RAIN Rain Oncology Inc

 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION  

Washington, D.C. 20549

 

 

SCHEDULE TO

 

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1)  

OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 2) 

 

 

RAIN ONCOLOGY INC.  

(Name of Subject Company (Issuer))

 

WK MERGER SUB, INC.  

(Name of Filing Persons (Offeror))

 

PATHOS AI, INC. 

(Name of Filing Persons (Parent of Offeror))

 

Common Stock, Par Value $0.001 Per Share  

(Title of Class of Securities)

 

75082Q105 

(CUSIP Number of Class of Securities)

 

Ryan Fukushima  

Pathos AI, Inc.  

600 West Chicago Avenue, Suite 150 

Chicago, IL 60654 

Tel. (312) 765-7820  

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)

 

Copies to:

 

Mitchell S. Bloom, Esq. 

Robert Masella, Esq. 

Jean A. Lee, Esq. 

100 Northern Ave 

Boston, MA 02210 

(617) 570-1000

 

 

☐

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

 

Check the appropriate boxes below to designate any transactions to which the statement relates:

 

☒

third-party tender offer subject to Rule 14d-1.

☐

issuer tender offer subject to Rule 13e-4.

☐

going-private transaction subject to Rule 13e-3.

☐

amendment to Schedule 13D under Rule 13d-2.

 

Check the following box if the filing is a final amendment reporting the results of the tender offer.  ☐

 

If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:

 

☐

Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

☐

Rule 13d-1(d) (Cross-Border Third-Party Tender Offer)

 

 

 

 

This Amendment No. 2 (this “Amendment”) amends and supplements the Tender Offer Statement on Schedule TO, filed with the Securities and Exchange Commission on December 27, 2023, as amended December 29, 2023 (together with any subsequent amendments and supplements thereto, the “Schedule TO”), by WK Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and a wholly owned subsidiary of Pathos AI, Inc., a Delaware corporation (“Parent”), and Parent. The Schedule TO relates to the offer (the “Offer”) by Merger Sub to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share (the “Shares”) of Rain Oncology Inc., a Delaware corporation (“Rain”), other than Shares held in the treasury of Rain or Shares owned, directly or indirectly, by Parent or Merger Sub immediately prior to the certificate of merger being duly filed with the Delaware Secretary of State which will be canceled without any consideration, for (i) $1.16 in cash per Share (the “Cash Consideration”), without interest, plus (ii) one contingent value right per Share (each, a “CVR”), which CVR shall represent the right to receive potential payments pursuant to the contingent value rights agreement, to be entered into among Parent, Merger Sub, Equiniti Trust Company, LLC and Fortis Advisors LLC, the form of which is attached as Exhibit C to the Merger Agreement, all upon the terms and subject to the conditions described in the Offer to Purchase and in the related Letter of Transmittal, copies of which are attached to the Schedule TO as exhibits (a)(1)(A) and (a)(1)(B), respectively. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of December 13, 2023 (together with any amendments or supplements thereto, the “Merger Agreement”), by and among Rain, Parent and Merger Sub, a copy of which is attached to the Schedule TO as Exhibit (d)(1) and incorporated herein by reference with respect to Items 4 through 9 and Item 11 of this Schedule TO.

 

Except as otherwise set forth in this Amendment, the information set forth in the Schedule TO remains unchanged and is incorporated herein by reference to the extent relevant to the items in this Amendment. Capitalized terms used but not defined herein have the meanings ascribed to them in the Schedule TO.

  

 

The Schedule TO is hereby amended and supplemented as follows:

Items 1 through 9 and 11.

Items 1 through 9 and 11 of the Schedule TO, to the extent such Items incorporate by reference the information contained in the Offer to Purchase, are hereby amended and supplemented as follows:

1.

The second question on page 10 set forth in the section of the Offer to Purchase entitled “Summary Term Sheet” is hereby amended and restated in its entirety to read as follows:

 

“DOES PARENT HAVE FINANCIAL RESOURCES TO MAKE PAYMENTS IN THE OFFER AND, IF REQUIRED, IN RESPECT OF THE CVRS?

 

●           Yes. Parent expects to fund the purchase of the Shares in the Offer, and the payment of any amounts payable with respect to the CVRs, on the payment dates applicable thereto, with Parent’s available cash on hand as of Closing. In connection with the execution of the Merger Agreement, 346 Short LLC (the “346”), has agreed to fund solely a portion of the Cash Consideration and certain other cash amounts to be paid by Parent or Merger Sub at the closing, subject to the terms and conditions set forth in pursuant to the commitment letter, dated as of December 13, 2023, by and among Parent, Rain and 346 (the “Commitment Letter”). Pursuant to the Commitment Letter, 346 has agreed to contribute to Parent at or prior to the Acceptance Time (as defined in Section 1 – “Terms of the Offer”), directly or indirectly through one or more intermediaries, an aggregate amount of $25,000,000 (the “Equity Commitment”). The Equity Commitment will be used by Parent solely to fund a portion of the Cash Consideration and certain other cash amounts to be paid by Parent or Merger Sub at the closing pursuant to the Merger Agreement, on the terms set forth in the Merger Agreement; provided, that 346 shall not, under any circumstances, be obligated to contribute or cause to be contributed to Parent more than the Equity Commitment. The Cash Consideration and the Merger Consideration (exclusive of CVRs) will be funded from the Equity Commitment. Otherwise, the amount to be funded pursuant to the Commitment Letter may be reduced on a dollar-for-dollar basis in the event Parent and Merger Sub do not require the full amount of the Equity Commitment, solely to the extent it will be possible, notwithstanding such reduction, for Parent and Merger Sub to consummate the transactions contemplated by the Merger Agreement in accordance with the terms thereof; provided, that any such reduction shall only occur simultaneously with the occurrence of the Closing. 346’s obligation to fund the Equity Commitment is subject to (i) the execution and delivery of the Merger Agreement by Parent and (ii) the satisfaction or written waiver by the applicable parties to the Merger Agreement of the Offer Conditions (other than those Offer Conditions that by their nature are to be satisfied at the Closing, but subject to the prior or substantially concurrent satisfaction or waiver of such conditions). Parent has a contractual right to specifically enforce the terms of the Commitment Letter if the conditions are met. No alternative financing arrangements or alternative financing plans have been made in the event the Equity Commitment described herein is not available. For the avoidance of doubt, if the Closing shall not occur for any reason, 346 shall have no obligation to fund the Equity Commitment. See Section 11 – “Purpose of the Offer and Plans for Rain; Summary of the Merger Agreement and Certain Other Agreements” and Section 12 – “Source and Amount of Funds.””

 

 

2.

The information set forth in the first paragraph of the section of the Offer to Purchase entitled “Purpose of the Offer and Plans for Rain; Summary of the Merger Agreement and Certain Other Agreements – CVR Agreement” on page 57 is amended and supplemented to add, after the final bullet point on page 57:

“● The CVR Agreement may be amended without the consent of the CVR Holders in the following circumstances:

(i)

Without the consent of any CVR Holders or the Rights Agent, the Representative, Parent and Merger Sub for any of the following purposes:

·

to evidence the succession of another person to Parent or Merger Sub and the assumption by any such successor of the covenants of Parent or Purchaser in the CVR Agreement;

·

to add to the covenants of Parent and Merger Sub such further covenants, restrictions, conditions or provisions as the Representative, Parent, and Merger Sub will consider to be for the protection of the CVR Holders; provided that, in each case, such provisions do not adversely affect the interests of the CVR Holders;

·

to cure any ambiguity, to correct or supplement any provision of the CVR Agreement that may be defective or inconsistent with any other provision contained therein, or to make any other provisions with respect to matters or questions arising under the CVR Agreement; provided that, in each case, such provisions do not adversely affect the interests of the CVR Holders;

·

as may be necessary or appropriate to ensure that the CVRs are not subject to registration under the Securities Act of 1933, as amended, or the Exchange Act, and to ensure that the CVRs are not subject to any similar registration or prospectus requirement under applicable securities laws outside of the United States; provided that, in each case, such provisions do not adversely affect the interests of the CVR Holders;

·

to evidence the succession of another person as a successor Rights Agent or the Representative and the assumption by any such successor of the covenants and obligations of the Rights Agent or the Representative, as applicable, in accordance with the terms of the CVR Agreement;

·

as may be necessary to ensure that Parent complies with applicable law, as determined by Parent after being advised by Parent’s outside counsel that such amendment is necessary for such purposes; or

·

any other amendments to the CVR Agreement for the purpose of adding, eliminating or changing any provisions of the CVR Agreement, unless such addition, elimination or change is adverse to the interests of the CVR Holders.

(ii)

Without the consent of any Holders, Parent and Merger Sub, by the Rights Agent, in its sole and absolute discretion to reduce the number of CVRs, in the event any CVR Holder agrees to renounce and abandon such CVR Holder’s rights under the CVR Agreement in accordance with the terms of the CVR Agreement.”

 

3.

The information set forth in the first paragraph of the section of the Offer to Purchase entitled “Purpose of the Offer and Plans for Rain; Summary of the Merger Agreement and Certain Other Agreements – Commitment Letter” on page 58 is hereby amended and supplemented to add, after the second to last paragraph on page 58:

“346’s obligation to fund the Equity Commitment is subject to (i) the execution and delivery of the Merger Agreement by Parent and (ii) the satisfaction or written waiver by the applicable parties to the Merger Agreement of the Offer Conditions (other than those Offer Conditions that by their nature are to be satisfied at the Closing, but subject to the prior or substantially concurrent satisfaction or waiver of such conditions). Parent has a contractual right to specifically enforce the terms of the Commitment Letter if the conditions are met.

The summary and description of the material terms of the Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Commitment Letter, which is filed as Exhibit (d)(6) to the Schedule TO and is incorporated by reference herein.”

4.

The information set forth in the first paragraph of the section of the Offer to Purchase entitled “Source and Amount of Funds” on page 58 is hereby amended and supplemented to add, after the final paragraph on page 58:

“346’s obligation to fund the Equity Commitment is subject to (i) the execution and delivery of the Merger Agreement by Parent and (ii) the satisfaction or written waiver by the applicable parties to the Merger Agreement of the Offer Conditions (other than those Offer Conditions that by their nature are to be satisfied at the Closing, but subject to the prior or substantially concurrent satisfaction or waiver of such conditions). Parent has a contractual right to specifically enforce the terms of the Commitment Letter if the conditions are met. No alternative financing arrangements or alternative financing plans have been made in the event the Equity Commitment described herein is not available.”

 

5.

The information set forth in the first paragraph of the section of the Offer to Purchase entitled “Conditions of the Offer” on page 60 is hereby amended and restated in its entirety to read as follows:

“(iv) (A) Rain shall have breached or failed to comply in any material respect with any of its obligations, covenants or agreements under the Merger Agreement, (B) (1) the representations and warranties of Rain set forth in Section 4.1(a) (Organization, Standing and Power), the final sentence of Section 4.3 (Subsidiaries), and Sections 4.4 (Authority), 4.5(a)(i) (No Conflict; Consents and Approvals), 4.14 (State Takeover Statutes), 4.15 (Section 251(h)), 4.16 (No Rights Plan), 4.17 (Brokers) and 4.25 (Opinion of Financial Advisor) of the Merger Agreement shall not be true and correct in all material respects as of the date of the Merger Agreement or as of and as though made on the Expiration Date, (2) the representations and warranties of Rain set forth in Section 4.2 of the Merger Agreement shall not be true and correct in all respects as of the date of the Merger Agreement or as of and as though made on the Expiration Date, except to the extent the failures of such representations to be true and correct in all respects individually or in the aggregate would not reasonably be expected to result in an increase in the aggregate value of the consideration payable by Parent in connection with the Merger of more than $500,000 in the aggregate, as compared to what such aggregate amount would have been if such representations and warranties had been true and correct in all respects for de minimis inaccuracies (it being understood that, for purposes of determining the truth and correctness of such representations and warranties (x) any update or modification of the Rain disclosure letter purported to have been made after the date of the Merger Agreement shall be disregarded and (y) the truth and correctness of those representations and warranties that address matters only as of a specific date shall be measured only as of such date), (3) the representations and warranties of Rain set forth in Section 4.9(a) of the Merger Agreement shall not be true and correct in all respects as of the date of the Merger Agreement or as of and as though made on the Expiration Date (it being understood that, for purposes of determining the truth and correctness of such representations and warranties any update or modification of the Rain disclosure letter purported to have been made after the date of the Merger Agreement shall be disregarded), or (4) any of the remaining representations and warranties of Rain set forth in the Merger Agreement shall not be true and correct as of the date of the Merger Agreement or as of and as though made on the Expiration Date, except for inaccuracies of representations or warranties the circumstances giving rise to which, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect (it being understood that, for purposes of determining the truth and correctness of such representations and warranties, (x) any update or modification of the Rain disclosure letter purported to have been made after the date of the Merger Agreement shall be disregarded, (y) the truth and correctness of those representations and warranties that address matters only as of a specific date shall be measured only as of such date, and (z) all materiality and “Company Material Adverse Effect” qualifications and exceptions contained in such representations and warranties shall be disregarded); or (C) Parent and Merger Sub shall not have received a certificate of an executive officer of Rain, dated as of the scheduled Expiration Date, to the effect set forth in the foregoing clauses (A) and (B);”

 

6.

The information set forth in the first paragraph of the section of the Offer to Purchase entitled “Source and Amount of Funds” on page 60 is hereby amended and restated in its entirety to read as follows:

 

“The foregoing conditions (each, an “Offer Condition”) are for the sole benefit of Merger Sub and Parent and may be asserted by Merger Sub or Parent regardless of the circumstances giving rise to such condition, in whole or in part at any applicable time or from time to time in their sole discretion. The foregoing conditions are in addition to, and not a limitation of, the right of Parent and Merger Sub to extend, terminate or modify the Offer pursuant to the terms and conditions of the Merger Agreement. All conditions (except for the Minimum Condition) may be waived by Parent or Merger Sub in their sole discretion in whole or in part at any applicable time or from time to time, in each case subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC. The failure of Parent or Merger Sub at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time.”

 

 

 

ITEM 12.

EXHIBITS.

 

Item 12 of the Schedule TO is hereby amended and supplemented by attaching the Commitment Letter as exhibit (d)(6).

 

Index No.
(d)(6)*		Commitment Letter, dated December 13, 2023, by and among Parent, Rain and 346 Short LLC.

 

*	Filed herewith.

 

 

 

SIGNATURE

 

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated: January 16, 2024

 

WK MERGER SUB, INC.
By:	/s/  Ryan Fukushima
Name:	Ryan Fukushima
Title:	Chief Executive Officer
PATHOS AI, INC.
By:	/s/  Ryan Fukushima
Name:	Ryan Fukushima
Title:	Chief Executive Officer

 

 

Rain Oncology Inc SC TO-T/A

 

Exhibit (d)(6)

 

346 Short LLC

600 W Chicago Ave

Suit 510

Chicago, IL 60654

Commitment Letter

December 13, 2023

Pathos AI, Inc.
600 W. Chicago Ave., Suite 510
Chicago, IL 60654
Attention: Ryan Fukushima

Ladies and Gentlemen:

Reference is made to the Agreement and Plan of Merger, dated as of the date hereof (as the same may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), among Pathos AI, Inc., a Delaware corporation (“Parent”), WK Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”) and Rain Oncology Inc., a Delaware corporation (the “Company”). Capitalized terms used and not otherwise defined herein have the respective meanings ascribed thereto in the Merger Agreement. This letter agreement is being delivered to Parent and the Company in connection with the execution and delivery of the Merger Agreement by the Company, Parent and Merger Sub.

1.                  Commitment. This letter agreement confirms the commitment of 346 Short LLC (the “Investor”), subject to the terms and conditions contained herein, to contribute to Parent at or prior to the Acceptance Time, directly or indirectly through one or more intermediaries, an aggregate amount of $25,000,000 (the “Commitment”), which Commitment may be contributed to Parent through an equity investment, loan or other similar transaction. The Commitment will be used by Parent solely to fund (i) the aggregate Cash Consideration in accordance with Section 3.1(a) of the Merger Agreement, (ii) the aggregate cash consideration payable in accordance with Section 1.1(c) of the Merger Agreement, (iii) the aggregate consideration payable to holders of Company Stock Options and Company RSUs in accordance with Section 3.2(a) and (b) of the Merger Agreement, and (iv) related fees and expenses to be paid at the Closing pursuant to, and in accordance with, the terms set forth in the Merger Agreement (the foregoing clauses (i) through (iv), collectively, the “Transaction Payments”); provided, that the Investor shall not, under any circumstances, be obligated to contribute or cause to be contributed to Parent more than the Commitment. The Transaction Payments will be funded from the Commitment. Otherwise, the amount to be funded hereunder may be reduced on a dollar-for-dollar basis in the event Parent and Merger Sub do not require the full amount of the Commitment, solely to the extent it will be possible, notwithstanding such reduction, for Parent and Merger Sub to consummate the transactions contemplated by the Merger Agreement in accordance with the terms thereof; provided, that any such reduction shall only occur simultaneously with the occurrence of the Closing. For the avoidance of doubt, if the Closing shall not occur for any reason, the Investor shall have no obligation to fund the Commitment. The Investor may allocate its investment to Affiliates and co-investors, provided no such allocation shall relieve the Investor of its obligation to provide the amount set forth above in the event that such Affiliates or co-investors fail to make such investment. Notwithstanding anything else to the contrary in this letter agreement, the cumulative liability of the Investor under this letter agreement shall not exceed the Commitment.

 

2.                  Commitment Conditions. The Investor’s obligation to fund the Commitment is subject to the following conditions: (a) the execution and delivery of the Merger Agreement by the Company and (b) the satisfaction or written waiver by the applicable parties to the Merger Agreement of the conditions to the parties’ obligations to close the Offer set forth on Exhibit A of the Merger Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the prior or substantially concurrent satisfaction or waiver of such conditions).

3.                  Specific Performance. The parties hereto acknowledge and agree that, in the event of any breach of this letter agreement, irreparable harm would occur that monetary damages could not make whole. It is accordingly agreed that, subject to Section 4, (i) each party hereto will be entitled, in addition to any other remedy to which it may be entitled at law or in equity, to compel specific performance to prevent or restrain breaches or threatened breaches of this letter agreement in any action without the posting of a bond or undertaking and (ii) the parties hereto will, and hereby do, waive, in any action for specific performance, the defense of adequacy of a remedy at law and any other objections to specific performance of this letter agreement.

4.                  Limited Third-Party Beneficiaries; Enforcement. This letter agreement shall be binding on and inure solely to the benefit of Parent and the Investor and their respective successors and permitted assigns, and nothing set forth in this letter agreement shall be construed to confer upon or give to any Person other than the parties hereto any benefits, rights or remedies under or by reason of, or any rights to enforce or cause Parent to enforce, this letter agreement. The Commitment may only be enforced by Parent and no other Person shall have any rights to enforce or to cause Parent to enforce the Commitment or any other provision of this letter agreement. Parent’s creditors shall have no right to enforce this letter agreement or to cause Parent to enforce this letter agreement. Notwithstanding the foregoing, if the conditions set forth in Section 2 above have been satisfied, the parties intend that (i) Parent has the right to cause the Commitment to be funded hereunder in accordance with Section 1 hereof, (ii) the Company (but not its stockholders or any securityholders thereof) shall be a third party beneficiary of the rights granted to Parent under this letter agreement solely for the purpose of specific performance of Parent’s right to cause the Commitment to be funded hereunder in accordance with Sections 1 and 3 hereof if, and only if, (A) the Company would be permitted under Section 9.10 of the Merger Agreement to seek specific performance requiring Parent to consummate the Merger, (B) Parent would be entitled to enforce this Agreement on the terms and subject to the conditions hereof to cause the Commitment to be funded by the Investor to Parent in accordance with Section 1 hereof and (C) the conditions to the Investor’s obligations to fund the Commitment pursuant to Section 2 are satisfied, and (iii) each Non-Recourse Party (as defined herein) is an express third-party beneficiary hereof for the purpose of relying on and enforcing the provisions of Section 6 hereof.

5.                  Termination. This letter agreement and the Investor’s obligation to fund the Commitment, or cause the Commitment to be funded, will terminate automatically and immediately, without any further action required by the Investor, upon the earliest to occur of: (a) the consummation of the Closing, or (b) the valid termination of the Merger Agreement in accordance with its terms.

6.                  Limited Recourse. Notwithstanding anything that may be express or implied in this letter agreement, the Merger Agreement, or any document or instrument delivered contemporaneously herewith or therewith, and notwithstanding the fact that the Investor may be a partnership or limited liability company, Parent, by its acceptance of the benefits of this letter agreement, covenants, agrees and acknowledges that: (a) no Person other than the Investor or a permitted assignee of the Investor in accordance with the terms of Sections 1 and 7 hereof shall have any liability, obligation or commitment of whatever nature, known or unknown (whether of an equitable, contractual, tort, statutory or other nature) hereunder; (b) it shall have no rights of recovery against, and no recourse hereunder or under any documents or instruments delivered in connection herewith shall be attached to, be imposed on or otherwise be incurred by, any former, current or future director, officer, manager, member, partner (general or limited), employee, representative, agent, stockholder, equity holder, controlling person, affiliate or assignee of the Investor or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder, equity holder, controlling person, representative, agent, affiliate or assignee of any of the foregoing who is not also a party to the Merger Agreement (other than any Affiliate who is a permitted assignee of the Investor in accordance with the terms of Sections 1 and 7 hereof) (a “Non-Recourse Party”), whether by or through attempted piercing of the corporate, partnership or limited liability company veil, by or through a claim by or on behalf of Parent or Merger Sub against any Non-Recourse Party, by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law or otherwise; and (c) no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any Non-Recourse Party as such for any obligations of the Investor under this letter agreement or any documents or instruments delivered in connection herewith or in respect of any oral representations made or alleged to have been made in connection herewith or therewith or for any claim (whether at law or equity or in tort, contract or otherwise) based on, in respect of, or by reason of such obligations or their creation. Each of Parent and the Company hereby covenants and agrees that it shall not institute, and shall cause its Affiliates and Representatives not to institute, any proceeding or bring any other claim arising under, or in connection with, this letter agreement, the Merger Agreement, or the transactions contemplated hereby or thereby, against the Investor or any Non-Recourse Party, except for claims solely against the Investor under this letter agreement, subject to the terms and conditions hereof.

7.                  Assignment. Except to the extent set forth in Section 1 of this letter agreement, neither this letter agreement nor any of the rights and benefits hereunder shall be assigned, in whole or in part, by any party hereto without the prior written consent of the other parties hereto; provided, that the Investor may expressly assign all or any part of its rights and delegate all or any part of its obligations to one or more of its Affiliates or any other provider of equity financing, only on the condition that the Investor shall remain obligated for all obligations so delegated and shall remain entitled to all of the rights and benefits hereunder. The rights of the Company hereunder shall not be assignable by the Company without the Investor’s and Parent’s prior written consent, and the granting of such consent in a given instance shall be solely in the discretion of the Investor and Parent and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment. Any assignment or transfer in violation of this Section 7 shall be null and void ab initio.

8.                    Entire Agreement; No Modification. This letter agreement, the Merger Agreement and the Confidentiality Agreement constitute the entire agreement between the parties hereto, and supersede and cancel all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the Investor and Parent with respect to the subject matter hereof and thereof. This letter agreement may not be amended, modified, supplemented or waived in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each of the Investor and Parent. No failure or delay by any party in exercising any right, power or privilege in connection with this letter agreement will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege, and no waiver of any of the provisions of this letter agreement will be deemed or will constitute, a waiver of any other provisions, whether or not similar, nor will any waiver constitute a continuing waiver.

9.                  Counterparts. This letter agreement may be executed in counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. This letter agreement may be executed by .pdf signature and a .pdf signature shall constitute an original for all purposes.

 

10.

Governing Law; Venue; Waiver of Jury Trial.

(a)       This letter agreement and all disputes or controversies arising out of or relating to this letter agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Delaware.

(b)       Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this letter agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined in the Court of Chancery of the State of Delaware, provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court located in the State of Delaware. Each of the parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this letter agreement and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided in Section 9.2 of the Merger Agreement and the Investor further agrees that notices as provided in Section 13 of this letter agreement shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this letter agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this letter agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

(b)       Under no circumstances will any liability (whether direct or indirect, in contract or tort or otherwise) of the Investor with respect to this letter agreement include any special, indirect, consequential or punitive damages.

(c)       EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

11.              Relationship of the Parties. Each party acknowledges and agrees that (a) this letter agreement is not intended to, and does not, create any agency, partnership, fiduciary or joint venture relationship between or among any of the parties hereto and neither this letter agreement nor any other document or agreement entered into by any party hereto relating to the subject matter hereof shall be construed to suggest otherwise and (b) the obligations of the Investor under this letter agreement are solely contractual and not fiduciary in nature.

12.              Confidentiality. This letter agreement shall be treated as confidential and shall be held confidential by the Investor in accordance with the terms of the Mutual Confidentiality Agreement between Parent and the Company dated as of October 17, 2023 and is being provided to Parent solely in connection with the transactions contemplated by the Merger Agreement. This letter agreement may not be used, circulated, quoted or otherwise referred to in any document, except with the prior written consent of the Investor. Notwithstanding the foregoing, and without prejudice to any other provision of this letter agreement, this letter agreement may be: (a) provided to (i) the Company and (ii) the legal advisors of the Company, together with the legal advisors of Parent, provided each such party agrees to treat this letter agreement as confidential; (b) referred to in the Merger Agreement; and (c) disclosed as may be required by law, rule or regulation of any Governmental Entity, regulatory agency, court or national stock exchange, including in connection with seeking the approval, consent, or waiver from, or in connection with the filing of any notices or similar responses, in each case with any Governmental Entity (provided that, to the extent practicable, the Company will provide the Investor an opportunity to review such required disclosure in advance of such disclosure being made) or in connection with any proceeding or potential proceeding to enforce the obligations hereunder.

 

13.              Representations and Warranties. The Investor hereby represents and warrants to Parent that:

a.

it has all requisite limited liability company or other power and authority to execute, deliver and perform this letter agreement;

b.

the execution, delivery and performance of this letter agreement by the Investor has been duly and validly authorized and approved by all necessary action by it;

c.

all approvals of, filings with and notifications to, any Governmental Entity necessary for the due execution, delivery and performance of this letter by the Investor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Entity is required in connection with the execution, delivery or performance of this letter agreement;

d.

this letter agreement has been duly and validly executed and delivered by it and (assuming due execution and delivery of this letter agreement and the Merger Agreement by all the other parties hereto and thereto) constitutes a legal, valid and binding obligation of the Investor, enforceable against such Investor in accordance with its terms;

e.

the Investor has, and will maintain for so long as this letter agreement is in effect in accordance with Section 5 hereof, uncalled capital commitments or access to available funds in excess of the sum of its Commitment hereunder plus the aggregate amount of all other commitments and obligations it currently has outstanding;

f.

payment in full of the Commitment shall not result in a breach or violation of any applicable concentration limits or similar restrictions applicable to the Investor; and

g.

the execution, delivery and performance by the Investor of this letter agreement does not violate the Investor’s limited liability company agreement or other organizational documents.

14.              Notice to the Investor. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by e-mail, upon written confirmation of receipt by e-mail, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices delivered to the Investor hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Investor:

 

346 Short LLC
600 W Chicago Ave

Suit 510

Chicago, IL 60654
Attention: [***]
E-mail: [***]

with a copy (which shall not constitute notice) to:

Cooley LLP
110 N. Wacker Drive

Suite 4200

Chicago 60606
Attention: Rick Ginsberg
E-mail: RGinsberg@cooley.com

***

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Very truly yours,

346 Short LLC

By:

/s/ Eric Lefkofsky                             Eric Lefkofsky

Accepted and Agreed to
as of the date written above

PATHOS AI, INC.


By: /s/ Ryan Fukushima                            
Ryan Fukushima, Chief Executive Officer

 

Accepted and Agreed to
as of the date written above:

 

RAIN ONCOLOGY INC.

 

 

By: /s/ Avanish Vellanki                            

Name: Avanish Vellanki

Title: Chief Executive Officer

 

 

 

 

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