Keros Therapeutics(KROS) - 2025 Q3 - Quarterly Results

Introduction and Recitals This section introduces the Stock Purchase Agreement, detailing parties, purpose, share repurchase, and board resignations Agreement Overview This Stock Purchase Agreement, effective October 15, 2025, is between Keros Therapeutics, Inc. (the "Company") and the Seller Affiliates listed on Schedule I. It outlines the terms for the Company to repurchase shares from the Seller Affiliates as part of its Capital Return Program - The agreement is dated October 15, 2025, and is between Keros Therapeutics, Inc. and the Seller Affiliates[2] - The Company previously disclosed its intention to return $375 million in excess capital to stockholders as part of the Capital Return Program[4] Background and Purpose The Seller Affiliates collectively own 4,787,331 shares of the Company's common stock. As part of the Capital Return Program, the Company will purchase these shares from the Seller Affiliates. Concurrently, the Board Designees (Mr. Tomer Kariv and Mr. Ran Nussbaum) have delivered irrevocable resignation letters from the Company's Board of Directors, effective on the agreement's effective date - As of the agreement date, Seller Affiliates beneficially own 4,787,331 shares of the Company's Common Stock[4] - The Company intends to purchase shares from Seller Affiliates as part of its Capital Return Program[4] - Board Designees (Mr. Tomer Kariv and Mr. Ran Nussbaum) have delivered irrevocable resignation letters from the Board of Directors, effective as of the Effective Date[4][54] SECTION 1: PURCHASE AND SALE OF THE SHARES; THE CLOSING This section details the purchase and sale of Common Stock, specifying price, closing procedures, and mutual assurances for completion 1.1 Purchase and Sale of Common Stock The Seller Affiliates agree to sell, and the Company agrees to purchase, an aggregate number of Common Stock shares from each Seller Affiliate as specified in Schedule I, subject to the terms and conditions of this Agreement - Seller Affiliates agree to sell, and the Company agrees to purchase, shares of Common Stock as specified in Schedule I[6] 1.2 Purchase Price The per share purchase price for the Common Stock is set at $17.75. The total purchase price for each Seller Affiliate will be calculated by multiplying this per share price by the number of shares sold by that affiliate | Metric | Value | | :----- | :---- | | Per Share Purchase Price | $17.75 | 1.3 The Closing Process The closing of the share purchase and sale will occur on the settlement date. Upon execution of the agreement, each Seller Affiliate will transfer shares to the Company's transfer agent. Promptly after confirmation of transfer, the Company will wire the applicable Purchase Price to each Seller Affiliate - Closing will take place on the settlement date of the transactions[9] - Seller Affiliates will transfer shares to Computershare Trust Company, N.A. for the Company's benefit[10] - Within one business day of transfer confirmation, the Company will deliver the Purchase Price to Seller Affiliates via wire transfer[11] 1.4 Further Assurances Both parties agree to cooperate and use commercially reasonable efforts to execute additional documents and take necessary actions to consummate the Closing promptly in accordance with the agreement - Parties will cooperate and use commercially reasonable efforts to execute additional documents and actions to consummate the Closing[12] SECTION 2: REPRESENTATIONS AND WARRANTIES OF SELLER AFFILIATES This section outlines Seller Affiliates' representations regarding share ownership, authorization to sell, and assurances of no violations or required consents 2.1 Ownership of Shares Each Seller Affiliate represents that they beneficially own the shares listed on Schedule I with full voting rights. Immediately after closing, they will not have voting rights or beneficial ownership of Company capital stock (excluding Board Designees' equity awards) and the shares sold will be free of liens, claims, or encumbrances - Each Seller Affiliate beneficially owns shares listed on Schedule I with full voting rights[15] - Immediately upon Closing, Seller Affiliates will not have voting rights or beneficial ownership of Company capital stock (excluding Board Designees' equity awards)[15] - Shares sold to the Company will be free and clear of any liens, claims, or encumbrances[15] 2.2 Authorization Each Seller Affiliate warrants that they have the full right, power, and authority to execute, deliver, and perform this Agreement and to sell their shares to the Company. The Agreement constitutes a legal, valid, and binding obligation for each Seller Affiliate - Each Seller Affiliate has full right, power, and authority to execute, deliver, and perform this Agreement and sell their shares[16] - This Agreement is a legal, valid, and binding obligation of each Seller Affiliate[16] 2.3 No Violation; No Consent The execution and performance of this Agreement by Seller Affiliates will not breach any existing judgment or agreement, create any lien on the shares, or require consent from any Governmental Authority (other than customary SEC/Nasdaq filings) - Execution and performance by Seller Affiliates will not breach any judgment or agreement, create liens, or require governmental consent (except SEC/Nasdaq filings)[17] SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY This section details the Company's representations regarding corporate power, authorization to acquire shares, funds, and legal compliance 3.1 Organization and Corporate Power; Authorization The Company represents that it is a duly incorporated Delaware corporation with the requisite power and authority to execute and perform this Agreement and acquire the Shares. It also confirms having sufficient cash to purchase the Shares and that the Agreement is a duly authorized, legal, valid, and binding obligation of the Company - The Company is a duly incorporated Delaware corporation with the power and authority to execute and perform this Agreement[19] - The Company has sufficient cash in immediately available funds to purchase the Shares[19] - This Agreement is a legal, valid, and binding obligation of the Company[19] 3.2 No Violation; No Consent The Company warrants that the execution and performance of this Agreement will not breach any existing judgment or agreement, create any lien on the shares, or require consent from any Governmental Authority (other than customary SEC/Nasdaq filings) - Execution and performance by the Company will not breach any judgment or agreement, create liens, or require governmental consent (except SEC/Nasdaq filings)[20] SECTION 4: COVENANTS This section establishes covenants including tax withholding, standstill, voting commitments, non-disparagement, public announcements, affiliate compliance, and no-litigation 4.1 Withholding The Purchase Price paid to each Seller Affiliate will be subject to any applicable U.S. federal, state, local, or foreign income, backup withholding, or other withholding taxes - The Purchase Price is subject to applicable U.S. federal, state, local, or foreign income, backup withholding, or other withholding taxes[22] 4.2 Standstill Agreement During the Standstill Period (until the final certification of voting results for the 2028 Annual Meeting), Seller Affiliates and their Affiliates/Associates are prohibited from various actions without Company consent. These include acquiring more than 100,000 shares, engaging in proxy solicitations against the Board, proposing changes to the Company's management or structure, calling special meetings, forming groups, short selling, or challenging the agreement's validity. Exceptions are made for private communications with the Board, compliance with law, or participating in transactions on the same basis as other stockholders - The Standstill Period commences on the Effective Date and ends immediately following the final certification of voting results for the 2028 Annual Meeting of Stockholders[24] - Seller Affiliates are prohibited from acquiring beneficial ownership of more than 100,000 shares of Common Stock[24] - Seller Affiliates are restricted from engaging in proxy solicitations, proposing changes to the Board or Company policies, calling special meetings, forming groups, or engaging in short sales related to Company securities[24][25][26] 4.3 Voting Commitment During the Standstill Period, Seller Affiliates commit to vote all beneficially owned shares (i) in favor of Board nominees, (ii) against non-Board approved director nominations, (iii) against proposals to remove directors, and (iv) in accordance with Board recommendations on other proposals. Exceptions allow voting with ISS/Glass Lewis recommendations for non-director matters and sole discretion for Extraordinary Transactions - During the Standstill Period, Seller Affiliates must vote all beneficially owned shares in favor of Board nominees and against non-Board approved director nominations or removal proposals[28] - Seller Affiliates must vote in accordance with Board recommendations on other proposals, with an exception if ISS and Glass Lewis make a differing recommendation (for non-director matters)[28] - Seller Affiliates have sole discretion to vote on any Extraordinary Transaction[28] 4.4 Mutual Non-Disparagement During the Standstill Period, neither the Company nor the Seller Affiliates shall make any public or private statements that criticize, disparage, defame, or slander the other party, its subsidiaries, business, or current/former directors, officers, or employees. Exceptions apply for legally compelled disclosures or reporting federal law violations - During the Standstill Period, neither party shall make public or private statements that criticize, disparage, defame, or slander the other party or its associated individuals/entities[30] - Exceptions include compelled testimony, legally required disclosures, or private communications between parties[31] 4.5 Public Announcements and Filings On the Effective Date, the Company will issue a press release (Exhibit A). Within one business day, the Company will file a Form 8-K with the SEC, and within two business days, the Seller Affiliates will file an amendment to their Schedule 13D. Both parties will have the opportunity to review and comment on each other's SEC filings - On the Effective Date, the Company will issue a press release (Exhibit A)[32] - Within one business day of the Effective Date, the Company will file a Form 8-K with the SEC[33] - Within two business days of the Effective Date, the Seller Affiliates will file an amendment to their Schedule 13D[35] 4.6 Affiliates and Associates Compliance Each Seller Affiliate agrees to ensure their respective Affiliates and Associates comply with the terms of this Agreement and will be jointly and severally responsible for any breaches by them - Each Seller Affiliate will cause its Affiliates and Associates to comply with the Agreement's terms[37] - Seller Affiliates are jointly and severally responsible for any breaches by their respective Affiliates and Associates[37] 4.7 No Litigation During the Standstill Period, neither the Company nor the Seller Affiliates shall initiate, solicit, join, or assist in any lawsuit or proceeding against the other party or their directors/officers. Exceptions include legal proceedings to enforce this Agreement, counterclaims, or responding to legal requirements (with prompt notice to the other party) - During the Standstill Period, neither party shall initiate or assist in any lawsuit against the other, their Affiliates, or their directors/officers[38] - Exceptions include legal proceedings to remedy a breach of this Agreement, counterclaims, or responding to legal requirements[38] SECTION 5: MISCELLANEOUS This section covers miscellaneous provisions: survival, adjustments, assignment, termination, notices, governing law, amendments, and definitions 5.1 Survival All representations, warranties, and covenants made under this Agreement will survive the Closing of the transactions - All representations, warranties, and covenants survive the Closing[41] 5.2 Adjustments Any specified numbers, such as shares or price per share, will be adjusted to reflect stock dividends, stock-splits, reverse stock-splits, combinations, or other reclassifications to preserve the original rights and obligations of the Parties - Numbers of shares or price per share will be adjusted for stock dividends, splits, or reclassifications to preserve original rights and obligations[42] 5.3 Successors and Assigns; No Third-Party Beneficiaries The Agreement's provisions benefit and bind the successors and permitted assigns of the Parties. No Party may assign the Agreement without prior written consent from the other Parties. No third-party beneficiaries are intended - Provisions benefit and bind successors and permitted assigns; no assignment without prior written consent[43] - No provision is intended to confer rights or benefits upon any person other than the Parties and their successors/assigns[43] 5.4 Entire Agreement This Agreement constitutes the entire understanding between the Parties regarding its subject matter, superseding all prior agreements and communications. The Letter Agreement dated April 17, 2025, automatically terminates upon execution of this Agreement - This Agreement contains all terms agreed upon and supersedes all prior agreements, arrangements, and communications[44] - The letter agreement dated April 17, 2025, automatically terminates upon execution of this Agreement[44] 5.5 Termination This Agreement will terminate at the earlier of the end of the Standstill Period or the consummation of an Extraordinary Transaction, with the provisions of Section 5 surviving such termination. No liability for breaches occurring after termination, except for prior breaches - The Agreement terminates at the earlier of the end of the Standstill Period or the consummation of an Extraordinary Transaction[45] - Provisions of Section 5 survive termination[45] 5.6 Notices Notices, consents, and other communications must be in writing and are deemed delivered upon receipt (personally or by email) or one business day after deposit with an overnight delivery service. Specific addresses and email contacts are provided for both the Seller Affiliates and the Company - Notices must be in writing and delivered personally, by email, or via overnight delivery service[47] - Specific contact information for Seller Affiliates (Pontifax entities) and the Company (Keros Therapeutics, Inc.) is provided[47] 5.7 Severability If any provision of this Agreement is found to be invalid, illegal, or unenforceable by a court, the validity, legality, and enforceability of the remaining provisions will not be affected - If any provision is judicially determined to be invalid, illegal, or unenforceable, the remaining provisions' validity, legality, and enforceability will not be affected[47] 5.8 Governing Law; Jurisdiction This Agreement is governed by and construed in accordance with the laws of the State of Delaware. The Parties agree that jurisdiction for any related legal proceedings will exclusively lie in the Delaware Court of Chancery or other specified Delaware courts, and they irrevocably waive any objection to venue and submit to personal jurisdiction. Both Parties also irrevocably waive any right to trial by jury - The Agreement is governed by and construed in accordance with the laws of the State of Delaware[48] - Jurisdiction for any legal proceedings will exclusively lie in the Court of Chancery of the State of Delaware or other specified Delaware courts[48] - Each Party irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement[48] 5.9 Amendment; Waiver This Agreement can only be modified, amended, or changed by a written document signed by all Parties. Rights under the Agreement can only be waived in writing signed by the waiving Parties. No failure or delay in exercising a right constitutes a waiver - This Agreement may only be modified, amended, or changed in a writing signed by all Parties[49] - Rights under this Agreement may be waived only in a writing signed by each of the Parties waiving such right[49] 5.10 Specific Performance The Parties acknowledge that irreparable damage would result from any breach of this Agreement and are entitled to injunctions to prevent or cure breaches and to specifically enforce its terms, in addition to other remedies. Any defense that damages would be adequate is waived - Parties agree that irreparable damage would occur from breaches and are entitled to injunctions to prevent or cure breaches and to enforce terms specifically[50] - Any defense that a remedy in damages would be adequate is expressly waived[50] 5.11 Payment of Fees and Expenses Each Party is responsible for its own fees and expenses related to the Agreement. However, the Company will reimburse the Seller Affiliates for their reasonable and documented out-of-pocket fees and expenses, including legal fees, incurred from the date of the Letter Agreement through this Agreement's execution, up to a mutually agreed aggregate amount - Each Party is responsible for its own fees, costs, and expenses[51] - The Company will reimburse Seller Affiliates for reasonable and documented out-of-pocket fees and expenses (including legal fees) incurred from the Letter Agreement date through this Agreement's execution, up to a mutually agreed amount[51] 5.12 Interpretation and Construction of Agreement This section outlines rules for interpreting the Agreement, stating that all Parties were represented by counsel and participated in drafting, thus waiving any rule of law that would construe ambiguities against a drafting party. It also defines common terms and phrases used throughout the document - All Parties were represented by counsel and participated in drafting, waiving rules of construction against a drafting party[52] - Defines terms like 'including' (without limitation), 'hereof' (referring to the whole Agreement), and 'will' (same meaning as 'shall')[52] 5.13 Counterparts This Agreement may be executed in any number of counterparts, each considered an original, which together constitute one instrument. Delivery by facsimile, electronic mail, or other transmission method is deemed valid - The Agreement may be executed in any number of counterparts, each an original, together constituting one instrument[53] - Delivery by facsimile, electronic mail, or other transmission method is deemed duly and validly delivered[53] 5.14 Certain Definitions This section provides definitions for key capitalized terms used throughout the Agreement, including 'Affiliate,' 'Associate,' 'Board Designees' (Mr. Tomer Kariv and Mr. Ran Nussbaum), 'Business Day,' 'Extraordinary Transaction,' 'Governmental Authority,' 'person,' 'Representatives,' 'Short Interests,' 'Stockholder Meeting,' and 'Synthetic Equity Interests.' - Defines 'Affiliate' and 'Associate' as per Rule 12b-2 of the Exchange Act, with specific provisos[54] - Identifies 'Board Designees' as Mr. Tomer Kariv and Mr. Ran Nussbaum[54] - Defines 'Extraordinary Transaction' as a transaction with a third party resulting in pre-transaction stockholders not controlling a majority of the surviving entity's voting power, or the sale of substantially all Company assets[54] Schedules and Exhibits This section lists supporting schedules and exhibits, detailing share information, wire instructions, and the public press release form Schedule I: Shares Owned and Sold Schedule I details the number of Common Stock shares owned by each Seller Affiliate and the corresponding number of shares being sold to Keros Therapeutics, Inc. as part of this agreement | Name of Seller Affiliate | Number of Shares of Common Stock Owned | Number of Shares of Common Stock Sold | | :----------------------- | :------------------------------------- | :------------------------------------ | | Pontifax (Israel) IV, L.P. | 2,284,612 | 2,284,612 | | Pontifax (Cayman) IV L.P. | 1,121,045 | 1,121,045 | | Pontifax (China) IV L.P. | 1,226,412 | 1,226,412 | | Pontifax Late Stage Fund, L.P. | 155,262 | 155,262 | Schedule II: Wire Instructions Schedule II contains the wire instructions for the payment of the Purchase Price to the Seller Affiliates - Schedule II contains the wire instructions for payment[62] Exhibit A: Form of Press Release Exhibit A provides the agreed-upon form of the press release to be issued by the Company on the Effective Date regarding this Agreement and the contemplated transactions - Exhibit A is the Form of Press Release[63]