).
“Transfer” means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any Contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any securities.
“Transferee Investor” shall have the meaning set forth in Section 1.11.
Section 3.5 Interpretation; Headings. When a reference is made in this Agreement to an Exhibit, a Schedule or a Section, such reference shall be to an Exhibit, a Schedule or a Section of this Agreement unless otherwise indicated. The table of contents, index of defined terms and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof”, “hereto”, “hereby”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument or Law defined or referred to herein means such agreement, instrument or Law as from time to time amended, modified or supplemented, unless otherwise specifically indicated. References to a Person are also to its successors and permitted assigns. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded, and if the last day of such period is not a Business Day, the period shall end on the immediately following Business Day. Unless otherwise specifically indicated,
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all references to “dollars” and “$” will be deemed references to the lawful money of the United States of America. Each of the Parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement. References to “days” shall mean “calendar days” unless expressly stated otherwise. No specific provision, representation or warranty shall limit the applicability of a more general provision, representation or warranty. It is the intent of the Parties that each representation, warranty, covenant, condition and agreement contained in this Agreement shall be given full, separate, and independent effect and that such provisions are cumulative. Any reference in this Agreement to a date or time shall be deemed to be such date or time in the City of New York, New York, U.S.A., unless otherwise specified.
Section 3.6 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by the Purchase Agreement, the Note and this Agreement are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that such transactions be consummated as originally contemplated to the fullest extent possible.
Section 3.7 Entire Agreement; AmendmentsSection 1.1 . The Transaction Documents (including the schedules and exhibits hereto and thereto) constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to the subject matter hereof. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.
Section 3.8 Assignment; No Third Party Beneficiaries. Except as expressly provided herein, including, without limitation, the transfer of rights and obligations as set forth in Section 1.11, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party, in whole or in part (whether pursuant to a merger, by operation of law or otherwise), without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed). Subject to the immediately preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 3.9 Further Assurances. Each Party shall cooperate, take such actions, enter into such agreements (including customary indemnification and contribution agreements) and execute such documents as may be reasonably requested by any other Party in order to carry
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out the provisions and purposes of this Agreement and the transactions contemplated hereby; provided, however, that no Party shall be obligated to take any actions or omit to take any actions that would be inconsistent with applicable Law.
Section 3.10 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York. The Parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the State of New York and the United States of America, in each case located in the County of New York, for any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any Party or any of its Affiliates or against any Party or any of its Affiliates). Consistent with the preceding sentence, each of the Parties hereby (a) submits to the exclusive jurisdiction of such courts for the purpose of any Action arising out of or relating to this Agreement brought by either Party, (b) agrees that service of process will be validly effected by sending notice in accordance with Section 3.3, (c) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the above named courts, and (d) agrees not to move to transfer any such Action to a court other than any of the above-named courts.
(b) EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3.10.
(c) The Company agrees that service to the Process Agent (as defined below) or as otherwise specified in Section 3.3 shall be valid and sufficient service, and the Company waives any objections to such service. The Company hereby irrevocably designates GKL Corporate/Search, Inc., One Capitol Mall, Suite 660, Sacramento, California 95814 (the “Process Agent”), as the designee, appointee and agent of the Company to receive, for and on behalf of the Company, service of process for the purposes of this Section 3.10. The Company irrevocably
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waives any requirements for service abroad of process or other documents, including under the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters. The Company agrees that service of process in respect of it upon the Process Agent shall be deemed to be effective service of process upon it. The Company agrees that the failure of the Process Agent to give notice to it of any such service shall not impair or affect the validity of such service or any judgment rendered in any Action based thereon. If for any reason the Process Agent shall cease to be available to act as such, the Company agrees to irrevocably appoint another such agent as its authorized agent for service of process, on the terms and for the purposes of this Section 3.10. Nothing herein shall in any way be deemed to limit the ability of the Investor to serve any such legal process in any other manner permitted by applicable Law or to obtain jurisdiction over the Company or bring actions, suits or proceedings against them in such other jurisdiction, and in such matter, as may be permitted by applicable Law
Section 3.11 Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or other means of electronic transmission, such as by electronic mail in “pdf” form or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) in counterparts, and by the Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
Section 3.12 Specific Performance. The Parties acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each Party agrees that, in the event of any breach or threatened breach by the other Party of any covenant or obligation contained in this Agreement, the non-breaching Party shall be entitled (in addition to any other remedy that may be available to it whether in law or equity, including monetary damages) to (a) an Order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an injunction restraining such breach or threatened breach. Each Party further agrees that neither the other Party nor any other Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 3.12, and each Party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.
Section 3.13 Waiver. Any Party entitled to the benefits thereof may, to the extent permitted by Law (a) extend the time for the performance of any of the obligations or other acts of the other Party, (b) waive any inaccuracies in the representations and warranties contained herein, and (c) waive compliance with any of the covenants, agreements or conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or future exercise of any other right hereunder.
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Section 3.14 Recapitalization, Exchanges, etc.
(a) The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares or other securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise), which may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, stock splits, recapitalizations, pro rata distributions of stock and the like occurring after the date of this Agreement.
(b) The Company agrees that it shall not effect or permit to occur any combination or subdivision of Ordinary Shares or other securities constituting Registrable Securities which would adversely affect the ability of the Investor to include such Registrable Securities in any registration contemplated by this Agreement or the marketability of such Registrable Securities in any such registration.
Section 3.15 Obligations Limited to Parties to this Agreement. Each of the Parties hereto covenants, agrees and acknowledges that no Person other than the Investor (and its transferees or assignees) and the Company shall have any obligation hereunder and that notwithstanding that an Investor is a limited partnership, limited liability company or other entity, no recourse under this Agreement shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of the Investor or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of the Investor or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of the Investor under this Agreement or for any claim based on, in respect of or by reason of such obligation or its creation.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed, as of the date first written above, by their respective officers thereunto duly authorized.
| SEQUANS COMMUNICATIONS SA | |||||
| By: | /s/ Georges Karam | ||||
| Name: Georges Karam | |||||
| Title: Chief Executive Officer | |||||
| BOOTHBAY DIVERSIFIED ALPHA MASTER FUND, LP | |||||
| By: | /s/ Daniel Bloom | ||||
| Name: Daniel Bloom | |||||
| CFO & CCO | |||||
| BOOTHBAY ABSOLUTE RETURN STRATEGIES, LP | |||||
| By: | /s/ Daniel Bloom | ||||
| Name: Daniel Bloom | |||||
| CFO & CCO | |||||
[Signature Page to Registration Rights Agreement]
| 272 CAPITAL MASTER FUND, LTD | |||||
| by: B. Riley Asset Management LLC, its investment manager | |||||
| By: | /s/ Wesley Cummins | ||||
| Name: Wesley Cummins | |||||
| Duly authorized | |||||
| LYNROCK LAKE MASTER FUND LP | |||||
| by: Lynrock Lake Partners LLC, its general partner | |||||
| By: | /s/ Cynthia L. Paul | ||||
| Name: Cynthia L. Paul | |||||
| Title: Member | |||||
| DIVISAR PARTNERS QP, LP | |||||
| by: Divisar Capital Management LLC, its general partner | |||||
| By: | /s/ Steven R. Baughman | ||||
| Name: Steven R. Baughman | |||||
| Duly authorized | |||||
[Signature Page to Registration Rights Agreement]
| MARLIN FUND, LP | |||||
| by: Masters Capital Management LLC | |||||
| By: | /s/ Michael W. Masters | ||||
| Name: Michael W. Masters | |||||
| Duly authorized | |||||
| MARLIN FUND II, LP | |||||
| by: Masters Capital Management LLC | |||||
| By: | /s/ Michael W. Masters | ||||
| Name: Michael W. Masters | |||||
| Duly authorized | |||||
| MARLIN FUND III, LP | |||||
| by: Masters Capital Management LLC | |||||
| By: | /s/ Michael W. Masters | ||||
| Name: Michael W. Masters | |||||
| Duly authorized | |||||
| MARLIN MASTER FUND OFFSHORE II, LP | |||||
| by: Masters Capital Management LLC | |||||
| By: | /s/ Michael W. Masters | ||||
| Name: Michael W. Masters | |||||
| Duly authorized | |||||
[Signature Page to Registration Rights Agreement]
| POTOMAC CAPITAL PARTNERS V, LP | |||||
| By: | /s/ Paul Jon Solit | ||||
| Name: Paul Jon Solit | |||||
| Duly authorized | |||||
| SIDUS INVESTMENT PARTNERS, LP | |||||
| by: Sidus Investment Management LLC | |||||
| By: | /s/ Mark Schalles | ||||
| Name: Mark Schalles | |||||
| Duly authorized | |||||
| SIDUS DOUBLE ALPHA FUND, LP | |||||
| by: Sidus Investment Management LLC | |||||
| By: | /s/ Mark Schalles | ||||
| Name: Mark Schalles | |||||
| Duly authorized | |||||
[Signature Page to Registration Rights Agreement]
| SIDUS DOUBLE ALPHA FUND, LTD | |||||
| by: Sidus Investment Management LLC | |||||
| By: | /s/ Mark Schalles | ||||
| Name: Mark Schalles | |||||
| Duly authorized | |||||
[Signature Page to Registration Rights Agreement]
EXHIBIT A
SCHEDULE OF INVESTORS
1. Boothbay Diversified Alpha Master Fund, LP
2. Boothbay Absolute Return Strategies, LP
Address:
140 E 45th Street, 14th Floor, New York, NY 10017
3. 272 Capital Master Fund, Ltd
Address:
c/o B. Riley Asset Management LLC
3811 Turtle Creek Boulevard, Suite 2100
Dallas, TX 75219
4. Lynrock Lake Master Fund LP
Address:
c/o Lynrock Lake LP
2 International Dr, Suite 130
Rye Brook, NY 10573
5. Divisar Partners QP, LP
Address:
275 Sacramento St., 8th Fl
San Francisco, CA 94111
6. Marlin Fund, LP
7. Marlin Fund II, LP
8. Marlin Fund III, LP
9. Marlin Master Fund Offshore II, LP
Address:
c/o Masters Capital Management LLC
3060 Peachtree Road, NW, Ste 1425
Atlanta, GA 30305
10. Potomac Capital Partners V, LP
Address:
299 Park Avenue
New York, NY 10171
11. Sidus Investment Partners, LP
12. Sidus Double Alpha Fund, LP
13. Sidus Double Alpha Fund, Ltd
Address:
c/o Sidus Investment Management LLC
767 3rd Avenue
New York, NY 10017
Exhibit 4.5
Execution Version
SEQUANS COMMUNICATIONS S.A.
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is made as of December 22, 2021, by and between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “Company”), and Renesas Electronics Corporation, a Japanese corporation (the “Purchaser”). The Company and Purchaser are referred to hereinafter each as a “Party” and collectively as the “Parties”.
RECITALS
WHEREAS, Purchaser desires to subscribe from the Company and the Company desires to issue 7,899,020 Ordinary Shares (as defined below) represented by 1,974,755 ADSs (the “Shares”). As used herein, “Ordinary Shares” means the ordinary shares, nominal value €0.02 per share, of the Company, “ADS” means an American Depositary Share each representing the number of Ordinary Shares specified pursuant to the Deposit Agreement (as defined below), “ADR” means an American Depositary Receipt evidencing the ADSs and “Underlying Shares” means the Ordinary Shares underlying the ADSs;
WHEREAS, on the Closing Date (as defined below), the Company and Purchaser will enter into a right of first notification agreement, in the form attached as Exhibit A hereto (the “Right of First Notification Agreement”), and a registration rights agreement in the form attached as Exhibit B hereto (the “Registration Rights Agreement”), which provide certain rights to Purchaser relating to the Company and the Shares;
NOW THEREFORE, on and subject to the terms hereof, the Parties agree as follows:
ARTICLE I
DEFINED TERMS
The terms defined in this Article I (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Agreement shall have the respective meanings specified in this Article I. The terms defined in this Article I include the plural as well as the singular.
“ADR” shall have the meaning specified in the recitals.
“ADS” shall have the meaning specified in the recitals.
“Affiliates” shall have the meaning specified in Section 3.4.
“Agreement” shall have the meaning specified in the preamble.
“Business Day” shall mean any day other than a Saturday, a Sunday, or any other day on which banks in New York City, Paris, or Tokyo are authorized or required by law or other governmental action to be closed.
“Closing” shall have the meaning specified in Section 2.2.
“Closing Date” shall have the meaning specified in Section 2.2.
“Company” shall have the meaning specified in the preamble.
“Company Reports” shall have the meaning specified in Section 4.1.
“Confidential Information” shall have the meaning specified in Section 8.2(a).
“Deposit Agreement” shall have the meaning specified in Section 5.1.
“Depositary” shall have the meaning specified in Section 5.1.
“EY” shall have the meaning specified in Section 4.9.
“Enforceability Exceptions” shall have the meaning specified in Section 3.2.
“Environmental Laws” shall have the meaning specified in Section 4.20.
“Evaluation Date” shall have the meaning specified in Section 4.24.
“Exchange Act” shall have the meaning specified in Section 3.4.
“IFRS” shall have the meaning specified in Section 4.10.
“Intellectual Property Rights” shall have the meaning specified in Section 4.21.
“Issue Price” shall have the meaning specified in Section 2.1(a).
“Knowledge” shall have the meaning specified in Section 4.12.
“Material Adverse Effect” shall have the meaning specified in Section 4.2.
“Material Contract” shall have the meaning specified in Section 4.14.
“Material Permits” shall have the meaning specified in Section 4.13.
“OFAC” shall have the meaning specified in Section 4.23.
“Ordinary Shares” shall have the meaning specified in the recitals.
“Party” or “Parties” shall have the meaning specified in the preamble.
“Person” shall have the meaning specified in Section 4.23.
“Purchase” shall have the meaning specified in Section 2.2.
“Purchaser” shall have the meaning specified in the preamble.
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“Registration Rights Agreement” shall have the meaning specified in the recitals.
“Regulation D” shall have the meaning specified in Section 3.3.
“Right of First Notification Agreement” shall have the meaning specified in the recitals.
“Sanctions” shall have the meaning specified in Section 4.23.
“SEC” shall have the meaning specified in Section 3.8.
“Securities Act” shall have the meaning specified in Section 3.3.
“Shares” shall have the meaning specified in the recitals.
“Short Sales” shall have the meaning specified in Section 3.7.
“Subsidiary” shall have the meaning specified in Section 4.2.
“Transaction Documents” shall mean collectively, this Agreement, the Right of First Notification Agreement, the Registration Rights Agreement and the other documents and agreements entered into in connection with the transactions contemplated hereby and thereby.
“Underlying Shares” shall have the meaning specified in the recitals.
ARTICLE II
SUBSCRIPTION AND PURCHASE OF SECURITIES
Section 2.1 Issuance and Purchase of ADSs.
(a) Subject to the terms set forth in this Agreement, at the Closing (as defined herein), the Company agrees to issue 1,974,755 ADSs at the issue price of $4.70 per ADS, and Purchaser agrees to subscribe for and purchase the number of Shares at the aggregate issue price (the “Issue Price”) set forth opposite its name on Exhibit C.
(b) Under the terms of its seventeenth resolution, the general meeting of shareholders of the Company approved, on June 25, 2021, a delegation of authority to the board of directors of the Company in order to effect one (or several) share capital increase(s) up to a maximum nominal amount of €2,000,000 through the issuance, inter alia, of shares and/or securities giving access to the share capital with subscriptions reserved to a specified class of investors including Qualified Institutional Buyers or Institutional Accredited Investors within the meaning of US securities laws.
Section 2.2 Closing; Delivery of Shares.
(a) Subject to Section 6.1 and Section 6.2, the closing (the “Closing”) of the issuance and subscription of the Shares (the “Purchase”) shall occur on a date no later than fifteen (15) Business Days after the date of this Agreement, or at such other time as the Company and Purchaser mutually agree upon, orally or in writing (the “Closing Date”), upon the physical or
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electronic exchange among the Parties and their counsel of all documents and deliverables required under this Agreement.
(b) At the Closing, Purchaser shall deliver or cause to be delivered to the Company:
(1) a duly completed and signed subscription form for the Shares in the form attached as Exhibit D hereto; and
(2) the Issue Price.
(c) At the Closing, the Company shall do the following:
(1) issue 7,899,020 Underlying Shares and deposit such Underlying Shares with the Depositary, in the name and on behalf of Purchaser; and
(2) cause the Depositary to issue and deliver to Purchaser a book-entry transfer for the Shares to which Purchaser shall be entitled against deposit of the Underlying Shares, pursuant to the Deposit Agreement.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF PURCHASER
Purchaser hereby makes the following representations and warranties, each of which is and shall be true and correct on the date hereof and at the Closing, to the Company, and all such representations and warranties shall survive the Closing:
Section 3.1 Power and Authorization. Purchaser is duly organized, validly existing and in good standing, and has the power, authority and capacity to execute this Agreement, to perform its obligations hereunder, and to consummate the Purchase.
Section 3.2 Valid and Enforceable Agreement; No Violations. This Agreement has been duly executed and delivered by Purchaser and constitutes a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (b) general principles of equity, whether such enforceability is considered in a proceeding at law or in equity (such qualifications in clauses (a) and (b) being the “Enforceability Exceptions”). This Agreement and consummation of the Purchase will not violate, conflict with or result in a breach of or default under (i) Purchaser’s organizational documents, (ii) any agreement or instrument to which Purchaser is a party or by which Purchaser or any of its assets are bound or (iii) any laws, regulations or governmental or judicial decrees, injunctions or orders applicable to Purchaser.
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Section 3.3 Accredited Investor/Qualified Institutional Buyer. Purchaser is an “accredited investor” within the meaning of Rule 501(a) of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The information Purchaser has provided in writing to the Company as set forth on Purchaser’s signature page hereto is true, correct and complete, as of the date hereof and as of the Closing Date, in all material respects.
Section 3.4 5% Shareholder Status. If Purchaser and its affiliates (as that term is defined in Rule 501(b) of Regulation D under the Securities Act, “Affiliates”) will beneficially own after the Closing Date 5% or more of the Company’s outstanding Ordinary Shares represented by ADSs, Purchaser acknowledges and agrees that it will comply in all material respects with all applicable provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as a result of such holdings. Purchaser is not a subsidiary, affiliate or, to its knowledge, otherwise closely-related to any officer of the Company or any other beneficial owner of 5% or more of the outstanding Ordinary Shares (including Ordinary Shares represented by ADSs) or the voting power to elect members of the Company’s board of directors.
Section 3.5 Restricted Stock. Purchaser (a) acknowledges (i) that the issuance of the Shares pursuant to this Agreement has not been registered, nor does the Company have a plan or intent to register such issuance of the Shares, under the Securities Act or any state securities laws, (ii) the Shares are being offered and sold in reliance upon exemptions provided in the Securities Act and state securities laws for transactions not involving any public offering and, therefore, cannot be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless they are subsequently registered and qualified under the Securities Act and applicable state securities laws or unless an exemption from such registration and qualification is available and (iii) the Shares are “restricted securities” as that term is defined in Rule 144 promulgated under the Securities Act and (b) is purchasing the Shares for investment purposes only for the account of Purchaser and not with any view toward a distribution thereof or with any intention of selling, distributing or otherwise disposing of the Shares in a manner that would violate the registration requirements of the Securities Act. Purchaser is able to bear the economic risk of holding the Shares for an indefinite period and has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment in the Shares.
Section 3.6 Legends. Purchaser understands and agrees that any certificate or book-entry representing the Shares shall bear the restrictive legend set forth in Section 7.2 below.
Section 3.7 No Illegal Transactions. Purchaser has not, directly or indirectly, and no person acting on behalf of or pursuant to any understanding with it has, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as defined below) involving any of the Company’s securities) since the time the Company began negotiating the transactions contemplated by this Agreement with Purchaser. Purchaser covenants that neither it nor any person acting on its behalf or pursuant to any understanding with it will engage, directly or indirectly, in any transactions in the securities of the Company (including Short Sales) prior to the time the transactions contemplated by this Agreement are publicly disclosed. “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO promulgated under the Exchange Act, and all types of direct and indirect stock pledges, forward
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sale contracts, options, puts, calls, short sales, swaps, derivatives and similar arrangements (including on a total return basis), and sales and other transactions through non-U.S. broker-dealers or foreign regulated brokers.
Section 3.8 Adequate Information; No Reliance. Purchaser acknowledges and agrees that (a) Purchaser has been furnished with all materials it considers relevant to making an investment decision to enter into the Purchase and has had the opportunity to review the Company’s filings and submissions with the Securities and Exchange Commission (the “SEC”), including, without limitation, all information filed or furnished pursuant to the Exchange Act and all information incorporated into such filings and submissions, (b) Purchaser has sufficient knowledge and expertise to make an investment decision with respect to the transactions contemplated hereby, (c) Purchaser has had a full opportunity to speak directly with directors, officers and Affiliates of the Company and to ask questions of the Company and such directors, officers and Affiliates of the Company concerning the Company, its business, operations, financial performance, financial condition and prospects, and the terms and conditions of the Purchase, and to obtain such additional information as it deems necessary to verify the accuracy of the information furnished to it and has asked such questions, received such answers and obtained such information as it deems necessary, (d) Purchaser has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to evaluate the risks involved in the Purchase and to make an informed investment decision with respect to the Purchase and (e) Purchaser is not relying, and has not relied, upon any statement, advice (whether accounting, tax, financial, legal or other), representation or warranty made by the Company or any of its Affiliates or representatives, except for (i) the publicly available filings and submissions made by the Company with the SEC under the Exchange Act and (ii) the representations and warranties made by the Company in this Agreement.
Section 3.9 Purchaser’s Reporting Requirement. The Company has made no representations to Purchaser regarding Purchaser’s reporting requirements with the SEC related to Purchaser’s present or future ownership in the Company, and Purchaser acknowledges and agrees that it is the responsibility of Purchaser to ensure that Purchaser complies with any disclosure and reporting requirements of the SEC applicable to Purchaser as a result of the Purchase.
Section 3.10 No General Solicitation or Advertising. The offer to enter into the Purchase was directly communicated to Purchaser, and Purchaser was able to ask questions and receive answers concerning the terms of this transaction. At no time was Purchaser presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.
Section 3.11 Legal Opinions. Purchaser acknowledges and understands that a legal opinion is being delivered by counsel to the Company in reliance on, and assuming the accuracy of, the foregoing representations and warranties of Purchaser.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby makes the following representations and warranties, each of which is and shall be true and correct on the date hereof and at the Closing, to Purchaser, and all such representations and warranties shall survive the Closing.
Section 4.1 Exchange Act Filings. The Company has filed or furnished, as applicable, on a timely basis all forms, statements, certifications, reports and documents required to be filed or furnished by it with the SEC pursuant to the Exchange Act or the Securities Act since December 31, 2018 (the “Company Reports”). The Company Reports, when they became effective or were filed with or furnished to the SEC, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations thereunder and none of such documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed or furnished after the date hereof and on or prior to the Closing, when such documents become effective or are filed with the SEC, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the SEC thereunder and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
Section 4.2 Due Incorporation. Each of the Company and each of its Subsidiaries has been duly organized and is validly existing as a corporation or other legal entity in good standing (or the foreign equivalent thereof) under the laws of its jurisdiction of incorporation or organization. Each of the Company and its Subsidiaries is duly qualified to do business and is in good standing (or the foreign equivalent thereof) as a foreign corporation or other legal entity in each jurisdiction in which its ownership or lease of its properties or the conduct of its business requires such qualification and has all power and authority (corporate or other) necessary to own or hold its properties and to conduct the businesses in which each is engaged, except where the failure to so qualify or have such power or authority (i) would not have and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the condition (financial or otherwise), results of operations, assets or business of the Company and its Subsidiaries, taken as a whole, or (ii) impair in any material respect the ability of the Company to perform its obligations under the Transaction Documents or to consummate any transactions contemplated hereby or thereby (any such effect as described in clauses (i) or (ii), a “Material Adverse Effect”). As used in this Agreement, “Subsidiary” shall have the meaning set forth in Rule 1-02 of Regulation S-X of the SEC.
Section 4.3 Subsidiaries. The membership interests or capital stock (or the foreign equivalent thereof), as applicable, of each Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable and, except to the extent set forth in the Company Reports, are owned by the Company directly, free and clear of any claim, lien, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party.
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Section 4.4 Due Authorization. The Company has the full right, power and authority to enter into this Agreement and to perform and discharge its obligations hereunder; and this Agreement and the performance by the Company of its obligations hereunder have been duly authorized, and this Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity.
Section 4.5 The Shares. As of the date of this Agreement, the Shares represent approximately 4.96% of the total outstanding number of Ordinary Shares, including the Shares. The Ordinary Shares to be issued by the Company upon subscription to the Shares pursuant to Section 2.1(a) have been duly authorized for issuance. Upon subscription by Purchaser for the Ordinary Shares issuable in connection with the issuance of the Shares pursuant to Section 2.1(a), such Ordinary Shares shall be deposited with the Depositary for the issuance of ADSs in the form of ADRs. When issued in accordance with the terms of this Agreement, the ADSs issued in connection with the issuance of the Shares pursuant to Section 2.1(a), will be validly issued, fully paid and nonassessable and free of any preemptive or similar rights, and Purchaser will be entitled to the rights specified in the Deposit Agreement; no preemptive right, resale right, right of first refusal or similar rights exist with respect to any of the Ordinary Shares issued in connection with the issuance of the Shares pursuant to Section 2.1(a) and the issuance thereof will be free of any restriction upon the voting or transfer thereof pursuant to the laws of the French Republic or the Company’s statuts or any agreement or other instrument to which the Company is a party. Each Share will be issued in compliance with all U.S. federal and state securities laws and the securities laws of any other applicable jurisdiction.
Section 4.6 Capitalization; Indebtedness. As of the date hereof, the share capital of the Company consists of 151,419,322 issued Ordinary Shares, fully paid, and with a par value of €0.02 each, and total authorized capital of 311,686,798 Ordinary Shares. All of the outstanding shares of capital stock of the Company have been duly authorized, validly issued and are fully paid and nonassessable and were issued in compliance with all applicable securities laws and were not issued in violation of any preemptive right, resale right, right of first refusal or similar right. Other than 947,784 Ordinary Shares reserved for future issuance under the Company’s equity plans, 15,623,868 Ordinary Shares issuable upon the exercise of outstanding stock options, founders warrants and warrants and upon vesting of restricted free shares granted pursuant to the Company’s equity plans, and a maximum of 43,695,824 shares reserved for issuance under outstanding convertible notes and warrants, the Company has no shares of capital stock reserved for issuance. Except as set forth above or pursuant to this Agreement, the Company does not have outstanding any options to purchase, or any rights or warrants to subscribe for, any securities or obligations convertible into, or any contracts or commitments to issue or sell, any shares of capital stock, or any such warrants, convertible securities or obligations. Except as previously disclosed in the Company’s public filings, the Company has no indebtedness as of the date of this Agreement.
Section 4.7 No Default, Termination or Lien. The execution, delivery and performance of this Agreement by the Company, the issuance and delivery of the Shares by the Company, the consummation of the transactions contemplated hereby and thereby, and compliance by the Company with the terms of this Agreement will not (with or without notice or lapse of time or
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both) conflict with or result in a breach or violation of any of the terms or provisions of, constitute a default under, give rise to any right of termination or other right or the cancellation or acceleration of any right or obligation or loss of a benefit under, or give rise to the creation or imposition of any lien, encumbrance, security interest, claim or charge upon any property or assets of the Company or any Subsidiary pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, nor will such actions result in any violation of the provisions of the organizational documents of the Company or any of its Subsidiaries or any law, statute, rule, regulation, judgment, order or decree of any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its Subsidiaries or any of their properties or assets; provided that an investor in the Company has the right to purchase a warrant providing for the right to acquire ADSs to maintain its proportionate interest in the Company.
Section 4.8 No Consents. No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, except such as may be required by the New York Stock Exchange in connection with the listing of the Shares.
Section 4.9 Independent Accountants. Ernst & Young Audit (“EY”), who has certified certain financial statements and related schedules included or incorporated by reference in the Company Reports, is an independent registered public accounting firm as required by the Securities Act and the Exchange Act and the rules and regulations thereunder and the Public Company Accounting Oversight Board (United States). Except as pre-approved in accordance with the requirements set forth in Section 10A of the Exchange Act, EY has not been engaged by the Company to perform any “prohibited activities” (as defined in Section 10A of the Exchange Act).
Section 4.10 Financial Statements. The financial statements, together with the related notes and schedules, included in the Company Reports present fairly in all material respects the financial condition of the Company and its consolidated Subsidiaries as of the respective dates thereof and the results of operations and cash flows of the Company and its consolidated Subsidiaries for the respective periods covered thereby, all in conformity with International Financial Reporting Standards (“IFRS”) applied on a consistent basis throughout the entire period involved, except as otherwise disclosed in the Company Reports. Such financial statements, together with the related notes and schedules, comply in all material respects with the Securities Act, the Exchange Act and the rules and regulations thereunder. No other financial statements or supporting schedules or exhibits are required by the Exchange Act or the rules and regulations thereunder to be filed with the SEC.
Section 4.11 No Material Adverse Effect. There has not occurred any Material Adverse Effect, or any development involving a prospective Material Adverse Effect, in the condition, financial or otherwise, or in the earnings, assets, business or operations of the Company and its Subsidiaries, taken as a whole, from that set forth or contemplated in the Company Reports filed prior to the date hereof.
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Section 4.12 Legal Proceedings. There are no legal or governmental proceedings, actions, suits or claims pending or, to the Company’s Knowledge, threatened to which the Company or any of its Subsidiaries is a party or to which any of the properties or assets of the Company or any of its Subsidiaries is subject (i) other than proceedings accurately described in all material respects in the Company Reports and proceedings that would not have and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or (ii) that are required to be described in the Company Reports and are not so described; and there are no statutes, regulations, contracts or other documents to which the Company or any of its Subsidiaries is subject or by which the Company or any of its Subsidiaries is bound that are required to be described in the Company Reports or to be filed as exhibits to the Company Reports that are not described therein or filed as required. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any legal or governmental proceedings, actions, suits or claims of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. For purposes of this Agreement, “Knowledge” means the actual knowledge (after due inquiry) of the executive officers (as defined in Exchange Act Rule 3b-7) of the Company or its Subsidiaries, as applicable.
Section 4.13 Regulatory Permits. Each of the Company and its Subsidiaries possesses or has applied for all certificates, authorizations, licenses, franchises, permits, orders and approvals issued or granted by the appropriate governmental or regulatory authorities, agencies, courts, commissions or other entities, whether federal, state, local or foreign, or applicable self-regulatory organizations necessary to conduct its business as currently conducted, except (i) where the failure to possess such certificates, authorizations, licenses, franchises, permits, orders and approval, individually or in the aggregate, has not and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (“Material Permits”) and (ii) as accurately described in all material respects in the Company Reports, and neither the Company nor any of its Subsidiaries has received any written notice of proceedings relating to the revocation or material adverse modification of any such Material Permits (except as accurately described in all material respects in the Company Reports), and to the Company’s Knowledge, there are no facts or circumstances that would give rise to the revocation, termination or material adverse modifications of any Material Permits.
Section 4.14 Material Contracts. Except for the Material Contracts, the Company and its Subsidiaries are not party to any agreements, contracts or commitments that are material to the business, financial condition, assets or operations of the Company and its Subsidiaries or that would be required to be filed pursuant to Item 19 and the Instructions as to Exhibits of Form 20-F. Neither the Company nor any of its Subsidiaries is in material default under, or in material violation of, nor has received written notice of termination or default under any Material Contract. For purposes of this Agreement, “Material Contract” means any contract of the Company that was filed as an exhibit to the Company Reports pursuant to Item 19 and the Instructions as to Exhibits of Form 20-F.
Section 4.15 Investment Company Act. Neither the Company nor any of its Subsidiaries is or, after giving effect to the Purchase and the application of the proceeds thereof, will become an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.
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Section 4.16 No Price Stabilization. Neither the Company, its Subsidiaries nor any of the Company’s or its Subsidiaries’ officers, directors or Affiliates has taken or will take, directly or indirectly, any action designed or intended to stabilize or manipulate the price of any security of the Company, or which caused or resulted in, or which would in the future reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company.
Section 4.17 Title to Property. The Company and its Subsidiaries have good and marketable title to all real and personal property owned by them which is material to the business of the Company and its Subsidiaries, taken as a whole, in each case free and clear of all liens, encumbrances and defects of title except such as are described in the Company Reports or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries; and any real property and buildings held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries, in each case except as described in the Company Reports.
Section 4.18 No Labor Disputes. Neither the Company nor any of the Subsidiaries is engaged in any unfair labor practice; except for matters which would not, individually or in the aggregate, have a Material Adverse Effect, (i) there is (A) no discrimination complaint or unfair labor practice complaint pending or, to the Knowledge of the Company or the Subsidiaries, threatened against the Company or any of the Subsidiaries before the National Labor Relations Board or any other governmental body, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements is pending or, to the Knowledge of the Company or the Subsidiaries, threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the Knowledge of the Company or the Subsidiaries, threatened against the Company or any of the Subsidiaries and (C) no union representation dispute currently existing concerning the employees of the Company or any of the Subsidiaries, (ii) to the Knowledge of the Company or the Subsidiaries, no union organizing activities are currently taking place concerning the employees of the Company or any of the Subsidiaries and (iii) there has been no violation of any federal, state, local or foreign law or collective bargaining agreement relating to discrimination in the hiring, promotion or pay of employees, any applicable wage or hour laws or retirement benefits, or any provision of the Employee Retirement Income Security Act of 1974, as amended, or the rules and regulations promulgated thereunder concerning the employees of the Company or any of the Subsidiaries.
Section 4.19 Taxes. The Company (i) has timely filed all necessary federal, state, local and foreign income and franchise tax returns (or timely filed applicable extensions therefore) that have been required to be filed and (ii) is not in default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect thereto, other than any which the Company is contesting in good faith and for which adequate reserves have been provided and reflected in the financial statements included in the Company Reports. The Company does not have any tax deficiency that has been or, to the Company’s Knowledge, is reasonably likely to be asserted or threatened against it.
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Section 4.20 Compliance with Environmental Laws. Except as disclosed in the Company Reports, neither the Company nor any of its Subsidiaries is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), or, to the Company’s Knowledge, operates any real property contaminated with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws or is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or claim would or would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.
Section 4.21 Intellectual Property Rights. The Company and its Subsidiaries own or possess, or have the right to use, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, “Intellectual Property Rights”) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any Intellectual Property Rights, except as disclosed in the Company’s Form 20-F for the year ended December 31, 2020 or such as would not and would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
Section 4.22 Foreign Corrupt Practices Act. Neither the Company nor any of its Subsidiaries, nor to the Company’s Knowledge, any director, officer, employee or other person associated with or acting on behalf of the Company or any of its Subsidiaries, has (i) used any Company funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from Company funds, (iii) caused the Company or any of its Subsidiaries to be in violation of any provision of the United States Foreign Corrupt Practices Act of 1977, as amended, or any similar laws, including without limitation French law no. 2016-1691 of December 9, 2016 relating to the prevention of corruption, (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment from Company funds.
Section 4.23 OFAC and Similar Laws. None of the Company, any of its Subsidiaries or, to the Company’s Knowledge, any director, officer, agent, employee, affiliate or representative of the Company or any of its Subsidiaries is an individual or entity (“Person”) currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any of its Subsidiaries located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the issuance of any Shares, or lend, contribute or otherwise make available such proceeds to any Subsidiaries, joint venture partners or other Person, to knowingly fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions or in any other
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manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
Section 4.24 Disclosure Controls and Procedures. Except as disclosed in the Company Reports, the Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are effective in all material respects to ensure that material information relating to the Company, including any consolidated Subsidiaries, is made known to its chief executive officer and chief financial officer by others within those entities. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the end of the period covered by the most recently filed annual report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed annual report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date and except as disclosed in the Company Reports, there have been no material changes in the Company’s internal controls (as such term is defined in the rules of the SEC under the Exchange Act) or, to the Company’s Knowledge, in other factors that could affect the Company’s internal controls.
Section 4.25 Accounting Controls. The Company and its Subsidiaries maintain a system of internal accounting and other controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Company Reports, since the end of the Company’s most recent audited fiscal year, there has been (A) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Section 4.26 Absence of Material Changes. Subsequent to the respective dates as of which information is given in the Company Reports, and except as may be otherwise disclosed in such Company Reports, there has not been (i) any Material Adverse Effect, (ii) any transaction which is material to the Company, (iii) any obligation, direct or contingent (including any off-balance sheet obligations), incurred by the Company, which is material to the Company, (iv) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company, (v) any change in the capital stock (other than a change in the number of outstanding Ordinary Shares or ADSs due to grants of stock under the Company’s stock incentive plans existing on the date hereof or the issuance of shares upon the exercise of outstanding options or warrants) or (vi) any issuance of options, warrants, convertible securities or other rights to purchase the capital stock (other than grants of stock options under the Company’s stock option plans existing on the date hereof) of the Company.
Section 4.27 Brokers Fees. Neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim
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against the Company for a brokerage commission, finder’s fee or like payment in connection with any transaction contemplated by this Agreement.
Section 4.28 Listing and Maintenance Requirements. The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act, as applicable. The ADSs are registered pursuant to Section 12(b) of the Exchange Act and are listed on the New York Stock Exchange, and the Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the ADSs under the Exchange Act or delisting the ADSs from the New York Stock Exchange, nor has the Company received any notification that either the SEC or the New York Stock Exchange is contemplating terminating such registration or listing.
Section 4.29 Sarbanes-Oxley Act. The Company is in compliance in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002 and all applicable rules and regulations promulgated thereunder or implementing provisions thereof that are then in effect.
Section 4.30 New York Stock Exchange Approval Rules. No further approval of the stockholders of the Company under the rules and regulations of the New York Stock Exchange is required for the Company to issue and deliver the Shares to Purchaser.
Section 4.31 No General Solicitation. Neither the Company nor any person acting on its or their behalf has engaged in any general solicitation or general advertising in connection with the offering or issuance of any Shares, including but not limited to the methods described in Rule 502(c) under the Securities Act.
ARTICLE V
OTHER AGREEMENTS
Section 5.1 Depositary. Upon issuance of the Shares, the Company will cause the Depositary to deliver the relevant number of ADSs to Purchaser against deposit of the Underlying Shares, pursuant to the Amended and Restated Deposit Agreement dated as of May 14, 2018 (the “Deposit Agreement”) among the Company, The Bank of New York Mellon, as depositary (the “Depositary”), and the owners and holders from time to time of the ADSs issued thereunder, and Purchaser shall cooperate with the Company and the Depositary in connection therewith.
Section 5.2 Supplemental Listing Application. Within two (2) Business Days following the Closing Date, the Company shall file with the New York Stock Exchange a supplemental listing application reflecting the transactions contemplated hereby.
Section 5.3 Listing of Shares; Certificates. The Company covenants that all Shares issued pursuant to Section 2.1(a) will be duly approved for listing subject to official notice of issuance on the New York Stock Exchange. The Company covenants that the certificates, if any, representing the ADRs to be issued to evidence any ADSs issued pursuant to Section 2.1(a) will comply with applicable law.
Section 5.4 Use of Proceeds. The proceeds of the Purchase shall be used by the Company for general corporate purposes.
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Section 5.5 Protective Rights. For three (3) years from the date of this Agreement, if the Company contemplates the issuance of shares (whether ordinary or preferred) or securities giving access to the share capital of the Company with cancellation of shareholders’ preferential subscription right (avec suppression du droit préférentiel de souscription des actionnaires) or reserved to the beneficiary(ies) of such issuance (including issuances made pursuant to Article L.225-147 of the French Commercial Code in the context of a contribution in kind) (a “Dilutive Action”), the Company shall (i) provide Purchaser with no less than seven (7) Business Days’ prior written notice in advance of the opening of the subscription period of such issuance and (ii) assuming valid delegations from the Company’s general meeting of shareholders are in force, it being agreed that the Company shall use its best efforts to ensure that such valid delegations are in force at all times, in order to allow Purchaser to maintain the same percentage in the share capital of the Company (on a non-diluted basis) immediately before and immediately after such Dilutive Action, the Company shall, at the option of Purchaser, upon notice to the Company no more than seven (7) Business Days following the consummation of any such Dilutive Action proceed with an issuance reserved to Purchaser, allowing Purchaser to subscribe for such number of shares or securities so as to allow Purchaser to maintain its percentage in the share capital as in effect prior to giving effect to the Dilutive Action, at the same price and/or conditions, as those offered to the beneficiary(ies) of the Dilutive Action.
ARTICLE VI
CONDITIONS TO CLOSING
Section 6.1 Purchaser’s Conditions Precedent. The obligation of Purchaser to complete the Purchase is subject to the satisfaction of each of the following conditions precedent:
(a) each of the representations and warranties of the Company contained in this Agreement shall be true and correct as of the Closing Date, with the same effect as though those representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty need only be true and correct as of such date;
(b) the Company shall have duly performed and complied in all material respects with all covenants and agreements contained in this Agreement that are required to be performed or complied with by it at or before the Closing;
(c) no court or other governmental or regulatory authorities, agencies, commissions or other entities, whether federal, state, local or foreign, shall have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the transactions contemplated by this Agreement, and there shall not be pending by or before any such entity any suit, action or proceeding in respect thereof;
(d) Orrick, Herrington & Sutcliffe LLP, U.S. counsel to the Company and Orrick, Herrington & Sutcliffe (Europe) LLP, French counsel to the Company, shall have furnished to Purchaser opinions in the form attached as Exhibits E-1 and E-2 to Purchaser and addressed to Purchaser;
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(e) the Chief Executive Officer and Chief Financial Officer of the Company shall have delivered to Purchaser a certificate, dated as of the Closing Date, certifying to their knowledge, after reasonable inquiry, as to the matters set forth in paragraphs (a) and (b) of this Section 6.1; and
(f) the Company shall have executed and delivered to Purchaser each of the other Transaction Documents.
Section 6.2 Company’s Conditions Precedent. The obligation of the Company to complete the issuance of the Shares to Purchaser contemplated by this Agreement is subject to the satisfaction of each of the following conditions precedent:
(a) each of the representations and warranties of Purchaser contained in this Agreement shall be true and correct as of the Closing Date, with the same effect as though those representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty need only be true and correct as of such date;
(b) Purchaser shall have duly performed and complied in all material respects with all covenants and agreements contained in this Agreement that are required to be performed or complied with by it at or before the Closing;
(c) no court or other governmental or regulatory authorities, agencies, commissions or other entities, whether federal, state, local or foreign, shall have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the transactions contemplated by this Agreement, and there shall not be pending by or before any such entity any suit, action or proceeding in respect thereof;
(d) Purchaser shall have delivered to the Company a certificate, dated as of the Closing Date, certifying to his or her knowledge, after reasonable inquiry, as to the matters set forth in paragraphs (a) and (b) of this Section 6.2; and
(e) Purchaser shall have executed and delivered to the Company each of the other Transaction Documents.
ARTICLE VII
CERTAIN COVENANTS
Section 7.1 Certain Actions. The Company and Purchaser shall reasonably cooperate with each other and use (and shall cause their respective Affiliates to use) reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on its part under this Agreement, applicable law and stock exchange listing standards to consummate the transactions contemplated by this Agreement as soon as practicable.
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Section 7.2 Legends. To the extent reasonably necessary under applicable law, any certificate, book-entry or ADR issued under this Agreement shall have endorsed, to the extent appropriate, upon its face the following words:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY JURISDICTION. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM REGISTRATION UNDER SUCH ACT, OR APPLICABLE STATE SECURITIES LAW, RELATING TO THE DISPOSITION OF SECURITIES, INCLUDING RULE 144.
Section 7.3 Legend Removal. Upon the request of Purchaser or any transferee or proposed transferee thereof, the Company shall instruct the Depositary to remove the legend contemplated by Section 7.2 (and shall revoke any related stop transfer or similar instructions to its registrar and transfer agent), if the Shares issued pursuant to Section 2.1(a) are covered by an effective registration statement under the Securities Act or if such person provides reasonable evidence and an opinion of counsel to the effect that a sale, transfer or assignment of such Shares may be made without registration under the Securities Act or that such Shares are eligible for resale pursuant to Rule 144 under the Securities Act.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. All expenses incurred by the Parties in connection with the negotiation, execution and delivery of this Agreement will be borne solely and entirely by the Party incurring such expenses.
Section 8.2 Confidentiality; Public Announcements.
(a) Purchaser shall hold in confidence, and shall not disclose to any Person, unless and to the extent disclosure is required by judicial or administrative process or by other requirement of Law or the applicable requirements of any regulatory agency or relevant stock exchange, all non-public records, books, contracts, instruments, computer data and other data and information which is reasonably understood by Purchaser to be confidential (collectively, “Confidential Information”) concerning the Company and its Subsidiaries furnished to it by Company or its representatives pursuant to this Agreement (except (a) to the extent such Confidential Information was (i) previously known by Purchaser or any Affiliates on a non-confidential basis, (ii) in the public domain through no breach of Purchaser of any of the confidentiality obligations to the Company, (iii) later acquired by Purchaser or any Affiliate from other sources not known by Purchaser or such Affiliate to be subject to a duty of confidentiality with respect to such Confidential Information, and (b) Confidential Information may be disclosed by Purchaser to any Affiliates or Purchaser’s or any Affiliate’s respective representatives in
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connection with the management of the investment of Purchaser and any Affiliates in the Company; provided that Purchaser informs any such Person that such information is confidential. If disclosure is required by judicial or administrative process or by any other requirement of law, Purchaser shall provide the Company with prompt written notice to the extent permissible by law, together with a copy of any material proposed to be disclosed, so that the Company may (a) seek, at the Company’s expense, an appropriate protective order or other appropriate relief (and Purchaser and the Affiliate shall reasonably cooperate with the Company, at the Company’s expense, to obtain such order or relief), or (b) if the Company so elects, waive compliance with the provisions of this Section 8.2(a).
(b) No later than three (3) days after the Closing Date, at 9:00 a.m. (New York Time), to the extent not already publicly disclosed, the Company shall issue a publicly available press release or file with the SEC a Report on Form 6-K disclosing (i) the material terms of the transactions contemplated by the Transaction Documents and (ii) any other information (or an appropriate summary that, at a minimum, includes the material portions thereof), in each case that constitutes material non-public information under applicable United States federal and state securities laws that was provided by the Company or any of its representatives to Purchaser or its Affiliates.
(c) The Company will consult with Purchaser before issuing any press release or making any public statement or filing with respect to the Transaction Documents and the transactions contemplated hereby and will provide Purchaser and its counsel with a draft of any press release or other public statement or filing at least one (1) day prior to such disclosure, except where advance notice is not permitted by applicable Law. The Company will in good faith consider comments to or other modifications of such disclosure. Notwithstanding anything herein to the contrary, the Company shall not use Purchaser’s name without Purchaser’s prior written approval, except as required by applicable law; provided, that if the Company has received the requisite approval for any disclosures as required hereunder, the Company or its Affiliates shall be entitled to make disclosures substantially similar (as to form and content) to those prior disclosures that have been so approved.
Section 8.3 Notices. Except as may otherwise be provided herein, all notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be conclusively deemed to have been duly given when sent by electronic mail to the address set forth below if sent between 8:00 am and 5:00 pm recipient’s local time on a Business Day, or on the next Business Day if sent by electronic mail other than between 8:00 am and 5:00 pm recipient’s local time.
If to the Company:
Sequans Communications S.A.
15-55 boulevard Charles de Gaulle
Les Portes de la Défense
92700 Colombes
Republic of France
Email:
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Attention: Chief Financial Officer
With a copy (which shall not constitute notice) to:
Orrick, Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105
Email:
Attention:
If to Purchaser:
Renesas Electronics Corporation
Toyosu Foresia
3-2-24, Toyosu, Koto-ku
Tokyo 135-0061, Japan
Email:
Attention:
With a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
Shin-Marunouchi Building 5-1
Marunouchi 1-chome
Chiyoda-ku, Tokyo, Japan 100-6529
Email:
Attention:
Section 8.4 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement or any other Transaction Document are not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that such transactions be consummated as originally contemplated to the fullest extent possible.
Section 8.5 Entire Agreement. The Transaction Documents (including the schedules and exhibits hereto and thereto) constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to the subject matter hereof. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.
Section 8.6 Assignment; No Third Party Beneficiaries. Except for the Shares, which (subject to applicable securities laws) shall at all times be freely transferable, and except as otherwise expressly provided herein, neither this Agreement nor any of the rights, interests or
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obligations hereunder shall be assigned by any Party, in whole or in part (whether pursuant to a merger, by operation of law or otherwise), without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed). Subject to the immediately preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 8.7 Construction. References in the singular shall include the plural, and vice versa, unless the context otherwise requires. References in the masculine shall include the feminine and neuter, and vice versa, unless the context otherwise requires. Headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meanings of the provisions hereof. Neither Party, nor its respective counsel, shall be deemed the drafter of this Agreement for purposes of construing the provisions of this Agreement, and all language in all parts of this Agreement shall be construed in accordance with its fair meaning, and not strictly for or against either party.
Section 8.8 Governing Law; Jurisdiction. This Agreement shall in all respects be construed in accordance with, and governed by, the substantive laws of the State of New York, without reference to its choice of law rules. Any dispute arising out of or in connection with this Agreement shall be submitted to the exclusive jurisdiction of the state and federal courts within the Southern District of New York.
Section 8.9 Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or other means of electronic transmission, such as by electronic mail in “pdf” form or any electronic signature complying with the U.S. federal ESIGN Act of 200, e.g., www.docusign.com) in counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
Section 8.10 Certain Definitional Provisions. Unless the express context otherwise requires, the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; any references herein to a specific Section, Schedule or Annex shall refer, respectively, to Sections, Schedules or Annexes of this Agreement; wherever the word “include”, “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; and references herein to any gender includes each other gender.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed as of the date first above written.
| THE COMPANY | |||||
| SEQUANS COMMUNICATIONS S.A. | |||||
| By: | /s/ Georges Karam | ||||
| Name: Georges Karam | |||||
| Title: Chief Executive Officer | |||||
| PURCHASER | |||||
| RENESAS ELECTRONICS CORPORATION | |||||
| By: | /s/ Sailesh Chittipeddi | ||||
| Name: Sailesh Chittipeddi | |||||
| Title: Executive Vice President | |||||
[Signature page to Securities Purchase Agreement]
Exhibit 4.6
REGISTRATION RIGHTS AGREEMENT
between
SEQUANS COMMUNICATIONS S.A.
and
RENESAS ELECTRONICS CORPORATION
Dated January 11, 2022
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of January 11, 2022 (this “Agreement”), is made between Sequans Communications S.A., a société anonyme incorporated in the French Republic (the “Company”), and Renesas Electronics Corporation , a Japanese corporation (the “Investor”). The Investor and the Company are referred to hereinafter each as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, pursuant to a Securities Purchase Agreement dated as of December 22, 2021 between the Company and the Investor (the “Purchase Agreement”), the Investor subscribed from the Company 7,899,020 Ordinary Shares represented by 1,974,755 ADSs (the “Shares”);
WHEREAS, on the date hereof, the Company and the Investor have entered into a right of first notification agreement, (the “Right of First Notification Agreement”), which provides certain rights to the Investor relating to the Company;
WHEREAS, the Parties are entering into this Agreement to set forth certain rights of the Investor relating to the registration of the Shares;
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
REGISTRATION RIGHTS
Section 1.1 Resale Shelf Registration.
(a) Within ninety (90) days following a written request by Investor (the “Investor Request”), the Company shall (i) file with the SEC a Shelf Registration Statement on Form F-3 (such Shelf Registration Statement shall be an ASRS to the extent that the Company is then ASR Eligible and, if the Company is not then eligible to register the resale of the Registrable Securities on Form S-3, such registration shall be on another appropriate form) or (ii) prepare an amendment to an existing and effective Registration Statement (the “Transaction Shelf Registration Statement”), in each case, with respect to the registration under the Securities Act of the resale of all of the Registrable Securities, in each case, which shall include a prospectus sufficient to permit the resale of all Registrable Securities held by the Investor; provided that, in the event the SEC does not permit such number of Registrable Securities to be registered under the Transaction Shelf Registration Statement, the number of Registrable Securities that shall be registered under the Transaction Shelf Registration Statement shall be the maximum number of Registrable Securities permitted by the SEC. The Company shall use its commercially reasonable efforts to cause such Transaction Shelf Registration Statement to become effective as promptly as practicable (but in no event later than ninety (90) days following receipt of the Investor Request) and to keep the Transaction Shelf Registration Statement
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continuously effective subject to the Securities Act and the provisions of Section 1.3. The Company hereby represents that, as of the date hereof, it is eligible to use Form F-3 for primary offerings under General Instruction I.B(1) of Form F-3.
(b) Notwithstanding anything to the contrary herein, unless the Company has previously caused the Ordinary Shares to be listed on a national securities exchange or trading system (it being acknowledged that the Company shall have no obligation to so list the Ordinary Shares) and a market exists for the Ordinary Shares not held in the form of ADSs, in any registration pursuant to this Section 1.1, any Registrable Securities sold pursuant thereto shall be in the form of ADSs.
Section 1.2 Expenses. Except as specifically provided herein, all Registration Expenses incurred in connection with the registration or offering and sale of the Registrable Securities shall be borne by the Company and all Selling Expenses shall be borne by the Investor; provided that, notwithstanding anything herein to the contrary, in no event shall the Investor bear or be responsible for any fees or expenses of the Company’s legal counsel in connection with the registration or offering and sale of Registrable Securities.
Section 1.3 Suspensions.
(a) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, by providing written notice (a “Notice of Suspension”) to the Investor, to delay the filing or effectiveness of a Registration Statement or require the Investor to suspend the use of the Prospectus for sales of Registrable Securities under an effective Registration Statement for a reasonable period of time not to exceed sixty (60) consecutive days or ninety (90) days in the aggregate in any twelve (12)-month period (a “Suspension Period”) if the Board determines in good faith that such filing, effectiveness or use would (i) require the public disclosure of material non-public information concerning any material transaction or negotiations involving the Company that would interfere with such material transaction or negotiations or (ii) otherwise materially interfere with material financing plans, acquisition activities or business activities of the Company; provided, that if at the time of receipt of such notice by the Investor, the Investor shall have sold all or a portion of the Registrable Securities pursuant to an effective Registration Statement and the reason for the Suspension Period is not of a nature that would require a post-effective amendment to the Registration Statement, then the Company shall use its commercially reasonable efforts to take such action as to eliminate any restriction imposed by federal securities Laws by the time such Registrable Securities are scheduled to be delivered. Immediately upon receipt of a Notice of Suspension, the Investor shall discontinue the disposition of Registrable Securities under an effective Registration Statement and Prospectus relating thereto until the Suspension Period is terminated.
(b) The Company agrees that it will terminate any Suspension Period as promptly as reasonably practicable and will promptly notify in writing the Investor, to the extent it still holds Registrable Securities, of such termination. After the expiration of any Suspension Period in the case of an effective Registration Statement, and without the need for any further request from the Investor, the Company shall, as applicable and as promptly as reasonably practicable, prepare a post-effective amendment or supplement to such Registration Statement,
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the relevant Prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Registration Statement or the Prospectus, as applicable, will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Section 1.4 Registration Procedures. The Company will use its commercially reasonable efforts to effect the registration and the offer and sale of Registrable Securities in accordance with the intended method of disposition thereof as soon as reasonably practicable, and shall, in connection therewith:
(a) prepare and promptly file with the SEC a Registration Statement (or a prospectus supplement, as applicable) with respect to such securities and use its commercially reasonable efforts to cause such Registration Statement to become effective as soon as practicable thereafter;
(b) (i) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith and such Free Writing Prospectuses and Exchange Act reports as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement, (ii) cause any Prospectus or supplement thereto to be filed pursuant to Rule 424 under the Securities Act when so required and (iii) provide reasonable notice to the Investor to the extent that the Company determines that a post-effective amendment to a Registration Statement would be appropriate;
(c) (i) furnish to the Investor as far in advance as reasonably practicable before filing any Registration Statement contemplated by this Agreement or any Prospectus to be used in connection therewith or any supplement or amendment thereto, only upon request of the Investor, copies (or such requested portions of copies) of reasonably complete drafts of all such documents proposed to be filed (including furnishing or making available exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the SEC), and provide the Investor the opportunity to object to any information pertaining to the Investor and its plan of distribution that is contained therein and make the corrections reasonably requested by the Investor with respect to such information prior to filing a Registration Statement or any Prospectus to be used in connection therewith or supplement or amendment thereto, and (ii) furnish to the Investor, without charge, such number of copies of the Registration Statement, each amendment and supplement thereto, the Prospectus included therein (including each preliminary prospectus) and any other prospectuses filed under Rule 424 and each Free Writing Prospectus as such Persons reasonably may request in order to facilitate the sale of the Registrable Securities covered by such Registration Statement;
(d) use its commercially reasonable efforts to register or qualify the Registrable Securities covered by such Registration Statement under the securities or “blue sky” Laws of such jurisdictions as the Investor reasonably shall request and do any and all other acts and things which may be reasonably necessary or advisable to enable the Investor to
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consummate the disposition in such jurisdictions; provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction;
(e) promptly notify the Investor: (i) when the Registration Statement, any pre-effective amendment, the Prospectus or any prospectus supplement related thereto, any post-effective amendment to the Registration Statement or any Free Writing Prospectus has been filed with the SEC and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or state securities authority for amendments or supplements to the Registration Statement or the Prospectus related thereto or for additional information, including copies of any and all transmittal letters and other correspondence with the SEC and all correspondence (including comment letters and a copy of the Company’s draft responses thereto), from the SEC to the Company relating to such Registration Statement or any Prospectus or any amendment or supplement thereto (but not, for the avoidance of doubt, any documents incorporated by reference therein); (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; or (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or state “blue sky” Laws of any jurisdiction or the initiation of any proceeding for such purpose.
(f) if at any time (i) any event or development shall occur or condition shall exist as a result of which the Disclosure Package, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (ii) it is necessary to amend or supplement the Disclosure Package to comply with Law, the Company will promptly notify the Investor and promptly prepare and file with the SEC (to the extent required) and furnish to the Investor such amendments or supplements to the Disclosure Package as may be necessary so that the statements in the Disclosure Package, as so amended or supplemented, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, be misleading, or so that the Disclosure Package will comply with Law;
(g) use its commercially reasonable efforts to make generally available to the Investor, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of a Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158;
(h) use its commercially reasonable efforts to list the Registrable Securities covered by such Registration Statement on the New York Stock Exchange (the “NYSE”) or, if not the NYSE, the primary trading market or any other national securities exchange on which the Ordinary Shares or Ordinary Shares represented by ADSs are listed;
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(i) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement;
(j) immediately notify the Investor, at any time when a Prospectus is required to be delivered under the Securities Act, of the occurrence or happening of any event as a result of which the Prospectus contained in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and at the request of the Investor, as promptly as reasonably practicable prepare and furnish to the Investor a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;
(k) use its commercially reasonable efforts to cooperate with the Investor in the disposition of the Registrable Securities covered by such Registration Statement;
(l) in connection with the preparation and filing of each Registration Statement registering Registrable Securities under the Securities Act, and before filing any such Registration Statement or any other document in connection therewith, give reasonable consideration to the inclusion in such documents of any comments reasonably and timely made by the Investor or its legal counsel;
(m) use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to use its commercially reasonable efforts to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose;
(n) otherwise use its commercially reasonable efforts to comply with the Securities Act, the Exchange Act and any other applicable rules and regulations of the SEC and reasonably cooperate with the Investor in the disposition of its Registrable Securities in accordance with the method of distribution described in the Prospectus included in any Registration Statement, such cooperation to include the endorsement and transfer of any certificates representing Registrable Securities (or a book-entry transfer to similar effect) transferred in accordance with this Agreement and delivery of any necessary instructions or opinions to the Company’s transfer agent in order to cause the transfer agent to allow Registrable Securities to be sold from time to time as permitted by Law;
(o) use its commercially reasonable efforts to cooperate with the Investor and its counsel in connection with the preparation and filing of any applications, notices, registrations and responses to requests for additional information with FINRA, the NYSE or any other national securities exchange on which the Registrable Securities are listed; and
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(p) pay the applicable filing fees covering the Registrable Securities in compliance with the SEC rules and to file such amendments or subsequent registration statements as may be required to maintain an effective registration statement for the relevant Effectiveness Period.
Section 1.5 Effectiveness Period. For purposes of this Article I, the period of distribution of Registrable Securities pursuant to a Registration Statement shall be deemed to extend until the sale of all Registrable Securities covered thereby (such period, the “Effectiveness Period”).
Section 1.6 Indemnification.
(a) Indemnification Rights.
(i) In the event of any registration or other offer and sale of any securities of the Company under the Securities Act pursuant to this Article I, the Company shall indemnify and hold harmless the Investor and each Person, if any, that controls the Investor within the meaning of Section 15 of the Securities Act (each a “controlling person”), their respective officers, directors, employees, stockholders, members, Representatives and Affiliates, and each controlling person of each Affiliate of any of the foregoing Persons (each, a “Investor Registration Rights Indemnitee”), to the fullest extent lawful, from and against any and all Damages caused by (A) any untrue statement of material fact (or alleged untrue statement of a material fact) contained in any Disclosure Package, any Registration Statement, any Prospectus (including any preliminary Prospectus), any Free Writing Prospectus, or in any amendment or supplement thereto, (B) any omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (C) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any foreign or state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any foreign or state securities laws; provided that the Company shall not be liable to an Investor Registration Rights Indemnitee to the extent that any such Damages are directly caused by any untrue statement or omission (or alleged untrue statement or omission) made in such Disclosure Package, Registration Statement, Prospectus (including any preliminary Prospectus), Free Writing Prospectus, or any amendment or supplement thereto, in strict reliance upon and strictly in conformity with written information about the Investor furnished to the Company by or on behalf of the Investor expressly for use therein. This indemnity shall be in addition to any liability which the Company may otherwise have. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of any Investor Registration Rights Indemnitee and shall survive the Transfer of securities by the Investor.
(ii) The Investor shall indemnify and hold harmless the Company and each of its officers who execute any of the Company’s filings with the SEC pursuant to the Exchange Act or the Securities Act, its directors, officers and employees (each, a
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“Company Registration Rights Indemnitee”), to the fullest extent lawful, from and against any and all Damages directly caused by (A) any untrue statement of material fact (or alleged untrue statement of a material fact) contained in any Disclosure Package, any Registration Statement, any Prospectus (including any preliminary Prospectus), any Free Writing Prospectus or in any amendment or supplement thereto, (B) any omission (or alleged omission) to state therein any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case, to the extent that such untrue statement or omission was made in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor expressly for use therein or (C) any violation or alleged violation by the Investor of the Securities Act, the Exchange Act, any foreign or state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any foreign or state securities laws; provided, however, that in no event shall the obligations of the Investor hereunder exceed the net proceeds received by it from the sale of its Registrable Securities related to the matter in which Damages are sought. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of a Company Registration Rights Indemnitee and shall survive the Transfer of such securities by the Investor. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of a Company Registration Rights Indemnitee and shall survive the Transfer of such securities by the Investor.
(iii) If the indemnification provided for in Section 1.6(a)(i) or Section 1.6(a)(ii) is unavailable to an Investor Registration Rights Indemnitee or a Company Registration Rights Indemnitee, as applicable, with respect to any Damages referred to therein or is unenforceable or insufficient to hold an Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, harmless as contemplated therein, then the Company or the Investor, as applicable, in lieu of indemnifying such Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, shall contribute to the amount paid or payable by such Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, as a result of such Damages in such proportion as is appropriate to reflect the relative fault of such Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, on the one hand, and the Company or the Investor, as applicable, on the other hand, in connection with the statements or omissions which resulted in such Damages as well as any other relevant equitable considerations. The relative fault of the Company or the Investor, as applicable, on the one hand, and of an Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee, as applicable, on the other hand, shall be determined by reference to, among other factors, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by or on behalf of the Company or the Investor, as applicable, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; the Company and the Investor agree that it would not be just and equitable if contribution
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pursuant to this Section 1.6(a)(iii) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 1.6(a)(iii). No Investor Registration Rights Indemnitee or Company Registration Rights Indemnitee guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from the Company or the Investor, as applicable, if the Company or the Investor, as applicable, was not guilty of such fraudulent misrepresentation. Notwithstanding anything herein to the contrary, in no event shall the liability of the Investor pursuant to this Section 1.6(a)(iii) be greater in amount than the amount of net proceeds received by it from the sale of such Registrable Securities related to the matter in which indemnification or contribution for Damages are sought.
(b) Notice of Reg Rights Claim.
(i) As used in this Agreement, the term “Reg Rights Claim” means a claim for indemnification or contribution by or on behalf of any Company Registration Rights Indemnitee or Investor Registration Rights Indemnitee, as the case may be, for Damages under Section 1.6(a) (such Person making a Reg Rights Claim, a “Reg Rights Indemnified Person”). The Company (for its own Damages or for the Damages incurred by any other Company Registration Rights Indemnitee) or the Investor (for its own Damages or for the Damages incurred by any other Investor Registration Rights Indemnitee), as applicable, shall give notice of a Reg Rights Claim under this Agreement pursuant to a written notice of such Reg Rights Claim executed by the Company or the Investor, as applicable (a “Notice of Reg Rights Claim”), and delivered to the Company or the Investor, as applicable (such receiving party, the “Reg Rights Indemnifying Person”), promptly after such Reg Rights Indemnified Person becomes aware of the existence of any potential claim by such Reg Rights Indemnified Person for indemnification arising out of or resulting from any item indemnified pursuant to the terms of Section 1.6(a)(i) or Section 1.6(a)(ii) as applicable; provided that the failure to timely give such notice shall not limit or reduce the Reg Rights Indemnified Person’s right to indemnification hereunder unless (and then only to the extent that) the Reg Rights Indemnifying Person’s defense of such Reg Rights Claim is actually materially and adversely prejudiced thereby.
(ii) Each Notice of Reg Rights Claim shall: (A) state the aggregate amount (where practicable) that the Reg Rights Indemnified Person has incurred or paid in Damages arising from such Reg Rights Claim (which amount may include the amount of Damages claimed by a third party in an action (a “Third-Party Reg Rights Claim”) brought against such Reg Rights Indemnified Person based on alleged facts, which if true, would give rise to liability for Damages to such Reg Rights Indemnified Person); and (B) contain a brief description, in reasonable detail (to the extent reasonably available to the Reg Rights Indemnified Person) of the facts, circumstances or events giving rise to the alleged Damages based on the Reg Rights Indemnified Person’s good faith belief and knowledge thereof, including the identity and address of any third party claimant (to the extent reasonably available to the Reg Rights Indemnified Person).
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(c) Defense of Third-Party Reg Rights Claims.
(i) Subject to the provisions hereof, the applicable Reg Rights Indemnifying Person shall have the right (at its own expense) to elect to defend and assume control of the defense of any Third-Party Reg Rights Claim on behalf of a Reg Rights Indemnified Person, utilizing legal counsel reasonably acceptable to such Reg Rights Indemnified Person. In the event such election is made, the Reg Rights Indemnified Person (unless itself controlling the Third-Party Reg Rights Claim in accordance with this Section 1.6(c)) may participate, through counsel of its own choice and, except as provided herein, at its own expense, in the defense of any Third-Party Reg Rights Claim. The reasonable and documented costs and expenses incurred by the Reg Rights Indemnifying Person in connection with such defense (including reasonable attorneys’ fees, other professionals’ and experts’ fees and court or arbitration costs) shall be paid by the Reg Rights Indemnifying Person.
(ii) A Reg Rights Indemnifying Person shall not be entitled to assume control of such defense, and the applicable Reg Rights Indemnified Person may assume the control and defense thereof, at the sole expense of the applicable Reg Rights Indemnifying Person, if (A) the Reg Rights Claim relates to, or arises in connection with, any criminal or governmental proceeding, action, indictment, allegation or investigation, (B) the Reg Rights Claim seeks an injunction against the Reg Rights Indemnified Person, to the extent that such defense relates to the claim for such injunction, (C) a conflict of interest between the Reg Rights Indemnifying Person and the Reg Rights Indemnified Person exists with respect to the Reg Rights Claim or the Reg Rights Indemnifying Person and the Reg Rights Indemnified Person have one or more conflicting defenses, in the reasonable view of their respective counsel, or (D) the Reg Rights Indemnifying Person has elected to have the Reg Rights Indemnified Person defend, or assume the control and defense of, a Third-Party Reg Rights Claim in accordance with this Section 1.6(c); provided that in no event shall the Reg Rights Indemnifying Person be liable for the fees and expenses of more than one separate counsel for all Reg Rights Indemnified Persons, which counsel shall be selected by the Investor (in the case of the Investor Registration Rights Indemnitees) or by the Company (in the case of the Company Registration Rights Indemnitees).
(iii) Any party controlling the defense of any Third-Party Reg Rights Claim pursuant hereto shall: (A) conduct the defense of such Third-Party Reg Rights Claim with reasonable diligence and keep the other parties reasonably informed of material developments in the Third-Party Reg Rights Claim at all stages thereof, (B) as promptly as reasonably practicable, submit to the other parties copies of all pleadings, responsive pleadings, motions and other similar legal documents and papers received or filed in connection therewith, (C) permit the other parties and their counsel to confer on the conduct of the defense thereof, and (D) permit the other parties and their counsel an opportunity to review all legal papers to be submitted prior to their submission. The parties not controlling the defense will render to the party controlling the defense such assistance as may be reasonably required in order to insure the proper and adequate
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defense thereof and shall furnish such records, information and testimony and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested by the party controlling the defense in connection therewith. The Reg Rights Indemnifying Person shall reimburse the parties not controlling the defense for any reasonable and documented costs and expenses incurred in connection with providing such assistance. Notwithstanding anything to the contrary in this Agreement, no Party shall be required to disclose any information to the other Party or its Representatives, if doing so would be reasonably expected to violate any Law to which such Party is subject or could jeopardize (in the reasonable discretion of the disclosing Party) any attorney-client privilege available with respect to such information.
(iv) If the Reg Rights Indemnifying Person controls the defense of and defends any Third-Party Reg Rights Claim under this Section 1.6(c), the Reg Rights Indemnifying Person shall have the right to effect a settlement of such Third-Party Reg Rights Claim on the Reg Rights Indemnified Person’s behalf and without the consent of the Reg Rights Indemnified Person; provided that (A) such settlement shall not involve any injunctive relief binding upon the Reg Rights Indemnified Person or any of its Affiliates, (B) such settlement expressly and unconditionally releases the Reg Rights Indemnified Person and the other applicable Reg Rights Indemnified Persons (that is, each of the Company Registration Rights Indemnitees, if the Reg Rights Indemnified Person is a Company Registration Rights Indemnitee, and each of the Investor Registration Rights Indemnitees, if the Reg Rights Indemnified Person is an Investor Registration Rights Indemnitee) from any and all liabilities with respect to such Third-Party Reg Rights Claim, with prejudice and (C) the Reg Rights Indemnifying Person unconditionally acknowledges in writing to the Reg Rights Indemnified Person its obligation to pay all Damages of the Reg Rights Indemnified Person with respect to such Third-Party Reg Rights Claim. If the Reg Rights Indemnified Person controls the defense of and defends any Third-Party Reg Rights Claim under this Section 1.6(c), the Reg Rights Indemnified Person shall have the right to effect a settlement of such Third-Party Reg Rights Claim only with the consent of the Reg Rights Indemnifying Person (which consent shall not be unreasonably withheld, conditioned or delayed). No settlement by the Reg Rights Indemnified Person of such Third-Party Reg Rights Claim effected in accordance with this Section 1.6(c) shall limit or reduce the right of any Reg Rights Indemnified Person to indemnity hereunder for all Damages they may incur arising out of or resulting from the Third-Party Reg Rights Claim, to the extent such Damages are indemnifiable hereunder. As used in this Section 1.6(c)(iv), the term “settlement” refers to any consensual resolution of the claim in question, including by consent decree or by permitting any judgment or other resolution of a claim to occur without disputing the same, and the term “settle” has a corresponding meaning.
Section 1.7 Free Writing Prospectuses. Except for a Prospectus relating to Registrable Securities included in a Registration Statement, an “issuer free writing prospectus” (as defined in Rule 433 under the Securities Act) prepared by the Company or other materials prepared by Company, the Investor represents and agrees that it (a) will not make any offer relating to the Registrable Securities that would constitute an issuer free writing prospectus
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or that would otherwise constitute a Free Writing Prospectus, and (b) will not distribute any written materials in connection with the offer or sale pursuant to a Registration Statement of Registrable Securities, in each case, without the prior written consent of the Company.
Section 1.8 Information from and Obligations of the Investor. The Company’s obligation to include the Investor’s Registrable Securities in any Registration Statement or Prospectus is contingent upon the Investor:
(a) furnishing to the Company in writing information with respect to its ownership of Registrable Securities and the intended method of disposition of its Registrable Securities as may be required by the Company and as required by Law for use in connection with a Registration Statement or Prospectus (or any amendment or supplement thereto) and all information required to be disclosed in order to make the information the Investor previously furnished to the Company not contain a material misstatement of fact or necessary to cause such Registration Statement or Prospectus (or amendment or supplement thereto) not to omit a material fact with respect to the Investor necessary in order to make the statements therein not misleading;
(b) complying in all material respects with (i) the Securities Act and the Exchange Act, (ii) all applicable state securities Laws, (iii) the rules of any securities exchange or trading market on which the Ordinary Shares or Ordinary Shares represented by ADSs are listed or traded, and (iv) all other applicable regulations, in each case, in connection with, and only to the extent applicable to, the registration and the disposition of Registrable Securities by the Investor;
(c) following its actual knowledge thereof, notifying the Company of the occurrence of any event that makes any statement made in a Registration Statement, Prospectus, issuer free writing prospectus or other Free Writing Prospectus regarding the Investor untrue in any material respect or that requires the making of any changes in a Registration Statement, Prospectus, issuer free writing prospectus or other Free Writing Prospectus so that, in such regard, it will not contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements not misleading;
(d) providing the Company with such information related to the Investor as may be required to enable the Company to prepare a supplement or post-effective amendment to any such Registration Statement or a supplement to such Prospectus or Free Writing Prospectus;
(e) using commercially reasonable efforts to cooperate with the Company in preparing the applicable Registration Statement and any related Prospectus; and
(f) furnishing the Company with all information required to be included in such Registration Statement or Prospectus by applicable securities Laws in connection with the disposition of such Registrable Securities as the Company reasonably requests.
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Section 1.9 Rule 144 Reporting.
(a) With a view to making available to the Investor the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to make and keep available adequate current public information, as defined in Rule 144(c), including all periodic and annual reports and other documents (other than Form 6-K reports) required of the Company under Sections 13 or 15(d) of the Exchange Act, and so long as the Investor beneficially owns any Registrable Securities or securities convertible into or exercisable for Registrable Securities, furnish to the Investor forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Exchange Act; a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as the Investor may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any Registrable Securities without registration.
(b) For the avoidance of doubt, the Investor may sell any Registrable Securities in compliance with Rule 144, regardless of whether a Registration Statement has been filed with the SEC or is effective. The Company agrees to (i) make and keep public information available as those terms are understood and defined in Rule 144, (ii) use its commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act, and (iii) so long as the Investor owns any Registrable Securities, furnish to the Investor upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Securities Act and the Exchange Act.
Section 1.10 Termination of Registration Rights. Notwithstanding anything to the contrary contained herein and subject to Section 1.11 and Section 4.1, the registration rights granted under this Article I terminate and are of no further force and effect (other than Section 1.2 and Section 1.6), on the date on which there cease to be any Registrable Securities.
Section 1.11 Transfer of Registration Rights. The Investor shall have the right to Transfer to any Person (such Person, a “Transferee Investor”), directly or indirectly, by written agreement, all of its related rights and obligations granted under this Article I in connection with a Transfer of all of its Registrable Securities to such Person. Such Transferee Investor shall, following such Transfer, become responsible for all obligations applicable to the Investor under this Article I with respect to the Registrable Securities Transferred to such Transferee Investor.
ARTICLE II
TERMINATION
Section 2.1 Termination. This Agreement shall terminate upon the earlier of (i) the time when there are no Registrable Securities outstanding, (ii) the time when all of the Registrable Securities are freely transferable under Rule 144 and do not bear a restrictive legend relating to the Securities Act or the securities laws of any other applicable jurisdiction or a restricted CUSIP (ii) the mutual written agreement of the Investor and the Company.
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Section 2.2 Effect of Termination; Survival. In the event of any termination of this Agreement pursuant to Section 2.1, this Agreement shall be terminated, and there shall be no further liability or obligation hereunder on the part of any Party, other than this Section 2.2 and Article III, which provisions shall survive such termination; provided, however, that nothing contained in this Agreement (including this Section 2.2) shall relieve a Party from liability for any breach of any of its representations, warranties, covenants or agreements set forth in this Agreement to the extent occurring prior to such termination.
ARTICLE III
GENERAL PROVISIONS
Section 3.1 Confidential Information. The Investor shall hold in confidence, and shall not disclose to any Person, unless and to the extent disclosure is required by judicial or administrative process or by other requirement of Law or the applicable requirements of any regulatory agency or relevant stock exchange, all non-public records, books, Contracts, instruments, computer data and other data and information (collectively, “Confidential Information”) concerning the Company and its Subsidiaries furnished to it by Company or its Representatives pursuant to this Agreement (except (a) to the extent such Confidential Information can be shown to have been (i) previously known by the Investor or any Affiliates on a non-confidential basis, (ii) in the public domain through no breach of the Investor of any of the confidentiality obligations to the Company, (iii) later acquired by the Investor or any Affiliate from other sources not known by the Investor or such Affiliate to be subject to a duty of confidentiality with respect to such Confidential Information, and (b) Confidential Information may be disclosed by the Investor to any Affiliates or the Investor’s or any Affiliate’s respective Representatives in connection with (i) the management of the investment of the Investor and any Affiliates in the Company or (ii) any offerings under Article I; provided that the Investor informs any such Person that such information is confidential. If disclosure is required by judicial or administrative process or by any other requirement of Law, the Investor shall provide the Company with prompt written notice to the extent permissible by Law, together with a copy of any material proposed to be disclosed, so that the Company may (a) seek, at the Company’s expense, an appropriate protective order or other appropriate relief (and the Investor and the Affiliate shall reasonably cooperate with the Company, at the Company’s expense, to obtain such order or relief), or (b) if the Company so elects, waive compliance with the provisions of this Section 3.1.
Section 3.2 Fees and Expenses. All expenses incurred by the Parties in connection with the negotiation, execution and delivery of this Agreement will be borne solely and entirely by the Party incurring such expenses.
Section 3.3 Notices. Except as may otherwise be provided herein, all notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be conclusively deemed to have been duly given when sent by electronic mail to the address set forth below if sent between 8:00 am and 5:00 pm recipient’s local time on a Business Day, or on the next Business Day if sent by electronic mail other than between 8:00 am and 5:00 pm recipient’s local time.
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If to the Company, addressed to it at:
Sequans Communications S.A.
15-55 boulevard Charles de Gaulle
Les Portes de la Défense
92700 Colombes
Republic of France
Email:
Attention:
With a copy (which shall not constitute notice) to:
Orrick, Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105
Email:
Attention:
If to the Investor, addressed to it at:
Renesas Electronics Corporation
Toyosu Foresia
3-2-24, Toyosu, Koto-ku
Tokyo 135-0061, Japan
Attention:
Email: l
With a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
Shin-Marunouchi Building 5-1
Marunouchi 1-chome
Chiyoda-ku, Tokyo, Japan 100-6529
Attention:
Email:
Section 3.4 Definitions. For purposes of this Agreement, the following terms have the meanings indicated:
“Action” means any litigation, suit, claim, action, proceeding, arbitration, mediation, hearing, inquiry or investigation (in each case, whether civil, criminal or investigative).
“Affiliate” of a specified Person means any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise; provided that no portfolio company of the Investor shall be deemed to be an “Affiliate” of the Investor.
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“American Depositary Shares” or “ADSs” means those certain American Depositary Shares issued pursuant to a deposit agreement by and among the Company, Bank of New York Mellon (or any successor thereto), as depositary, and the owners and holders of American Depositary Shares, as such agreement may from time to time be amended.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“ASR Eligible” means the Company meets or is deemed to meet the eligibility requirements to file an ASRS as set forth in the General Instruction to Form F-3.
“ASRS” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the Securities Act.
“Board” or “Board of Directors” means the board of directors of the Company, or any duly authorized committee thereof.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States, a legal holiday in the Republic of France or any day on which banking institutions in the State of California or in the Republic of France are authorized or required by law or other governmental action to close.
“Company” has the meaning set forth in the preamble to this Agreement.
“Company Registration Rights Indemnitee” has the meaning set forth in Section 1.6(a)(ii).
“Confidential Information” has the meaning set forth in Section 3.1.
“Contract” means any oral or written binding contract, subcontract, agreement, note, bond, mortgage, indenture, lease, sublease, license, sublicense, permit, franchise or other instrument, obligation, commitment or arrangement or understanding of any kind or character.
“control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, or as trustee or executor, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by Contract or credit arrangement or otherwise.
“controlling person” has the meaning set forth in Section 1.6(a)(i).
“Damages” means any and all claims, demands, suits, actions, causes of actions, losses, costs, damages, liabilities, judgments, and reasonable and documented out-of-pocket expenses incurred or paid, including reasonable attorneys’ fees, costs of investigation or settlement, other professionals’ and experts’ fees, court or arbitration costs.
“Disclosure Package” means, with respect to any offering of Registrable Securities, (a) the preliminary Prospectus or Prospectus, as applicable, (b) each Free Writing Prospectus, and (c) all other information, in each case, that is deemed, under Rule 159 under the Securities Act, to have been conveyed to purchasers of Registrable Securities at the time of sale of such securities.
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“Effectiveness Period” has the meaning set forth in Section 1.5.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.
“FINRA” means the Financial Industry Regulatory Authority, Inc. or any successor regulatory organization.
“Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405 promulgated under the Securities Act relating to the Registrable Securities included in the applicable Registration Statement that has been approved for use by the Company.
“Governmental Entity” means any federal, national, foreign, supranational, state, provincial, county, local or other government, governmental, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal, or judicial or arbitral body of competent jurisdiction.
“Investor” has the meaning set forth in the preamble to this Agreement.
“Investor Registration Rights Indemnitee” has the meaning set forth in Section 1.6(a)(i).
“issuer free writing prospectus” has the meaning set forth in Section 1.7.
“Law” any U.S. or non-U.S. federal, state, local, national, supranational, foreign or administrative law (including common law), statute, ordinance, regulation, requirement, regulatory interpretation, rule, code or Order.
“Notice of Reg Rights Claim” has the meaning set forth in Section 1.6(b)(i).
“Notice of Suspension” has the meaning set forth in Section 1.3(a).
“NYSE” has the meaning set forth in Section 1.4(h).
“Order” means any order (temporary or otherwise), judgment, injunction, award, decision, determination, stipulation, ruling, subpoena, writ, decree or verdict entered by or with any Governmental Entity.
“Ordinary Shares” means ordinary shares, nominal value €0.02 per share, of the Company.
“Party” and “Parties” have the meanings set forth in the preamble to this Agreement.
“Person” means an individual, company, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government.
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“Prospectus” means the prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference, or deemed to be incorporated by reference, into such prospectus.
“Purchase Agreement” has the meaning set forth in the recitals to this Agreement.
“Reg Rights Claim” has the meaning set forth in Section 1.6(b)(i).
“Reg Rights Indemnified Person” has the meaning set forth in Section 1.6(b)(i).
“Reg Rights Indemnifying Person” has the meaning set forth in Section 1.6(b)(i).
“Registrable Securities” means (i) the Shares and (ii) any Ordinary Shares or Ordinary Shares represented by ADSs issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) as a result of any stock split, recapitalization, exchange, dividend or other distribution with respect to, or in exchange for or in replacement of, the Shares; provided, that any such securities will cease to be Registrable Securities when (a) they are sold pursuant to a Registration Statement or (b) they are sold pursuant to Rule 144 (or any similar provisions then in force).
“Registration Expenses” means (whether or not any Registration Statement is declared effective or any of the transactions described herein is consummated) all expenses incurred by the Company in filing a Registration Statement, including, all registration and filing fees, fees and disbursements of counsel for the Company, SEC or FINRA registration and filing fees, all applicable ratings agency fees, expenses of the Company’s independent accountants in connection with any regular or special reviews or audits incident to or required by any such registration, fees and expenses of compliance with securities or “blue sky” Laws, costs of any comfort letters required by any underwriter, listing fees, printing, transfer agent’s and registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, the Company’s internal expenses, the expense of any annual audit or quarterly review, the expenses and fees for listing the securities to be registered on the NYSE or any other securities exchange, roadshow expenses, all other expenses incident to the registration of the Registrable Securities; provided, that the term “Registration Expenses” does not include, and the Company shall not be responsible for, Selling Expenses.
“Registration Statement” means a registration statement of the Company on an appropriate form under the Securities Act filed with the SEC covering the resale of Registrable Securities, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference or deemed to be incorporated by reference in such Registration Statement.
“Representatives” means a Person’s officers, directors, employees, accountants, consultants, legal counsel, investment bankers, other advisors, authorized agents and other representatives.
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“Right of First Notification Agreement” has the meaning set forth in the recitals to this Agreement.
“Rule 144” means Rule 144 under the Securities Act or any replacement or successor rule promulgated under the Securities Act.
“Rule 415” means Rule 415 under the Securities Act or any replacement or successor rule promulgated under the Securities Act.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.
“Selling Expenses” means, in connection with the registration or offering and sale of the Registrable Securities, (a) all underwriting fees, discounts and selling commissions fees, (b) stock transfer taxes applicable to the sale of the Registrable Securities, and (c) fees and expenses of any counsel to the Investor other than the counsel referred to in the definition of Registration Expenses.
“settlement” and “settle” have the meanings set forth in Section 1.6(c)(iv).
“Shares” has the meaning set forth in the recitals to this Agreement.
“Shelf Registration Statement” means a registration statement filed with the SEC for the sale of Registrable Securities pursuant to Rule 415 under the Securities Act.
“Suspension Period” has the meaning set forth in Section 1.3(a).
“Third-Party Reg Rights Claim” has the meaning set forth in Section 1.6(b)(ii).
“Transaction Documents” means collectively, this Agreement, the Purchase Agreement, the Right of First Notification Agreement and the other documents and agreements entered into in connection with the transactions contemplated hereby and thereby.
“Transaction Shelf Registration Statement” has the meaning set forth in Section 1.1(a).
“Transfer” means to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any Contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any securities.
“Transferee Investor” shall have the meaning set forth in Section 1.11.
Section 3.5 Interpretation; Headings. When a reference is made in this Agreement to an Exhibit, a Schedule or a Section, such reference shall be to an Exhibit, a Schedule or a Section of this Agreement unless otherwise indicated. The table of contents, index
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of defined terms and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof”, “hereto”, “hereby”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument or Law defined or referred to herein means such agreement, instrument or Law as from time to time amended, modified or supplemented, unless otherwise specifically indicated. References to a Person are also to its successors and permitted assigns. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded, and if the last day of such period is not a Business Day, the period shall end on the immediately following Business Day. Unless otherwise specifically indicated, all references to “dollars” and “$” will be deemed references to the lawful money of the United States of America. Each of the Parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement. References to “days” shall mean “calendar days” unless expressly stated otherwise. No specific provision, representation or warranty shall limit the applicability of a more general provision, representation or warranty. It is the intent of the Parties that each representation, warranty, covenant, condition and agreement contained in this Agreement shall be given full, separate, and independent effect and that such provisions are cumulative. Any reference in this Agreement to a date or time shall be deemed to be such date or time in the City of New York, New York, U.S.A., unless otherwise specified.
Section 3.6 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by the Purchase Agreement, the Note and this Agreement are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that such transactions be consummated as originally contemplated to the fullest extent possible.
Section 3.7 Entire Agreement; Amendments. The Transaction Documents (including the schedules and exhibits hereto and thereto) constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to the subject
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matter hereof. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.
Section 3.8 Assignment; No Third Party Beneficiaries. Except as expressly provided herein, including, without limitation, the transfer of rights and obligations as set forth in Section 1.11, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party, in whole or in part (whether pursuant to a merger, by operation of law or otherwise), without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed). Subject to the immediately preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 3.9 Further Assurances. Each Party shall cooperate, take such actions, enter into such agreements (including customary indemnification and contribution agreements) and execute such documents as may be reasonably requested by any other Party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby; provided, however, that no Party shall be obligated to take any actions or omit to take any actions that would be inconsistent with applicable Law.
Section 3.10 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York. The Parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the State of New York and the United States of America, in each case located in the County of New York, for any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby (whether brought by any Party or any of its Affiliates or against any Party or any of its Affiliates). Consistent with the preceding sentence, each of the Parties hereby (a) submits to the exclusive jurisdiction of such courts for the purpose of any Action arising out of or relating to this Agreement brought by either Party, (b) agrees that service of process will be validly effected by sending notice in accordance with Section 3.3, (c) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated by this Agreement may not be enforced in or by any of the above named courts, and (d) agrees not to move to transfer any such Action to a court other than any of the above-named courts.
(b) EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING
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OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3.10.
Section 3.11 Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or other means of electronic transmission, such as by electronic mail in “pdf” form or any electronic signature complying with the U.S. federal ESIGN Act of 200, e.g., www.docusign.com) in counterparts, and by the Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.
Section 3.12 Specific Performance. The Parties acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each Party agrees that, in the event of any breach or threatened breach by the other Party of any covenant or obligation contained in this Agreement, the non-breaching Party shall be entitled (in addition to any other remedy that may be available to it whether in law or equity, including monetary damages) to (a) an Order of specific performance to enforce the observance and performance of such covenant or obligation, and (b) an injunction restraining such breach or threatened breach. Each Party further agrees that neither the other Party nor any other Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 3.12, and each Party irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.
Section 3.13 Waiver. Any Party entitled to the benefits thereof may, to the extent permitted by Law (a) extend the time for the performance of any of the obligations or other acts of the other Party, (b) waive any inaccuracies in the representations and warranties contained herein, and (c) waive compliance with any of the covenants, agreements or conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by a Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or future exercise of any other right hereunder.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed, as of the date first written above, by their respective officers thereunto duly authorized.
SEQUANS COMMUNICATIONS S.A. | |||||
By: | /s/ Georges Karam | ||||
Name: Georges Karam | |||||
Title: Chief Executive Officer | |||||
RENESAS ELECTRONICS CORPORATION | |||||
| By: | /s/ Sailesh Chittipeddi | ||||
| Name: Sailesh Chittipeddi | |||||
Title: Executive Vice President | |||||
[Signature Page to Registration Rights Agreement]
Exhibit 5.1
 | ||
May 12, 2023
| Orrick, Herrington & Sutcliffe (Europe) LLP | ||
| 61, rue des Belles Feuilles | ||
| 75016 Paris | ||
| France | ||
| Siren : 808 676 316 | ||
| T +33 1 53 53 75 00 | ||
| F +33 1 53 53 75 01 | ||
orrick.com | ||
Sequans Communications S.A.
15-55 boulevard Charles de Gaulle
92700 Colombes, France
| Re: | Sequans Communications S.A – Registration Statement on Form F-3 | ||||
Ladies and Gentlemen:
We have acted as special French counsel to Sequans Communications S.A. (the “Company”), a société anonyme incorporated in the French Republic and have examined the Registration Statement on Form F-3 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”) in relation to the proposed resale or other disposition by the selling securityholders identified in the “Selling Securityholders” section of the Registration Statement of 11,683,493 American Depositary Shares (“ADSs”) each representing four ordinary shares, nominal value € 0.01 per share (the “Shares”) of the Company, as described in the prospectus dated May 12, 2023 (the “Prospectus”), which is part of the Registration Statement .
We have examined instruments, documents, records and matters of law which we deemed relevant and necessary for the basis of our opinion hereinafter expressed and have relied on written statements and representations of officers and other representatives of the Company as to factual statements contained in such instruments, documents and records. In such examination, we have assumed the following: (a) the authenticity of original documents and the genuineness of all signatures; (b) the conformity to the originals of all documents submitted to us as copies; and (c) the truth, accuracy, and completeness of the information, representations, and warranties contained in the records, documents, instruments, and certificates that we have reviewed.
Based upon the foregoing, and subject to further limitations, qualifications and assumptions set forth herein, we are of the opinion that the Shares represented by ADSs are validly issued, fully paid up and non-assessable and may be freely traded (librement négociables).
For the purposes of this opinion, the term “non-assessable”, which has no recognized meaning under French law, shall mean that no present or future holder of the Shares will be subject to personal liability, by reason of being such a holder, for additional payments or calls for further funds by the Company or any other person after the issuance of the Shares.
Sequans Communications S.A May 12, 2023 Page 2 | | |||||||||||||
Also in rendering this opinion, we have assumed that the Registration Statement, and any amendment thereto, will have become effective under the Securities Act.
We are members of the Paris Bar and this opinion is limited to the laws of the French Republic and we do not express any opinion as to the effect of any other laws. This opinion is subject to the sovereign power of the French courts to interpret the facts and circumstances of any adjudication. This opinion is given on the basis that it is to be governed by, and construed in accordance with, the laws of the French Republic.
We consent to the reference to us under the heading “Legal Matters” in the Prospectus and to the filing of this opinion as Exhibit 5.1 to the Registration Statement. By giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations promulgated thereunder, nor do we thereby admit that we are “experts” within the meaning of such term as used in the Securities Act with respect to any part of the Registration Statement, including this opinion letter as an exhibit or otherwise.
| Very truly yours, | ||
| /s/ ORRICK, HERRINGTON & SUTCLIFFE (EUROPE) LLP | ||
| ORRICK, HERRINGTON & SUTCLIFFE (EUROPE) LLP | ||
| Patrick Tardivy | ||
Exhibit 8.1
 | ||
Orrick, Herrington & Sutcliffe LLP The Orrick Building 405 Howard Street San Francisco, CA 94105-2669 +1 415 773 5700 orrick.com | ||
May 12, 2023
Sequans Communications S.A.
15-55 boulevard Charles de Gaulle
92700 Colombes, France
Re: Sequans Communications S.A. / Registration Statement on Form F-3
Ladies and Gentlemen:
We have acted as special United States tax counsel for Sequans Communications S.A., a French société anonyme (the “Company”), in connection with the proposed resale and other disposition of up to 46,733,972 ordinary shares, nominal value € 0.01 per share, of the Company, which may be represented by up to 11,683,493 American Depositary Shares (“ADSs”) and, together with the ordinary shares, the “Securities”), as contemplated by the Company’s registration statement on Form F-3, including all amendments or supplements thereto (as amended from time to time, the “Registration Statement”), filed with the United States Securities and Exchange Commission (the “Commission”) under the U.S. Securities Act of 1933, as amended.
The sale of the Securities will be as set forth in the prospectus contained in the Registration Statement (the “Prospectus”), as may be supplemented by one or more supplements to the Prospectus. The Securities may be offered and sold from time to time pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).
In rendering our opinion, we have examined and relied upon the accuracy and completeness of the facts, information, covenants and representations contained in the Registration Statement and such other documents and corporate records as we have deemed necessary or appropriate for purposes of this opinion. Our opinion is conditioned on, among other things, the initial and continuing accuracy of the facts, information, covenants and representations set forth in the documents referred to above. We have no reason to believe that such facts, information, covenants and representations are not true, but we have not attempted to verify them independently and expressly disclaim an opinion as to their validity and accuracy.
In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such documents.
The opinion expressed in this letter is based on the provisions of the Internal Revenue Code of 1986, as amended, final, temporary and proposed Treasury Regulations promulgated thereunder and
Sequans Communications S.A.
May 12, 2023
Page 2
administrative and judicial interpretations thereof, all as in effect and available as of the date hereof and all of which are subject to change (possibly on a retroactive basis). No ruling from the Internal Revenue Service (the “IRS”) has been or will be sought on any issues related to the acquisition, ownership or disposition of any of the Securities, and there can be no assurance that the IRS will not take a contrary view. Although our opinion expressed in this letter represents our best judgment as to the matters addressed, our opinion has no binding effect on the IRS or the courts.
Based upon and subject to the foregoing, and subject to the limitations, qualifications and assumptions set forth herein, the discussion under the heading “Certain Income Tax Considerations—Material United States Federal Income Tax Consequences” contained in the Registration Statement, insofar as it relates to statements of law and legal conclusions, constitutes our opinion regarding such matters as of the date hereof.
Any special United States federal income tax considerations relating to a particular issuance of the Securities will be set forth in a supplement to the Prospectus.
Except as set forth above, we express no opinion to any party as to the tax consequences, whether federal, state, local or foreign, relating to the Company or the Securities or of any transactions related to or undertaken in connection with the issuance and sale of the Securities.
We express no opinion as to the laws of any jurisdiction other than the federal income tax laws of the United States or as to any issue relating to the Company or the Securities other than as expressly stated herein.
We are furnishing this opinion to you solely in connection with the filing of the Registration Statement. We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder, nor do we thereby admit that we are “experts” within the meaning of such term as used in the Securities Act with respect to any part of the Registration Statement, including this opinion letter as an exhibit or otherwise. We disclaim any obligation to update this opinion letter for events occurring or coming to our attention after the date hereof.
| Very truly yours, | ||
| /s/ ORRICK, HERRINGTON & SUTCLIFFE LLP | ||
| ORRICK, HERRINGTON & SUTCLIFFE LLP | ||
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption "Experts" in this Registration Statement (Form F-3) and related Prospectus of Sequans Communications S.A. for the registration of 46,733,972 Ordinary Shares and to the incorporation by reference therein of our reports dated March 31, 2023, with respect to the consolidated financial statements of Sequans Communications S.A. and the effectiveness of internal control over financial reporting of Sequans Communications S.A. included in its Annual Report (Form 20-F) for the year ended December 31, 2022 filed with the Securities and Exchange Commission.
/s/ Ernst & Young Audit | ||
Paris – La Défense, France | ||
May 12, 2023 | ||