SC 13D

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )*

 

 

Epizyme, Inc.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

29428V104

(CUSIP Number)

George Lloyd, Esq.

RP Management, LLC, 110 E. 59th Street, 33rd Floor

New York, NY 10022

(212) 883-2280

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

November 6, 2019

(Date of Event which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.   ☐

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

*

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 


  1    

  NAMES OF REPORTING PERSONS

  I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

  RP Management, LLC

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS

 

  AF

  5    

  CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(e) or 2(f)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  New York

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  0

  8     

  SHARED VOTING POWER

 

  9,166,667

  9     

  SOLE DISPOSITIVE POWER

 

  0

  10     

  SHARED DISPOSITIVE POWER

 

  9,166,667

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  9,166,667

12    

  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  9.1%

14    

  TYPE OF REPORTING PERSON

 

  HC, IA


  1    

  NAMES OF REPORTING PERSONS

  I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

  RPI Finance Trust

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS

 

  WC

  5    

  CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(e) or 2(f)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  New York

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  0

  8     

  SHARED VOTING POWER

 

  9,166,667

  9     

  SOLE DISPOSITIVE POWER

 

  0

  10     

  SHARED DISPOSITIVE POWER

 

  9,166,667

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  9,166,667

12    

  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  9.1%

14    

  TYPE OF REPORTING PERSON

 

  OO


  1    

  NAMES OF REPORTING PERSONS

  I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

 

  Pablo G. Legorreta

  2    

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

  (a)  ☐        (b)  ☒

 

  3    

  SEC USE ONLY

 

  4    

  SOURCE OF FUNDS

 

  AF

  5    

  CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(e) or 2(f)

 

  ☐

  6    

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  The United States of America

NUMBER OF

SHARES

  BENEFICIALLY  

OWNED BY

EACH

REPORTING

PERSON

WITH

    7     

  SOLE VOTING POWER

 

  0

  8     

  SHARED VOTING POWER

 

  9,166,667

  9     

  SOLE DISPOSITIVE POWER

 

  0

  10     

  SHARED DISPOSITIVE POWER

 

  9,166,667

11    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  9,166,667

12    

  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

 

  ☐

13    

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  9.1%

14    

  TYPE OF REPORTING PERSON

 

  HC, IN


Item 1. Security and Issuer

This statement on Schedule 13D relates to the Common Stock, $0.0001 par value (the “Common Stock”) of Epizyme, Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at 400 Technology Square, Cambridge, MA 02139.

Item 2. Identity and Background

 

  (a)

This statement on Schedule 13D is being jointly filed by RP Management, LLC (“RP Management”), RPI Finance Trust (“RPIFT”), and Pablo G. Legorreta (collectively, the “Reporting Persons”). The Reporting Persons are filing jointly, and the agreement among them to file jointly is attached hereto as Exhibit A and incorporated herein by reference. The execution and filing of such joint filing agreement shall not be construed as an admission that the Reporting Persons are a group, or have agreed to act as a group.

 

  (b)

The address of the principal business and principal office of each of the Reporting Persons is c/o RP Management, LLC, 110 E. 59th Street, 33rd Floor, New York, NY 10022.

 

  (c)

The principal business of RP Management is to act as the manager of RPIFT and investment vehicles that invest in RPIFT. The principal business of RPIFT is to invest in pharmaceutical, biopharmaceutical, medical and/or healthcare assets, including royalties, and equity, debt and hybrid securities of companies in the pharmaceutical, biopharmaceutical, medical and/or healthcare industries, as an investment vehicle managed by RP Management. Mr. Legorreta is the chief executive officer, beneficial owner and sole manager of RP Management. Mr. Legorreta and RP Management may be deemed to have beneficial ownership under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, of the securities beneficially owned by RPIFT. Pursuant to Exchange Act Rule 13d-4, RP Management and Mr. Legorreta declare that the filing of this statement on Schedule 13D shall not be deemed an admission by either or both of them that they are, for the purposes of Section 13 of the Securities Exchange Act of 1934, as amended, the beneficial owner of any securities covered by this statement on Schedule 13D.


  (d)

None of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) during the past five years.

 

  (e)

None of the Reporting Persons have been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws during the last five years.

 

  (f)

RP Management is a Delaware limited liability company, RPIFT is a Delaware statutory trust and Mr. Legorreta is a citizen of the United States of America.

Item 3. Source and Amount of Funds or Other Consideration

On November 6, 2019, RPIFT acquired 6,666,667 shares of Common Stock (the “Shares”) and a three-year warrant to purchase 2,500,000 shares of Common Stock (the “Warrant” and together with the Shares, the “Securities”) in a private placement pursuant to that certain Purchase Agreement, dated November 4, 2019, by and between RPIFT and the Issuer (the “Purchase Agreement”). The aggregate purchase price paid by RPIFT to the Issuer for the Securities and other assets acquired pursuant to the Purchase Agreement was $100,000,000. The source of funds for the purchase of the Securities is the working capital of RPIFT. Additionally, pursuant to the Purchase Agreement, the Issuer has the option to sell an additional $50 million of Common Stock to Royalty Pharma until May 6, 2021 at a maximum price of $20.00 per share, provided that the ten-day volume-weighted average trading price of the Common Stock for the ten consecutive trading days immediately preceding the date on which the Issuer exercises such right must be greater than $8.00 per share.

Item 4. Purpose of Transaction

RPIFT acquired the Securities for investment purposes. The Reporting Persons intend to review their investment in the Issuer on a continuing basis and expect to engage in discussions with management and the board of directors of the Issuer concerning the business, operations, governance, strategy, capitalization, ownership and future plans of the Issuer. The Reporting Person may change its plans or proposals in the future. Depending on various factors including, without limitation, the Issuer’s financial position, strategic direction, business and prospects, anticipated future developments, existing and anticipated market conditions from time to time, actions taken by the management and board of directors of the Issuer, price levels of the Common Stock, general economic conditions and regulatory matters, the Reporting Persons may in the future take such actions with respect to its investment in the Issuer as it deems appropriate including, without limitation, purchasing additional Common Stock or other securities of the Issuer, exercising the Warrant in whole or in part, selling some or all of their Common Stock or engaging in short selling of or any hedging or similar transaction with respect to the Common Stock, to the extent permitted under applicable law. Any such transactions, if they occur at all, may take place at any time and without prior notice. Additionally, in connection with the acquisition of the Securities by RPIFT, the Issuer increased the size of its board of directors by one and appointed Mr. Legorreta, designated by RPIFT, to serve as a Class III member of its board of directors.

Except for the foregoing, the Reporting Persons do not have, as of the date of this filing, any plans or proposals that relate to or would result in any of the actions or events specified in clauses (a) through (j) of Item 4 of Schedule 13D. The Reporting Persons reserve the right to change their intention with respect to any or all of the matters referred to in this Item 4.

Item 5. Interest in Securities of the Issuer

 

  (a)

The responses to Items 7-13 of the cover pages of this Schedule 13D are incorporated by reference herein. The percentage of the Issuer’s Common Stock beneficially owned by the Reporting Persons is based on 91,073,942 shares of Common Stock outstanding as of October 31, 2019, as disclosed in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed with the Securities and Exchange Commission on October 31, 2019, the shares of Common Stock subject to the Warrant, and the Shares beneficially owned by the Reporting Person. As described in Item 3, 2,500,000 shares of the Issuer’s Common Stock are subject to the Warrant.


  (b)

The responses to Items 7-13 of the cover pages of this Schedule 13D are incorporated by reference herein. The percentage of the Issuer’s Common Stock beneficially owned by the Reporting Persons is based on 91,073,942 shares of Common Stock outstanding as of October 31, 2019, as disclosed in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed with the Securities and Exchange Commission on October 31, 2019.

 

  (c)

In connection with his appointment to the board of directors of the Issuer, on November 6, 2019, Mr. Legorreta was granted an option to purchase 34,408 shares of the Issuer’s common stock at a price of $13.51 per share. This option vests as to 25% of the shares on the first anniversary of the grant date and as to an additional 2.0833% of the shares at the end of each successive month following the first anniversary of the grant date until the fourth anniversary of the grant date. Any exercise of the stock option, when vested, or sale of the shares issuable upon exercise shall be at the direction of RP Management and the proceeds of the sale of the shares issuable upon exercise shall be delivered to RP Management. The proceeds of the sale of the shares issuable under the stock option will be offset against the management fee payable to RP Management by certain indirect owners of RPIFT, all of which are managed by RP Management.

 

  (d)

Except as set forth in this Schedule 13D, to the knowledge of the Reporting Persons, no person had the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, Shares covered by this Schedule 13D.

 

  (e)

Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Except as otherwise set forth in this Schedule 13D, to the knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 or between such persons and any other person with respect to any Shares. The response to Item 5(c) of this Schedule 13D and the description of the Warrant set forth in Item 3 of this Schedule 13D are incorporated by reference herein.

Item 7. Material to Be Filed as Exhibits

A. Joint Filing Agreement of the Reporting Persons

B. Warrant


Signature

After reasonable 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.

 

    RP Management, LLC
November 18, 2019     By:  

/s/ Pablo G. Legorreta

      Chief Executive Officer
    RPI Finance Trust
November 18, 2019    

By:

 

By:

 

RP Management, LLC, its Administrator

 

/s/ Pablo G. Legorreta

      Chief Executive Officer
    Pablo G. Legorreta
November 18, 2019     By:  

/s/ Pablo G. Legorreta

The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of the filing person), evidence of the representative’s authority to sign on behalf of such person shall be filed with the statement: provided, however, that a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature.

Footnotes:

Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001)

EX-99.A

EXHIBIT A

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(I) under the Securities Exchange Act of 1934, as amended, each of the undersigned Reporting Persons hereby agrees to the joint filing, along with all other such Reporting Persons, on behalf of each of them of a statement on Schedule I3D (including amendments thereto) with respect to beneficial ownership of shares of Common Stock, $0.0001 par value, of Epizyme, Inc., and that this Agreement be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. The execution and filing of this Agreement shall not be construed as an admission that the undersigned Reporting Persons are a group, or have agreed to act as a group.

IN WITNESS WHEREOF, each of the undersigned hereby executes this Agreement as of November 18, 2019.

 

RP Management, LLC

By:

 

/s/ Pablo G. Legorreta

  Chief Executive Officer

RPI Finance Trust

By:

  RP Management, LLC, its Administrator

By:

 

/s/ Pablo G. Legorreta

  Chief Executive Officer

Pablo G. Legorreta

By:

 

/s/ Pablo G. Legorreta

EX-99.B

Exhibit B

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

WARRANT TO PURCHASE STOCK

 

Company:    EPIZYME, INC., a Delaware corporation (the “Company”)
Number of Shares:    2,500,000, subject to adjustment in accordance with Article 2 below
Class of Stock:    Common Stock of the Company, par value $0.0001 per share (the “Common Stock”)
Warrant Price:    $20.00 per share
Issue Date:    November 6, 2019
Expiration Date:    The 3rd anniversary of the Issue Date
Purchase Agreement:    This Warrant is issued in connection with the Purchase Agreement, dated as of November 4, 2019, by and between the Company and RPI Finance Trust (as amended from time to time, the “Purchase Agreement”).

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, including, without limitation, the mutual promises contained in the Purchase Agreement, RPI Finance Trust (“Royalty Pharma,” together with any registered holder from time to time of this Warrant, “Holder”) is entitled to purchase the number of fully paid and nonassessable shares of Common Stock (the “Shares”) at the Warrant Price, all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.

ARTICLE 1. EXERCISE.

1.1 Method of Exercise. Holder may exercise this Warrant in whole or in part by delivering a duly executed Notice of Exercise in substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check, wire transfer (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.

1.2 Conversion Right. The Holder may, at its option, elect to exercise this Warrant, in whole or in part and at any time or from time to time, on a cashless basis, by surrendering this Warrant, and delivering a duly executed Notice of Exercise in substantially the form attached as Appendix I, to the principal office of the Company (such date, the “Cashless Exercise Date”). In the event of an exercise pursuant to this Section 1.2, the number of Shares issued to the Holder shall be determined according to the following formula:

 

1


X = Y(A-B)   
        A   
Where: X =    the number of Shares that shall be issued to the Holder;
Y =    the number of Shares for which this Warrant is being exercised (which shall include both the number of Shares issued to the Holder and the number of Shares subject to the portion of the Warrant being cancelled in payment of the Warrant Price);
A =    the Fair Market Value (as defined below) of one share of Common Stock; and
B =    the Warrant Price then in effect.

The Fair Market Value per share of Common Stock shall be determined as follows:

(1) If the Common Stock is listed on a national securities exchange, the Fair Market Value shall be deemed to be the closing price per share of Common Stock on the Nasdaq Global Select Market or another nationally recognized trading system as of the Business Day immediately preceding the Cashless Exercise Date. For the purpose of this Warrant, “Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which banking institutions located in New York are permitted or required by applicable law or regulation to remain closed.

(2) If the Common Stock is not listed on a national securities exchange, the Fair Market Value shall be deemed to be the amount most recently determined by the Board of Directors of the Company (the “Board”) to represent the fair market value per share of the Common Stock (including without limitation a determination for purposes of granting Common Stock options or issuing Common Stock under any plan, agreement or arrangement with employees of the Company); and, upon request of the Holder, the Board (or a representative thereof) shall, as promptly as reasonably practicable but in any event not later than 10 days after such request, notify the Holder of the Fair Market Value per share of Common Stock and furnish the Holder with reasonable documentation of the Board’s determination of such Fair Market Value. Notwithstanding the foregoing, if the Board has not made such a determination within the three-month period prior to the Cashless Exercise Date, then (A) the Board shall make, and shall provide or cause to be provided to the Registered Holder notice of, a determination of the Fair Market Value per share of the Common Stock within 15 days of a request by the Holder that it do so, and (B) the exercise of this Warrant pursuant to this subsection 1.2 shall be delayed until such determination is made and notice thereof is provided to the Holder.

1.3 Delivery of Shares and New Warrant. Promptly after Holder exercises or converts this Warrant and, if applicable, the Company receives payment of the aggregate Warrant Price, the Company shall deliver to Holder (a) the acquired Shares in book-entry form and (b) upon surrender of this Warrant, if this Warrant has not been fully exercised or converted and has not expired, a new Warrant exercisable for the number of shares of Common Stock remaining available for purchase under this Warrant.

 

2


1.4 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation on surrender and cancellation of this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

1.5 Treatment of Warrant Upon Acquisition of Company.

1.5.1 “Acquisition”. For the purpose of this Warrant, “Acquisition” means (i) any sale, license, or other disposition of all or substantially all of the assets of the Company, or (ii) any reorganization, consolidation, merger or other business combination (either in one transaction or a series of related transactions) with another person or group of persons whereby such other person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other person or other persons making or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination).

1.5.2 Treatment of Warrant at Acquisition.

(a) Holder agrees that, in the event of an Acquisition under Section 1.5.1(ii) and in which the consideration is cash, Marketable Securities (as defined below), or a combination thereof, upon the written request of the Company, either (i) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire upon the consummation of such Acquisition. The Company shall provide the Holder with written notice of its request relating to the foregoing (together with such reasonable information as the Holder may request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than ten (10) Business Days prior to the closing of the proposed Acquisition.

(b) Holder agrees that, in the event of an Acquisition under Section 1.5.1(i) to a third party that is not an Affiliate (as defined below) of the Company (a “True Asset Sale”), upon the written request of the Company, either (i) Holder shall exercise its conversion or purchase right under this Warrant and such exercise will be deemed effective immediately prior to the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will continue in full force and effect. The Company shall provide Holder with written notice of its request relating to the foregoing (together with such reasonable information as Holder may request in connection with such contemplated Acquisition giving rise to such notice), which is to be delivered to Holder not less than ten (10) Business Days prior to the closing of the proposed Acquisition.

(c) Upon the closing of any Acquisition other than those particularly described in subsections (a) and (b) above, the successor entity shall assume this Warrant, and shall succeed to, and be substituted for (so that from and after the date of such Acquisition, the provisions of this Warrant referring to the “Company” shall refer instead to the successor entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such successor entity had been named as the Company herein. Upon the closing of such an Acquisition in which the Common Stock is converted into or exchanged for securities, cash or other property, this Warrant shall be exercisable for, in lieu of the Shares, the kind and amount of securities, cash, and property the Holder would have been entitled to receive pursuant to such Acquisition if such Holder had executed this Warrant immediately prior to such Acquisition. In any such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Holder, to the end that the provisions set forth in this Section shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities, cash or other property thereafter deliverable upon exercise of this Warrant.

 

3


(d) As used herein (x) “Affiliate” shall mean any person or entity that owns or controls directly or indirectly ten percent (10%) or more of the Common Stock, any person or entity that controls or is controlled by or is under common control with such persons or entities, and each of such person’s or entity’s officers, directors, joint venturers or partners, as applicable; and (y) “Marketable Securities” shall mean securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is then current in its filing of all required reports and other information under the Securities Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise or convert this Warrant on or prior to the closing thereof is then traded on a national securities exchange or over-the-counter market; (iii) Holder would not be restricted by contract or by applicable federal or state securities laws from publicly re-selling, within six (6) months following the closing of such Acquisition, all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to convert this Warrant pursuant to Section 1.2 above in full on or prior to the closing of such Acquisition; and (iv) the issuer has a market capitalization, as of the date immediately prior to and on the closing of such Acquisition of at least $1,000,000,000.

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on its Common Stock payable in shares of Common Stock, or other securities of the Company, then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend occurred. If the Company subdivides the shares of Common Stock by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of Common Stock are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased. Any adjustment made pursuant to the first sentence of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend, and any adjustment pursuant to the second and third sentences of this paragraph shall become effective immediately after the effective date of such subdivision, combination or reclassification.

 

4


2.2 Reclassification, Exchange, Combinations or Substitution. Upon any changes in the Common Stock by reason of recapitalizations, reclassifications, exchanges, substitutions, combinations, reorganizations, liquidations or similar transactions, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this Warrant (other than in connection with an Acquisition), Holder shall be entitled to receive, upon exercise or conversion of this Warrant, the number and kind of securities and property that Holder would have received for the Shares if this Warrant had been exercised immediately before such event. The Company or its successor shall promptly issue to Holder an amendment to this Warrant setting forth the number and kind of such new securities or other property issuable upon exercise or conversion of this Warrant as a result of such reclassification, exchange, substitution or other event that results in a change of the number and/or class of securities issuable upon exercise or conversion of this Warrant. The amendment to this Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.

2.3 No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or other organizational documents or through a reorganization, transfer of assets, consolidation, merger, dissolution, issuance, or sale of its securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder’s rights under this Section against impairment.

2.4 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder the amount computed by multiplying the fractional interest by the fair market value of a full Share.

2.5 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the Company shall promptly notify Holder in writing, and, at the Company’s expense, promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant Price.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

3.1 Representations and Warranties. The Company represents and warrants and covenants to Holder as follows: All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and restrictions on transfer except for restrictions on transfer provided for herein or under applicable federal and state securities laws.

 

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3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend or distribution upon any of its stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) to effect any reclassification or recapitalization of any of its stock; (c) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up, then, in connection with each such event, the Company shall give Holder: (1) at least 10 Business Days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of Common Stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) above; and (2) in the case of the matters referred to in (b) and (c) above at least 10 Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other property deliverable upon the occurrence of such event). In addition, the Company shall give Holder notice within one Business Day of receipt by the Company of a delisting determination letter from the national securities exchange on which the Company’s Common Stock is then traded. Notwithstanding the foregoing, the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

3.4 No Shareholder Rights. Except as provided in this Warrant, the Holder will not have any rights as a shareholder of the Company until the exercise of this Warrant.

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and warrants to the Company as follows:

4.1 Purchase for Own Account. This Warrant and the securities to be acquired upon exercise of this Warrant by the Holder will be acquired for investment for the Holder’s account, not as a nominee or agent, and not with a view to the public resale or distribution within the meaning of the Securities Act. Holder also represents that the Holder has not been formed for the specific purpose of acquiring this Warrant or the Shares.

4.2 Disclosure of Information. The Holder has received or has had full access to all the information about the Company it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. The Holder further has had a full opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to the Holder or to which the Holder has access.

4.3 Investment Experience. The Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk. The Holder has experience as an investor in securities of companies in the development stage and acknowledges that the Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that the Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables the Holder to be aware of the character, business acumen and financial circumstances of such persons.

4.4 Accredited Investor Status. The Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act.

 

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4.5 The Securities Act. The Holder understands that this Warrant and the Shares issuable upon exercise or conversion hereof have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. The Holder understands that this Warrant and the Shares issued upon any exercise or conversion hereof must be held indefinitely unless subsequently registered under the Securities Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available.

ARTICLE 5. MISCELLANEOUS.

5.1 Term. This Warrant is exercisable in whole or in part at any time and from time to time on or before the Expiration Date.

5.2 Legends. This Warrant and the Shares shall be imprinted with a legend in substantially the following form:

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION.

5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to any “affiliate” (as such term is defined in Regulation D promulgated under the Securities Act) of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Securities Act. Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of current information as referenced in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e) in reasonable detail, the selling broker represents that it has complied with Rule 144(f), and the Company is provided with a copy of Holder’s notice of proposed sale.

5.4 Transfer Procedure. Royalty Pharma (and any Royalty Pharma Affiliate to which all or part of this Warrant is transferred pursuant to this Section 5.4) may transfer all or part of this Warrant to one or more of its affiliates subject to compliance, and in accordance, with Section 5.3 (each, a “Royalty Pharma Affiliate”) by execution of an Assignment substantially in the form of Appendix 2. Subject to the provisions of Section 5.3, any Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant to any transferee, provided, however, in connection with any such transfer, (i) such transferee agrees in writing to be bound by the terms of this Warrant (ii) Royalty Pharma, the Royalty Pharma Affiliate(s) or any subsequent Holder will give the Company written notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and (iii) the transferor will surrender this Warrant to the Company for reissuance to the transferee(s) (and the transferor if applicable).

 

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5.5 Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may (or on the first business day after transmission by facsimile) be, in writing by the Company or such Holder from time to time. Effective upon receipt of the fully executed Warrant and the initial transfer described in Section 5.4 above, all notices to the Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:

RPI Finance Trust

c/o Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention: Corporate Trust Administration

Facsimile: (302) 636-4140

with a copy to:

RP Management, LLC

110 E. 59th Street, Suite 3300

New York, New York 10022

Attention: George Lloyd

E-mail: glloyd@royaltypharma.com

Facsimile: (212) 883-2280

with another copy to:

Goodwin Procter LLP

100 Northern Avenue

Boston, Massachusetts 02210

Attention: Arthur R. McGivern

E-mail: amcgivern@goodwinlaw.com

Facsimile: (617) 523-1231

 

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Notice to the Company shall be addressed as follows until the Holder receives notice of a change in address:

Epizyme, Inc.

400 Technology Square, Cambridge, MA 02139

Robert Bazemore

Attention:     Chief Executive Officer

Telephone:   (617) 229-5872

Facsimile:    (617) 349-0707

E-mail:         rbazemore@epizyme.com

with a copy to:

WilmerHale

60 State Street

Boston, MA 02109

Attn: Stuart Falber

Telephone: (617) 526-6000

Facsimile: (617) 526-5000

Email: stuart.falber@wilmerhale.com

5.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

5.7 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.

5.8 Automatic Conversion upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.2 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be converted pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised or converted, and the Company shall promptly deliver in book-entry form the Shares (or such other securities) issued upon such conversion to the Holder.

5.9 Trustee Capacity of Wilmington Trust Company. Notwithstanding anything contained herein to the contrary, it is expressly understood and agreed by the parties hereto that (i) this Warrant is executed and delivered by Wilmington Trust Company, not individually or personally but solely in its trustee capacity, in the exercise of the powers and authority conferred and vested in it under the trust deed of Royalty Pharma, (ii) each of the representations, undertakings and agreements herein made on the part of Royalty Pharma is made and intended not as a personal representation, undertaking and agreement by Wilmington Trust Company but is made and intended for the purpose of binding only Royalty Pharma and (iii) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of Royalty Pharma or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by Royalty Pharma under this Warrant or any related documents.

 

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5.10 Counterparts. This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement.

5.11 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its principles regarding conflicts of law.

[Balance of Page Intentionally Left Blank]

 

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COMPANY:

 

EPIZYME, INC.

By:  

/s/ Robert B. Bazemore

  Name: Robert B. Bazemore
  Title: Chief Executive Officer

HOLDER:

 

RPI FINANCE TRUST

By:   Wilmington Trust Company, not in its individual capacity but solely in its capacity as owner trustee
By:  

/s/ Cynthia L. Major

  Name: Cynthia L. Major
  Title: Officer

 

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APPENDIX 1

NOTICE OF EXERCISE

Holder elects to purchase                 shares of the common stock of Epizyme, Inc., par value $0.0001 per share (the “Common Stock”), pursuant to the terms of the attached Warrant, and tenders payment of the purchase price of the shares in full.

[or]

Holder elects to convert the attached Warrant into shares of Common Stock in the manner specified in the Warrant. This conversion is exercised for                 of the Shares covered by the Warrant.

[Strike paragraph that does not apply.]

Please issue in book-entry form the shares of Common Stock in the name specified below:

 

 

Holders Name

 

 

(Address)

By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Article 4 of the Warrant as the date hereof.

 

HOLDER:
By:  

 

Name:  

 

Title:  

 

(Date):  

 

 

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APPENDIX 2

ASSIGNMENT

For value received, Holder hereby sells, assigns and transfers unto

 

[Name:   

[ROYALTY PHARMA TRANSFEREE]

  
Address:   

 

  
Tax ID:   

 

  

]

that certain Warrant to Purchase Stock issued by Epizyme, Inc. (the “Company”), on [___], 2019 (the “Warrant”) together with all rights, title and interest therein.

 

HOLDER:

 

By:  

 

Name:  
Title:  
Date:  

By its execution below, and for the benefit of the Company, [ROYALTY PHARMA TRANSFEREE] makes each of the representations and warranties set forth in Article 4 of the Warrant and agrees to all other provisions of the Warrant as of the date hereof.

 

[ROYALTY PHARMA TRANSFEREE]
By:  

 

Name:  
Title:  

 

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