Provision Language
5. Withdrawal Right
(a) The Withdrawal Right described and defined in this Section 5 will be triggered only as a result of a Charitability Default.
(b) A “Charitability Default” will occur if the Company (i) is in material breach of any of the Global Access Commitments, including the material failure to conduct the Programs as described above, other than for reasons of regulatory, technical or scientific failure not within the reasonable control of the Company and not known to the Company at or before closing of the Foundation Investment, (ii) fails to comply with the restrictions in Sections 2 and 9 of this Letter Agreement on the use of proceeds from the Foundation Investment, or (iii) fails to comply with the other related U.S. legal obligations set forth in this Letter Agreement, including the requirements set forth in Sections 6, 9, 11, and 12. Each party agrees to promptly notify the other party in writing if it becomes aware of a Charitability Default and the Company will thereafter promptly provide to the Foundation a proposed strategy to remedy the Charitability Default. Notwithstanding the foregoing, the Foundation will not lose any rights or remedies solely as a result of a failure to notify the Company after it becomes aware of a Charitability Default.
(c) If the Company fails to cure the Charitability Default within [**] days of the Foundation’s written notice of such Charitability Default, and if the Foundation holds any securities of the Company issued in connection with the Foundation Investment, including securities issued in respect of or upon conversion or exercise of such securities (collectively, the “Foundation Stock”), the Company will have the obligation, if required by the Foundation, to (i) redeem all of the Foundation Stock; provided, that such redemption will be made only to the extent permitted by applicable law and only to the extent that such redemption does not render the Company insolvent, or (ii) locate a third party that will purchase the Foundation Stock ((i) and (ii), the “Withdrawal Right”). If the Company is unable to redeem all of the Foundation Stock, and no third party purchases the Foundation Stock, then the Company will use its best efforts to effect the Withdrawal Right, consistent with the Code and applicable law, as soon as practicable. During the period when the Company is unable to exercise its obligation to redeem or find a purchaser of the Foundation Stock, the Company will not pay dividends on any of its capital stock, redeem the capital stock of any other stockholder of the Company (excluding repurchases of stock from former employees, officers, directors, consultants or other persons who performed services for the Company or any subsidiary in connection with the cessation of such employment or service at the lower of the original purchase price or the then–current fair market value thereof) or otherwise make any other distribution to any other stockholder of the Company (other than shares of common stock or stock options issued to employees or directors of, or consultants or advisors to, the Company or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors of the Company).
(d) For redemption or purchase by the Company or a third party pursuant to Section 5(c), the Foundation Stock will be valued at the greater of (i) the original purchase price attributable to such shares plus a [**]% per annum compounding interest rate calculated from the date of issuance of the Foundation Stock through the date of redemption or purchase or (ii) Fair Market Value.
(e) Notwithstanding any exercise of the Withdrawal Right by the Foundation, the Foundation’s rights under the Global Access Commitments will survive.