Exhibit 3.1

 

RESTATED
CERTIFICATE OF INCORPORATION
OF
IN8bio, Inc.

 

(Pursuant to Section 242 and Section 245 of the
General Corporation Law of the State of Delaware)

 

IN8bio, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”),

 

DOES HEREBY CERTIFY:

 

1.                   That the name of this corporation is IN8bio, Inc., and that this corporation was originally incorporated pursuant to the General Corporation Law on May 7, 2018 under the name Incysus Therapeutics, Inc.

 

2.                    That this Restated Certificate of Incorporation does not amend the provisions of the Corporation’s Original Certificate, as previously amended or supplemented, and there is no discrepancy between the provisions in this Restated Certificate of Incorporation and the provisions in the Corporation’s Original Restated Certificate, as previously amended or supplemented.

 

3.                   That this Restated Certificate of Incorporation has been duly approved by the Board of Directors of the Corporation in accordance with Sections 245 of the DGCL, and shall read as follows:

 

FIRST:                 The name of this corporation is IN8bio, Inc. (the “Corporation”).

 

SECOND:            The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of its registered agent at such address is The Corporation Trust Company.

 

THIRD:                 The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).

 

FOURTH:             The total number of shares of all classes of stock which the Corporation shall have authority to issue is (i) 50,7000,000 shares of Common Stock, $0.0001 par value per share (“Common Stock”) and (ii) 27,564,260 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”).

 

The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

 

A.                 COMMON STOCK

 

1.                   General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.

 

 

2.                   Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings); provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation or pursuant to the DGCL. There shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of this Certificate of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.

 

B.                  PREFERRED STOCK

 

All of the shares of the authorized Preferred Stock of the Corporation are hereby designated “Series A Preferred Stock” with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations. Unless otherwise indicated, references to “sections” or “subsections” in this Part B of this Article Fourth refer to sections and subsections of Part B of this Article Fourth.

 

1.                   Dividends.

 

From and after the date of the issuance of any shares of Series A Preferred Stock, dividends at the rate per annum of $0.10463 per share shall accrue on such shares of Series A Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock) (the “Accruing Dividends”). Accruing Dividends shall accrue from day to day, whether or not declared, and shall be cumulative; provided, however, that except as set forth in the following sentence of this Section 1 or in Subsection 2.1, such Accruing Dividends shall be payable only when, as, and if declared by the Board of Directors and the Corporation shall be under no obligation to pay such Accruing Dividends. The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in this Certificate of Incorporation) the holders of the Series A Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A Preferred Stock in an amount at least equal to the sum of (i) the amount of the aggregate Accruing Dividends then accrued on such share of Series A Preferred Stock and not previously paid and (ii) (A) in the case of a dividend on Common Stock or any class or series that is convertible into Common Stock, that dividend per share of Series A Preferred Stock as would equal the product of (1) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (2) the number of shares of Common Stock issuable upon conversion of a share of Series A Preferred Stock, in each case calculated on the record date for determination of holders entitled to receive such dividend or (B) in the case of a dividend on any class or series that is not convertible into Common Stock, at a rate per share of Series A Preferred Stock determined by (1) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issuance price of such class or series of capital stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (2) multiplying such fraction by an amount equal to the Series A Original Issue Price (as defined below); provided that if the Corporation declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital stock of the Corporation, the dividend payable to the holders of Series A Preferred Stock pursuant to this Section 1 shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest Series A Preferred Stock dividend. The “Series A Original Issue Price” shall mean $1.30787 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock.

 

 

2.                   Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.

 

2.1               Preferential Payments to Holders of Series A Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event (as defined below), the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to one (1) times the Series A Original Issue Price, plus any Accruing Dividends accrued but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon. If, upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series A Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1, the holders of shares of Series A Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

2.2               Distribution of Remaining Assets. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, after the payment in full of all Series A Liquidation Amounts required to be paid to the holders of shares of Series A Preferred Stock the remaining assets of the Corporation available for distribution to its stockholders shall be distributed among the holders of the shares of Series A Preferred Stock and Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of this Certificate of Incorporation immediately prior to such liquidation, dissolution or winding up of the Corporation; provided, however, that if the aggregate amount which the holders of Series A Preferred Stock are entitled to receive under Subsections 2.1 and 2.2 shall exceed $3.92361 per share (subject to appropriate adjustment in the event of a stock split, stock dividend, combination, reclassification, or similar event affecting the Series A Preferred Stock) (the “Maximum Participation Amount”), each holder of Series A Preferred Stock shall be entitled to receive upon such liquidation, dissolution or winding up of the Corporation the greater of (i) the Maximum Participation Amount and (ii) the amount such holder would have received if all shares of Series A Preferred Stock had been converted into Common Stock immediately prior to such liquidation, dissolution or winding up of the Corporation. The aggregate amount which a holder of a share of Series A Preferred Stock is entitled to receive under Subsections 2.1 and 2.2 is hereinafter referred to as the “Series A Liquidation Amount.”

 

2.3               Deemed Liquidation Events.

 

2.3.1                   Definition. Each of the following events shall be considered a “Deemed Liquidation Event” unless the holders of at least a majority of the outstanding shares of Series A Preferred Stock (the “Requisite Holders”) elect otherwise by written notice sent to the Corporation at least ten (10) days prior to the effective date of any such event:

 

(a)                a merger or consolidation in which

 

 

(i)                 the Corporation is a constituent party or

 

(ii)               a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation,

 

except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation;

 

(b)               (1) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or (2) the sale or disposition (whether by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation; or

 

(c)                Notwithstanding Subsections 2.3.1(a) and (b) above, any transaction involving OncoMed Pharmaceuticals, Inc. (or its Affiliates) shall not be considered a Deemed Liquidation Event, provided that such transaction has been approved by the Board of Directors of the Corporation (the “Board of Directors”), which approval must include the affirmative vote of one of the Series A Directors.

 

2.3.2                   Effecting a Deemed Liquidation Event.

 

(a)                The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in Subsection 2.3.1(a)(i) unless the agreement or plan of merger or consolidation for such transaction (the “Merger Agreement”) provides that the consideration payable to the stockholders of the Corporation in such Deemed Liquidation Event shall be paid to the holders of capital stock of the Corporation in accordance with Subsections 2.1 and 2.2.

 

(b)               In the event of a Deemed Liquidation Event referred to in Subsection 2.3.1(a)(ii) or 2.3.1(b), if the Corporation does not effect a dissolution of the Corporation under the DGCL within ninety (90) days after such Deemed Liquidation Event, then (i) the Corporation shall send a written notice to each holder of Series A Preferred Stock no later than the ninetieth (90^th) day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause; (ii) to require the redemption of such shares of Series A Preferred Stock, and (iii) if the Requisite Holders so request in a written instrument delivered to the Corporation not later than one hundred twenty (120) days after such Deemed Liquidation Event, the Corporation shall use the consideration received by the Corporation for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Corporation), together with any other assets of the Corporation available for distribution to its stockholders, all to the extent permitted by Delaware law governing distributions to stockholders (the “Available Proceeds”), on the one hundred fiftieth (150^th) day after such Deemed Liquidation Event, to redeem all outstanding shares of Series A Preferred Stock at a price per share equal to the Series A Liquidation Amount (the “Redemption Price”). Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Series A Preferred Stock, the Corporation shall redeem a pro rata portion of each holder’s shares of Series A Preferred Stock to the fullest extent of such Available Proceeds, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the Available Proceeds were sufficient to redeem all such shares, and shall redeem the remaining shares as soon as it may lawfully do so under Delaware law governing distributions to stockholders. Prior to the distribution or redemption provided for in this Subsection 2.3.2(b), the Corporation shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with such Deemed Liquidation Event or in the ordinary course of business. A redemption pursuant to this Subsection 2.3.2(b) shall be effected in accordance with Subsections 2.3.2(c), (d) and (e) below.

 

 

(c)                Redemption Notice. In connection with a redemption under Subsection 2.3.2(b), the Corporation shall send written notice of the mandatory redemption pursuant to this Subsection 2.3.2(c) (the “Redemption Notice”) to each holder of record of Series A Preferred Stock not less than forty (40) days prior to the date of such redemption (the “Redemption Date”). Each Redemption Notice shall state:

 

the number of shares of Series A Preferred Stock held by the holder that the Corporation shall redeem on the Redemption Date specified in the Redemption Notice;

 

(i)                 the Redemption Date and the Redemption Price;

 

(ii)               the date upon which the holder’s right to convert such shares terminates (as determined in accordance with Subsection 4.1); and

 

(iii)             that the holder is to surrender to the Corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares of Series A Preferred Stock to be redeemed.

 

(d)               Surrender of Certificates; Payment. On or before the Redemption Date, each holder of shares of Series A Preferred Stock to be redeemed on such Redemption Date, unless such holder has exercised his, her or its right to convert such shares as provided in Section 4, shall surrender the certificate or certificates representing such shares (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof. In the event less than all of the shares of Series A Preferred Stock represented by a certificate are redeemed, a new certificate representing the unredeemed shares of Series A Preferred Stock shall promptly be issued to such holder.

 

(e)                Rights Subsequent to Redemption. If the Redemption Notice shall have been duly given, and if on the applicable Redemption Date the Redemption Price payable upon redemption of the shares of Series A Preferred Stock to be redeemed on such Redemption Date is paid or tendered for payment or deposited with an independent payment agent so as to be available therefor in a timely manner, then notwithstanding that the certificates evidencing any of the shares of Series A Preferred Stock so called for redemption shall not have been surrendered, dividends with respect to such shares of Series A Preferred Stock shall cease to accrue after such Redemption Date and all rights with respect to such shares shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Price without interest upon surrender of their certificate or certificates therefor.

 

 

2.3.3                   Amount Deemed Paid or Distributed. The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer, exclusive license, other disposition or redemption shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. If the amount deemed paid or distributed under this Subsection 2.3 is made in property other than in cash, the value of such distribution shall be the fair market value of such property, determined as follows:

 

(a)                If the value of such property, rights or securities is established in the definitive documentation entered into in connection with such transaction (the “Acquisition Agreement”), then value thereof for purposes of this Subsection 2.3.3 shall be established using the method set forth in the Acquisition Agreement.

 

(b)               If the value of such property, rights or securities is not established in the Acquisition Agreement, then for securities not subject to investment letters or other similar restrictions on free marketability,

 

(1)                if traded on a national securities exchange or the Nasdaq Stock Market (or a similar national quotation system), the value shall be deemed to be the average of the closing prices of the securities on such exchange or system over the thirty (30) day trading period ending three (3) days prior to the closing of the Deemed Liquidation Event;

 

(2)                if actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices or sale prices (whichever is applicable) over the thirty (30) trading day period ending three (3) days prior to the closing of such transaction; or

 

(3)                if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors including the approval of at least one Series A Director.

 

(c)                If the value of such property, rights or securities is not established in the Acquisition Agreement, then the method of valuation of securities subject to investment letters or other similar restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall take into account an appropriate discount (as determined in good faith by the Board of Directors) from the market value as determined pursuant to clause (b) above so as to reflect the approximate fair market value thereof.

 

(d)               For the purposes of this Subsection 2.3.3, “trading day” shall mean any day which the exchange or system on which the securities to be distributed are traded is open and “closing prices” or “closing bid or sales prices” shall be deemed to be: (i) for securities traded primarily on the New York Stock Exchange or Nasdaq Stock Market, the last reported trade price or sale price, as the case may be, at 4:00 p.m., New York time, on that day and (ii) for securities listed or traded on other exchanges, markets and systems, the market price as of the end of the regular hours trading period that is generally accepted as such for such exchange, market or system. If, after the date hereof, the benchmark times generally accepted in the securities industry for determining the market price of a stock as of a given trading day shall change from those set forth above, the fair market value shall be determined as of such other generally accepted benchmark times.

 

 

2.3.4                   Allocation of Escrow and Contingent Consideration. In the event of a Deemed Liquidation Event pursuant to Subsection 2.3.1(a)(i), if any portion of the consideration payable to the stockholders of the Corporation is payable only upon satisfaction of contingencies (the “Additional Consideration”), the Merger Agreement shall provide that (a) the portion of such consideration that is not Additional Consideration (such portion, the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 and 2.2 as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation Event; and (b) any Additional Consideration which becomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 and 2.2 after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Subsection 2.3.4, consideration placed into escrow or retained as a holdback to be available for satisfaction of indemnification or similar obligations in connection with such Deemed Liquidation Event shall be deemed to be Initial Consideration.

 

3.                   Voting.

 

3.1               General. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Series A Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series A Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of this Certificate of Incorporation, holders of Series A Preferred Stock shall vote together with the holders of Common Stock as a single class and on an as-converted to Common Stock basis.

 

3.2               Election of Directors. The holders of record of the shares of Series A Preferred Stock, exclusively and as a separate class, shall be entitled to elect two (2) directors of the Corporation (the “Series A Directors”) and the holders of record of the shares of Common Stock, exclusively and as a separate class, shall be entitled to elect two (2) directors of the Corporation. Any director elected as provided in the preceding sentence may be removed without cause by, and only by, the affirmative vote of the holders of the shares of the class or series of capital stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders. If the holders of shares of Series A Preferred Stock or Common Stock, as the case may be, fail to elect a sufficient number of directors to fill all directorships for which they are entitled to elect directors, voting exclusively and as a separate class, pursuant to the first sentence of this Subsection 3.2, then any directorship not so filled shall remain vacant until such time as the holders of the Series A Preferred Stock or Common Stock, as the case may be, elect a person to fill such directorship by vote or written consent in lieu of a meeting; and no such directorship may be filled by stockholders of the Corporation other than by the stockholders of the Corporation that are entitled to elect a person to fill such directorship, voting exclusively and as a separate class. The holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Series A Preferred Stock), exclusively and voting together as a single class, shall be entitled to elect the balance of the total number of directors of the Corporation. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director. Except as otherwise provided in this Subsection 3.2, a vacancy in any directorship filled by the holders of any class or series shall be filled only by vote or written consent in lieu of a meeting of the holders of such class or series or by any remaining director or directors elected by the holders of such class or series pursuant to this Subsection 3.2. The rights of the holders of the Series A Preferred Stock and the rights of the holders of the Common Stock under the first sentence of this Subsection 3.2 shall terminate on the first date following the Series A Original Issue Date (as defined below) on which there are issued and outstanding less than 360,000 shares of Series A Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination, or other similar recapitalization with respect to the Series A Preferred Stock).

 

 

3.3               Series A Preferred Stock Protective Provisions. At any time when at least 360,000 shares of Series A Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock) are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or this Certificate of Incorporation) (i) the written consent or affirmative vote of the holders of at least 60% of the outstanding shares of Series A Preferred Stock, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class and (ii) the prior approval of at least 60% of the members of the Board of Directors then in office, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect. 

 

3.3.1                   liquidate, dissolve or wind-up the business and affairs of the Corporation, effect any merger or consolidation or any other Deemed Liquidation Event, or consent to any of the foregoing;

 

3.3.2                   amend, alter or repeal any provision of this Certificate of Incorporation or Bylaws of the Corporation in a manner that adversely affects the powers, preferences or rights of the Series A Preferred Stock;

 

3.3.3                   create, or authorize the creation of, or issue shares of, or obligate itself to issue shares of, any additional class or series of capital stock unless the same ranks junior to the Series A Preferred Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends and rights of redemption;

 

3.3.4                   increase or decrease the authorized number of shares of Preferred Stock or of Series A Preferred Stock, or increase or decrease the authorized number of shares of any additional class or series of capital stock of the Corporation;

 

3.3.5                   (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with the Series A Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to the Series A Preferred Stock in respect of any such right, preference, or privilege or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to the Series A Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to or pari passu with the Series A Preferred Stock in respect of any such right, preference or privilege;

 

3.3.6                   purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock of the Corporation other than (i) redemptions of or dividends or distributions on the Series A Preferred Stock as expressly authorized herein, (ii) dividends or other distributions payable on the Common Stock solely in the form of additional shares of Common Stock and (iii) repurchases of stock from former employees, officers, directors, consultants or other persons who performed services for the Corporation or any subsidiary in connection with the cessation of such employment or service at the lower of the original purchase price or the then current fair market value thereof;

 

 

3.3.7                   create, or authorize the creation of, or issue, or authorize the issuance of any debt security or permit any subsidiary to take any such action with respect to any debt security, if the aggregate indebtedness of the Corporation and its subsidiaries for borrowed money following such action would exceed $2,000,000 (other than equipment leases or bank lines of credit);

 

3.3.8                   create, or hold capital stock in, any subsidiary that is not wholly owned (either directly or through one or more other subsidiaries) by the Corporation, or permit any subsidiary to create, or authorize the creation of, or issue or obligate itself to issue, any shares of any class or series of capital stock, or sell, transfer or otherwise dispose of any capital stock of any direct or indirect subsidiary of the Corporation, or permit any direct or indirect subsidiary to sell, lease, transfer, exclusively license or otherwise dispose (in a single transaction or series of related transactions) of all or substantially all of the assets of such subsidiary; or

 

3.3.9                   increase or decrease the authorized number of directors constituting the Board of Directors.

 

4.                   Optional Conversion.

 

The holders of the Series A Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

 

4.1               Right to Convert.

 

4.1.1                   Conversion Ratio. Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Series A Original Issue Price by the Series A Conversion Price (as defined below) in effect at the time of conversion. The “Series A Conversion Price” shall initially be equal to $1.30787. Such initial Series A Conversion Price, and the rate at which shares of Series A Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided below.

 

4.1.2                   Termination of Conversion Rights. In the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Series A Preferred Stock.

 

4.2               Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board of Directors of the Corporation. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Series A Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.

 

4.3               Mechanics of Conversion.

 

 

4.3.1                   Notice of Conversion. In order for a holder of Series A Preferred Stock to voluntarily convert shares of Series A Preferred Stock into shares of Common Stock, such holder shall (a) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Series A Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent) that such holder elects to convert all or any number of such holder’s shares of Series A Preferred Stock and, if applicable, any event on which such conversion is contingent and (b), if such holder’s shares are certificated, surrender the certificate or certificates for such shares of Series A Preferred Stock (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Series A Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the shares of Common Stock to be issued. If required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such notice and, if applicable, certificates (or lost certificate affidavit and agreement) shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the specified shares shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time (i) issue and deliver to such holder of Series A Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Series A Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (ii) pay in cash such amount as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (iii) pay all declared but unpaid dividends on the shares of Series A Preferred Stock converted.

 

4.3.2                   Reservation of Shares. The Corporation shall at all times when the Series A Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Series A Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Certificate of Incorporation. Before taking any action which would cause an adjustment reducing the Series A Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted Series A Conversion Price.

 

4.3.3                   Effect of Conversion. All shares of Series A Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Subsection 4.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Series A Preferred Stock so converted shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A Preferred Stock accordingly.

 

 

4.3.4                   No Further Adjustment. Upon any such conversion, no adjustment to the Series A Conversion Price shall be made for any declared but unpaid dividends on the Series A Preferred Stock surrendered for conversion or on the Common Stock delivered upon conversion.

 

4.3.5                   Taxes. The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Series A Preferred Stock pursuant to this Section 4. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Series A Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

 

4.4               Adjustments to Series A Conversion Price for Diluting Issues.

 

4.4.1                   Special Definitions. For purposes of this Article Fourth, the following definitions shall apply:

 

(a)                “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

 

(b)               “Series A Original Issue Date” shall mean the date on which the first share of Series A Preferred Stock was issued.

 

(c)                “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.

 

(d)               “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or, pursuant to Subsection 4.4.3 below, deemed to be issued) by the Corporation after the Series A Original Issue Date, other than (1) the following shares of Common Stock and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) and (2), collectively, “Exempted Securities”):

 

(i)                 shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on Series A Preferred Stock;

 

(ii)               shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Subsection 4.5, 4.6, 4.7 or 4.8;

 

(iii)             shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors (including the board of directors of the Corporation’s predecessor Incysus, Ltd. (the “Predecessor Board”);

 

 

(iv)              shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security;

 

(v)                shares of Common Stock, Options or Convertible Securities issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by the Board of Directors (including the Predecessor Board);

 

(vi)              shares of Common Stock, Options or Convertible Securities issued to suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions approved by the Board of Directors (including the Predecessor Board);

 

(vii)            shares of Common Stock, Options or Convertible Securities issued as acquisition consideration pursuant to the acquisition of another entity by the Corporation by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, provided that such issuances are approved by the Board of Directors;

 

(viii)          shares of Common Stock, Options or Convertible Securities issued in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by the Board of Directors (including the Predecessor Board);

 

(ix)              shares of Common Stock, Options or Convertible Securities issued in, or in connection with any adjustments to the Corporation’s capitalization table in preparation for, an underwritten public offering;

 

(x)                shares of Common Stock, Options or Convertible Securities issued to the Adverse Party or the Adverse Party’s affiliates in connection with the Subject Matter (as defined in the Series A Preferred Stock Purchase Agreement dated on or about the date that this Certificate of Incorporation was filed with the Secretary of State of the State of Delaware (the “Purchase Agreement”)); or

 

(xi)              shares of Common Stock, Options or Convertible Securities issued pursuant to any warrants to purchase Series A Preferred Stock approved by the Board of Directors and issued to Purchasers (as defined in the Purchase Agreement).

 

4.4.2                   No Adjustment of Series A Conversion Price. No adjustment in the Series A Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from the Requisite Holders agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock.

 

4.4.3                   Deemed Issue of Additional Shares of Common Stock.

 

(a)                If the Corporation at any time or from time to time after the Series A Original Issue Date shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.

 

 

(b)               If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Series A Conversion Price pursuant to the terms of Subsection 4.4.4, are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Corporation upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Series A Conversion Price computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such Series A Conversion Price as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this clause (b) shall have the effect of increasing the Series A Conversion Price to an amount which exceeds the lower of (i) the Series A Conversion Price in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (ii) the Series A Conversion Price that would have resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.

 

(c)                If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Series A Conversion Price pursuant to the terms of Subsection 4.4.4 (either because the consideration per share (determined pursuant to Subsection 4.4.5) of the Additional Shares of Common Stock subject thereto was equal to or greater than the Series A Conversion Price then in effect, or because such Option or Convertible Security was issued before the Series A Original Issue Date), are revised after the Series A Original Issue Date as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Subsection 4.4.3(a) shall be deemed to have been issued effective upon such increase or decrease becoming effective.

 

(d)               Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Series A Conversion Price pursuant to the terms of Subsection 4.4.4, the Series A Conversion Price shall be readjusted to such Series A Conversion Price as would have obtained had such Option or Convertible Security (or portion thereof) never been issued.

 

 

(e)                If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to the Series A Conversion Price provided for in this Subsection 4.4.3 shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in clauses (b) and (c) of this Subsection 4.4.3). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to the Series A Conversion Price that would result under the terms of this Subsection 4.4.3 at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the Series A Conversion Price that such issuance or amendment took place at the time such calculation can first be made.

 

4.4.4                   Adjustment of Series A Conversion Price Upon Issuance of Additional Shares of Common Stock. In the event the Corporation shall at any time after the Series A Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Subsection 4.4.3), without consideration or for a consideration per share less than the Series A Conversion Price in effect immediately prior to such issuance or deemed issuance, then the Series A Conversion Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest one-hundredth of a cent) determined in accordance with the following formula:

 

CP₂ = CP₁* (A + B) ÷ (A + C).

 

For purposes of the foregoing formula, the following definitions shall apply:

 

(a)                “CP₂” shall mean the Series A Conversion Price in effect immediately after such issuance or deemed issuance of Additional Shares of Common Stock

 

(b)               “CP₁” shall mean the Series A Conversion Price in effect immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock;

 

(c)                “A” shall mean the number of shares of Common Stock outstanding immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issuance or deemed issuance or upon conversion or exchange of Convertible Securities (including the Series A Preferred Stock) outstanding (assuming exercise of any outstanding Options therefor) immediately prior to such issue);

 

(d)               “B” shall mean the number of shares of Common Stock that would have been issued if such Additional Shares of Common Stock had been issued or deemed issued at a price per share equal to CP1 (determined by dividing the aggregate consideration received by the Corporation in respect of such issue by CP1); and

 

(e)                “C” shall mean the number of such Additional Shares of Common Stock issued in such transaction.

 

 

4.4.5                   Determination of Consideration. For purposes of this Subsection 4.4, the consideration received by the Corporation for the issuance or deemed issuance of any Additional Shares of Common Stock shall be computed as follows:

 

(a)                Cash and Property: Such consideration shall:

 

(i)                 insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest;

 

(ii)               insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors of the Corporation; and

 

(iii)             in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (i) and (ii) above, as determined in good faith by the Board of Directors of the Corporation.

 

(b)               Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Subsection 4.4.3, relating to Options and Convertible Securities, shall be determined by dividing:

 

(i)                 The total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by

 

(ii)               the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.

 

4.4.6                   Multiple Closing Dates. In the event the Corporation shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Series A Conversion Price pursuant to the terms of Subsection 4.4.4, then, upon the final such issuance, the Series A Conversion Price shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).

 

4.5               Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the Series A Original Issue Date effect a subdivision of the outstanding Common Stock, the Series A Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of Series A Preferred Stock shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Series A Original Issue Date combine the outstanding shares of Common Stock, the Series A Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of Series A Preferred Stock shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

 

4.6               Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Series A Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Series A Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Series A Conversion Price then in effect by a fraction:

 

(1)       the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

 

(2)       the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Series A Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Series A Conversion Price shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (b) that no such adjustment shall be made if the holders of Series A Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event.

 

4.7               Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Series A Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 1 do not apply to such dividend or distribution, then and in each such event the holders of Series A Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event.

 

4.8               Adjustment for Merger or Reorganization, etc. Subject to the provisions of Subsection 2.3, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not the Series A Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Subsections 4.4, 4.6 or 4.7), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Series A Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of Series A Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors of the Corporation) shall be made in the application of the provisions in this Section 4 with respect to the rights and interests thereafter of the holders of the Series A Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the Series A Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Series A Preferred Stock. For the avoidance of doubt, nothing in this Subsection 4.8 shall be construed as preventing the holders of Series A Preferred Stock from seeking any appraisal rights to which they are otherwise entitled under the DGCL in connection with a merger triggering an adjustment hereunder, nor shall this Subsection 4.8 be deemed conclusive evidence of the fair value of the shares of Series A Preferred Stock in any such appraisal proceeding.

 

 

4.9               Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Series A Conversion Price pursuant to this Section 4, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which the Series A Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Series A Preferred Stock (but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Series A Conversion Price then in effect, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of Series A Preferred Stock.

 

4.10           Notice of Record Date. In the event:

 

(a)                the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Series A Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

 

(b)               of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or

 

(c)                of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,

 

then, and in each such case, the Corporation will send or cause to be sent to the holders of the Series A Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Series A Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Series A Preferred Stock and the Common Stock. Such notice shall be sent at least ten (10) days prior to the record date or effective date for the event specified in such notice.

 

 

4.11           Additional Adjustments. If (i) shares of the Corporation’s capital stock are issued to the Adverse Party (as defined in the Purchase Agreement) in connection with the final resolution of the Subject Matter (such shares, the “Subject Matter Shares”), and/or (ii) the Subject Matter Expenses (as defined below) are greater than $0, then the Series A Conversion Price then in effect shall be adjusted (the “Conversion Price Adjustment”) in accordance with the following formula:

 

CP₂ = CP₁ * (A ÷ B) * (C ÷ (C + D)).

 

For purposes of the foregoing formula, the following definitions shall apply:

 

(a)                “CP₂” shall mean the Series A Conversion Price in effect immediately after the Conversion Price Adjustment (such price, the “Adjusted Series A Conversion Price”);

 

(b)               “CP₁” shall mean the Series A Conversion Price in effect immediately prior to the Conversion Price Adjustment;

 

(c)                “A” shall mean the Common Stock Outstanding on a Fully-Diluted Basis immediately prior to the Initial Closing (as defined in the Purchase Agreement);

 

(d)               “B” shall mean the sum of (i) the Common Stock Outstanding on a Fully-Diluted Basis immediately prior to the Initial Closing and (ii) the Subject Matter Shares;

 

(e)                “C” shall mean (i) the Series A Original Issue Price multiplied by (ii) the number of shares of Series A Preferred Stock purchased by the Purchasers under the Purchase Agreement; and

 

(f)                 “D” shall mean the amount of the Subject Matter Expenses.

 

For purposes of this Subsection 4.11, (A) “Common Stock Outstanding on a Fully-Diluted Basis” shall mean (i) the sum of: (a) all issued and outstanding Common Stock as of immediately prior to the Initial Closing, and (b) all Common Stock issuable as of immediately prior to the Initial Closing upon (1) the exercise of Options and other securities outstanding immediately prior to the Initial Closing (other than the Additional Shares, as defined in the Purchase Agreement), (2) exercise of Options and other securities that are reserved for grant (even if unissued) under the Corporation’s stock option plan or any other equity, option or stock incentive plan as of immediately prior to the Initial Closing, and (3) the conversion or exchange of Convertible Securities (including the Series A Preferred Stock) outstanding immediately prior to the Initial Closing (assuming exercise of any Options therefor, but excluding Options covered by subsection (1) or (2)) and (B) “Subject Matter Expenses” shall mean the fees and expenses paid by the Corporation in defending the Subject Matter in excess of $150,000. Any Conversion Price Adjustment shall be calculated as of the end of each of the Corporation’s fiscal quarters, until and including the fiscal quarter in which the final resolution of the Subject Matter occurs. Promptly following the end of each such fiscal quarter, the Corporation shall compute the Conversion Price Adjustment in accordance with the terms of this Subsection 4.11 and furnish to each holder of Series A Preferred Stock, upon request, a certificate setting forth the number of shares of Common Stock into which the Series A Preferred Stock is convertible as a result of the Conversion Price Adjustment and showing the number of Subject Matter Shares and the amount of the Subject Matter Expenses on which such computation is based. Any adjustment of the Series A Conversion Price pursuant to this Subsection 4.11 shall be in addition to any other conversion price adjustments which may be required pursuant to this Section 4. To give effect to any such other adjustments required after the Initial Closing and prior to the date of the Conversion Price Adjustment, the Adjusted Series A Conversion Price shall be further adjusted, after making the Conversion Price Adjustment, as if the Series A Conversion Price as of the Initial Closing was equal to the Adjusted Series A Conversion Price. Notwithstanding anything to the contrary set forth in this Section 4.11, no adjustment to the Series A Conversion Price pursuant to this Section 4.11 shall be made unless the adjustment in the Series A Conversion Price exceeds $0.01 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization). At the written request of any holder of Series A Preferred Stock, the Corporation hereby agrees to produce the Purchase Agreement and make it available for inspection by any duly registered holder of Series A Preferred Stock for purposes of facilitating such holder’s enforcement of its rights hereunder, and subject to any redaction thereto reasonably required by the Board of Directors for purposes of protecting the Corporation’s confidential or proprietary information from public disclosure.

 

 

5.                   Mandatory Conversion.

 

5.1               Trigger Events. Upon either (a) the closing of the sale of shares of Common Stock in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $25,000,000 of gross proceeds to the Corporation or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the Requisite Holders (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”), then (i) all outstanding shares of Series A Preferred Stock shall automatically be converted into shares of Common Stock, at the then effective conversion rate as calculated pursuant to Subsection 4.1.1. and (ii) such shares may not be reissued by the Corporation.

 

5.2               Procedural Requirements. All holders of record of shares of Series A Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Series A Preferred Stock pursuant to this Section 5. Such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of shares of Series A Preferred Stock in certificated form shall surrender his, her or its certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice. If so required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his, her or its attorney duly authorized in writing. All rights with respect to the Series A Preferred Stock converted pursuant to Subsection 5.1, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender any certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of any certificate or certificates of such holders (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Subsection 5.2. As soon as practicable after the Mandatory Conversion Time and, if applicable, the surrender of any certificate or certificates (or lost certificate affidavit and agreement) for Series A Preferred Stock, the Corporation shall (a) issue and deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof and (b) pay cash as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Series A Preferred Stock converted. Such converted Series A Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Series A Preferred Stock accordingly.

 

 

6.                   Redeemed or Otherwise Acquired Shares. Any shares of Series A Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Series A Preferred Stock following redemption.

 

7.                   Waiver. Any of the rights, powers, preferences and other terms of the Series A Preferred Stock set forth herein may be waived on behalf of all holders of Series A Preferred Stock by the affirmative written consent or vote of the Requisite Holders.

 

8.                   Notices. Any notice required or permitted by the provisions of this Article Fourth to be given to a holder of shares of Series A Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the DGCL, and shall be deemed sent upon such mailing or electronic transmission.

 

FIFTH: Subject to any additional vote required by this Certificate of Incorporation or Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

 

SIXTH: Subject to any additional vote required by this Certificate of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation. Each director shall be entitled to one vote on each matter presented to the Board of Directors; provided, however, that, so long as the holders of Series A Preferred Stock are entitled to elect a Series A Director, the affirmative vote of at least 60% of the members of the Board of Directors then in office shall be required for the authorization by the Board of Directors of any of the matters set forth in Section 5.5(a) of the Investors’ Rights Agreement, dated as of May 7, 2018, by and among the Corporation and the other parties thereto, as such agreement may be amended from time to time.

 

SEVENTH: Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

 

EIGHTH: Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

 

NINTH: To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL or any other law of the State of Delaware is amended after approval by the stockholders of this Article Ninth to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.

 

 

Any repeal or modification of the foregoing provisions of this Article Ninth by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

 

TENTH: To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which DGCL permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL.

 

Any amendment, repeal or modification of the foregoing provisions of this Article Tenth shall not (a) adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification or (b) increase the liability of any director of the Corporation with respect to any acts or omissions of such director, officer or agent occurring prior to, such amendment, repeal or modification.

 

ELEVENTH: The Corporation renounces, to the fullest extent permitted by law, any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any Excluded Opportunity. An “Excluded Opportunity” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Series A Preferred Stock or any partner, member, director, stockholder, employee, affiliate or agent of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, the persons referred to in clauses (i) and (ii) are “Covered Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Corporation while such Covered Person is performing services in such capacity. Any repeal or modification of this Article Eleventh will only be prospective and will not affect the rights under this Article Eleventh in effect at the time of the occurrence of any actions or omissions to act giving rise to liability. Notwithstanding anything to the contrary contained elsewhere in this Certificate of Incorporation, the affirmative vote of the Requisite Holders will be required to amend or repeal, or to adopt any provisions inconsistent with this Article Eleventh.

 

TWELFTH: Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery in the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or the Corporation’s certificate of incorporation or bylaws or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. If any provision or provisions of this Article Twelfth shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article Twelfth (including, without limitation, each portion of any sentence of this Article Twelfth containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

 

* * *

 

 

In Witness Whereof, this Certificate has been subscribed this 15th day of October, 2020 by the undersigned who affirms that the statements made herein are true and correct.

 

	By:	/s/ William Ho
		William Ho, Chief Executive Officer

 

 

 

Exhibit 3.3

 

BYLAWS

OF

IN8BIO, INC.

(A DELAWARE CORPORATION)

 

 

ARTICLE I

 

OFFICES 

 

Section 1.                 Registered Office. The registered office of the corporation in the State of Delaware shall be 1209 Orange Street, City of Wilmington, County of New Castle, 19801 or in such other location as the Board of Directors may from time to time determine or the business of the corporation may require.

 

Section 2.                  Other Offices. The corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or the business of the corporation may require.

 

ARTICLE II

Corporate Seal

 

Section 3.                  Corporate Seal. The Board of Directors may adopt a corporate seal. Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

 

ARTICLE III

Stockholders’ Meetings

 

Section 4.                  Place of Meetings. Meetings of the stockholders of the corporation may be held at such place, either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (“DGCL”).

 

Section 5.                  Annual Meeting.

 

(a)                The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may lawfully come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors. Nominations of persons for election to the Board of Directors of the corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the corporation’s notice of meeting of stockholders; (ii) by or at the direction of the Board of Directors; or (iii) by any stockholder of the corporation who was a stockholder of record at the time of giving of notice provided for in the following paragraph, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section.

 

 

(b)               At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a) of this Section, (i) the stockholder must have given timely notice thereof in writing to the Secretary of the corporation, (ii) such other business must be a proper matter for stockholder action under the DGCL and applicable law, (iii) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the corporation with a Solicitation Notice (as defined in this paragraph), such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the corporation’s voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the corporation’s voting shares reasonably believed by such stockholder or beneficial owner to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice, and (iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this Section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the 90^th day nor earlier than the close of business on the 120^th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120^th day prior to such annual meeting and not later than the close of business on the later of the 90^th day prior to such annual meeting or the 10^th day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth: (A) as to each person whom the stockholder proposed to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and Rule 14a-4(d) thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (ii) the class and number of shares of the corporation that are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of the proposal, at least the percentage of the corporation’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the corporation’s voting shares to elect such nominee or nominees (an affirmative statement of such intent, a “Solicitation Notice”).

 

(c)                Notwithstanding anything in the second sentence of paragraph (b) of this Section to the contrary, in the event that the number of directors to be elected to the Board of Directors of the corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the corporation at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the 10^th day following the day on which such public announcement is first made by the corporation.

 

(d)               Only such persons who are nominated in accordance with the procedures set forth in this Section (or elected or appointed pursuant to Article IV of these Bylaws) shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section. Except as otherwise provided by law, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.

 

 

(e)               Notwithstanding the foregoing provisions of this Section, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, stockholders must provide notice as required by the regulations promulgated under the 1934 Act. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation proxy statement pursuant to Rule 14a-8 under the 1934 Act.

 

(f)                For purposes of this Section, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13, 14 or 15(d) of the 1934 Act.

 

Section 6.                  Special Meetings.

 

(a)                Special meetings of the stockholders of the corporation may be called, for any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, (iii) the Board of Directors pursuant to a resolution adopted by directors representing a quorum of the Board of Directors or (iv) by the holders of shares entitled to cast not less than 20% of the votes at the meeting, and shall be held at such place, on such date, and at such time as the Board of Directors shall fix.

 

(b)               If a special meeting is properly called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the general nature of the business proposed to be transacted, and shall be delivered personally or sent by certified or registered mail, return receipt requested, or by telegraphic or other facsimile transmission to the Chairman of the Board of Directors, the Chief Executive Officer, or the Secretary of the corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The Board of Directors shall determine the time and place of such special meeting, which shall be held not less than 35 nor more than 120 days after the date of the receipt of the request. Upon determination of the time and place of the meeting, the officer receiving the request shall cause notice to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7 of these Bylaws. Nothing contained in this paragraph (b) shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.

 

Section 7.                  Notice of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his or her attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.

 

 

Section 8.                 Quorum. At all meetings of stockholders, except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of a majority of shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the subject matter shall be the act of the stockholders. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by statute, the Certificate of Incorporation or these Bylaws, a majority of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.

 

Section 9.                  Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting pursuant to the Certificate of Incorporation, these Bylaws or applicable law. If the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

Section 10.              Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in Section 12 of these Bylaws, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote or execute consents shall have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted after three years from its date of creation unless the proxy provides for a longer period.

 

Section 11.              Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting (including giving consent pursuant to Section 13) shall have the following effect: (a) if only one votes, his or her act binds all; (b) if more than one votes, the act of the majority so voting binds all; (c) if more than one votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c) shall be a majority or even-split in interest.

 

 

Section 12.               List of Stockholders. The Secretary shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. The list shall be open to examination of any stockholder during the time of the meeting as provided by law.

 

Section 13.               Action Without Meeting.

 

(a)               Unless otherwise provided in the Certificate of Incorporation, any action required by statute to be taken at any annual or special meeting of the stockholders, or any action that may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, or by electronic transmission setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

 

(b)               Every written consent or electronic transmission shall bear the date of signature of each stockholder who signs the consent, and no written consent or electronic transmission shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered to the corporation in the manner herein required, written consents or electronic transmissions signed by a sufficient number of stockholders to take action are delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

 

(c)                Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing or by electronic transmission and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take action were delivered to the corporation as provided in Section 228(c) of the DGCL. If the action to which the stockholders consent is such as would have required the filing of a certificate under any section of the DGCL if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.

 

 

(d)               An electronic mail, facsimile or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this Section, provided that any such electronic mail, facsimile or other electronic transmission sets forth or is delivered with information from which the corporation can determine (i) that the electronic mail, facsimile or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such electronic mail, facsimile or electronic transmission. The date on which such electronic mail, facsimile or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by electronic mail, facsimile or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the corporation by delivery to its registered office in the state of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by electronic mail, facsimile or other electronic transmission may be otherwise delivered to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the board of directors of the corporation. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

 

Section 14.                Organization.

 

(a)                At every meeting of stockholders, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the Chief Executive Officer, or, if the Chief Executive Officer is absent, a chairman of the meeting chosen by a majority in interest of the stockholders entitled to vote, present in person or by proxy, shall act as chairman. The Secretary, or, in his or her absence, an Assistant Secretary directed to do so by the Chief Executive Officer, shall act as secretary of the meeting.

 

(b)               The Board of Directors shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters that are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.

 

 

ARTICLE IV

 

Directors

 

Section 15.              Number and Term of Office. The authorized number of directors of the corporation shall be fixed by the Board of Directors from time to time, subject to the contractual rights of any stockholders to approve any increase or decrease to such number. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient.

 

Section 16.               Powers. The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors, except as otherwise provided by statute or by the Certificate of Incorporation.

 

Section 17.               Term of Directors. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, directors shall be elected at each annual meeting of stockholders to serve until the next annual meeting of stockholders and his or her successor is duly elected and qualified or until his or her death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

 

Section 18.              Vacancies. Unless otherwise provided in the Certificate of Incorporation, and subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, or by a sole remaining director; provided, however, that whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.

 

Section 19.              Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors. When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each Director so chosen shall hold office for the unexpired portion of the term of the Director whose place shall be vacated and until his or her successor shall have been duly elected and qualified.

 

Section 20.              Removal. Subject to any limitations imposed by applicable law, the Certificate of Incorporation or the contractual rights of any stockholders, the Board of Directors or any director may be removed from office at any time (i) with cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the corporation entitled to vote generally at an election of directors or (ii) without cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the corporation, entitled to elect such director.

 

 

Section 21.               Meetings

 

(a)               Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any time or date and at any place within or without the State of Delaware that has been designated by the Board of Directors and publicized among all directors, either orally or in writing, including a voice-messaging system or other system designated to record and communicate messages, facsimile, or by electronic mail or other electronic means. No further notice shall be required for a regular meeting of the Board of Directors.

 

(b)               Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairman of the Board, the Chief Executive Officer (if a director), the President (if a director) or any director.

 

(c)                Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

 

(d)               Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least 24 hours before the date and time of the meeting. If notice is sent by US mail, it shall be sent by first class mail, postage prepaid at least three days before the date of the meeting. Notice of any meeting may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

 

(e)               Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.

 

Section 22.               Quorum and Voting.

 

(a)                Unless the Certificate of Incorporation requires a greater number, a quorum of the Board of Directors shall consist of a majority of the total number of directors then serving; provided, however, that such number shall never be less than 1/3 of the total number of directors except that when one director is authorized, then one director shall constitute a quorum. At any meeting, whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting. If the Certificate of Incorporation provides that one or more directors shall have more or less than one vote per director on any matter, every reference in this Section to a majority or other proportion of the directors shall refer to a majority or other proportion of the votes of the directors.

 

 

(b)               At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.

 

Section 23.              Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 24.               Fees and Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.

 

Section 25.               Committees.

 

(a)                Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any bylaw of the corporation.

 

(b)               Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.

 

(c)                Term. The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of paragraphs (a) or (b) of this Section may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his or her death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

 

 

(d)               Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place that has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.

 

Section 26.               Organization. At every meeting of the directors, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the Chief Executive Officer (if a director), or if the Chief Executive Officer is not a director or is absent, the President (if a director), or if the President is not a director or is absent, the most senior Vice President (if a director) or, in the absence of any such person, a chairman of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his or her absence, any Assistant Secretary directed to do so by the Chief Executive Officer or President, shall act as secretary of the meeting.

 

ARTICLE V

Officers

 

Section 27.              Officers Designated. The officers of the corporation shall include, if and when designated by the Board of Directors, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer, the Treasurer and the Controller, all of whom shall be elected at the annual organizational meeting of the Board of Directors. The Board of Directors may also appoint one or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed by or in the manner designated by the Board of Directors.

 

Section 28.               Tenure and Duties of Officers.

 

(a)                General. All officers shall hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors, or by the Chief Executive Officer or other officer if so authorized by the Board of Directors.

 

 

(b)               Duties of Chairman of the Board of Directors. The Chairman of the Board of Directors, when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairman of the Board of Directors shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. If there is no Chief Executive Officer and no President, then the Chairman of the Board of Directors shall also serve as the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in paragraph (c) of this Section.

 

(c)                Duties of Chief Executive Officer. The Chief Executive Officer shall preside at all meetings of the stockholders and (if a director) at all meetings of the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. The Chief Executive Officer shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The Chief Executive Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time.

 

(d)               Duties of President. In the absence or disability of the Chief Executive Officer or if the office of Chief Executive Officer is vacant, the President shall preside at all meetings of the stockholders and (if a director) at all meetings of the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. If the office of Chief Executive Officer is vacant, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time.

 

(e)                Duties of Vice Presidents. The Vice Presidents may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. The Vice Presidents shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.

 

(f)                Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. The Chief Executive Officer may direct any Assistant Secretary to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer shall designate from time to time.

 

(g)                Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the Chief Executive Officer. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Chief Financial Officer shall perform other duties commonly incident to his or her office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer shall designate from time to time. The Chief Executive Officer may direct the Treasurer or any Assistant Treasurer, or the Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each Controller and Assistant Controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer shall designate from time to time.

 

 

Section 29.              Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

 

Section 30.               Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission notice to the Board of Directors or to the Chief Executive Officer or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.

 

Section 31.               Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written or electronic consent of the directors in office at the time, or by any committee or superior officers upon whom such power of removal may have been conferred by the Board of Directors.

 

ARTICLE VI

Execution Of Corporate Instruments And Voting
Of Securities Owned By The Corporation

 

Section 32.              Execution of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name, or to enter into contracts on behalf of the corporation, except as otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the corporation. All checks and drafts drawn on banks or other depositaries of funds to the credit of the corporation or on special accounts of the corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do. Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

 

Section 33.              Voting of Securities Owned by the Corporation. All stock and other securities of other corporations owned or held by the corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.

 

ARTICLE VII

Shares Of Stock

 

Section 34.               Form and Execution of Certificates. The shares of the corporation shall be represented by certificates, or shall be uncertificated. Certificates for the shares of stock, if any, of the corporation shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of shares of stock in the corporation represented by certificate shall be entitled to have a certificate signed by or in the name of the corporation by any two authorized officers, including but not limited to the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary, certifying the number of shares owned by him or her in the corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he or she were such officer, transfer agent, or registrar at the date of issue.

 

 

Section 35.                Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.

 

Section 36.               Restrictions on Transfer.

 

(a)                No holder of any of the shares of stock of the corporation may sell, transfer, assign, pledge, or otherwise dispose of or encumber any of the shares of stock of the corporation or any right or interest therein, whether voluntarily or by operation of law, or by gift or otherwise (each, a “Transfer”) without the prior written consent of the corporation, upon duly authorized action of its Board of Directors.  The corporation may withhold consent for any legitimate corporate purpose, as determined by the Board of Directors. Examples of the basis for the corporation to withhold its consent include, without limitation, (i) if such Transfer to individuals, companies or any other form of entity identified by the corporation as a potential competitor or considered by the corporation to be unfriendly; or (ii) if such Transfer increases the risk of the corporation having a class of security held of record by 2,000 or more persons, or 500 or more persons who are not accredited investors (as such term is defined by the SEC), as described in Section 12(g) of the 1934 Act and any related regulations, or otherwise requiring the corporation to register any class of securities under the 1934 Act; or (iii) if such Transfer would result in the loss of any federal or state securities law exemption relied upon by the corporation in connection with the initial issuance of such shares or the issuance of any other securities; or (iv) if such Transfer is facilitated in any manner by any public posting, message board, trading portal, internet site, or similar method of communication, including without limitation any trading portal or internet site intended to facilitate secondary transfers of securities; or (v) if such Transfer is to be effected in a brokered transaction; or (vi) if such Transfer represents a Transfer of less than all of the shares then held by the stockholder and its affiliates or is to be made to more than a single transferee.

 

(b)               If a stockholder desires to Transfer any shares, then the stockholder shall first give written notice thereof to the corporation. The notice shall name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other terms and conditions of the proposed transfer. Any shares proposed to be transferred to which Transfer the corporation has consented pursuant to paragraph (a) of this Section will first be subject to the corporation’s right of first refusal located in Section 37 of these Bylaws.

 

 

(c)              At the option of the corporation, the stockholder shall be obligated to pay to the corporation a reasonable transfer fee related to the costs and time of the corporation and its legal and other advisors related to any proposed Transfer.

 

(d)               Any Transfer, or purported Transfer, of shares not made in strict compliance with this Section shall be null and void, shall not be recorded on the books of the corporation and shall not be recognized by the corporation.

 

(e)               The foregoing restriction on Transfer shall not apply to the Transfer of shares of Preferred Stock or to the Transfer of any shares of Common Stock issued upon the conversion of any shares of Preferred Stock.

 

(f)               The foregoing restriction on Transfer shall terminate upon the date securities of the corporation are first offered to the public pursuant to a registration statement filed with, and declared effective by, the SEC under the Securities Act of 1933, as amended (the “1933 Act”).

 

(g)              The certificates representing shares of Common Stock of the corporation shall bear on their face the following legend so long as the foregoing Transfer restrictions are in effect:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A TRANSFER RESTRICTION, AS PROVIDED IN THE BYLAWS OF THE CORPORATION.”

 

Section 37.               Right of First Refusal. No stockholder shall Transfer any of the shares of stock of the corporation, except by a Transfer that meets the requirements set forth in this Section 37, in addition to any other restrictions or requirements set forth under applicable law or these Bylaws:

 

(a)                If the stockholder desires to Transfer any of his or her shares of stock, then the stockholder shall first give written notice thereof to the corporation. The notice shall name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other terms and conditions of the proposed transfer.

 

(b)               For 30 days following receipt of such notice, the corporation shall have the option to purchase up to all the shares specified in the notice at the price and upon the terms set forth in such notice; provided, however, that, with the consent of the stockholder, the corporation shall have the option to purchase a lesser portion of the shares specified in said notice at the price and upon the terms set forth therein. In the event of a gift, property settlement or other Transfer in which the proposed transferee is not paying the full price for the shares, and that is not otherwise exempted from the provisions of this Section, the price shall be deemed to be the fair market value of the stock at such time as determined in good faith by the Board of Directors. In the event the corporation elects to purchase all of the shares or, with consent of the stockholder, a lesser portion of the shares, it shall give written notice to the transferring stockholder of its election and settlement for said shares shall be made as provided below in paragraph (d) of this Section.

 

(c)               The corporation may assign its rights hereunder.

 

(d)               In the event the corporation and/or its assignee(s) elect to acquire any of the shares of the transferring stockholder as specified in said transferring stockholder’s notice, the Secretary of the corporation shall so notify the transferring stockholder and settlement thereof shall be made in cash within 30 days after the Secretary of the corporation receives said transferring stockholder’s notice; provided that if the terms of payment set forth in said transferring stockholder’s notice were other than cash against delivery, the corporation and/or its assignee(s) shall pay for said shares on the same terms and conditions set forth in said transferring stockholder’s notice.

 

 

  

(e)             In the event the corporation and/or its assignees(s) do not elect to acquire all of the shares specified in the transferring stockholder’s notice, said transferring stockholder may, subject to the corporation’s approval and all other restrictions on Transfer located in Section 36 of these Bylaws, within the 60-day period following the expiration or waiver of the option rights granted to the corporation and/or its assignees(s) herein, Transfer the shares specified in said transferring stockholder’s notice that were not acquired by the corporation and/or its assignees(s) as specified in said transferring stockholder’s notice. All shares so sold by said transferring stockholder shall continue to be subject to the provisions of this Bylaw in the same manner as before said Transfer.

 

(f)              Anything to the contrary contained herein notwithstanding, the following transactions shall be exempt from the right of first refusal in paragraph (a) of this Section:

 

(1)               A stockholder’s Transfer of any or all shares held either during such stockholder’s lifetime or on death by will or intestacy to such stockholder’s immediate family or to any custodian or trustee for the account of such stockholder or such stockholder’s immediate family or to any limited partnership of which the stockholder, members of such stockholder’s immediate family or any trust for the account of such stockholder or such stockholder’s immediate family will be the general or limited partner(s) of such partnership. “Immediate family” as used herein shall mean spouse, lineal descendant, father, mother, brother, or sister of the stockholder making such Transfer;

 

(2)               A stockholder’s bona fide pledge or mortgage of any shares with a commercial lending institution, provided that any subsequent Transfer of said shares by said institution shall be conducted in the manner set forth in this Bylaw;

 

(3)               A stockholder’s Transfer of any or all of such stockholder’s shares to the corporation or to any other stockholder of the corporation;

 

(4)               A stockholder’s Transfer of any or all of such stockholder’s shares to a person who, at the time of such Transfer, is an officer or director of the corporation;

 

(5)               A corporate stockholder’s Transfer of any or all of its shares pursuant to and in accordance with the terms of any merger, consolidation, reclassification of shares or capital reorganization of the corporate stockholder, or pursuant to a sale of all or substantially all of the stock or assets of a corporate stockholder;

 

(6)               A stockholder’s Transfer of shares of Preferred Stock of the corporation (or any shares of Common Stock issued upon conversion thereof);

 

(7)               A corporate stockholder’s Transfer of any or all of its shares to any or all of its stockholders; or

 

(8)               A Transfer by a stockholder that is a limited or general partnership to any or all of its partners or former partners in accordance with partnership interests.

 

In any such case, the transferee, assignee, or other recipient shall receive and hold such stock subject to the provisions of this Section and any other restrictions set forth in these Bylaws, and there shall be no further Transfer of such stock except in accord with this Section and the other provisions of these Bylaws.

 

 

(g)             The provisions of this Bylaw may be waived with respect to any Transfer either by the corporation, upon duly authorized action of its Board of Directors, or by the stockholders, upon the express written consent of the owners of a majority of the voting power of the corporation (excluding the votes represented by those shares to be transferred by the transferring stockholder). This Bylaw may be amended or repealed either by a duly authorized action of the Board of Directors or by the stockholders, upon the express written consent of the owners of a majority of the voting power of the corporation.

 

(h)             Any Transfer, or purported Transfer, of securities of the corporation shall be null and void unless the terms, conditions, and provisions of this Bylaw are strictly observed and followed.

 

(i)               The foregoing right of first refusal shall terminate upon the date securities of the corporation are first offered to the public pursuant to a registration statement filed with, and declared effective by, the SEC under the Securities Act of 1933, as amended.

 

(j)               The certificates representing shares of Common Stock of the corporation that are subject to the right of first refusal in paragraph (a) of this Section shall bear on their face the following legend so long as the foregoing right of first refusal remains in effect:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION AND/OR ITS ASSIGNEE(S), AS PROVIDED IN THE BYLAWS OF THE CORPORATION.”

 

(k)             To the extent this Section conflicts with any written agreements between the corporation and the stockholder attempting to Transfer shares, such agreement shall control.

 

Section 38.              Fixing Record Dates.

 

(a)              In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, subject to applicable law, not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day immediately preceding the day on which notice is given, or if notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

(b)              In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

 

 

(c)              In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

Section 39.              Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

 

ARTICLE VIII

Other Securities Of The Corporation

 

Section 40.              Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 34 of these Bylaws), may be signed by the Chairman of the Board of Directors, the Chief Executive Officer, the President or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the corporation.

 

 

ARTICLE IX

Dividends

 

Section 41.             Declaration of Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.

 

Section 42.             Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

 

ARTICLE X

Fiscal Year

 

Section 43.              Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

 

ARTICLE XI

indemnification

 

Section 44.              Indemnification of Directors, Executive Officers, Other Officers, Employees and Other Agents.

 

(a)              Directors and Executive Officers. The corporation shall indemnify its directors and executive officers (for the purposes of this Article, “executive officers” shall have the meaning defined in Rule 3b-7 promulgated under the 1934 Act) to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the corporation may modify the extent of such indemnification by individual contracts with its directors and executive officers; and, provided, further, that the corporation shall not be required to indemnify any director or executive officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under paragraph (d) of this Section.

 

(b)              Other Officers, Employees and Other Agents. The corporation shall have power to indemnify its other officers, employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate the determination of whether indemnification shall be given to any such person except executive officers to such officers or other persons as the Board of Directors shall determine.

 

(c)              Expenses. The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or executive officer of the corporation, or is or was serving at the request of the corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or executive officer in connection with such proceeding, provided, however, that, if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise.

 

 

Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph (e) of this Section, no advance shall be made by the corporation to an executive officer of the corporation (except by reason of the fact that such executive officer is or was a director of the corporation, in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by a majority vote of a quorum consisting of directors who were not parties to the proceeding, even if not a quorum, or (ii) by a committee of such directors designated by a majority of such directors, even though less than a quorum, or (iii) if there are no such directors, or such directors so direct, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation.

 

(d)              Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and executive officers under this Section shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or executive officer. Any right to indemnification or advances granted by this Section to a director or executive officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within 90 days of request therefor. The claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. In connection with any claim by an executive officer of the corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such executive officer is or was a director of the corporation) for advances, the corporation shall be entitled to raise as a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his or her conduct was lawful. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct.

 

(e)              Non-Exclusivity of Rights. The rights conferred on any person by this Section shall not be exclusive of any other right that such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.

 

 

(f)              Survival of Rights. The rights conferred on any person by this Section shall continue as to a person who has ceased to be a director or executive officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

(g)              Insurance. To the fullest extent permitted by the DGCL, or any other applicable law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Section.

 

(h)             Amendments. Any repeal or modification of this Section shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.

 

(i)               Saving Clause. If this Section or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and executive officer to the full extent not prohibited by any applicable portion of this Bylaw that shall not have been invalidated, or by any other applicable law. If this Section shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify each director and executive officer to the full extent under applicable law.

 

(j)               Certain Definitions. For the purposes of this Section, the following definitions shall apply:

 

(1)               The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

 

(2)               The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.

 

(3)               The term the “corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

 

(4)                References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.

 

 

(5)              References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation that imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this Section.

 

ARTICLE XII

Notices

 

Section 45.              Notices.

 

(a)              Notice to Stockholders. Written notice to stockholders of stockholder meetings shall be given as provided in Section 7 of these Bylaws. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder meetings may be sent by United States mail or nationally recognized overnight courier, or by facsimile, telegraph or telex or by electronic mail or other electronic means.

 

(b)              Notice to Directors. Any notice required to be given to any director may be given by the method stated in paragraph (a) of this Section, or as provided for in Section 21 of these Bylaws. If such notice is not delivered personally, it shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.

 

(c)             Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.

 

(d)              Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.

 

(e)              Notice to Person with Whom Communication Is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

 

 

(f)               Notice to Stockholders Sharing an Address. Except as otherwise prohibited under DGCL, any notice given under the provisions of DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the corporation within 60 days of having been given notice by the corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the corporation.

 

ARTICLE XIII

Amendments

 

Section 46.            Amendments. The Board of Directors is expressly empowered to adopt, amend or repeal Bylaws of the corporation. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.

 

ARTICLE XIV

Loans To Officers

 

Section 47.              Loans to Officers. Except as otherwise prohibited under applicable law, the corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a Director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

 

ARTICLE XV

Miscellaneous

 

Section 48.              Forum. Unless the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the corporation; (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation’s stockholders; (iii) any action asserting a claim against the corporation or any director or officer or other employee of the corporation arising pursuant to any provision of the DGCL, the certificate of incorporation or the Bylaws of the corporation; or (iv) any action asserting a claim against the corporation or any director or officer or other employee of the corporation governed by the internal affairs doctrine.

 

 

 

 

 

Exhibit 4.2

 

INVESTORS’ RIGHTS AGREEMENT

 

This Investors’ Rights Agreement (this “Agreement”), is made as of the 7th day of May, 2018, by and among Incysus Therapeutics, Inc., a Delaware corporation (the “Company”), and each of the investors listed on Schedule A hereto, each of which is referred to in this Agreement as an “Investor”, each of the stockholders listed on Schedule B hereto, each of whom is referred to herein as a “Key Holder” and any Additional Purchaser (as defined in the Purchase Agreement) that becomes a party to this Agreement in accordance with Section 6.9 hereof.

 

Recitals

 

Whereas, the Company and the Investors are parties to that certain Series A Preferred Stock Purchase Agreement of even date herewith (the “Purchase Agreement”); and

 

Whereas, in order to induce the Company to enter into the Purchase Agreement and to induce the Investors to invest funds in the Company pursuant to the Purchase Agreement, the Investors and the Company hereby agree that this Agreement shall govern the rights of the Investors to cause the Company to register shares of Common Stock issuable to the Investors, to receive certain information from the Company, and to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement;

 

Now, Therefore, the parties hereby agree as follows:

 

1.                  Definitions. For purposes of this Agreement:

 

1.1              “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer, director or trustee of such Person or any venture capital fund or registered investment company now or hereafter existing that is controlled by one or more general partners, managing members or investment adviser of, or shares the same management company or investment adviser with, such Person.

 

1.2              “BIOS Entities” means BIOS Fund II, LP, BIOS Fund II QP, LP and BIOS Fund II NT, LP.

 

1.3              “Board of Directors” means the board of directors of the Company.

 

1.4              “Certificate of Incorporation” means the Company’s Certificate of Incorporation, as amended and/or restated from time to time.

 

1.5              “Common Stock” means shares of the Company’s common stock, par value $0.0001 per share.

 

1.6              “Competitor” means a Person engaged, directly or indirectly (including through any partnership, limited liability company, corporation, joint venture or similar arrangement (whether now existing or formed hereafter)), in the business conducted by the Company, but shall not include any financial investment firm or collective investment vehicle that, together with its Affiliates, holds less than twenty percent (20%) of the outstanding equity of any Competitor and does not, nor do any of its Affiliates, have a right to designate any members of the board of directors of any Competitor; provided, however, that “Competitor” shall not include any of the BIOS Entities or any of their respective Affiliates.

 

 

1.7              “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

1.8              “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants, to the extent such conversion, exercise or exchange is calculable at the applicable time.

 

1.9              “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

1.10          “Excluded Registration” means (i) a registration relating to the sale or grant of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

 

1.11          “FOIA Party” means a Person that, in the reasonable determination of the Board of Directors, may be subject to, and thereby required to disclose non-public information furnished by or relating to the Company under, the Freedom of Information Act, 5 U.S.C. 552 (“FOIA”), any state public records access law, any state or other jurisdiction’s laws similar in intent or effect to FOIA, or any other similar statutory or regulatory requirement.

 

1.12          “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

 

1.13          “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits forward incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

1.14          “GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

1.15          “Holder” means any holder of Registrable Securities who is a party to this Agreement.

 

1.16          “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships, of a natural person referred to herein.

 

1.17          “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

1.18          “IPO” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.

 

1.19          “Key Employee” means any executive-level employee (including, division director and vice president-level positions) as well as any employee who, either alone or in concert with others, develops, invents, programs, or designs any Company Intellectual Property (as defined in the Purchase Agreement).

 

1.20          “Key Holder Registrable Securities” means (i) the shares of Common Stock held by the Key Holders, and (ii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of such shares.

 

1.21          “Major Investor” means any Investor that, individually or together with such Investor’s Affiliates, holds at least 1,000,000 shares of Registrable Securities (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof).

 

1.22          “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

 

1.23          “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

1.24          “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Series A Preferred Stock; (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other Securities of the Company, acquired by the Investors after the date hereof; (iii) the Key Holder Registrable Securities, provided, however, that such Key Holder Registrable Securities shall not be deemed Registrable Securities and the Key Holders shall not be deemed Holders for the purposes of Subsections 2.1 (and any other applicable Section or Subsection with respect to registrations under Subsection 2.1), 2.10, 3.1, 3.2, 4.1 and 6.6; and (iv) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Subsection 6.1, and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Subsection 2.13 of this Agreement.

 

 

1.25          “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.

 

1.26          “Restricted Securities” means the securities of the Company required to be notated with the legend set forth in Subsection 2.12(b) hereof.

 

1.27          “SEC” means the Securities and Exchange Commission.

 

1.28          “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.29          “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

1.30          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

1.31          “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Subsection 2.6.

 

1.32          “Series A Director” means any director of the Company that the holders of record of the Series A Preferred Stock are entitled to elect, exclusively and as a separate class, pursuant to the Certificate of Incorporation.

 

1.33          “Series A Preferred Stock” means shares of the Company’s Series A Preferred Stock, par value $0.0001 per share.

 

 

2.                  Registration Rights. The Company covenants and agrees as follows:

 

2.1              Demand Registration.

 

(a)               Form S-1 Demand. If at any time after the earlier of (i) five (5) years after the date of this Agreement or (ii) one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a request from Holders of at least fifty percent (50%) of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to the Registrable Securities then outstanding of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $20 million, then the Company shall (x) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (y) as soon as practicable, and in any event within ninety (90) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 2.1(c) and 2.3.

 

(b)              Form S-3 Demand. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders of at least twenty-five percent (25%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $1 million, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within ninety (90) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 2.1(c) and 2.3.

 

(c)               Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Subsection 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than twice in any twelve (12) month period; and provided further that the Company shall not register any Securities for its own account or that of any other stockholders during such ninety (90) day period other than an Excluded Registration.

 

 

(d)              The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 2.1(a)(i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two registrations pursuant to Subsection 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Subsection 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 2.1(b) (i) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has effected two registrations pursuant to Subsection 2.1(b) within the twelve (12) month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Subsection 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Subsection 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Subsection 2.1(d); provided, that if such withdrawal is during a period the Company has deferred taking action pursuant to Subsection 2.1(c), then the Initiating Holders may withdraw their request for registration and such registration will not be counted as “effected” for purposes of this Subsection 2.1(d).

 

2.2              Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its securities under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Subsection 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Subsection 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Subsection 2.6.

 

 

2.3              Underwriting Requirements.

 

(a)               If, pursuant to Subsection 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Subsection 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Board of Directors and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Subsection 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Subsection 2.3, if the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.

 

(b)              In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Subsection 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, (ii) the number of Registrable Securities included in the offering be reduced below twenty-five percent (25%) of the total number of securities included in such offering unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering or (iii) notwithstanding (ii) above, any Registrable Securities which are not Key Holder Registrable Securities be excluded from such underwriting unless all Key Holder Registrable Securities are first excluded from such offering. For purposes of the provision in this Subsection 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

 

 

(c)               For purposes of Subsection 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Subsection 2.3(a), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.

 

2.4              Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)               prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to one hundred twenty (120) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;

 

(b)              prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

 

(c)               furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

 

(d)              use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

 

(e)               in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

(f)                use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(g)               provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(h)              promptly make available for inspection by the selling Holders, any underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(i)                 notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

 

(j)                after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act.

 

2.5              Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.

 

 

2.6              Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements, of counsel for the Company; and the reasonable fees and disbursements, not to exceed $50,000, of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Subsection 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Subsections 2.1(a) or 2.1(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Subsections 2.1(a) or 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.7              Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.8              Indemnification. If any Registrable Securities are included in a registration statement under this Section 2:

 

(a)               To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

 

 

(b)              To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Subsections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

(c)               Promptly after receipt by an indemnified party under this Subsection 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Subsection 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Subsection 2.8.

 

 

(d)              To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Subsection 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Subsection 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Subsection 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Subsection 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

(e)               Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Subsection 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement.

 

2.9              Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:

 

(a)               make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO, so long as there are Registrable Securities outstanding;

 

(b)              use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become and remains subject to such reporting requirements); and

 

(c)               furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time after the Company has become and remains subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become and remains subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

 

 

2.10          Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of at least fifty percent (50%) of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would provide to such holder or prospective holder the right to (i) include such securities in any registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in any registration statement only to the extent that the inclusion of such securities will not reduce the number of the Registrable Securities of the Holders that are included; or (ii) initiate a demand for registration of any Securities held by any such holder or prospective holder; provided that this limitation shall not apply to Registrable Securities acquired by any additional Investor that becomes a party to this Agreement in accordance with Subsection 6.9.

 

2.11          “Market Stand-off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1, and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days following the IPO, (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock (whether such shares or any such securities are then owned by the Holder or are thereafter acquired) or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Subsection 2.11 shall apply only to the IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, or the transfer of any shares to any trust for the direct or indirect benefit of the Holder or the immediate family of the Holder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders only if all officers and directors are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all stockholders individually owning more than five percent (5%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Series A Preferred Stock). The underwriters in connection with such registration are intended third-party beneficiaries of this Subsection 2.11 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Subsection 2.11 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements.

 

 

2.12          Restrictions on Transfer.

 

(a)               The Series A Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Series A Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.

 

(b)              Each certificate, instrument, or book entry representing (i) the Series A Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Subsection 2.12(c)) be notated with a legend substantially in the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

 

THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Subsection 2.12.

 

 

(c)               The holder of such Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144; or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided that each transferee agrees in writing to be subject to the terms of this Subsection 2.12. Each certificate, instrument, or book entry representing the Restricted Securities transferred as above provided shall be notated with, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Subsection 2.12(b), except that such certificate instrument, or book entry shall not be notated with such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act.

 

2.13          Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Subsections 2.1 or 2.2 shall terminate upon the earliest to occur of:

 

(a)               the closing of a Deemed Liquidation Event, as such term is defined in the Certificate of Incorporation;

 

(b)              such time after consummation of the IPO as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation during a three-month period without registration; or

 

(c)               the third anniversary of the IPO.

 

3.                  Information Rights.

 

3.1              Delivery of Financial Statements. The Company shall deliver to each Major Investor, provided that the Board of Directors has not reasonably determined that such Major Investor is a Competitor:

 

(a)               as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company (i) an unaudited balance sheet as of the end of such year, (ii) unaudited statements of income and of cash flows for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments; and (ii) not contain all notes thereto that may be required in accordance with GAAP); and

 

 

(b)              as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance sheet as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments; and (ii) not contain all notes thereto that may be required in accordance with GAAP).

 

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

Notwithstanding anything else in this Subsection 3.1 to the contrary, the Company may cease providing the information set forth in this Subsection 3.1 during the period starting with the date thirty (30) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Subsection 3.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.

 

3.2              Inspection. The Company shall permit each Major Investor (provided that the Board of Directors has not reasonably determined that such Major Investor is a competitor of the Company), at such Major Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Subsection 3.2 to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

3.3              Termination of Information Rights. The covenants set forth in Subsection 3.1 and Subsection 3.2 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon the closing of a Deemed Liquidation Event, as such term is defined in the Certificate of Incorporation, whichever event occurs first.

 

3.4              Confidentiality. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Subsection 3.4 by such Investor), (b) is or has been independently developed or conceived by such Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to such Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Subsection 3.4; (iii) to any existing or prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, regulation, rule, court order or subpoena, provided that such Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

 

 

4.                  Rights to Future Stock Issuances.

 

4.1              Right of First Offer. Subject to the terms and conditions of this Subsection 4.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Investor. An Investor shall be entitled to apportion the right of first offer hereby granted to it, in such proportions as it deems appropriate, among (i) itself, (ii) its Affiliates and (iii) its beneficial interest holders, such as limited partners, members or any other Person having “beneficial ownership,” as such term is defined in Rule 13d-3 promulgated under the Exchange Act, of such Investor (“Investor Beneficial Owners”); provided that each such Affiliate or Investor Beneficial Owner (x) is not a Competitor or FOIA Party, unless such party’s purchase of New Securities is otherwise consented to by the Board of Directors, (y) agrees to enter into this Agreement and each of the Voting Agreement and Right of First Refusal and Co-Sale Agreement of even date herewith among the Company, the Investors and the other parties named therein, as an “Investor” under each such agreement (provided that any Competitor or FOIA Party shall not be entitled to any rights as a Major Investor under Subsections 3.1, 3.2 and 4.1 hereof), and (z) agrees to purchase at least such number of New Securities as are allocable hereunder to the Investor holding the fewest number of Series A Preferred Stock and any other Derivative Securities.

 

(a)               The Company shall give notice (the “Offer Notice”) to each Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.

 

(b)              By notification to the Company within twenty (20) days after the Offer Notice is given, each Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the number of shares of Common Stock then held by such Investor (including all shares of Common Stock then issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Series A Preferred Stock and any other Derivative Securities then held by such Investor) bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Series A Preferred Stock and other Derivative Securities). At the expiration of such twenty (20) day period, the Company shall promptly notify each Investor that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Investor”) of any other Investor’s failure to do likewise. During the ten (10) day period commencing after the Company has given such notice, each Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Investors were entitled to subscribe but that were not subscribed for by the Investors which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of Series A Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Investor bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Series A Preferred Stock and any other Derivative Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed shares. The closing of any sale pursuant to this Subsection 4.1(b) shall occur within the later of one hundred and twenty (120) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Subsection 4.1(c).

 

 

(c)               If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Subsection 4.1(b), the Company may, during the ninety (90) day period following the expiration of the periods provided in Subsection 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investors in accordance with this Subsection 4.1.

 

(d)              The right of first offer in this Subsection 4.1 shall not be applicable to (i) Exempted Securities (as defined in the Certificate of Incorporation); (ii) shares of Common Stock issued in the IPO; and (iii) the issuance of shares of Series A Preferred Stock or any Common Stock issued or issuable upon the conversion thereof pursuant to the Purchase Agreement and (iv) the issuance of warrants to purchase Series A Preferred Stock (or any Common Stock issued or issuable upon the conversion thereof) as disclosed in the Disclosure Schedule accompanying the Purchase Agreement.

 

(e)               Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Subsection 4.1, the Company may elect to give notice to the Investors within thirty (30) days after the issuance of New Securities. Such notice shall describe the type, price, and terms of the New Securities. Each Investor shall have twenty (20) days from the date notice is given to elect to purchase up to the number of New Securities that would, if purchased by such Investor, maintain such Investor’s percentage-ownership position, calculated as set forth in Subsection 4.1(b) before giving effect to the issuance of such New Securities. In the event one or more Investor declines to purchase the number of New Securities that would maintain such Investors’ percentage-ownership positions, the New Securities so declined shall be offered to the fully participating Investors on the basis provided in Subsection 4.1(b). The closing of such sale shall occur within sixty (60) days of the date notice is given to the Investors.

 

 

4.2              Termination. The covenants set forth in Subsection 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon the closing of a Deemed Liquidation Event, as such term is defined in the Certificate of Incorporation, whichever event occurs first.

 

5.                  Additional Covenants.

 

5.1              Insurance. The Company shall obtain, within ninety (90) days of the date hereof, from financially sound and reputable insurers Directors and Officers liability insurance and term “key-person” insurance on William Ho, in an amount equal to $5,000,000 and on terms and conditions satisfactory to the Board of Directors, and will use commercially reasonable efforts to cause such insurance policies to be maintained until such time as the Board of Directors determines that such insurance should be discontinued. The key-person policy shall name the Company as loss payee, and the policy shall not be cancelable by the Company without prior approval by the Board of Directors, including one of the Series A Directors. Notwithstanding any other provision of this Section 5.1 to the contrary, for so long as a Series A Director (as defined in the Certificate of Incorporation) is serving on the Board of Directors, the Company shall maintain a Directors and Officers liability insurance policy in an amount reasonably satisfactory to the Company and the Board of Directors, and the Company shall annually, within one hundred twenty (120) days after the end of each fiscal year of the Company, deliver to the Series A Directors a certification that such a Directors and Officers liability insurance policy remains in effect. Each Key Holder hereby covenants and agrees that, to the extent such Key Holder is named under such key-person policy, such Key Holder will execute and deliver to the Company, as reasonably requested, a written notice and consent form with respect to such policy.

 

5.2              Employee Agreements. The Company will cause (i) each Person now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment agreement and (ii) each Key Employee (as defined in the Purchase Agreement) to enter into a one (1) year noncompetition and nonsolicitation agreement restricting such Key Employee’s provision of services to immuno-oncology businesses and otherwise substantially in the form approved by the Board of Directors. In addition, the Company shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and any employee, without the consent of one of the Series A Directors. 

 

 

5.3              Employee Stock. Unless otherwise approved by the Board of Directors, including one of the Series A Directors, and except as otherwise disclosed in the Disclosure Schedule accompanying the Purchase Agreement as transactions currently contemplated by the Company, all future employees and consultants of the Company who purchase, receive options to purchase, or receive awards of shares of the Company’s capital stock after the date hereof shall be required to execute restricted stock or option agreements, as applicable, providing for (i) vesting of shares over a four (4) year period, with the first twenty-five percent (25%) of such shares vesting following twelve (12) months of continued employment or service, and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months, and (ii) a market stand-off provision substantially similar to that in Section 2.11. Without the prior approval by the Board of Directors, including one of the Series A Directors, the Company shall not amend, modify, terminate, waive or otherwise alter, in whole or in part, any stock purchase, stock restriction or option agreement with any existing employee or service provider if such amendment would cause it to be inconsistent with this Section 5.3. In addition, unless otherwise approved by the Board of Directors, including one of the Series A Directors, the Company shall retain (and not waive) a “right of first refusal” on employee transfers until the Company’s IPO and shall have the right to repurchase unvested shares at cost upon termination of employment of a holder of restricted stock.

 

5.4              Qualified Small Business Stock. The Company shall use commercially reasonable efforts to cause the shares of Series A Preferred Stock issued pursuant to the Purchase Agreement, as well as any shares into which such shares are converted, within the meaning of Section 1202(f) of the Internal Revenue Code (the “Code”), to constitute “qualified small business stock” as defined in Section 1202(c) of the Code; provided, however, that such requirement shall not be applicable if the Board of Directors of the Company reasonably determines, in its good-faith business judgment, that such qualification is inconsistent with the best interests of the Company. The Company shall submit to its stockholders (including the Investors) and to the Internal Revenue Service any reports that may be required under Section 1202(d)(1)(C) of the Code and the regulations promulgated thereunder. In addition, within twenty (20) days after any Investor’s written request therefor, the Company shall, at its option, either (i) deliver to such Investor a written statement indicating whether (and what portion of) such Investor’s interest in the Company constitutes “qualified small business stock” as defined in Section 1202(c) of the Code or (ii) deliver to such Investor such factual information in the Company’s possession as is reasonably necessary to enable such Investor to determine whether (and what portion of) such Investor’s interest in the Company constitutes “qualified small business stock” as defined in Section 1202(c) of the Code.

 

5.5              Matters Requiring Director Approval. So long as the holders of Series A Preferred Stock are entitled to elect a Series A Director, the Company hereby covenants and agrees with each of the Investors as follows:

 

(a)               The Company shall not, without approval of at least 60% of the members of the Board of Directors then in office, increase the aggregate number of shares authorized for issuance under any existing equity incentive plan, or authorize the creation of any new equity incentive plan.

 

 

(b)              Except as disclosed in the Disclosure Schedule accompanying the Purchase Agreement as a transaction currently contemplated by the Company, the Company shall not, without approval of the Board of Directors, including one of the Series A Directors:

 

(i)               enter into or be a party to any transaction with any director, officer, or management employee of the Company or any affiliate or immediate family member of any such Person, except for transactions contemplated by this Agreement and the Purchase Agreement, transactions resulting in payments to or by the Company in an aggregate amount less than $60,000 per year, and transactions made in the ordinary course of business and pursuant to reasonable requirements of the Company’s business and upon fair and reasonable terms that are approved by a majority of the Board of Directors;

 

(ii)              hire, terminate, or change the compensation of any senior executive of the Company;

 

(iii)            sell, assign, license, pledge, or encumber material technology or intellectual property;

 

(iv)             enter into any corporate strategic relationship involving the payment, contribution, or assignment by the Company or to the Company of money or assets greater than $500,000; ¹

 

(v)               encumber or create a security interest in all or substantially all of the assets of the Company in connection with the increase of any indebtedness by the Company; or

 

(vi)             acquire or dispose of any assets greater than $500,000 through a merger, the purchase or sale of all or substantially all of the assets or capital stock of another entity, or otherwise.

 

 

5.6              Board Matters. Unless otherwise determined by the vote of a majority of the directors then in office, the Board of Directors shall meet at least quarterly in accordance with an agreed-upon schedule. The Company shall reimburse the directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors.

 

5.7              Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, the Certificate of Incorporation, or elsewhere, as the case may be.

 

5.8              Expenses of Counsel. In the event of a transaction which is a Sale of the Company (as defined in the Voting Agreement of even date herewith among the Investors, the Company and the other parties named therein), the reasonable fees and disbursements, not to exceed $50,000, of one counsel for the Investors (“Investor Counsel”), in their capacities as stockholders, shall be borne and paid by the Company. At the outset of considering a transaction which, if consummated would constitute a Sale of the Company, the Company shall obtain the ability to share with the Investor Counsel (and such counsel's clients) and shall share the confidential information (including, without limitation, the initial and all subsequent drafts of memoranda of understanding, letters of intent and other transaction documents and related noncompete, employment, consulting and other compensation agreements and plans) pertaining to and memorializing any of the transactions which, individually or when aggregated with others would constitute the Sale of the Company. The Company shall be obligated to share (and cause the Company's counsel and investment bankers to share) such materials when distributed to the Company's executives and/or any one or more of the other parties to such transaction(s). In the event that Investor Counsel deems it appropriate, in its reasonable discretion, to enter into a joint defense agreement or other arrangement to enhance the ability of the parties to protect their communications and other reviewed materials under the attorney client privilege, the Company shall, and shall direct its counsel to, execute and deliver to Investor Counsel and its clients such an agreement in form and substance reasonably acceptable to Investor Counsel. In the event that one or more of the other party or parties to such transactions require the clients of Investor Counsel to enter into a confidentiality agreement and/or joint defense agreement in order to receive such information, then the Company shall share whatever information can be shared without entry into such agreement and shall, at the same time, in good faith work expeditiously to enable Investor Counsel and its clients to negotiate and enter into the appropriate agreement(s) without undue burden to the clients of Investor Counsel.

 

¹ NTD: Adjusted to bring in line with (vi) below.

 

 

 

5.9              Indemnification Matters. The Company hereby acknowledges that one (1) or more of the directors nominated to serve on the Board of Directors by the Investors (each an “Investor Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their Affiliates (collectively, the “Investor Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Investor Director are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Investor Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Investor Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Investor Director to the extent legally permitted and as required by the Company’s Certificate of Incorporation or Bylaws of the Company (or any agreement between the Company and such Investor Director), without regard to any rights such Investor Director may have against the Investor Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Investor Indemnitors from any and all claims against the Investor Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Investor Indemnitors on behalf of any such Investor Director with respect to any claim for which such Investor Director has sought indemnification from the Company shall affect the foregoing and the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Investor Director against the Company. The Investor Directors and the Investor Indemnitors are intended third party beneficiaries of this Subsection 5.9 and shall have the right, power and authority to enforce the provisions of this Subsection 5.9 as though they were a party to this Agreement.

 

5.10          Right to Conduct Activities. The Company hereby agrees and acknowledges that each of the BIOS Entities is a professional investment fund, and as such invests in numerous portfolio companies, some of which may be deemed to be competitive with the Company’s business (as currently conducted or as currently propose to be conducted). The Company hereby agrees that, to the extent permitted under applicable law, none of the BIOS Entities (or any of their respective Affiliates) shall be liable to the Company for any claim arising out of, or based upon, (i) the investment by any of the BIOS Entities (or any of their respective Affiliates) in any entity competitive with the Company, or (ii) actions taken by any partner, officer, employee or other representative of any of the BIOS Entities (or any of their respective Affiliates) to assist any such competitive company, whether or not such action was taken as a member of the board of directors of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company; provided, however, that the foregoing shall not relieve (x) any of the Investors from liability associated with the unauthorized disclosure of the Company’s confidential information obtained pursuant to this Agreement, or (y) any director or officer of the Company from any liability associated with his or her fiduciary duties to the Company.

 

 

5.11          Termination of Covenants. The covenants set forth in this Section 5, except for Subsections 5.7 and 5.9, shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the period reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Deemed Liquidation Event, as such term is defined in the Certificate of Incorporation, whichever event occurs first.

 

6.                  Miscellaneous.

 

6.1              Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder; (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (iii) after such transfer, holds at least 1,000,000 shares of the Company’s capital stock (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations); provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Subsection 2.11. For the purposes of determining the number of shares of the Company’s capital stock held by a transferee, the holdings of a transferee (1) that is an Affiliate or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder; provided further that all transferees who would not qualify individually for assignment of rights shall, as a condition to the applicable transfer, establish a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

6.2              Governing Law. This Agreement shall be governed by the internal law of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.

 

6.3              Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

6.4              Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

 

 

6.5              Notices.

 

(a)               All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A or Schedule B (as applicable) hereto, or to the principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Subsection 6.5. If notice is given to the Company, a copy shall also be sent to Cooley LLP, 1114 Avenue of the Americas, New York, NY 10036, Attention: Josh Kaufman and if notice is given to Stockholders, a copy shall also be given to Winstead PC, 300 Throckmorton Street, Suite 1700, Fort Worth, TX 76102, Attention: Charlie Florsheim, counsel to the BIOS Entities.

 

(b)              Consent to Electronic Notice. Each Investor and Key Holder consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by electronic transmission pursuant to Section 232 of the DGCL (or any successor thereto) at the electronic mail address or the facsimile number set forth below such Investor’s or Key Holder’s name on the Schedules hereto, as updated from time to time by notice to the Company, or as on the books of the Company. Each Investor and Key Holder agrees to promptly notify the Company of any change in such stockholder’s electronic mail address, and that failure to do so shall not affect the foregoing.

 

6.6              Amendments and Waivers. Any term of this Agreement may be amended, modified or terminated and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of at least a majority of the Registrable Securities then outstanding; provided that the Company may in its sole discretion waive compliance with Subsection 2.12(c) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Subsection 2.12(c) shall be deemed to be a waiver); and provided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing, (a) this Agreement may not be amended, modified or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment, modification, termination, or waiver applies to all Investors in the same fashion (it being agreed that a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction) and (b) Subsections 3.1 and 3.2 and any other section of this Agreement applicable to the Major Investors (including this clause (b) of this Subsection 6.6) may not be amended, modified, terminated or waived without the written consent of the holders of at least a majority of the Registrable Securities then outstanding and held by the Major Investors. Further, this Agreement may not be amended, modified or terminated, and no provision hereof may be waived, in each case, in any way which would adversely affect the rights of the Key Holders hereunder in a manner disproportionate to any adverse effect such amendment, modification, termination or waiver would have on the rights of the Investors hereunder, without also the written consent of the holders of at least a majority of the Registrable Securities held by the Key Holders. Notwithstanding the foregoing, Schedule A hereto may be amended by the Company from time to time to add transferees of any Registrable Securities in compliance with the terms of this Agreement without the consent of the other parties; and Schedule A hereto may also be amended by the Company after the date of this Agreement without the consent of the other parties to add information regarding any additional Investor who becomes a party to this Agreement in accordance with Subsection 6.9. The Company shall give prompt notice of any amendment, modification, or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, modification, termination, or waiver. Any amendment, modification, termination, or waiver effected in accordance with this Subsection 6.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

 

6.7              Severability. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

 

6.8              Aggregation of Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

 

6.9              Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of the Company’s Series A Preferred Stock after the date hereof, whether pursuant to the Purchase Agreement or otherwise, any purchaser of such shares of Series A Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor” for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder.

 

6.10          Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

 

6.11          Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

 

WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

Each party will bear its own costs in respect of any disputes arising under this Agreement. The prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the District of Delaware or any court of the State of Delaware having subject matter jurisdiction.

 

6.12          Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

6.13          Aggregation of Stock. All Registrable Securities held or acquired by an Investor and/or its Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement, and such Affiliated Persons may apportion such rights as among themselves in any manner they deem appropriate.

 

[Remainder of Page Intentionally Left Blank]

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INCYSUS THERAPEUTICS, INC.
	By:	/s/ William Ho
	Name: William Ho
	Title: Chief Executive Officer

  

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	KEY HOLDER:
	Signature:	/s/ William Ho
	Name: William Ho

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	KEY HOLDER:
	Signature:	/s/ Thomas Cirrito
	Name:	Thomas Cirrito

 

  

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	KEY HOLDER:
	Signature:	/s/ Joy Bessenger
	Name:	Joy Bessenger

   

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTORS:
	BIOS Fund II, LP
	By:	BIOS Equity Partners II, LP
	Its:	General Partner
	By:	/s/ Leslie Wayne Kreis, Jr.

	Name:	Leslie Wayne Kreis, Jr.
	Title:	Managing Partner

  

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTORS:
	BIOS Fund II NT, LP
	By:	BIOS Equity Partners II, LP
	Its:	General Partner
	By:	/s/ Leslie Wayne Kreis, Jr.

	Name:	Leslie Wayne Kreis, Jr.
	Title:	Managing Partner

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTORS:
	BIOS Fund II QP, LP
	By:	BIOS Equity Partners II, LP
	Its:	General Partner
	By:	/s/ Leslie Wayne Kreis, Jr.

	Name:	Leslie Wayne Kreis, Jr.
	Title:	Managing Partner

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTORS:
	BIOS Incysus Co-Invest I, LP
	By:	BIOS Equity Partners II, LP
	Its:	General Partner
	By:	/s/ Leslie Wayne Kreis, Jr.

	Name:	Leslie Wayne Kreis, Jr.
	Title:	Managing Partner

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Peter Wen
	Peter Wen

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Ingram Tynes
	Ingram Tynes

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Neelay Patel
	Neelay Patel

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Charles D. Perry, Jr.
	Charles D. Perry, Jr.

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	H.C. Wainwright & Co., LLC
	By:	/s/ Kenneth J. Kirsch
	Name:	Kenneth J. Kirsch
	Title:	Chief Financial Officer

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	Timberline Holdings III, LLC
	By:	/s/ Joseph McCorty
	Name:	Joseph McCorty
	Title:	President of the Manager

 

 

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTORS:
	GC&H Investments
	By:	/s/ Jim Kindler
	Name: Jim Kindler
	Title: Manager
	GC&H Investments, LLC
	By:	/s/ Jim Kindler
	Name: Jim Kindler
	Title: Manager

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Bradley J. Sklar
	Bradley J. Sklar

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Henry Craft O’Neal
	Henry Craft O’Neal

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	Huckleberry, llc
	By:	/s/ Paul Beasley
	Name: Paul Beasley
	Title: Member

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	woodcrest capital inc.
	By:	/s/ Charles W. Redden
	Name: Charles W. Redden
	Title: President

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ R. Holman Head
	R. Holman Head

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	sigma investment corporation
	By:	/s/ Robert M. Conch
	Name: Robert M.Conch
	Title: President

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Avik S.A. Roy
	Avik S.A. Roy

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Roseanne Stanzione
	Roseanna Stanzione

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	The PCA Revocable trust
	By:	/s/ Philippe Chambon
	Name: Philippe Chambon
	Title: Trustee

 

 

In Witness Whereof, the parties have executed this Agreement as of the date first written above.

 

	INVESTOR:
	/s/ Jeremy Pee
	Jeremy Pee

 

 

INCYSUS THERAPEUTICS, INC.

 

Joinder Agreement

Series A Preferred Stock Financing

 

February 28, 2020

 

The undersigned hereby agrees to become a party to (i) that certain Series A Preferred Stock Purchase Agreement, as amended (the “Purchase Agreement”), (ii) that certain Investors’ Rights Agreement (the “IRA”), (iii) that certain Right of First Refusal and Co-Sale Agreement (the “ROFR and Co-Sale Agreement”), and (iv) that certain Voting Agreement (the “Voting Agreement” and together with the Purchase Agreement, the IRA and the ROFR and Co-Sale Agreement, the “Series A Financing Agreements”), each dated as of May 7, 2018, by and among Incysus Therapeutics, Inc., a Delaware corporation (the “Company”), and the respective parties named therein. Effective as of the undersigned’s acquisition of shares of the Company’s Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) in a subsequent Closing (as defined in the Purchase Agreement), the undersigned is hereby made a party to the Purchase Agreement as a “Purchaser” thereunder and to each of the IRA, the ROFR and Co-Sale Agreement and the Voting Agreement as an “Investor” thereunder. The undersigned agrees that this Joinder Agreement may be attached to each of the Series A Financing Agreements as a counterpart signature page thereto.

 

The undersigned (i) acknowledges receipt of a copy of each of the Series A Financing Agreements, (ii) confirms that the representations and warranties contained in Section 3 of the Purchase Agreement are true and correct as to the undersigned as of the date hereof, (iii) acknowledges the undersigned’s waiver of the provisions of Section 4 of the Purchase Agreement with respect to each subsequent Closing and (iv) confirms that the undersigned is acquiring 7,650 shares of Series A Preferred Stock at a purchase price of $1.30787 per share, or $10,005.21 in the aggregate, at a subsequent Closing. The address and email address to which notices may be sent to the undersigned are as follows below.

  

Ethan Chang Yi Ho

 

By:

/s/ Ethan Chang Yi Ho

Name: Ethan Chang Yi Ho

Title: Individual

 

Address:

 

Email:

 

 

INCYSUS THERAPEUTICS, INC.

 

Joinder Agreement

Series A Preferred Stock Financing

 

May 4, 2020

 

The undersigned hereby agrees to become a party to that certain Right of First Refusal and Co-Sale Agreement (the “ROFR and Co-Sale Agreement”), and that certain Voting Agreement (the “Voting Agreement” and together with the ROFR and Co-Sale Agreement, the “Shareholder Agreements”), in each case dated as of May 7, 2018, by and among Incysus Therapeutics, Inc. and the parties named therein respectively, as may be amended from time to time. Effective as of the date that this Joinder Agreement is executed and delivered by the undersigned, the undersigned (a) is hereby made a party to the Voting Agreement as a “Key Holder” thereunder and agrees to be bound by and subject to all of the terms and provisions of the Voting Agreement applicable to a Key Holder in accordance with Section 7.1(b) thereof and (b) is hereby made a party to the ROFR and Co-Sale Agreement as a “Key Holder” thereunder and agrees to be bound by and subject to all of the terms and provisions of the ROFR and Co-Sale Agreement applicable to a Key Holder in accordance with Section 6.17 thereof. The undersigned agrees that this Joinder Agreement may be attached to each of the Shareholder Agreements as a counterpart signature page thereto.

 

The undersigned acknowledges receipt of a copy of each of the Shareholder Agreements. The address, facsimile number and email address to which notices may be sent to the undersigned is as follows:

 

Peter Brandt

 

By:

/s/ Peter Brandt

Name: Peter Brandt

Title: Director

 

Address:

 

Email:

 

 

In8bio, INC.

 

Joinder Agreement

Series A Preferred Stock Financing

 

August 7, 2020

 

The undersigned hereby agrees to become a party to (i) that certain Series A Preferred Stock Purchase Agreement, as amended (the “Purchase Agreement”), (ii) that certain Investors’ Rights Agreement (the “IRA”), (iii) that certain Right of First Refusal and Co-Sale Agreement (the “ROFR and Co-Sale Agreement”), and (iv) that certain Voting Agreement (the “Voting Agreement” and together with the Purchase Agreement, the IRA and the ROFR and Co-Sale Agreement, the “Series A Financing Agreements”), each dated as of May 7, 2018, by and among In8bio, Inc. (f/k/a Innatus Therapeutics, Inc. and Incysus Therapeutics, Inc.), a Delaware corporation (the “Company”), and the respective parties named therein. Effective as of the undersigned’s acquisition of shares of the Company’s Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) in a subsequent Closing (as defined in the Purchase Agreement), the undersigned is hereby made a party to the Purchase Agreement as a “Purchaser” thereunder and to each of the IRA, the ROFR and Co-Sale Agreement and the Voting Agreement as an “Investor” thereunder. The undersigned agrees that this Joinder Agreement may be attached to each of the Series A Financing Agreements as a counterpart signature page thereto.

 

The undersigned (i) acknowledges receipt of a copy of each of the Series A Financing Agreements, (ii) confirms that the representations and warranties contained in Section 3 of the Purchase Agreement are true and correct as to the undersigned as of the date hereof, (iii) acknowledges the undersigned’s waiver of the provisions of Section 4 of the Purchase Agreement with respect to each subsequent Closing and (iv) confirms that the undersigned is acquiring 4,138,248 shares of Series A Preferred Stock at a purchase price of $1.30787 per share, or $5,412,290.41 in the aggregate, at a subsequent Closing. The address and email address to which notices may be sent to the undersigned are as follows below.

 

Bios Fund III QP, LP

 

By:

/s/ Leslie Wayne Kreis, Jr.

Name: Leslie Wayne Kreis, Jr.

Title: Managing Partner

 

Address:

 

Email:

 

 

In8bio, INC.

 

Joinder Agreement

Series A Preferred Stock Financing

 

August 7, 2020

 

The undersigned hereby agrees to become a party to (i) that certain Series A Preferred Stock Purchase Agreement, as amended (the “Purchase Agreement”), (ii) that certain Investors’ Rights Agreement (the “IRA”), (iii) that certain Right of First Refusal and Co-Sale Agreement (the “ROFR and Co-Sale Agreement”), and (iv) that certain Voting Agreement (the “Voting Agreement” and together with the Purchase Agreement, the IRA and the ROFR and Co-Sale Agreement, the “Series A Financing Agreements”), each dated as of May 7, 2018, by and among In8bio, Inc. (f/k/a Innatus Therapeutics, Inc. and Incysus Therapeutics, Inc.), a Delaware corporation (the “Company”), and the respective parties named therein. Effective as of the undersigned’s acquisition of shares of the Company’s Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) in a subsequent Closing (as defined in the Purchase Agreement), the undersigned is hereby made a party to the Purchase Agreement as a “Purchaser” thereunder and to each of the IRA, the ROFR and Co-Sale Agreement and the Voting Agreement as an “Investor” thereunder. The undersigned agrees that this Joinder Agreement may be attached to each of the Series A Financing Agreements as a counterpart signature page thereto.

 

The undersigned (i) acknowledges receipt of a copy of each of the Series A Financing Agreements, (ii) confirms that the representations and warranties contained in Section 3 of the Purchase Agreement are true and correct as to the undersigned as of the date hereof, (iii) acknowledges the undersigned’s waiver of the provisions of Section 4 of the Purchase Agreement with respect to each subsequent Closing and (iv) confirms that the undersigned is acquiring 882,397 shares of Series A Preferred Stock at a purchase price of $1.30787 per share, or $1,154,060.56 in the aggregate, at a subsequent Closing. The address and email address to which notices may be sent to the undersigned are as follows below.

 

Bios Fund III, LP

 

By:

/s/ Leslie Wayne Kreis, Jr.

Name: Leslie Wayne Kreis, Jr.

Title: Managing Partner

 

Address:

  

Email:

 

 

in8bio, INC.

 

Joinder Agreement

Series A Preferred Stock Financing

 

August 21, 2020

 

The undersigned hereby agrees to become a party to (i) that certain Series A Preferred Stock Purchase Agreement, as amended (the “Purchase Agreement”), (ii) that certain Investors’ Rights Agreement (the “IRA”), (iii) that certain Right of First Refusal and Co-Sale Agreement (the “ROFR and Co-Sale Agreement”), and (iv) that certain Voting Agreement (the “Voting Agreement” and together with the Purchase Agreement, the IRA and the ROFR and Co-Sale Agreement, the “Series A Financing Agreements”), each dated as of May 7, 2018, by and among In8bio, Inc. (f/k/a Innatus Therapeutics, Inc. and Incysus Therapeutics, Inc.), a Delaware corporation (the “Company”), and the respective parties named therein. Effective as of the undersigned’s acquisition of shares of the Company’s Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) in a subsequent Closing (as defined in the Purchase Agreement), the undersigned is hereby made a party to the Purchase Agreement as a “Purchaser” thereunder and to each of the IRA, the ROFR and Co-Sale Agreement and the Voting Agreement as an “Investor” thereunder. The undersigned agrees that this Joinder Agreement may be attached to each of the Series A Financing Agreements as a counterpart signature page thereto.

 

The undersigned (i) acknowledges receipt of a copy of each of the Series A Financing Agreements, (ii) confirms that the representations and warranties contained in Section 3 of the Purchase Agreement are true and correct as to the undersigned as of the date hereof, (iii) acknowledges the undersigned’s waiver of the provisions of Section 4 of the Purchase Agreement with respect to each subsequent Closing and (iv) confirms that the undersigned is acquiring 471,477 shares of Series A Preferred Stock at a purchase price of $1.30787 per share, or $616,630.63 in the aggregate, at a subsequent Closing. The address and email address to which notices may be sent to the undersigned are as follows below.

 

Bios Fund III NT, LP

 

By:

/s/ Leslie Wayne Kreis, Jr.

Name: Leslie Wayne Kreis, Jr.

Title: Managing Partner

 

Address:

 

Email:

 

 

Schedule A

 

INVESTORS

 

Name and Address		Number of Shares Held
BIOS Fund II, LP			1,336,149
BIOS Fund II NT, LP			584,340
BIOS Fund II QP, LP			4,365,106
Valley High Limited Partnership			229,592
Christina Ronac			23,784
John McPhee			151,967
Christian Coluccio			125,000
Maarten de Jong			50,046
Peter Wen			11,676
Keith Goldan			7,784
GC&H Investments			191,196
GC&H Investments, LLC			191,196
Avik Roy			29,998
Bios Fund III LP			882,397
Bios Fund III NT, LP			471,477
Bios Fund III QP, LP			5,934,313
BIOS Incysus Co-Invest I, LP			2,484,957
Bradley J. Sklar			38,229
Charles D. Perry, Jr.			38,230
Ethan Chang Yi Ho			7,650
H.C. Wainwright & Co., LLC			76,459
Henry Craft O’Neal			131,804
Huckleberry, LLC			19,114
Ingram Tynes			107,343
Jeremy Pee			84,992
Neelay Patel			42,085
PCA Revocable Trust			84,108
Robert Holman Head			38,229
Roseanne Stanzione			76,460
Sigma Investment Corporation			38,229
Timberline Holdings III, LLC			841,063
Transcend Partners Opportunity Fund LLC			8,028,321
Woodcrest Capital, Inc.			76,459

 

 

Schedule B

 

KEY HOLDERS

 

William Ho

 

Thomas Cirrito

 

Joy Bessenger

 

Peter Brandt

 

 

 

Exhibit 4.3

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Incysus Therapeutics, Inc.

 

WARRANT TO PURCHASE SERIES A PREFERRED STOCK

 

Warrant Series: 2018-A	No. PAW-[__]	May 7, 2018
	Void After May 7, 2023

 

This Certifies That, for value received, [___________________________], with its principal office at [__________________________], or assigns (the “Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below) from Incysus Therapeutics, Inc., a Delaware corporation, with its principal office at 79 Madison Avenue, 2^nd Floor, New York, NY 10016 (the “Company”) up to [____________________ (_____)] shares of the Series A Preferred Stock of the Company (the “Preferred Stock”).

 

Immediately prior to the closing of the Company’s initial public offering, this Warrant shall become exercisable for that number of shares of Common Stock of the Company into which the shares of Preferred Stock issuable under this Warrant would then be convertible, so long as such shares, if this Warrant has been exercised prior to such offering, would have been converted into shares of the Company’s Common Stock pursuant to the automatic conversion provisions (or otherwise) of the Company’s Certificate of Incorporation.

 

This Warrant is being issued as part of a series of warrants designated by the Warrant Series above (collectively, the “Warrants”) and issued in a series of multiple closings to certain persons and entities (collectively, the “Holders”). The Company shall maintain a ledger of all Holders. Unless indicated otherwise herein, the number of shares of Preferred Stock that Holder may purchase by exercising this warrant is equal to [__].

 

1.            Definitions. As used herein, the following terms shall have the following respective meanings:

 

(a)           “Exercise Period” shall mean the period commencing with the date hereof and ending five (5) years later, unless sooner terminated as provided below.

 

(b)           “Exercise Price” shall mean $0.0001 per share, subject to adjustment pursuant to Section 6 below.

 

(c)           “Exercise Shares” shall mean the shares of the Company’s Preferred Stock issuable upon exercise of this Warrant, subject to adjustment pursuant to the terms herein, including but not limited to adjustment pursuant to Section 6 below.

 

 

(d)           “Majority Holders” means the Holders of a majority of the Exercise Shares.

 

(e)           “Purchase Agreement” means the Series A Stock Purchase Agreement between the Company, the Holders and the other parties thereto, dated as of May 7, 2018.

 

2.            Exercise of Warrant. The rights represented by this Warrant may be exercised in whole or in part at any time during the Exercise Period, by delivery of the following to the Company at its address set forth above (or at such other address as it may designate by notice in writing to the Holder):

 

(a)           An executed Notice of Exercise in the form attached hereto;

 

(b)           Payment of the Exercise Price in cash or by check; and

 

(c)           This Warrant.

 

Upon the exercise of the rights represented by this Warrant, a certificate or certificates for the Exercise Shares so purchased, registered in the name of the Holder or persons affiliated with the Holder, if the Holder so designates, shall be issued and delivered to the Holder within a reasonable time after the rights represented by this Warrant shall have been so exercised.

 

The person in whose name any certificate or certificates for Exercise Shares are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Exercise Price was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

2.1          Net Exercise. Notwithstanding any provisions herein to the contrary, if the fair market value of one share of the Company’s Preferred Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Preferred Stock computed using the following formula:

 

X = Y (A-B)

A

 

Where	X =	the number of shares of Preferred Stock to be issued to the Holder
	Y =	the number of shares of Preferred Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation)

 

 

A =

the fair market value of one share of the Company’s Preferred Stock (at the date of such calculation)

 

B =

Exercise Price (as adjusted to the date of such calculation)

 

For purposes of the above calculation, the fair market value of one share of Preferred Stock shall be determined by the Company’s Board of Directors in good faith; provided, however, that in the event that this Warrant is exercised pursuant to this Section 2.1 in connection with the Company’s initial public offering of its Common Stock, the fair market value per share shall be the product of (i) the per share offering price to the public of the Company’s initial public offering, and (ii) the number of shares of Common Stock into which each share of Preferred Stock is convertible at the time of such exercise.

 

3.            Covenants of the Company.

 

3.1          Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Preferred Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Preferred Stock shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Preferred Stock to such number of shares as shall be sufficient for such purposes.

 

3.2          Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Company shall mail to the Holder, at least ten (10) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

 

4.            Representations of the Company. The Company hereby represents and warrants to the Holder as of the date of this Warrant as follows:

 

4.1          Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business (a “Material Adverse Effect”).

 

 

4.2          Corporate Power. The Company has all requisite corporate power to issue this Warrant and to carry out and perform its obligations under this Warrant. The Company’s Board of Directors (the “Board”) has approved the issuance of this Warrant based upon a reasonable belief that the issuance of this Warrant is appropriate for the Company after reasonable inquiry concerning the Company’s financing objectives and financial situation.

 

4.3          Authorization. All corporate action on the part of the Company, the Board and the Company’s stockholders necessary for the issuance and delivery of this Warrant has been taken. This Warrant constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws. Any securities issued upon exercise of this Warrant, when issued in compliance with the provisions of this Warrant, will be validly issued, fully paid, nonassessable, free of any liens or encumbrances and issued in compliance with all applicable federal and securities laws.

 

4.4          Governmental Consents. All consents, approvals, orders or authorizations of, or registrations, qualifications, designations, declarations or filings with, any governmental authority required on the part of the Company in connection with issuance of this Warrant has been obtained.

 

4.5          Compliance with Laws. To its knowledge, the Company is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties, which violation of which would have a Material Adverse Effect.

 

4.6          Compliance with Other Instruments. The Company is not in violation or default of any term of its certificate of incorporation or bylaws, or of any provision of any mortgage, indenture or contract to which it is a party and by which it is bound or of any judgment, decree, order or writ, other than such violation(s) that would not have a Material Adverse Effect. The execution, delivery and performance of this Warrant will not result in any such violation or be in conflict with, or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, decree, order or writ or an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets or properties. Without limiting the foregoing, the Company has obtained all waivers reasonably necessary with respect to any preemptive rights, rights of first refusal or similar rights, including any notice or offering periods provided for as part of any such rights, in order for the Company to consummate the transactions contemplated hereunder without any third party obtaining any rights to cause the Company to offer or issue any securities of the Company as a result of the consummation of the transactions contemplated hereunder.

 

 

4.7          No “Bad Actor” Disqualification. The Company has exercised reasonable care to determine whether any Company Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through (viii), as modified by Rules 506(d)(2) and (d)(3), under the Act (“Disqualification Events”). To the Company’s knowledge, no Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent required, with any disclosure obligations under Rule 506(e) under the Act. For purposes of this Warrant, “Company Covered Persons” are those persons specified in Rule 506(d)(1) under the Act; provided, however, that Company Covered Persons do not include (a) the Holder, or (b) any person or entity that is deemed to be an affiliated issuer of the Company solely as a result of the relationship between the Company and the Holder.

 

4.8          Offering. Assuming the accuracy of the representations and warranties of the Holder contained in Section 5 below, the offer, issue and sale of this Warrant and the Exchange Shares are and will be exempt from the registration and prospectus delivery requirements of the Act, and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws.

 

4.9          Use of Proceeds. The Company shall use the proceeds of this Warrant solely for the operations of its business, and not for any personal, family or household purpose.

 

5.           Representations of Holder.

 

5.1          Acquisition of Warrant for Personal Account. The Holder represents and warrants that it is acquiring the Warrant and the Exercise Shares solely for its account for investment and not with a view to or for sale or distribution of said Warrant or Exercise Shares or any part thereof. The Holder also represents that the entire legal and beneficial interests of the Warrant and Exercise Shares the Holder is acquiring is being acquired for, and will be held for, its account only.

 

5.2          Information and Sophistication. Without lessening or obviating the representations and warranties of the Company set forth in Section 4 above, the Holder hereby: (A) acknowledges that the Holder has received all the information the Holder has requested from the Company and the Holder considers necessary or appropriate for deciding whether to acquire the Warrant and the Exercise Shares, (B) represents that the Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the Exercise Shares and to obtain any additional information necessary to verify the accuracy of the information given the Holder and (C) further represents that the Holder has such knowledge and experience in financial and business matters that the Holder is capable of evaluating the merits and risk of this investment.

 

5.3          Ability to Bear Economic Risk. The Holder acknowledges that investment in the Warrant and the Exercise Shares involves a high degree of risk, and represents that the Holder is able, without materially impairing the Holder’s financial condition, to hold the Warrant and the Exercise Shares for an indefinite period of time and to suffer a complete loss of the Holder’s investment.

 

5.4          Securities Are Not Registered.

 

(a)            The Holder understands that the Warrant and the Exercise Shares have not been registered under the Act on the basis that no distribution or public offering of the stock of the Company is to be effected. The Holder realizes that the basis for the exemption may not be present if, notwithstanding its representations, the Holder has a present intention of acquiring the securities for a fixed or determinable period in the future, selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing the securities. The Holder has no such present intention.

 

 

(b)          The Holder recognizes that the Warrant and the Exercise Shares must be held indefinitely unless they are subsequently registered under the Act or an exemption from such registration is available. The Holder recognizes that the Company has no obligation to register the Warrant or the Exercise Shares of the Company, or to comply with any exemption from such registration.

 

(c)          The Holder is aware that neither the Warrant nor the Exercise Shares may be sold pursuant to Rule 144 adopted under the Act unless certain conditions are met, including, among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale following the required holding period under Rule 144 and the number of shares being sold during any three month period not exceeding specified limitations. Holder is aware that the conditions for resale set forth in Rule 144 have not been satisfied and that the Company presently has no plans to satisfy these conditions in the foreseeable future.

 

5.5         Disposition of Warrant and Exercise Shares.

 

(a)          The Holder further agrees not to make any disposition of all or any part of the Warrant or Exercise Shares in any event unless and until:

 

(i)              The Company shall have received a letter secured by the Holder from the Securities and Exchange Commission stating that no action will be recommended to the Commission with respect to the proposed disposition;

 

(ii)             There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with said registration statement; or

 

(iii)           The Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, the Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, for the Holder to the effect that such disposition will not require registration of such Warrant or Exercise Shares under the Act or any applicable state securities laws.

 

(b)         The Holder understands and agrees that all certificates evidencing the shares to be issued to the Holder may bear the following legend:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

 

5.6          Accredited Investor Status. The Holder is an “accredited investor” as such term is defined in Rule 501 under the Act.

 

5.7          No “Bad Actor” Disqualification. The Holder represents and warrants that neither (A) the Holder nor (B) any entity that controls the Holder or is under the control of, or under common control with, the Holder, is subject to any Disqualification Event, except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Act and disclosed in writing in reasonable detail to the Company. The Holder represents that the Holder has exercised reasonable care to determine the accuracy of the representation made by the Holder in this paragraph, and agrees to notify the Company if the Holder becomes aware of any fact that makes the representation given by the Holder hereunder inaccurate.

 

5.8          Foreign Investors. If the Holder is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (the “Code”)), the Holder hereby represents that he, she or it has satisfied itself as to the full observance of the laws of the Holder’s jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Warrant, including (A) the legal requirements within the Holder’s jurisdiction for the purchase of the Warrant and the Exercise Shares, (B) any foreign exchange restrictions applicable to such purchase, (C) any governmental or other consents that may need to be obtained, and (D) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Warrant and the Exercise Shares. The Holder’s subscription, payment for and continued beneficial ownership of the Warrant and the Exercise Shares will not violate any applicable securities or other laws of the Holder’s jurisdiction.

 

5.9          Forward-Looking Statements. With respect to any forecasts, projections of results and other forward-looking statements and information provided to the Holder, the Holder acknowledges that such statements were prepared based upon assumptions deemed reasonable by the Company at the time of preparation. There is no assurance that such statements will prove accurate, and the Company has no obligation to update such statements.

 

6.            Adjustment of Exercise Price. In the event of changes in the outstanding Preferred Stock of the Company by reason of stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, or the like, the number and class of shares available under the Warrant in the aggregate and the Exercise Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same aggregate Exercise Price, the total number, class, and kind of shares as the Holder would have owned had the Warrant been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring adjustment; provided, however, that (i) such adjustment shall not be made with respect to, and this Warrant shall terminate if not exercised prior to, the events set forth in Section 8 below and (ii) no adjustment shall be made that reduces the Exercise Price to less than the par value per share of the Preferred Stock. The form of this Warrant need not be changed because of any adjustment in the number of Exercise Shares subject to this Warrant.

 

 

7.             Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of an Exercise Share by such fraction.

 

8.             Early Termination. In the event of, at any time during the Exercise Period, an initial public offering of securities of the Company registered under the Act, or any capital reorganization, or any reclassification of the capital stock of the Company (other than a change in par value or from par value to no par value or no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), or the consolidation or merger of the Company with or into another corporation (other than a merger solely to effect a reincorporation of the Company into another state), or the sale or other disposition of all or substantially all the properties and assets of the Company in its entirety to any other person, the Company shall provide to the Holder five (5) days advance written notice of such public offering, reorganization, reclassification, consolidation, merger or sale or other disposition of the Company’s assets, and this Warrant shall automatically be deemed exercised in accordance with the provisions of Section 2.1 hereof unless exercised by Holder prior to the date such public offering is closed or the occurrence of such reorganization, reclassification, consolidation, merger or sale or other disposition of the Company’s assets.

 

9.             Market Stand-Off Agreement. Holder hereby agrees that Holder shall not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock (or other securities) of the Company held by Holder (other than those included in the registration) during the 180-day period following the effective date of the initial public offering ; provided, that all officers and directors of the Company are bound by and have entered into similar agreements. Holder further agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the managing underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Holder shall provide, within ten (10) days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section 9 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to such Common Stock (or other securities) until the end of such period. Holder agrees that any transferee of the Warrant (or other securities) of the Company held by Holder shall be bound by this Section 9. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 9 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

 

10.           No Stockholder Rights. This Warrant in and of itself shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company.

 

11.           Transfer of Warrant. This Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized attorney, upon prior written consent of the Company (which may be withheld for any reason) and delivery of this Warrant and the form of assignment attached hereto to any transferee designated by Holder. The transferee shall (i) sign an investment letter in form and substance satisfactory to the Company and (ii) become a party to the Investors’ Rights Agreement, the Voting Agreement and the Right of First Refusal and Co-Sale Agreement (each as defined in the Purchase Agreement) as an “Investor” thereunder.

 

12.           Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

13.           Notices, etc. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at the address listed on the signature page and to Holder at [___________________] or at such other address as the Company or Holder may designate by ten (10) days advance written notice to the other parties hereto.

 

14.           Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

 

15.           Amendment and Waiver. Any term of this Warrant may be amended or waived with the written consent of the Company and the Holder. In addition, any term of this Warrant may be amended or waived with the written consent of the Company and the Majority Holders. Upon the effectuation of such waiver or amendment with the consent of the Majority Holders in conformance with this paragraph, such amendment or waiver shall be effective as to, and binding against the holders of, all of the Warrants, and the Company shall promptly give written notice thereof to the Holder if the Holder has not previously consented to such amendment or waiver in writing; provided that the failure to give such notice shall not affect the validity of such amendment or waiver.

 

 

16.           Waiver of Conflicts. Each party to this Warrant acknowledges that Cooley LLP (“Cooley”), outside general counsel to the Company, has in the past performed and is or may now or in the future represent the Holder or the Holder’s affiliates in matters unrelated to the transactions contemplated by this Warrant (the “Transactions”), including representation of the Holder or the Holder’s affiliates in matters of a similar nature to the Transactions. The applicable rules of professional conduct require that Cooley inform the parties hereunder of this representation and obtain their consent. Cooley has served as outside general counsel to the Company and has negotiated the terms of the Transactions solely on behalf of the Company. The Company and the Holder hereby (i) acknowledge that they have had an opportunity to ask for and have obtained information relevant to such representation, including disclosure of the reasonably foreseeable adverse consequences of such representation; (ii) acknowledge that with respect to the Transactions, Cooley has represented solely the Company, and not any Holder or any stockholder, Board member or employee of the Company or director, stockholder or employee of the Holder; and (iii) gives the Holder’s informed consent to Cooley’s representation of the Company in the Transaction.

 

17.           Governing Law. This Warrant and all rights, obligations and liabilities hereunder shall be governed by the laws of the State of Delaware.

 

 

In Witness Whereof, the Company has caused this Warrant to be executed by its duly authorized officer as of May 7, 2018.

 

	Incysus Therapeutics, Inc.
	By:
	Name:	William Ho
	Title:	Chief Executive Officer

 

Address:

 

 

NOTICE OF EXERCISE

 

TO: Incysus Therapeutics, Inc.

 

(1)          ¨            The undersigned hereby elects to purchase ________ shares of the Series A Preferred Stock of Incysus Therapeutics, Inc. (the “Company”) pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2)           Please issue a certificate or certificates representing said shares of Series A Preferred Stock in the name of the undersigned or in such other name as is specified below:

 

________________________

(Name)

 

________________________

________________________

(Address)

 

(3)           The undersigned represents that (i) the aforesaid shares of Series A Preferred Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares; (ii) the undersigned is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision regarding its investment in the Company; (iii) the undersigned is experienced in making investments of this type and has such knowledge and background in financial and business matters that the undersigned is capable of evaluating the merits and risks of this investment and protecting the undersigned’s own interests; (iv) the undersigned understands that the shares of Series A Preferred Stock issuable upon exercise of this Warrant have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act, which exemption depends upon, among other things, the bona fide nature of the investment intent as expressed herein, and, because such securities have not been registered under the Securities Act, they must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available; (v) the undersigned is aware that the aforesaid shares of Series A Preferred Stock may not be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met and until the undersigned has held the shares for the number of years prescribed by Rule 144, that among the conditions for use of the Rule is the availability of current information to the public about the Company and the Company has not made such information available and has no present plans to do so; and (vi) the undersigned agrees not to make any disposition of all or any part of the aforesaid shares of Series A Preferred Stock unless and until there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement, or the undersigned has provided the Company with an opinion of counsel satisfactory to the Company, stating that such registration is not required.

 

 

(Date)		(Signature)
		(Print name)

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

Name:
	(Please Print)
Address:
	(Please Print)

 

Dated: __________, 20__

 

Holder’s
Signature:
Holder’s
Address:

 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

 

 

 

Exhibit 10.2

 

IN8BIO, INC.

 

2018 EQUITY INCENTIVE PLAN

 

ADOPTED BY THE BOARD OF DIRECTORS: May 7, 2018

APPROVED BY THE STOCKHOLDERS: May 7, 2018

TERMINATION DATE: May 7, 2028

  

1.            General.

 

(a)           Eligible Stock Award Recipients. Employees, Directors and Consultants are eligible to receive Stock Awards.

 

(b)          Available Stock Awards. The Plan provides for the grant of the following types of Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards and (vi) Other Stock Awards.

 

(c)          Purpose. The Plan, through the grant of Stock Awards, is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and provide a means by which the eligible recipients may benefit from increases in value of the Common Stock.

 

2.            Administration.

 

(a)          Administration by the Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).

 

(b)          Powers of the Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

 

(i)                 To determine (A) who will be granted Stock Awards; (B) when and how each Stock Award will be granted; (C) what type of Stock Award will be granted; (D) the provisions of each Stock Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Stock Award; (E) the number of shares of Common Stock subject to, or the cash value of, a Stock Award; and (F) the Fair Market Value applicable to a Stock Award.

 

(ii)               To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Stock Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it will deem necessary or expedient to make the Plan or Stock Award fully effective.

 

(iii)              To settle all controversies regarding the Plan and Stock Awards granted under it.

 

(iv)              To accelerate, in whole or in part, the time at which a Stock Award may be exercised or vest (or the time at which cash or shares of Common Stock may be issued in settlement thereof).

 

 

(v)                To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or a Stock Award Agreement, suspension or termination of the Plan will not impair a Participant’s rights under the Participant’s then-outstanding Stock Award without the Participant’s written consent except as provided in subsection (viii) below.

 

(vi)              To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or bringing the Plan or Stock Awards granted under the Plan into compliance with the requirements for Incentive Stock Options or ensuring that they are exempt from, or compliant with, the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. If required by applicable law or listing requirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Stock Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands the types of Stock Awards available for issuance under the Plan. Except as otherwise provided in the Plan or a Stock Award Agreement, no amendment of the Plan will materially impair a Participant’s rights under an outstanding Stock Award without the Participant’s written consent.

 

(vii)            To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 422 of the Code regarding Incentive Stock Options.

 

(viii)           To approve forms of Stock Award Agreements for use under the Plan and to amend the terms of any one or more Stock Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Stock Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that a Participant’s rights under any Stock Award will not be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, (1) a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights, and (2) subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Stock Awards without the affected Participant’s consent (A) to maintain the qualified status of the Stock Award as an Incentive Stock Option under Section 422 of the Code; (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Stock Award solely because it impairs the qualified status of the Stock Award as an Incentive Stock Option under Section 422 of the Code; (C) to clarify the manner of exemption from, or to bring the Stock Award into compliance with, Section 409A of the Code; or (D) to comply with other applicable laws.

 

(ix)              Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Stock Awards.

 

(x)               To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Stock Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction).

 

 

(xi)              To effect, with the consent of any adversely affected Participant, (A) the reduction of the exercise, purchase or strike price of any outstanding Stock Award; (B) the cancellation of any outstanding Stock Award and the grant in substitution therefor of a new (1) Option or SAR, (2) Restricted Stock Award, (3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash and/or (6) other valuable consideration determined by the Board, in its sole discretion, with any such substituted award (x) covering the same or a different number of shares of Common Stock as the cancelled Stock Award and (y) granted under the Plan or another equity or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting principles.

 

(c)           Delegation to Committee. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee, as applicable). Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable). The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

 

(d)           Delegation to an Officer. The Board may delegate to one or more Officers the authority to do one or both of the following: (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by applicable law, the terms of such Stock Awards, and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however, that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awards will be granted on the form of Stock Award Agreement most recently approved for use by the Committee or the Board, unless otherwise provided in the resolutions approving the delegation authority. The Board may not delegate authority to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value pursuant to Section 13(t) below.

 

(e)            Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

 

3.            Shares Subject to the Plan.

 

(a)          Share Reserve.

 

(i)                Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date will not exceed 2,238,702 shares (the “Share Reserve”).

 

 

(ii)               For clarity, the Share Reserve in this Section 3(a) is a limitation on the number of shares of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in Section 7(a).

 

(b)            Reversion of Shares to the Share Reserve. If a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan. If any shares of Common Stock issued pursuant to a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased will revert to and again become available for issuance under the Plan. Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will again become available for issuance under the Plan.

 

(c)            Incentive Stock Option Limit. Subject to the Share Reserve and Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be a number of shares of Common Stock equal to three multiplied by the Share Reserve.

 

(d)            Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.

 

4.            Eligibility.

 

(a)            Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405, unless (i) the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuant to a corporate transaction such as a spin off transaction), (ii) the Company, in consultation with its legal counsel, has determined that such Stock Awards are otherwise exempt from Section 409A of the Code, or (iii) the Company, in consultation with its legal counsel, has determined that such Stock Awards comply with the distribution requirements of Section 409A of the Code.

 

(b)            Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five years from the date of grant.

 

(c)            Consultants. A Consultant will not be eligible for the grant of a Stock Award if, at the time of grant, either the offer or sale of the Company’s securities to such Consultant is not exempt under Rule 701 because of the nature of the services that the Consultant is providing to the Company, because the Consultant is not a natural person, or because of any other provision of Rule 701, unless the Company determines that such grant need not comply with the requirements of Rule 701 and will satisfy another exemption under the Securities Act as well as comply with the securities laws of all other relevant jurisdictions.

 

 

5.            Provisions Relating to Options and Stock Appreciation Rights.

 

Each Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical; provided, however, that each Stock Award Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Stock Award Agreement or otherwise) the substance of each of the following provisions:

 

(a)           Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of 10 years from the date of its grant or such shorter period specified in the Stock Award Agreement.

 

(b)           Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Stock Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value of the Common Stock subject to the Stock Award if such Stock Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents.

 

(c)           Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use a particular method of payment. The permitted methods of payment are as follows:

 

(i)                 by cash, check, bank draft or money order payable to the Company;

 

(ii)               pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

 

(iii)             by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

 

 

(iv)              if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations;

 

(v)                according to a deferred payment or similar arrangement with the Optionholder; provided, however, that interest will compound at least annually and will be charged at the minimum rate of interest necessary to avoid (A) the imputation of interest income to the Company and compensation income to the Optionholder under any applicable provisions of the Code, and (B) the classification of the Option as a liability for financial accounting purposes; or

 

(vi)              in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Stock Award Agreement.

 

(d)            Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the SAR on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Stock Award Agreement evidencing such SAR.

 

(e)           Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:

 

(i)                 Restrictions on Transfer. An Option or SAR will not be transferable except by will or by the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided in the Plan, neither an Option nor a SAR may be transferred for consideration.

 

(ii)               Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

 

 

(iii)             Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, upon the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, upon the death of the Participant, the executor or administrator of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

 

(f)             Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and therefore become exercisable in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of performance goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.

 

(g)           Termination of Continuous Service. Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Stock Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date three months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Stock Award Agreement, which period will not be less than 30 days if necessary to comply with applicable laws unless such termination is for Cause) and (ii) the expiration of the term of the Option or SAR as set forth in the Stock Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR (as applicable) within the applicable time frame, the Option or SAR will terminate.

 

(h)           Extension of Termination Date. If the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Stock Award Agreement. In addition, unless otherwise provided in a Participant’s Stock Award Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of the period of time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Stock Award Agreement.

 

 

(i)             Disability of Participant. Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date 12 months following such termination of Continuous Service (or such longer or shorter period specified in the Stock Award Agreement, which period will not be less than six months if necessary to comply with applicable laws unless such termination is for Cause), and (ii) the expiration of the term of the Option or SAR as set forth in the Stock Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.

 

(j)            Death of Participant. Except as otherwise provided in the applicable Stock Award Agreement or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Stock Award Agreement for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date of death (or such longer or shorter period specified in the Stock Award Agreement, which period will not be less than six months if necessary to comply with applicable laws unless such termination is for Cause), and (ii) the expiration of the term of such Option or SAR as set forth in the Stock Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR (as applicable) will terminate.

 

(k)          Termination for Cause. Except as explicitly provided otherwise in a Participant’s Stock Award Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate immediately upon such Participant’s termination of Continuous Service, and the Participant will be prohibited from exercising his or her Option or SAR from and after the date of such termination of Continuous Service.

 

(l)           Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least six months following the date of grant of the Option or SAR (although the Stock Award may vest prior to such date). Consistent with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Stock Award Agreement, in another agreement between the Participant and the Company, or, if no such definition, in accordance with the Company's then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six months following the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award Agreements.

 

 

(m)          Early Exercise of Options. An Option may, but need not, include a provision whereby the Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Subject to the “Repurchase Limitation” in Section 8(l), any unvested shares of Common Stock so purchased may be subject to a repurchase right in favor of the Company or to any other restriction the Board determines to be appropriate. Provided that the “Repurchase Limitation” in Section 8(l) is not violated, the Company will not be required to exercise its repurchase right until at least six months (or such longer or shorter period of time required to avoid classification of the Option as a liability for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option Agreement.

 

(n)           Right of Repurchase. Subject to the “Repurchase Limitation” in Section 8(l), the Option or SAR may include a provision whereby the Company may elect to repurchase all or any part of the vested shares of Common Stock acquired by the Participant pursuant to the exercise of the Option or SAR.

 

(o)           Right of First Refusal. The Option or SAR may include a provision whereby the Company may elect to exercise a right of first refusal following receipt of notice from the Participant of the intent to transfer all or any part of the shares of Common Stock received upon the exercise of the Option or SAR. Such right of first refusal will be subject to the “Repurchase Limitation” in Section 8(l). Except as expressly provided in this Section 5(o) or in the Stock Award Agreement, such right of first refusal will otherwise comply with any applicable provisions of the bylaws of the Company.

 

6.            Provisions of Stock Awards Other than Options and SARs.

 

(a)           Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board will deem appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock underlying a Restricted Stock Award may be (i) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical. Each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

 

(i)                Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

 

(ii)               Vesting. Subject to the “Repurchase Limitation” in Section 8(l), shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.

 

(iii)             Termination of Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.

 

 

(iv)              Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.

 

(v)                Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.

 

(b)            Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the will Board deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:

 

(i)                 Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

 

(ii)               Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

 

(iii)             Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

 

(iv)              Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

 

(v)                Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.

 

(vi)              Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

 

 

(vii)            Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set forth herein, any Restricted Stock Unit Award granted under the Plan that is not exempt from the requirements of Section 409A of the Code shall contain such provisions so that such Restricted Stock Unit Award will comply with the requirements of Section 409A of the Code. Such restrictions, if any, shall be determined by the Board and contained in the Restricted Stock Unit Award Agreement evidencing such Restricted Stock Unit Award. For example, such restrictions may include, without limitation, a requirement that any Common Stock that is to be issued in a year following the year in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed pre-determined schedule.

 

(c)           Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.

 

7.            Covenants of the Company.

 

(a)           Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards.

 

(b)           Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participant will not be eligible for the grant of a Stock Award or the subsequent issuance of cash or Common Stock pursuant to the Stock Award if such grant or issuance would be in violation of any applicable securities law.

 

(c)            No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award.

 

 

 

8.                   Miscellaneous.

 

(a)                Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will constitute general funds of the Company.

 

(b)                Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a grant by the Company of a Stock Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Stock Award Agreement or related grant documents as a result of a clerical error in the papering of the Stock Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Stock Award Agreement or related grant documents.

 

(c)                Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Stock Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to the Stock Award has been entered into the books and records of the Company.

 

(d)                No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement or any other instrument executed thereunder or in connection with any Stock Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

 

(e)                Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Stock Award to the Participant, the Board has the right in its sole discretion to (x) make a corresponding reduction in the number of shares subject to any portion of such Stock Award that is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Stock Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Stock Award that is so reduced or extended.

 

(f)                Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

 

(g)               Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that the Participant is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

 

 

(h)               Withholding Obligations. Unless prohibited by the terms of a Stock Award Agreement, the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to a Stock Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Stock Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from a Stock Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Stock Award Agreement.

 

(i)                Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).

 

(j)                Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Stock Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. The Board is authorized to make deferrals of Stock Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.

 

(k)               Compliance with Section 409A of the Code. To the extent that the Board determines that any Stock Award granted hereunder is subject to Section 409A of the Code, the Stock Award Agreement evidencing such Stock Award shall incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Stock Award Agreements shall be interpreted in accordance with Section 409A of the Code. Notwithstanding anything to the contrary in the Plan (and unless the Stock Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding a Stock Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six months following the date of such Participant’s “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.

 

 

(l)                Repurchase Limitation. The terms of any repurchase right will be specified in the Stock Award Agreement. The repurchase price for vested shares of Common Stock will be the Fair Market Value of the shares of Common Stock on the date of repurchase. The repurchase price for unvested shares of Common Stock will be the lower of (i) the Fair Market Value of the shares of Common Stock on the date of repurchase or (ii) their original purchase price. However, the Company will not exercise its repurchase right until at least six months (or such longer or shorter period of time necessary to avoid classification of the Stock Award as a liability for financial accounting purposes) have elapsed following delivery of shares of Common Stock subject to the Stock Award, unless otherwise specifically provided by the Board.

 

9.                   Adjustments upon Changes in Common Stock; Other Corporate Events.

 

(a)               Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c), and (iii) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.

 

(b)               Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service, provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.

 

(c)                Corporate Transaction. The following provisions will apply to Stock Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board may take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:

 

 

(i)                arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);

 

(ii)               arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);

 

(iii)             accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board determines (or, if the Board does not determine such a date, to the date that is five days prior to the effective date of the Corporate Transaction), with such Stock Award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction; provided, however, that the Board may require Participants to complete and deliver to the Company a notice of exercise before the effective date of a Corporate Transaction, which exercise is contingent upon the effectiveness of such Corporate Transaction;

 

(iv)               arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Stock Award;

 

(v)                cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration (including no consideration) as the Board, in its sole discretion, may consider appropriate; and

 

(vi)               make a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of the Stock Award immediately prior to the effective time of the Corporate Transaction, over (B) any exercise price payable by such holder in connection with such exercise. For clarity, this payment may be zero ($0) if the value of the property is equal to or less than the exercise price. Payments under this provision may be delayed to the same extent that payment of consideration to the holders of the Company’s Common Stock in connection with the Corporate Transaction is delayed as a result of escrows, earn outs, holdbacks or any other contingencies.

 

The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants. The Board may take different actions with respect to the vested and unvested portions of a Stock Award.

 

(d)               Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.

 

10.               Plan Term; Earlier Termination or Suspension of the Plan.

 

(a)               Plan Term. The Board may suspend or terminate the Plan at any time. Unless terminated sooner by the Board, the Plan will automatically terminate on the day before the 10th anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the stockholders of the Company. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

 

 

(b)               No Impairment of Rights. Suspension or termination of the Plan will not impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant or as otherwise permitted in the Plan.

 

11.               Effective Date of Plan.

 

This Plan will become effective on the Effective Date.

 

12.               Choice of Law.

 

The laws of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

 

13.               Definitions. As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

 

(a)                “Affiliate” means, at the time of determination, any “parent” or “majority-owned subsidiary” of the Company, as such terms are defined in Rule 405. The Board will have the authority to determine the time or times at which “parent” or “majority-owned subsidiary” status is determined within the foregoing definition.

 

(b)               “Board” means the Board of Directors of the Company.

 

(c)                “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

 

(d)               “Cause” will have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) such Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such Participant’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant’s intentional, material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) such Participant’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) such Participant’s gross misconduct. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Company, in its sole discretion. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Stock Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.

 

 

(e)                “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(i)                any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

 

(ii)               there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction; or

 

(iii)              there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition.

 

Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Stock Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.

 

(f)                “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

 

 

(g)               “Committee” means a committee of one or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).

 

(h)               “Common Stock” means the common stock of the Company.

 

(i)                 “Company” means IN8bio, Inc., a Delaware corporation.

 

(j)                 “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan.

 

(k)               “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

 

(l)                 “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(i)                a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

 

(ii)               a sale or other disposition of more than 50% of the outstanding securities of the Company;

 

(iii)              a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

 

(iv)              a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

 

 

(m)             “Director” means a member of the Board.

 

(n)               “Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.

 

(o)               “Effective Date” means the effective date of this Plan, which is the earlier of (i) the date that this Plan is first approved by the Company’s stockholders, and (ii) the date this Plan is adopted by the Board.

 

(p)               “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

 

(q)                “Entity” means a corporation, partnership, limited liability company or other entity.

 

(r)                “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

(s)               “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.

 

(t)                “Fair Market Value” means, as of any date, the value of the Common Stock determined by the Board in compliance with Section 409A of the Code or, in the case of an Incentive Stock Option, in compliance with Section 422 of the Code.

 

(u)               “Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

 

(v)                “Nonstatutory Stock Option” means an option granted pursuant to Section 5 of the Plan that does not qualify as an Incentive Stock Option.

 

(w)               “Officer” means any person designated by the Company as an officer.

 

(x)                “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

 

 

(y)               “Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.

 

(z)                “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

 

(aa)              “Other Stock Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(c).

 

(bb)              “Other Stock Award Agreement” means a written agreement between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement will be subject to the terms and conditions of the Plan.

 

(cc)              “Own,” “Owned,” “Owner,” “Ownership” A person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

 

(dd)              “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

 

(ee)              “Plan” means this 2018 Equity Incentive Plan.

 

(ff)               “Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).

 

(gg)             “Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.

 

(hh)             “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

 

(ii)               “Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.

 

(jj)               “Rule 405” means Rule 405 promulgated under the Securities Act.

 

(kk)             “Rule 701” means Rule 701 promulgated under the Securities Act.

 

(ll)               “Securities Act” means the Securities Act of 1933, as amended.

 

(mm)           “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.

 

 

(nn)            “Stock Appreciation Right Agreement” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.

 

(oo)              “Stock Award” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right or any Other Stock Award.

 

(pp)             “Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the terms and conditions of the Plan.

 

(qq)              “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.

 

(rr)              “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.

 

 

IN8BIO, INC.

 

AMENDMENT NO. 1 TO 2018 EQUITY INCENTIVE PLAN

 

Date Approved by the Board of Directors: August 6, 2020

Date Approved by the stockholders: August 6, 2020

 

1.

The name of the Plan be, and it hereby is, amended to be the “In8bio, Inc. 2018 Equity Incentive Plan.”

 

2.

Section 3(a)(i) of the Plan be, and it hereby is, amended to read as follows:

 

“(i) Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date will not exceed 5,205,919 shares (the “Share Reserve”).”

 

3.

Section 13(i) of the Plan be, and it hereby is, amended to read as follows:

 

“(i)    “Company” means In8bio, Inc., a Delaware corporation.”

 

4.

Except as set forth in this Amendment, the Plan shall be unaffected hereby and shall remain in full force and effect.

 

5.

Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Plan.

 

* * *

 

IN8BIO, INC.

 

AMENDMENT NO. 2 TO 2018 EQUITY INCENTIVE PLAN

 

Date Approved by the Board of Directors: August 21, 2020

Date Approved by the stockholders: August 21, 2020

 

 

1.

Section 3(a)(i) of the Plan be, and it hereby is, amended to read as follows:

 

“(i) Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date will not exceed 5,757,474 shares (the “Share Reserve”).”

 

2.

Except as set forth in this Amendment, the Plan shall be unaffected hereby and shall remain in full force and effect.

 

3.

Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Plan.

 

* * *

 

 

 

Exhibit 10.3

 

IN8BIO, INC.

 

STOCK OPTION GRANT NOTICE
(2018 EQUITY INCENTIVE PLAN)

 

IN8bio, Inc. (the “Company”), pursuant to its 2018 Equity Incentive Plan (the “Plan”), hereby grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set forth below. This option is subject to all of the terms and conditions as set forth in this notice, in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms in this notice and the Plan, the terms of the Plan will control. If the Company uses an electronic capitalization table system (such as Carta or Shareworks) and the fields below are blank or the information is otherwise provided in a different format electronically, the blank fields and other information (such as exercise schedule and type of grant) shall be deemed to come from the electronic capitalization system and is considered part of this Grant Notice.

 

Optionholder:
Date of Grant:
Vesting Commencement Date:
Number of Shares Subject to Option:
Exercise Price (Per Share):
Total Exercise Price:
Expiration Date:

 

Type of Grant:	¨	Incentive Stock Option1	¨	Nonstatutory Stock Option
Exercise Schedule:	¨	Same as Vesting Schedule	¨	Early Exercise Permitted

 

Vesting Schedule:	[One-fourth (1/4th) of the shares vest one year after the Vesting Commencement Date; the balance of the shares vest in a series of 36 successive equal monthly installments measured from the first anniversary of the Vesting Commencement Date, subject to Optionholder’s Continuous Service as of each such date.]
Payment:	By one or a combination of the following items (described in the Option Agreement):
	¨	By cash, check, bank draft or money order payable to the Company
	¨	Pursuant to a Regulation T Program if the shares are publicly traded, and subject to the Company’s consent at the time of exercise
	¨	By delivery of already-owned shares if the shares are publicly traded, and subject to the Company’s consent at the time of exercise
	¨	If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement

 

¹ If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.

 

 

Additional Terms/Acknowledgements: By Optionholder’s signature below or by electronic acceptance or authentication in a form authorized by the Company, Optionholder acknowledges receipt of, and understands and agrees that the Option is governed by this Stock Option Grant Notice, the Option Agreement and the Plan, all of which are made a part of this document. By accepting this Option, Optionholder consents to receive this Stock Option Grant Notice, the Stock Option Agreement, the Plan, and any other Plan-related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. Optionholder represents that he or she has read and is familiar with the provisions of the Plan and the Stock Option Agreement. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except as provided in the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of (i) options previously granted and delivered to Optionholder, and (ii) the following agreements only. This Stock Option Grant Notice and any notices, agreements or other documents related thereto may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

Other Agreements:

 

By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

IN8bio, Inc.

Optionholder:

 

By:
	Signature			Signature

Title:

Email:

Email:

Date:

Date:

 

Attachments: Option Agreement, 2018 Equity Incentive Plan and Notice of Exercise

 

 

ATTACHMENT I

 

OPTION AGREEMENT

 

 

IN8BIO, INC.

 

2018 EQUITY INCENTIVE PLAN

OPTION AGREEMENT
(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

 

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement, IN8bio, Inc. (the “Company”) has granted you an option under its 2018 Equity Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “Date of Grant”). If there is any conflict between the terms in this Option Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.

 

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows:

 

1.                  Vesting. Your option will vest as provided in your Grant Notice. Vesting will cease upon the termination of your Continuous Service.

 

2.                  Number of Shares and Exercise Price. The number of shares of Common Stock subject to your option and your exercise price per share in your Grant Notice will be adjusted for Capitalization Adjustments.

 

3.                  Exercise Restriction for Non-Exempt Employees. If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six months of Continuous Service measured from the Date of Grant, even if you have already been an employee for more than six months. Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six month anniversary in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your “retirement” (as defined in the Company’s benefit plans).

 

4.                  Exercise prior to Vesting (“Early Exercise”). If permitted in your Grant Notice (i.e., the “Exercise Schedule” indicates “Early Exercise Permitted”) and subject to the provisions of your option, you may elect at any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all or part of your option, including the unvested portion of your option; provided, however, that:

 

(a)               a partial exercise of your option will be deemed to cover first vested shares of Common Stock and then the earliest vesting installment of unvested shares of Common Stock;

 

(b)              any shares of Common Stock so purchased from installments that have not vested as of the date of exercise will be subject to the purchase option in favor of the Company as described in the Company’s form of Early Exercise Stock Purchase Agreement;

 

 

(c)               you will enter into the Company’s form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if no early exercise had occurred; and

 

(d)              if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair Market Value (determined at the Date of Grant) of the shares of Common Stock with respect to which your option plus all other Incentive Stock Options you hold are exercisable for the first time by you during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, your option(s) or portions thereof that exceed such limit (according to the order in which they were granted) will be treated as Nonstatutory Stock Options.

 

5.                  Method of Payment. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted by your Grant Notice, which may include one or more of the following:

 

(a)               Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to cover”.

 

(b)              Provided that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. You may not exercise your option by delivery to the Company of Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.

 

(c)               If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. You must pay any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted form of payment. Shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.

 

6.                  Whole Shares. You may exercise your option only for whole shares of Common Stock.

 

7.                  Securities Law Compliance. In no event may you exercise your option unless the shares of Common Stock issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable).

 

 

8.                  Term. You may not exercise your option before the Date of Grant or after the expiration of the option’s term. Except as set forth in your Grant Notice, the term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:

 

(a)               immediately upon the termination of your Continuous Service for Cause;

 

(b)              three months after the termination of your Continuous Service for any reason other than Cause, your Disability or your death (except as otherwise provided in Section 8(d) below); provided, however, that if during any part of such three month period your option is not exercisable solely because of the condition set forth in the section above relating to “Securities Law Compliance,” your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three months after the termination of your Continuous Service; provided further, that if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until the earlier of (x) the later of (A) the date that is seven months after the Date of Grant, and (B) the date that is three months after the termination of your Continuous Service, and (y) the Expiration Date;

 

(c)               12 months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 8(d)) below;

 

(d)              18 months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates for any reason other than Cause;

 

(e)               the Expiration Date indicated in your Grant Notice; or

 

(f)                the day before the 10th anniversary of the Date of Grant.

 

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three months after the date your employment with the Company or an Affiliate terminates.

 

9.                  Exercise.

 

(a)               You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require (including, without limitation, any voting agreement or other agreement between the Company and certain of its stockholders).

 

 

(b)              By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.

 

(c)               If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within 15 days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two years after the Date of Grant or within one year after such shares of Common Stock are transferred upon exercise of your option.

 

(d)              By exercising your option you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company held by you, for a period of 180 days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rules or regulation (the “Lock-Up Period”); provided, however, that nothing contained in this section will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. You also agree that any transferee of any shares of Common Stock (or other securities) of the Company held by you will be bound by this Section 9(d). The underwriters of the Company’s stock are intended third party beneficiaries of this Section 9(d) and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

 

10.              Transferability. Except as otherwise provided in this Section 10, your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.

 

(a)               Certain Trusts. Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.

 

(b)              Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

 

(c)               Beneficiary Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration resulting from such exercise.

 

11.              Option not a Service Contract. Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate, their respective stockholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

 

 

12.              Withholding Obligations.

 

(a)               At the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.

 

(b)              If this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes). If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

 

(c)               You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein, if applicable, unless such obligations are satisfied.

 

13.              Tax Consequences. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there is no other impermissible deferral of compensation associated with the option. Because the Common Stock is not traded on an established securities market, the Fair Market Value is determined by the Board, perhaps in consultation with an independent valuation firm retained by the Company. You acknowledge that there is no guarantee that the Internal Revenue Service will agree with the valuation as determined by the Board, and you will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that the valuation determined by the Board is less than the “fair market value” as subsequently determined by the Internal Revenue Service.

 

14.              Notices. Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

15.              Governing Plan Document. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control.

 

 

ATTACHMENT II

 

2018 EQUITY INCENTIVE PLAN

 

 

ATTACHMENT III

 

NOTICE OF EXERCISE

 

 

IN8BIO, INC.
NOTICE OF EXERCISE

 

IN8bio, Inc.

79 Madison Avenue

New York, NY 10016

Date of Exercise: _______________

 

This constitutes notice to IN8bio, Inc. (the “Company”) under my stock option that I elect to purchase the below number of shares of Common Stock of the Company (the “Shares”) for the price set forth below. If the Company uses an electronic capitalization table system (such as Carta or Shareworks) and the fields below are blank, the blank fields shall be deemed to come from the electronic capitalization system and is considered part of this Notice of Exercise.

 

Type of option (check one):	Incentive  ¨	Nonstatutory  ¨
Stock option dated:	_______________	_______________
Number of Shares as to which option is exercised:	_______________	_______________
Certificates to be issued in name of2:	_______________	_______________
Total exercise price:	$______________	$______________
Cash payment delivered herewith:	$______________	$______________
Regulation T Program (cashless exercise3)	$______________	$______________
Value of _________ Shares delivered herewith4:	$______________	$______________

 

By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the 2018 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within 15 days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two years after the date of grant of this option or within one year after such Shares are issued upon exercise of this option. I further agree that this Notice of Exercise may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

² If left blank, will be issued in the name of the option holder.

³ Shares must meet the public trading requirements set forth in the option agreement.

⁴ Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate.

 

 

I hereby make the following certifications and representations with respect to the number of Shares listed above, which are being acquired by me for my own account upon exercise of the option as set forth above:

 

I acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are deemed to constitute “restricted securities” under Rule 701 and Rule 144 promulgated under the Securities Act. I warrant and represent to the Company that I have no present intention of distributing or selling said Shares, except as permitted under the Securities Act and any applicable state securities laws.

 

I further acknowledge and agree that, except for such information as required to be delivered to me by the Company pursuant to the option or the Plan (if any), I will have no right to receive any information from the Company by virtue of the grant of the option or the purchase of shares of Common Stock through exercise of the option, ownership of such shares of Common Stock, or as a result of my being a holder of record of stock of the Company. Without limiting the foregoing, to the fullest extent permitted by law, I hereby waive all inspection rights under Section 220 of the Delaware General Corporation Law and all such similar information and/or inspection rights that may be provided under the law of any jurisdiction, or any federal, state or foreign regulation, that are, or may become, applicable to the Company or the Company’s capital stock (the “Inspection Rights”). I hereby covenant and agree never to directly or indirectly commence, voluntarily aid in any way, prosecute, assign, transfer, or cause to be commenced any claim, action, cause of action, or other proceeding to pursue or exercise the Inspection Rights.

 

I further acknowledge that I will not be able to resell the Shares for at least 90 days after the stock of the Company becomes publicly traded (i.e., subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that more restrictive conditions apply to affiliates of the Company under Rule 144.

 

I further acknowledge that all certificates representing any of the Shares subject to the provisions of the option shall have endorsed thereon appropriate legends reflecting the foregoing limitations, as well as any legends reflecting restrictions pursuant to the Company’s Certificate of Incorporation, Bylaws and/or applicable securities laws.

 

I further agree that, if required by the Company (or a representative of the underwriters) in connection with the first underwritten registration of the offering of any securities of the Company under the Securities Act, I will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company for a period of 180 days following the effective date of a registration statement of the Company filed under the Securities Act (or such longer period as the underwriters or the Company shall request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation) (the “Lock-Up Period”). I further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period.

 

Very truly yours,

 

 

	(Signature)
	Name (Please Print)
Address of Record:
Email:

 

 

 

 

Exhibit 10.8

 

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain identified information marked with [*****] has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

Exclusive License Agreement

Between

The UAB Research Foundation

and

Incysus, Ltd.

 

March 10, 2016

 

 

table of contents

 

	Page
Article 1: Definitions	3
Article 2: Grant of License	7
Article 3: Development and Commercialization	9
Article 4: Protection of The Licensed Patents; Patent Prosecution	10
Article 5: Financial terms	11
Article 6: Recordkeeping and Audit Rights	14
Article 7: Infringement; Enforcement; Other Legal Claims	15
Article 8: Other Covenants and Agreements	19
Article 9: Term and Termination	21
Article 10: Covenants; Representations and Warranties; Limitations on UABRF’s Obligations	22
Article 11: Liability and Indemnification	23
Article 12: Miscellaneous	25
Exhibit A: Licensed Patents	29
Exhibit B:  Development and Commercialization Plan	30
Exhibit C: Milestones	31
Exhibit D: Form of Stock Purchase Agreement	33
Exhibit E: Form of Development & Commercialization Progress Report	34
Exhibit F: Research Plan	35

 

 

EXCLUSIVE LICENSE AGREEMENT

 

This exclusive license agreement (this “Agreement”) is made and is effective as of March 10^th, 2016 (the “Effective Date”) between The UAB Research Foundation (“UABRF”), a non-profit 501(c)(3) corporation incorporated in the State of Alabama with its principal place of operations at 701 20^th Street South, Birmingham, AL 35233 and Incysus, Ltd. (the “Licensee”), an entity incorporated in Bermuda, with its principal place of operations at Clarendon House 2 Church Street Hamilton HM 11, Bermuda.

 

RECITALS

 

WHEREAS, UABRF owns all right, title and interest in the intellectual property described in UABRF intellectual property disclosure number [*****] entitled “[*****]” which was developed by [*****] while employed by the University of Alabama at Birmingham (the “Inventors”), and has filed for patent protection with respect to such intellectual property; and

 

WHEREAS, UABRF has the right to grant licenses to the intellectual property and the Licensed Patents (defined below) and desires to have the same developed and commercialized to benefit the public; and

 

WHEREAS, Licensee, a biotechnology company created to develop cancer immunotherapy technology, desires an exclusive license to the Licensed Patents;

 

NOW, THEREFORE, in consideration of the premises described above and the mutual promises and agreements set forth in this Agreement, the Parties agree as set forth below.

 

Article 1

Definitions

 

The Definitions used in this Agreement are set forth below.

 

1.1           “Affiliate” means any Person that directly or indirectly controls, is controlled by, or is under common control with a Party. “Control” means (i) the beneficial ownership of at least fifty percent (50%) of the voting securities of a Person with voting equity, or (ii) the power to direct or cause the direction of the management or policies of a Person.

 

1.2           “Agreement” means this agreement, as amended from time to time in accordance with the terms and conditions set forth in this agreement.

 

1.3           “Applicable Law” means all laws, statutes and regulations promulgated by all Regulatory Authorities and all Governmental Authorities.

 

1.4           “Change in Control” means, with respect to an entity, a transaction or series of related transactions as a result of which a Person or group of Persons acting in concert directly or indirectly acquires control of the entity or acquires any of the entity’s assets that are, individually or in the aggregate, material to its performance under this Agreement. The transactions may be in any form or combination of forms, including an issuance of voting securities, a grant of one or more proxies, the establishment of a voting agreement, a merger (whether or not the entity survives), a share exchange, or a reorganization, a recapitalization or an asset sale.

 

 

1.5           “Development and Commercialization Plan” means development, manufacturing, marketing, and commercialization activities proposed to be undertaken by the Licensee with respect to the Licensed Patents as set forth on attached Exhibit B.

 

1.6           “Disclaimed Licensed Patent(s)” means any Licensed Patent in respect of which the Licensee decides not to pursue protective rights, undertake, or be responsible for, the payment of Protection Expenses, as described in Section 4.1(e) and (f) of this Agreement.

 

1.7           “First Commercial Sale” means the first Sale of a Licensed Product to a Third Party.

 

1.8           “For Value” means any consideration, remuneration or benefit of any kind, whether received directly or indirectly, including, but not limited to, cash, equity, debt, preferential treatment, including waiver, rebate, discount, etc.

 

1.9           “Governmental Authorities” means, with respect to each country or jurisdiction, all legislative and governmental authorities, bodies, commissions, agencies or other instrumentalities of such country or jurisdiction.

 

1.10         “Infringement Notice” is defined in Section 7.1 of this Agreement.

 

1.11         “Inventors” is defined in the first recital of this Agreement.

 

1.12         “Licensed Field of Use” means cellular therapies in humans.

 

1.13        “Licensed Patents” means (a) the patents and/or patent applications set forth on attached Exhibit A, (b) any U.S. and foreign patents and patent applications that directly or indirectly claim priority to such patents and patent applications, (c) all patents proceeding from any of the foregoing, and (d) all foreign equivalents, divisionals, continuations, continuations-in-part, reissues, reexaminations, substitutions and extensions of any patent or patent application described in (a) – (c) above. Licensed Patents does not include any patent and/or patent application that is a Disclaimed Licensed Patent.

 

1.14         “Licensed Product” means any product or part thereof, composition, material, process, or service, the development, manufacture, use, import, export, offer for sale, or sale of which is covered by, or which cannot be undertaken or completed without infringing, a Valid Patent Claim set forth in any Licensed Patent. For the avoidance of doubt, for purposes of Section 5.5, any product or part thereof, composition, material, process, or service which would be deemed to be a Licensed Product if such product or part thereof, composition, material, process, or service were sold in any country or jurisdiction in which a Valid Patent Claim exists shall still be considered to be a Licensed Product with respect to sales in a country or jurisdiction in which no Valid Patent Claim exists.

 

 

1.15         “Licensed Territory” means worldwide.

 

1.16         “Net Sales” means the gross amount set forth on the invoice relating to any Sale of a Licensed Product, less (a) discounts actually allowed, (b) rebates, price reductions, rebates to social and welfare systems, charge backs, government mandated and similar rebates, (c) credits for claims, allowances, retroactive price reductions or returned goods, (d) prepaid freight and insurance, (e) customs duties, sales taxes or other governmental charges actually paid in connection with such Sale (but excluding income tax), transportation, or delivery (including annual fees due under Section 9008 of the United States Patient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-48); (f) outbound transportation expenses prepaid or allowed; and (g) invoiced amounts written off as uncollectible [*****]. Where a Licensed Product is not used, transferred or exchanged For Value, the Net Sales will be the net invoice price of products of similar kind and quality, sold or transferred For Value at similar quantities, currently being offered by the Licensee, a Sublicensee or by other manufacturers. Where there is no comparable sale or transfer For Value, the Net Sale will be the Licensee’s or Sublicensee’s cost of manufacture, determined by the Licensee’s or Sublicensee’s customary accounting procedures, plus [*****]. Components of Net Sales shall be determined in the ordinary course of business using the accrual method of accounting in accordance with generally accepted accounting practices.

 

1.17         “Non-Commercial Research Purposes” means any use and practice for academic research and educational purposes, including collaboration with other non-profit entities, but expressly excluding any commercial or for-profit purposes or uses.

 

1.18         “Non-Royalty Income” means anything received by Licensee or its Affiliates or Sublicensees For Value in consideration of (i) the transfer of Licensed Product in a transaction or portion of a transaction that is not structured to generate royalty payments based on Net Sales; or (ii) the grant of a right (through sublicense or otherwise) to practice the Licensed Patents and/or to make, have made, use or sell Licensed Product in a transaction or portion of a transaction that is not structured to generate royalty payments based on Net Sales.  For purposes of clarity, Non-Royalty Income includes upfront fees, milestone payments and advances and any consideration received by Licensee from the purchase by a Sublicensee of shares of the Licensee in exchange for a transaction or right as described in (i) or (ii) above. Non-Royalty Income shall not include [*****].

 

1.19         “Parties” means UABRF and the Licensee and each of them individually is a “Party”.

 

1.20         “Person” means an individual, corporation, partnership, trust, business trust, association or any other entity with a separate legal identity, including the Parties.

 

1.21         “Proprietary Information” is defined in Section 8.4 of this Agreement.

 

1.22         “Protection Activities” means preparation of, obtaining, filing for, securing, pursuing, prosecuting, and continuing or maintaining the patents and patent applications, including through participation in post-grant review, inter partes review, ex parte reexamination, or opposition proceedings.

 

 

1.23        “Protection Expenses” means all actual, out-of-pocket legal fees, costs and expenses reasonably incurred by UABRF in the performance of the Protection Activities, such fees, costs and expenses to be documented by written invoice.

 

1.24         “Regulatory Documents” means any document or information prepared for submission to, or submitted to any Governmental Authority with respect to the Licensed Patents that have been provided to UABRF by UAB and/ or an Inventor. Regulatory Documents shall include, but not be limited to, documents related to investigational new drug applications.

 

1.25         “Regulatory Authority” means, with respect to any particular country or jurisdiction, the Governmental Authority with the primary responsibility for the evaluation or approval of cellular therapy products and processes before such products and/or services can be tested, marketed, promoted, distributed or sold in such country or jurisdiction, including Governmental Authorities that have jurisdiction over the pricing of such products. The term Regulatory Authority includes the Food and Drug Administration of the United States.

 

1.26         “Representative(s)” means, with respect to each Party and their Affiliates, all directors, officers, employees, agents and advisors and with respect to UABRF only, the trustees of its Affiliate, UAB and any Third Party described in Section 8.4(d) to whom the Receiving Party provides the Proprietary Information in accordance with the conditions set forth in Section 8.4(d).

 

1.27         “Royalty Term” means, on a Licensed Product-by-Licensed Product and country-by-country basis, the period from the first sale of such Licensed Product in such country until the earlier of: (a) expiration of the last Valid Patent Claim of a Licensed Patents covering such Licensed Product in such country; or (b) fifteen (15) years from First Commercial Sale of such Licensed Product in such country.

 

1.28         “Sale or Sales” means any use, transfer or exchange, For Value, of a Licensed Product. Sales include all Sales by the Licensee and its Affiliates and Sublicensees, and include any transfer by the Licensee to an Affiliate or Sublicensee where there is no subsequent Sale (i.e. the Licensed Product is not further resold or transferred). For the avoidance of doubt, Sales shall not be deemed to include (a) any transfer by the Licensee where there is a subsequent Sale of the Licensed Product; only the subsequent Sale is used to calculate any amount due, (b) the use, performance or provision of a Licensed Product for research and development purposes, including preclinical, clinical or translational trials or for compassionate use or as samples or (c) reasonable distributions as samples or given as donations for indigent use. A Licensed Product shall be considered sold when the Licensed Product is shipped or invoiced, whichever is earlier.

 

1.29         “Sublicensee” means a Person to whom the Licensee has granted a sublicense pursuant to Section 2.5 of this Agreement.

 

1.30         “Technical Information” shall mean technical information, know-how, processes, procedures, compositions, devices, methods, formulas, protocols, techniques, designs, drawings or data created before the Effective Date by one or more of the Inventors and disclosed to UABRF by the Inventors before the Effective Date which are not covered by a Valid Patent Claim but which is/are necessary for practicing one or more invention claimed in the Licensed Patents.

 

 

1.31          “Term” is defined in Section 9.1 of this Agreement.

 

1.32         “Third Party” means any Person other than the Parties and their Affiliates and Representatives.

 

1.33         “United States” means the United States of America.

 

1.34         “United States Government” means the Federal Government of the United States.

 

1.35         “Valid Patent Claim” means (i) a pending patent claim included within the Licensed Patents or (ii) an issued and unexpired patent claim included within the Licensed Patents which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other Governmental Authority of competent jurisdiction, to which an appeal has not or cannot be taken within the time allowed for appeal, and which has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise.

 

Article 2

Grant of License

 

2.1           Grant of License. Subject to the terms and upon the conditions set forth in this Agreement, UABRF hereby grants to the Licensee and its Affiliates an exclusive right and license to (a) practice the Licensed Patents and (b) make, have made, develop, have developed, manufacture, have manufactured, use, have used, rent, lease, offer to sell, sell, have sold, distribute, import and export Licensed Products, within the Licensed Field of Use in the Licensed Territory during the Term. UABRF shall transfer or provide to Licensee a copy of all Technical Information requested by the Licensee, which has not been previously provided, within [*****] of the Effective Date. UABRF shall transfer or provide a copy to Licensee of all Regulatory Documents (i) within [*****] of UABRF’s receipt of such from the Inventors or (ii) within [*****] of the submission or receipt of such Regulatory Documents by UABRF, whichever shall occur first. For the avoidance of doubt, UABRF shall promptly after the Effective Date transfer to Licensee a copy any investigational new drug application related to any Licensed Patent.

 

2.2           Rights of the United States Government. It is understood that a United States Governmental Authority (through an award numbered [*****]) has funded research, during the course of or under which the Licensed Patents were conceived or made. The United States Government is entitled, as a right, under the provisions of 35 U.S.C. §§ 200-212 and applicable regulations of Chapter 37 of the Code of Federal Regulations (“Bayh-Dole”), to a non-exclusive, non-transferable, paid-up license to practice or have practiced and use the affected Licensed Patents for governmental purposes. The Licensee acknowledges that the rights and license granted to it pursuant to this Agreement are subject to any and all rights of the United States Government.

 

2.3           Reservation of Rights by UABRF and its Affiliates. UABRF reserves the right, for itself and for its Affiliates, to:

 

 

(a)

practice and use, and to permit its Representatives to practice and use, the Licensed Patents within the Licensed Field of Use solely for Non-Commercial Research Purposes;

(b)

grant to non-profit academic, educational or research institutions and Governmental Authorities, non-exclusive, royalty-free licenses to practice and use the Licensed Patents within the Licensed Field of Use solely for Non-Commercial Research Purposes;

(c)

permit their respective Representatives to disseminate and publish scientific findings from research related to the Licensed Patents; and

(d)

practice, use and otherwise commercialize, including licensing, the Licensed Patents to Third Parties for applications and uses outside of the Licensed Field of Use.

 

2.4           Title Remains with UABRF. All right, title and interest in and to the Licensed Patents remains with UABRF. Except as provided in this Agreement, no express or implied licenses with respect to the Licensed Patents or any other rights are transferred or granted to the Licensee by implication, estoppel or otherwise. UABRF represents and certifies that it has the legal right to grant the rights under this Agreement.

 

2.5           Right to Grant Sublicenses. The Licensee has the right to grant sublicenses to any Person under this Agreement on the following terms and conditions:

 

(a)

the execution of a sublicense shall not in any way diminish, reduce or eliminate any of the Licensee’s obligations under this Agreement;

(b)

any sublicense so granted is limited to the Licensed Field of Use;

(c)

any sublicense so granted shall be subject and subordinate to, and consistent with, the terms of this Agreement;

(d)

the Licensee may not [*****];

(e)

any sublicense shall also provide that, in the event this Agreement is terminated or upon the expiration of the Term, (i) the Licensee shall notify the Sublicensee of the termination or expiration, (ii) the sublicense will terminate simultaneously with the termination or expiration of this Agreement, and (iii) the Sublicensee may enter into a license agreement with UABRF on substantially the same terms as the Sublicensee’s sublicense with the Licensee with UABRF’s approval, provided that [*****] or [*****];

(f)

all sublicenses are to be For Value;

(g)

the Licensee shall provide UABRF with a copy of any such sublicense granted by it under this Agreement promptly after the execution of the sublicense;

(h)

all such copies of sublicense agreements may be redacted to exclude confidential scientific information and other information required by the Sublicensee to be kept confidential, provided that [*****] shall be retained and shall not be redacted; the disclosure of sublicense agreements to UABRF shall be subject to the confidentiality obligations set forth in this Agreement;

(i)

UABRF is a third party beneficiary to each sublicense and each agreement evidencing a sublicensing arrangement shall include a statement and an acknowledgement by the Sublicensee to this effect; and

 

 

(j)

Subject to the sublicensing terms in this Section 2.5, Sublicensees may be permitted, on a case-by-case basis, to further sublicense their rights to practice the Licensed Patents.  Prior to the execution of any sublicense agreement which allows a Sublicensee to further sublicense, Licensee shall present to UABRF a reasonably detailed business justification for the proposed sublicense, as well as [*****], for UABRF’s review and approval.  Licensee shall proceed with execution of the proposed sublicense agreement only with UABRF’s prior written consent, such consent shall not be unreasonably withheld.

 

Article 3

Development and Commercialization

 

3.1           Development and Commercialization Plan. During the Term, the Licensee shall use good faith, reasonable commercial efforts to develop, manufacture, commercialize and market the Licensed Patents through a diligent program designed to accomplish the commercial exploitation of the same and to make the technology covered by or embedded in the Licensed Patents available to the general public in accordance with the procedures and practices that are usual and customary for similar technologies and industries utilizing those resources that would be employed by the Licensee of a product or compound of similar market potential at a similar stage in its development or product life as the Licensed Patents taking into account, without limitation, issues of safety and efficacy, product profile, intellectual property situation, regulatory environment and other relevant scientific and commercial factors). The Parties acknowledge that the Licensee has provided to UABRF the Development and Commercialization Plan set forth on attached Exhibit B which sets forth its current development and commercialization objectives. The Parties further acknowledge and agree that the Development and Commercialization Plan is, and the development and commercialization milestones, each set forth on attached Exhibits B and C, are reasonable.

 

3.2           Amendment of Development and Commercialization Plan and Milestones. All variations and deviations from and changes to the Development and Commercialization Plan and milestones [*****].

 

3.3           Development and Commercialization Report. The Licensee shall provide UABRF not more than once annually written progress reports detailing generally the activities of the Licensee, its Affiliates and all Sublicensees relating to the Development and Commercialization Plan (Exhibit B) and if any of the Milestones on Exhibit C have been attained. Such reports are to be provided substantially in the format shown in Exhibit E.

 

3.4           Regulatory Approvals. With respect to each Licensed Product, and to the extent regulatory approval is required, the Licensee shall use its reasonable efforts to obtain the approval of each applicable Regulatory Authority prior to the First Commercial Sale in each country/jurisdiction in which the Licensee intends to sell Licensed Products.

 

3.5           Patent Markings. If required by Applicable Law, all Licensed Products manufactured and/or sold shall be marked in such a manner as to conform to the Applicable Law of such country/jurisdiction.

 

 

3.6           Manufacturing in the United States. The Licensee shall use its best efforts to substantially manufacture in the United States any Licensed Products sold in the United States that incorporates any invention or intellectual property owned by UABRF and licensed to the Licensee under this Agreement that was developed using funds provided by a United States Governmental Authority.

 

Article 4

Protection of The Licensed Patents; Patent Prosecution

 

4.1           Future Protection Activities.

 

(a)

UABRF Retains Primary Responsibility. Subject to the terms and conditions set forth in this Agreement, UABRF shall, from the Effective Date, continue to be primarily responsible for undertaking all Protection Activities relating to the Licensed Patents. UABRF shall select such legal counsel as it deems appropriate to assist it in this process, provided that such counsel is reasonably acceptable to Licensee.

(b)

Co-operation of the Licensee. The Licensee shall reasonably cooperate with UABRF and its designated legal counsel in connection with the Protection Activities.

(c)

Consultation with the Licensee. UABRF shall, and shall cause its designated legal counsel to, consult with the Licensee in connection with such Protection Activities, and the Licensee shall be given reasonable opportunity to discuss, advise and review issues with UABRF and its designated legal counsel in connection therewith.

(d)

Foreign Protection Requested by the Licensee. The Licensee must notify UABRF in writing identifying in which foreign countries and jurisdictions, if any, the Licensee wishes to undertake Protection Activities with respect to any Licensed Patents. Exhibit A shall be amended accordingly to reflect these designations.

(e)

Foreign Patent Protection Not Requested by the Licensee. UABRF may elect to undertake Protection Activities with respect to any Licensed Patents in any country or jurisdiction not so designated by the Licensee pursuant to Section 4.1(d) above. In such cases (i) UABRF shall be responsible for all Protection Expenses incurred in connection therewith, and the Licensee shall not be responsible for such expenses, (ii) the Licensed Patents so affected shall no longer be deemed to be licensed to the Licensee and shall be deemed to have been disclaimed by the Licensee (each, a “Disclaimed Licensed Patent”), (iii) the Licensee shall forfeit and shall no longer have any rights or obligations with respect thereto and (iv) Exhibit A shall be amended accordingly to delete the affected Licensed Patents.

(f)

Disclaimed Licensed Patent. The Licensee may, at any time during the Term, provide at least [*****] written notice to UABRF that it no longer wishes to be responsible for the Protection Expenses in connection with one or more Licensed Patents. In such cases, (i) the Licensee shall continue to be responsible for all Protection Expenses incurred in connection therewith until the expiration of such [*****] notice period and thereafter shall not be responsible for such expenses, (ii) the Licensed Patents so affected shall no longer be deemed to be licensed to the Licensee and shall be deemed to have been disclaimed by the Licensee (each, a “Disclaimed Licensed Patent”), (iii) the Licensee shall forfeit and shall no longer have any rights or obligations with respect thereto and (iv) Exhibit A shall be amended accordingly to delete the affected Licensed Patent.

 

 

4.2           Information to the Licensee. UABRF shall provide the Licensee with copies of all issued patents relating to the Licensed Patent. UABRF shall provide copies of all patent applications and all filings, correspondence and other related documentation pertaining to prosecutorial matters arising from the Protection Activities, including, but not limited to, all office actions, requests for examinations and restriction requirements.

 

Article 5

Financial Terms

 

5.1          License Issue Fee. Within [*****] of the Effective Date, the Licensee shall pay to UABRF a non-refundable, non-creditable license issue fee of [*****].

 

5.2          Future Protection Expenses. Beginning [*****] after the Effective Date, or [*****] before the filing of the non-provisional application of a Licensed Patent, whichever is earlier and during the Term and with respect to the Licensed Patents, other than Disclaimed Licensed Patents, the Licensee will be financially responsible for the payment of all Protection Expenses incurred after the Effective Date. The Licensee shall pay such amounts to UABRF within [*****] of receipt of an invoice for the same from UABRF. UABRF shall be responsible for all Protection Expenses incurred in connection with each Disclaimed Licensed Patent in countries/jurisdictions not designated by the Licensee pursuant to Section 4.1(d) above or after the expiration of the notice period referred to in Section 4.1(f) above.

 

5.3          Issuance of Stock in the Licensee to UABRF. On or promptly following the Effective Date, the Licensee shall issue to UABRF shares in the Licensee initially equivalent to a two and one-half percent (2.5%) ownership interest in Licensee, prior to raising any outside capital to fund the Licensee, which ownership interests shall be subject to the terms and conditions of the Stock Purchase Agreement, dated of even date herewith, a copy of which is attached to this Agreement as Exhibit D. The equity position held by UABRF shall not be diluted until the Licensee has raised at least Twenty Million Dollars ($20,000,000.00) through one or more rounds of investment in equity securities of the Company (or debt securities of the Company that are convertible into or exchangeable for equity securities of the Company) (the “Threshold Amount”). Thereafter, the shares held by UABRF may be diluted only upon the same terms and conditions [*****], until completion of an initial public offering of the Licensee’s common stock.

 

5.4           Funding of Research Program. The Licensee hereby agrees to support a research program, as set forth in the Research Plan attached hereto as Exhibit F, to be carried out by UABRF’s Affiliate, the University of Alabama at Birmingham. The Parties anticipate that the Licensee’s support of such research program shall take the form of a series of sponsored research agreements and/or clinical trial agreements, as applicable, which the University of Alabama at Birmingham and Licensee agree to negotiate in good faith.

 

 

5.5         Running Royalty Payments. During the Term and with respect to each country or jurisdiction within the Licensed Territory in which a Valid Patent Claim exists, the Licensee shall pay to UABRF royalties on all Net Sales of Licensed Products as set forth below:

 

Entity Accomplishing Sales	Royalty Rate to UABRF
Licensee or Licensee’s Affiliates	[*****]
Sublicensees	[*****]

 

These payments shall be made on all Net Sales arising in such country/jurisdiction until the expiration of the last Valid Patent Claim in that country/jurisdiction. With respect to each country or jurisdiction within the Licensed Territory in which no Valid Patent Claim exists, Licensee agrees to pay to UABRF a running royalty of [*****] on all Net Sales arising in each such country/jurisdiction during the Term of this Agreement. For the avoidance of doubt, a running royalty shall only be payable to UABRF one time upon the Sale of any Licensed Product to an end user or consumer. All amounts owing to UABRF under this section shall be paid on a quarterly basis, on or before the [*****] following the end of the calendar quarter in which such amounts were earned.

 

5.6           Anti-Stacking Provision. If, at any time, Licensee discovers that any Licensed Product or the use thereof in the Licensed Field of Use or the practice of any Licensed Patent infringes claims of an unexpired patent or patents other than those in the Licensed Patents, Licensee may, if it has not already done so, negotiate with the owner of such patents for a license on such terms as Licensee deems appropriate. Should the license with the owner of such patents require the payment of royalties or other consideration to such owner then the royalties otherwise payable under this Agreement may be reduced by the amount payable [*****] to the other patent owner(s), but in no event shall the royalties payable under this Agreement be reduced by more than [*****]. To clarify, Licensee and UABRF agree that under no circumstance shall UABRF’s royalty amount under Section 5.5 be less than (a) [*****] when the Licensee or one of its Affiliates is the entity generating Net Sales and (b) [*****] when a Sublicensee is the entity generating Net Sales. If a combination product incorporates a product based on a patent (other than a Licensed Patent) to which Licensee has secured rights via an agreement with the patent owner and the owner of such patent requires the payment of royalties or other consideration to such owner, then the royalties otherwise payable under this Agreement may be reduced by the amount payable [*****] to the other patent owner(s), but in no event shall the royalties payable under this Agreement be reduced by more than [*****].

 

5.7           Lump Sum Royalties on Cumulative Net Sales. The Licensee shall pay to UABRF a lump sum amount when the cumulative Net Sales accomplished by Licensee, its Affiliates and Sublicensees reaches the amounts set forth below in any calendar year. The table below sets out the cumulative Net Sales amounts and corresponding lump sum payments owed to UABRF:

 

Cumulative Net Sales Amount Reached in Calendar Year	Lump Sum Due to UABRF
[*****]	[*****]
[*****]	[*****]
[*****]	[*****]

 

 

All amounts owing to UABRF under this section shall be paid within [*****] of the close of any calendar year in which one of the above amounts is reached in cumulative Net Sales made by Licensee, its Affiliates and Sublicensees.

 

5.8          Milestone Payments. During the Term, the Licensee shall pay to UABRF the development and commercialization milestone payments set forth in Exhibit C. Each such milestone payment is in consideration of this Agreement and shall be due to UABRF without deduction or adjustment relating to milestones payable to other Third Parties, shall be non-creditable and non-refundable and shall be due within [*****] of achievement. The Licensee shall provide written notice to UABRF to accompany the payment identifying the milestone that has been achieved.

 

5.9           Non-Royalty Income. The Licensee shall pay to UABRF the amounts as laid out in the chart below on any and all Non-Royalty Income received by it during the Term with such payments being made to UABRF on or before the [*****] of receipt by the Licensee. All such payments shall be accompanied by a written notification of the nature and origin of the Non-Royalty Income upon which the payment is based, the identity of the source of such Non-Royalty Income and, if such Non-Royalty Income was received by the Licensee or generated in a foreign currency, the rate of currency conversion and the date such conversion was calculated as described in Section 5.13 of this Agreement. In the event that the Licensee receives Non-Royalty Income that is not cash or a cash equivalent, the percentage of non-cash payments shall be calculated as a percentage of the then current fair market value of such non-cash consideration. For purposes of clarity and by example only, consideration received by the Licensee in a transaction in which [*****] or in which [*****] would not be considered Non-Royalty Income. Further, [*****] shall mean [*****] and Licensee resolves all queries or requests for clarification made by Licensee to sites participating in the trial. The term [*****] as used below shall be as defined in Exhibit C.

 

YEAR	PARTICIPATION PCT. IN NON-ROYALTY INCOME
Effective Date until Completion of Phase I Trial (γδ T -TMZr)	25%
From Completion of Phase I Trial to Completion of Phase II Trial (γδ T -TMZr)	10%
From Completion of Phase II Trial and for the Remainder of the Term of this Agreement	2.5%

 

5.10        Royalty Reports. During the term of this Agreement, Licensee shall provide UABRF written reports semiannually until the first Sale of a Licensed Product and quarterly thereafter showing:

i.

the occurrence of any event triggering a Milestone Payment obligation or any other payment in accordance with Section 5.8 above; and

ii.

a summary of all reports provided to LICENSEE by LICENSEE'S Sublicensees, including the names and addresses of all Sublicensees; and

iii.

the amount of any consideration received by LICENSEE from Sublicensees and an explanation of the contractual obligation satisfied by such consideration;

iv.

within a given fiscal quarter, the gross selling price and the number of units of all Licensed Products (identified by product number/name) Sold in each country of the Licensed Territory, together with the calculations of Net Sales; and

v.

within a given fiscal quarter, the royalties payable in U.S. Dollars which accrued hereunder; and

vi.

within a given fiscal quarter, the exchange rates, if any, used in determining the amount due.

 

 

5.11        Address for Payments. Except as otherwise directed by UABRF, all amounts due to be paid by the Licensee to UABRF pursuant to this Agreement shall be paid to UABRF at the address set forth below its signature on the signature page of this Agreement.

 

5.12        Late Payment Penalty. The balance of any amount which remains unpaid more than [*****] after it is due to UABRF may be assessed interest until paid at the rate equal to the lesser of [*****] or the maximum amount allowed under Applicable Law. However, in no event shall this interest provision be construed as a grant of permission for payment delays.

 

5.13         Currency Conversion. All amounts due to be paid to UABRF pursuant to this Agreement shall be made in United States dollars. Any and all amounts received by the Licensee or generated in foreign currency shall be converted into United States dollars at the official rate of exchange from such currency to United States dollars at the rate quoted in the Wall Street Journal (United States edition) for the daily average over the calendar quarter in which running royalties are due and payable to UABRF or on a business day no earlier than five (5) business days before payment is made to UABRF.

 

5.14        Taxes. UABRF is exempt from paying income taxes under United States law; therefore, all payments made by Licensee under this Agreement shall be made without deduction for taxes, assessments or other charges of any kind that are typically imposed by United States Governmental Authority. Any tax required to be withheld by the Licensee under the laws of any foreign country or jurisdiction for the account of UABRF shall be promptly paid by the Licensee for and on behalf of UABRF to the appropriate Governmental Authority, and the Licensee shall use reasonable commercial efforts to furnish UABRF with proof of payment of such tax, together with official or other appropriate evidence issued by the applicable Governmental Authority. Any such amounts actually paid on UABRF’s behalf shall be deducted from any amounts due to be paid to UABRF under this Agreement.

 

5.15         No Refund/Offset. Except as otherwise expressly provided under this Agreement, no amounts payable to UABRF under this Agreement are refundable or may be offset, including any amounts paid prior to or during the period of a Patent Challenge under Section 7.7, even if the Patent Challenge is successful or it is otherwise determined that the Licensed Patents are invalid or unenforceable.

 

Article 6

Recordkeeping

 

6.1           Books and Records. The Licensee shall keep complete and accurate books, accounts and other records and documentation necessary to ascertain all transactions and events pursuant to which payments due to UABRF pursuant to this Agreement arise and are accrued and to verify the accuracy and completeness of such amounts. All such books, accounts and other records and documentation shall be kept at the Licensee’s principal place of business for a period of not less than [*****] following the end of the calendar year to which they pertain.

 

 

6.2           Right to Audit. For the Term, UABRF shall have the right to have the Licensee’s books and records audited by a qualified, independent accounting firm of its choosing, under appropriate confidentiality provisions such as those set forth in Section 8.4 of this Agreement, to ascertain the accuracy of the reports and payments due to UABRF under this Agreement and compliance by the Licensee, its Affiliates and its Sublicensees with their obligations pursuant to this Agreement and any sublicense. Such audit shall be conducted upon reasonable advance notice, during normal business hours and in a manner that does not interfere unreasonably with the Licensee’s business but not more than once in any [*****] period. If any such examination reveals that the Licensee has underpaid or underreported any amount due under this Agreement to UABRF for any calendar quarter examined, the Licensee shall promptly pay to UABRF the amount so underpaid or underreported.

 

6.3          Reimbursement of Cost of Audit. If any such examination reveals that the Licensee has underpaid or underreported any amount due under this Agreement to UABRF by more than [*****] for any calendar quarter examined, the Licensee shall immediately reimburse UABRF the full costs and expenses incurred by it with respect to the audit.

 

Article 7

Infringement; Enforcement; Other Legal Claims

 

7.1           Notification of Infringement and Other Potential Claims. During the Term, each Party shall provide prompt written notice to the other Party of any actual infringement or suspected/potential infringement of the Licensed Patents in the Licensed Territory of which such Party is or becomes aware and shall provide, to the extent reasonable and practicable, any available evidence of such infringement by a Third Party (an “Infringement Notice”). In addition, during the Term, the Licensee shall also provide prompt written notice to UABRF of any facts, circumstances or events which negatively impact or which the Licensee reasonably believes negatively impact the ability of the Licensee or its Affiliates or Sublicensees to exercise their rights or to perform their obligations under this Agreement or any sublicense granted under this Agreement or which negatively impact UABRF’s intellectual property rights in the Licensed Patents, and the Licensee shall provide, to the extent reasonable and practicable, details of (i) the potential claim(s) or cause(s) of action which the Licensee reasonably believes it has or which may be asserted by the Licensee against a Third Party and any actual claims or causes of action asserted by any Third Party against the Licensee or the potential claim(s) or cause(s) of action the Licensee reasonably believes a Third Party may assert against the Licensee, and (ii) sufficient information to enable UABRF to evaluate the issues and the potential effect and impact such claims may have on its rights under this Agreement and the Licensed Patents (a “Potential Claim Notice”).

 

7.2           Licensee Right to Pursue/Prosecute. During the Term, the Licensee shall have the right to (i) resolve, in the Licensed Field of Use and in the Licensed Territory, any suspected/potential infringement and prosecute any infringement of any Licensed Patents, and/or (ii) resolve any actual or potential claim or cause of action the Licensee believes it has or may have or which a Third Party has or may have against the Licensee which negatively impact or which the Licensee reasonably believes negatively impact the ability of the Licensee or its Affiliates or Sublicensees to exercise their rights or to perform their obligations under this Agreement or any sublicense granted under this Agreement, in its own name and at its own expense, provided:

 

 

(a)

the affected Licensed Patents remain exclusively licensed to the Licensee and are not a Disclaimed Licensed Patent;

(b)

the claim relates to a Valid Patent Claim; and

(c)

the Licensee remains in compliance in all material respects with its obligations under this Agreement.

 

The Licensee shall use its best efforts to abate or terminate such infringement or resolve any other actual or potential claim(s) or cause(s) of action without resorting to litigation, which may include negotiating and executing a sublicense agreement that complies with the terms of Section 2.5 of this Agreement. Before the Licensee commences an action with respect to any infringement or potential infringement or commences an action filed by, or responds to an allegation raised by, a Third Party, it shall give careful consideration to the views of UABRF and the potential effects on the public interest in making its decision whether or not to sue or how to respond. UABRF shall use reasonable efforts to cooperate with the Licensee in connection with any remedial action undertaken by the Licensee and shall be responsible for the costs and expenses incurred by it and for those costs and expenses incurred by it at the reasonable request of the Licensee with respect to such cooperation.

 

7.3

Control of Suit; Joinder; Expenses.

 

(a)

Initiated by the Licensee. If the Licensee wishes to commence a lawsuit, it must do so within [*****] following the date of the relevant Infringement Notice and/or Potential Claim Notice, and it shall bear all costs and expenses incurred by it in connection with such lawsuit. UABRF shall cooperate fully with the Licensee in connection with such lawsuit and shall be responsible for the costs and expenses incurred by it and for those costs and expenses incurred by it at the reasonable request of the Licensee with respect to such cooperation.

 

(b)

Initiated by UABRF. If the Licensee elects not to exercise its right to commence, or fails to commence, an action within [*****] of the date of the relevant Infringement Notice and/or Potential Claim Notice, UABRF may do so at its own expense, and shall retain sole control over the direction of such lawsuit. The Licensee shall cooperate fully with UABRF in connection with such lawsuit and shall be responsible for the costs and expenses incurred by it with respect to such cooperation. If UABRF files an infringement or other lawsuit, the Licensee may not thereafter commence a lawsuit against the same infringing or other party with respect to the same acts of infringement or facts or circumstances which are the subject of UABRF’s lawsuit or with respect to which settlement is reached by the infringing or other party and UABRF.

 

(c)

Joinder by UABRF. UABRF, to the extent permitted by Applicable Law, may elect to join in as a party to any lawsuit relating to the Licensed Patents, UABRF’s intellectual property rights in the Licensed Patents and/or the Licensee’s ability to exercise its rights or perform its obligations under this Agreement initiated by the Licensee, in which case, both Parties shall jointly control the lawsuit and shall equally share the responsibility of all legal fees, costs and expenses, unless otherwise agreed to by the Parties. The Licensee may not join UABRF in as a party to any lawsuit initiated by it without the prior written consent of UABRF, which such consent shall not be unreasonably withheld, and without prior written agreement between the Parties as to the responsibility between the Parties for all costs and expenses incurred by the Parties. If UABRF is involuntarily joined as a party to a lawsuit initiated by the Licensee, the Licensee shall pay all legal fees, costs and expenses incurred by UABRF arising out of such joinder and participation, including, but not limited to legal fees, costs and expenses reasonably incurred by legal counsel selected and retained by UABRF to represent it in such lawsuit. While UABRF remains a party to any lawsuit initiated by the Licensee, UABRF may not thereafter commence a lawsuit against the same Third Party with respect to the same acts or omissions which are the subject of the Licensee’s lawsuit or with respect to which settlement is reached by the Third Party, the Licensee and UABRF.

 

 

7.4           Settlement. The Licensee may not settle or enter into a consent judgment or other voluntary final disposition of any lawsuit relating to the Licensed Patents, UABRF’s intellectual property rights in the Licensed Patents and/or the Licensee’s ability to exercise its rights or perform its obligations under this Agreement initiated by it or to which it is a party without the prior written consent of UABRF, which consent shall not be unreasonably withheld. Neither Party may settle or otherwise dispose of any lawsuit to which it is a party, which admits liability on the part of the other Party or which requires the other Party to pay money damages or issue a formal statement without such other Party’s prior written consent.

 

7.5           Recoveries.

 

(a)

Lawsuit initiated by the Licensee and in which only the Licensee is a party. With respect to any lawsuit commenced by the Licensee pursuant to Section 7.3(a) above and in which UABRF is not a party, any recovery of damages shall first be applied in satisfaction of the costs and expenses incurred by the Licensee in bringing such lawsuit, including attorneys’ fees, provided they are reasonably incurred, and any balance shall be treated in accordance with Section 5.5 (Running Royalty Payments).

 

(b)

Lawsuit initiated by the Licensee and in which UABRF joins.

 

(i)

With respect to any lawsuit commenced by the Licensee pursuant to Section 7.3(a) above and in which UABRF is involuntarily joined as a party, any recovery of damages (whether compensatory or punitive in nature) shall first be applied, pro rata, in satisfaction of the costs and expenses incurred by UABRF arising out of such joinder and participation, including, but not limited to legal fees and expenses reasonably incurred by legal counsel selected and retained by UABRF to represent it in such lawsuit, then in satisfaction of the costs and expenses incurred by the Licensee in bringing such lawsuit, including attorneys’ fees, provided they are reasonably incurred. Any balance remaining after payment of such costs and expenses, in the case of patent infringement lawsuits, shall be treated in accordance with Section 5.5 of this Agreement as it pertains to Sales by Licensee.

 

 

(ii)

With respect to any lawsuit commenced by the Licensee pursuant to Section 7.3(a) above and in which UABRF voluntarily joins as a party, any recovery of damages (whether compensatory or punitive in nature) shall first be applied in satisfaction of the costs and expenses incurred by the Parties in bringing such lawsuit, including attorneys’ fees, provided they are reasonably incurred and shall be applied equally or, in the case of a different agreement between the Parties, in the same manner as the Parties have agreed to be responsible for the costs and expenses. Any balance remaining after payment of such expenses shall be treated in accordance with Section 5.5 of this Agreement as it pertains to Sales by Licensee.

 

(c)

Lawsuit initiated by UABRF. With respect to any lawsuit commenced by UABRF pursuant to Section 7.3(b) above, all recoveries of damages shall belong to UABRF. Furthermore, the Licensee shall pay over to UABRF any payments (whether or not designated as “royalties”) made by an alleged infringer to the Licensee under any existing or future sublicense authorizing Licensed Products, up to the amount of UABRF’s unreimbursed litigation expenses (including, but not limited to, attorneys’ fees reasonably incurred).

 

7.6           Inapplicability of Licensee’s Rights. Notwithstanding Sections 7.1 – 7.5 above, the rights and obligations of the Licensee under this article shall not apply to (a) any Licensed Patents in which there are no Valid Patent Claims remaining or (b) any Disclaimed Licensed Patent.

 

7.7           Patent Challenges. In the event the Licensee, any of its Affiliates, any Sublicensee or any Third Party at the written urging of any of these parties intends to challenge the validity or enforceability of any of the Licensed Patents in any manner, including instituting opposition, declaratory judgment, interference, post-grant review, inter partes review, or re-examination proceeding (a “Patent Challenge”), the Licensee shall give UABRF at least [*****] prior written notice, which shall include stating the basis for such Patent Challenge and providing a copy of all relevant prior art or other materials used as the basis for such Patent Challenge. In the event of a Patent Challenge, Licensee shall: [*****]. In the event of an Unsuccessful Patent Challenge, [*****]. As used herein, “Unsuccessful” means that, upon the conclusion of the action before the court or other Governmental Authority in which the Patent Challenge was brought, [*****]. The Licensee represents that it has reviewed the Licensed Patents and as of the Effective Date is unaware of any reasons why issued patents would not be valid or enforceable or why pending applications would not be valid or enforceable upon issuance.

 

 

Article 8

Other Covenants and Agreements

 

8.1           Use of Names. No Party may, without the prior written consent of the other Party: use (a) the name of the other Party or its Affiliates, if applicable, (b) the name or image of any Representative of the other Party, or (c) any trade-name, trademark, trade device, service mark, or symbol owned by the other Party in any publication, marketing or advertising documentation or material; or represent, either directly or indirectly, that any product or service of the other Party is a product or service of the representing Party or that it is made in accordance with or utilizes the information or documents of the other Party. Notwithstanding the foregoing, the Licensee may disclose that it has received a license from UABRF in connection with any Licensed Product, and either Party may use the name of the other Party to the extent such use is reasonably necessary for complying with Applicable Law.

 

8.2           Publications. In furtherance of Section 2.3(c) of this Agreement, UABRF or its Affiliates shall submit a copy of any proposed publication or disclosure containing Proprietary Information to the Licensee at least [*****] prior to submission or disclosure. The Licensee shall have [*****] days from its receipt to provide written notice to UABRF or its disclosing Affiliate as to (i) specific edits to remove Licensee’s Proprietary Information prior to publication or disclosure or (ii) the need to delay such publication or disclosure for a reasonable period of time to undertake Protection Activities. If the Licensee does not provide written notice of such request to UABRF or its Affiliate within [*****], UABRF or its Affiliate shall be free to publish or disclose to third parties the proposed publication or disclosure without further obligation to the Licensee.

 

8.3           Insurance Coverage. Prior to commencing any clinical trial and during the Term, the Licensee shall cause to be in effect through purchase from a reputable insurance company or, upon the consent of UABRF, through a self-insurance program, at its sole expense, "occurrence based type" liability insurance coverage or, if the Licensee is unable to obtain “occurrence based type” liability insurance, a “claims made type” liability insurance coverage (with at least [*****] tail coverage). Such insurance coverage shall include a contractual endorsement providing coverage for all liability which may be incurred in connection with this Agreement, including, but not limited to general liability and products liability, and such other type of insurance coverage required by Applicable Law or which it deems necessary to enable the Licensee to perform its obligations under this Agreement. All such insurance coverage shall list UABRF and its Affiliates as additional insureds. The Licensee shall provide evidence of such insurance coverage to UABRF within [*****] of commencing any clinical trial and at least annually thereafter. All such insurance coverage shall require the insurance provider, or in the case of a self-insurance program, the Licensee, to provide UABRF with at least [*****] prior written notice of any change in the terms or cancellation of coverage.

 

8.4           Confidentiality.

 

(a)

Exchange of Proprietary Information. The Parties acknowledge that during the Term they are likely to share information with each other that they each consider to be confidential and proprietary (“Proprietary Information”). For the purposes of this Agreement, the Party that discloses Proprietary Information shall be referred to as the “Disclosing Party” and the Party receiving the Proprietary Information, the “Receiving Party.”

 

 

(b)

Nature of Proprietary Information. The Parties agree that information provided to the other Party shall be deemed to be Proprietary Information if it can reasonably be considered to be proprietary, non-public information. Any information that is disclosed orally and that could not reasonably be considered to be proprietary and non-public information will only be deemed to be Proprietary Information if it is , summarized and reduced to writing and identified as “Proprietary” or “Confidential” in writing to the other Party within [*****] of such disclosure. Notwithstanding the above, the Parties specifically agree that any reports provided by the Licensee pursuant to this Agreement shall be considered Proprietary Information.

 

(c)

Restrictions. With respect to all Proprietary Information disclosed to it, the Receiving Party (i) shall keep it confidential (other than as permitted by this Agreement), (ii) shall store and maintain it with the same diligence and care as its own proprietary information, but no less than reasonable diligence and care, (iii) may only use it for the purpose for which it was disclosed by the Disclosing Party, (iv) may not disclose it (other than to Affiliates, Sublicensees or as permitted by this Agreement), unless such Third Party is contractually bound by confidentiality restrictions at least as stringent as those contained herein; (v) may not deconstruct, modify or copy it (other than as permitted by this Agreement), and (vi) may not transfer or assign it to any Third Party (other than as permitted by this Agreement)without the prior written consent of the Disclosing Party.

 

(d)

Access to the Proprietary Information. The Proprietary Information may be used by, and disclosed to, on an “as-needed” basis, the Receiving Party’s Representatives. The Licensee may disclose Proprietary Information relating to the Licensed Patents to investors, prospective investors, consultants, collaborators and other Third Parties in the chain of manufacturing and distribution, if and only if, the Licensee obtains from such recipient a written confidentiality agreement, the provisions of which are at least as protective of UABRF’s Proprietary Information as these set forth in this section 8.4. Each Party will promptly notify the other Party of any unauthorized use of or access to the Proprietary Information of which it becomes aware.

 

(e)

Exceptions to Confidentiality Obligation. The restrictions of confidentiality described above shall not apply to Proprietary Information (i) which as of the Effective Date or subsequent thereto is or becomes available to the public without breach of this Agreement, (ii) if it is lawfully obtained from a Third Party not bound by similar confidentiality and use restrictions and obligations, (iii) if it is known by the Receiving Party prior to disclosure as evidenced by contemporaneous records, or (iv) if it is at any time developed by the Receiving Party independently of any disclosure made pursuant to this Agreement. In addition, the confidentiality obligations shall not apply to the Receiving Party if the Receiving Party is legally required by applicable law, court order or Governmental Authority to disclose the Information, provided the Receiving Party discloses only the minimum to comply and, if possible and in light of the circumstances, provides reasonable prior notice to the Disclosing Party to enable it to contest the requirement or to seek a protective order.

 

 

(f)

Termination or Expiration of this Agreement. Upon the expiration of the Term, or the earlier termination of this Agreement, each Receiving Party shall, at the Disclosing Party’s option and upon written notice thereof to the Receiving Party, return all Proprietary Information, copies and other tangible expressions thereof, to the Disclosing Party or provide the Disclosing Party with written notice that the Proprietary Information in its possession, or in the possession of its Representatives, has been destroyed within [*****] after receipt of the Disclosing Party’s written notice to the Receiving Party requiring the Receiving Party to destroy the Proprietary Information in its possession. The Receiving Party may retain one archival copy of the Information for purposes of compliance of its obligations under this Agreement.

 

(g)

Continuing Obligations after Termination/Expiration. The restrictions and obligations set forth in Section 8.4(c) above shall continue for [*****] from the termination or expiration of this Agreement.

 

Article 9

Term and Termination

 

9.1           Term. This Agreement shall commence on the Effective Date and shall continue, unless terminated sooner in accordance with the terms of this Agreement, until the date of expiration of the last to expire of any Valid Patent Claim (inclusive of any extensions, supplementary protection certificates or their equivalents) within the Licensed Patents (the “Term”).

 

9.2           Termination by the Licensee. The Licensee may terminate this Agreement at any time, in its sole discretion, by giving not less than [*****] prior written notice to UABRF. Upon the reasonable request of UABRF, the Licensee shall provide assistance, at its expense, to UABRF to enable UABRF to facilitate and effect the transfer of applicable information and documents regarding the Licensed Patents to a new licensee.

 

9.3           Termination by UABRF. UABRF shall have the right to immediately terminate this Agreement upon the occurrence of any one or more of the following events:

 

(a)

if the Licensee is in material default of any provision of this Agreement or its obligations under this Agreement and such default has not been remedied within [*****] after receipt of a notice to cure from UABRF;

(b)

if the Licensee fails to make a payment due under this Agreement and fails to cure such non-payment within [*****] of receipt of a non-payment notice from UABRF;

(c)

if the Licensee fails to diligently undertake development and commercialization activities as set forth in the Development and Commercialization Plan, provided however, Licensee shall be deemed to have demonstrated sufficient diligence through [*****] or [*****], and [*****] in accordance with [*****];

 

 

 

(d)

if an examination by UABRF pursuant to Section 6.2 shows an underreporting or underpayment by the Licensee in excess of [*****] of any amounts due to UABRF under this Agreement in any [*****] period, provided however, any disputed reporting or payment obligations by Licensee shall not be considered a breach of this provision;

(e)

if the Licensee, any of its Affiliates, any Sublicensee, or any Third Party at the written urging of any of these parties brings a Patent Challenge under Section 7.7 of this Agreement;

(f)

if the Licensee, any of its Affiliates, any Sublicensee, or any Third Party at the written urging of any of these parties issues a press release, public announcement, or news release alleging invalidity or unenforceability of any Licensed Patent; or

(g)

if the Licensee shall become insolvent, shall make an assignment for the benefit of its creditors, or shall have a petition in bankruptcy filed for or against it.

 

9.4       Effect of Termination or Expiration. Any termination or expiration of this Agreement will not relieve either Party of any obligation or liability accrued by Licensee, its Affiliates or Sublicensee prior to such termination or expiration.

 

Article 10

Covenants; Representations and Warranties;

Limitations on UABRF’s Obligations

 

10.1       Both Parties. Each Party represents and warrants to the other Party that it is duly incorporated, validly existing and in good standing under the laws of the jurisdiction in which it was formed, it has all necessary corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby, that the execution, delivery and performance of this Agreement by it will not conflict with or result in a breach of, or entitle any party thereto to terminate, an agreement or instrument to which it is a party, or by which any of its assets or properties are bound, and that this Agreement has been duly authorized, executed and delivered by it and constitutes a legal, valid and binding agreement of such Party, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally.

 

10.2

The Licensee. The Licensee makes the following representations and warranties to UABRF.

 

(a)

The Licensee possesses the necessary expertise and skill in the technical areas pertaining to the Licensed Patents, and to make its own evaluation of the capabilities, safety, utility and commercial application of the Licensed Patents.

(b)

Any activity undertaken with the Licensed Patents and the Licensed Products will be conducted in compliance with all Applicable Laws.

 

10.3

UABRF. UABRF makes the following representations and warranties to the Licensee.

 

(a)

UABRF has the right to grant the license under this Agreement and, to the best of its knowledge, has provided, or will provide, Licensee with all Technical Information and Regulatory Documents as provided to UABRF by The University of Alabama at Birmingham and/or the Inventors.

 

 

(b)

To UABRF’s best knowledge and based upon information and representations and warranties made to it by the Inventors, UABRF has no knowledge of any defects to the title and interest in the Licensed Patents and there have been no claims made against UABRF asserting the invalidity or non-enforceability, and with respect to the Licensed Patents, UABRF is not aware that any such claims exist.

(c)

The performance of Management Activities with respect to Disclaimed Licensed Patents will not conflict with or result in a breach of any of the terms, conditions, or provisions of, or constitute a default under, this Agreement, and no Third Party shall have any right of claim against the Licensee, with respect to this Agreement or any rights remaining therein.

 

10.3       Limitations on UABRF’s Representations and Warranties. Except as set forth in this Agreement, UABRF makes no other representations or warranties of any kind. In particular, UABRF makes no express or implied warranties regarding merchantability, fitness for a particular purpose, non-infringement of the intellectual property rights of third parties, validity and scope of any Licensed Patents, the capability, safety, efficacy, utility or commercial application or usefulness for any purpose of any Licensed Patents, or that UABRF will not grant licenses to one or more Third Parties to make, use or sell products or perform processes that may be similar to and/or compete with any Licensed Product.

 

10.4       Limitations on Licensee’s Representations and Warranties. LICENSEE MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, REGARDING THE RESULTS OF ITS EFFORTS TO DEVELOP, MANUFACTURE OR COMMERCIALIZE ANY LICENSED PRODUCTS.

 

10.5       No Obligation of UABRF. Unless otherwise agreed in a writing signed by both Parties, UABRF has no obligation to:

 

(a)

supervise, monitor, review or otherwise assume responsibility for the production, manufacture, testing, marketing, sale or disposition of any Licensed Product;

(b)

furnish any know-how or other information relating to the Licensed Patents, other than as specifically provided in this Agreement; or

(c)

bring or prosecute legal action against any Person for infringement of the Licensed Patents or to defend a Patent Challenge.

 

Article 11

Liability and Indemnification

 

11.1       No Indirect, Special or Consequential Liability. None of the Parties shall under any circumstances be liable to any other Party or any other Party’s Affiliates for indirect, incidental, special or consequential damages (including, but not limited to, loss of production time, profits, revenue or business) resulting from or in any way related to this Agreement.

 

 

11.2       No Liability of UABRF. Neither UABRF nor any of its Representatives have any liability whatsoever to the Licensee, its Affiliates or any Sublicensee or any Person for or on account of any injury, loss or damage of any kind or nature, sustained by, assessed or asserted against, or any other liability incurred by or imposed upon the Licensee, its Affiliates or any Sublicensee or any Person, arising out of or in connection with or resulting from:

 

(a)

the use of the Licensed Patents during the Term;

(b)

the production, use, practice, lease, or sale of any Licensed Product;

(c)

any advertising or other promotional activities with respect to (a) and/or (b) above;

(d)

the Licensee’s compliance with, and performance of the Licensee’s representations and warranties given under, and the Licensee’s obligations pursuant to, this Agreement; or

(e)

any fraudulent act on the part of one or more of the Inventors that affects the title of the Licensed Patents.

 

In addition, UABRF’s liability shall be [*****].

 

Notwithstanding the foregoing, UABRF shall be responsible and liable for any injury, loss or damage of any kind or nature, sustained by, assessed or asserted against, or any other liability incurred by or imposed upon the Licensee, any Sublicensee, any of their respective Representatives or any Person, arising out of or in connection with or resulting from (i) UABRF’s or any of its Representatives’ negligent acts or omissions, willful malfeasance, or intentional misconduct; (ii) the practice by UABRF of the Licensed Patents prior the Effective Date; or (iii) any breach of Applicable Law by UABRF or any of its Representatives which is the direct and sole cause of the injury, loss or damage sustained.

 

11.3       Indemnification by the Licensee. The Licensee agrees to indemnify and hold UABRF, its Affiliates and their respective Representatives harmless from and against any and all claims, demands, losses, costs, expenses, deficiencies, liabilities or causes of action of any kind or nature (including, without limitation, reasonable attorneys’ fees and other costs and expenses of defense) directly relating to:

 

(a)

the use of the Licensed Patents during the Term;

(b)

the production, use, practice, lease, or sale of any Licensed Product during the Term;

(c)

any advertising or other promotional activities with respect to (a) and/or (b) above; or

(d)

the Licensee’s compliance with, and performance of the Licensee’s representations and warranties given under, and the Licensee’s obligations pursuant to, this Agreement.

 

11.3       Indemnification by UABRF. UABRF shall indemnify, defend and hold harmless Licensee, its Sublicensees, and each of their Representatives from and against any and all claims, demands, losses, costs, expenses, deficiencies, liabilities or causes of action of any kind or nature (including, without limitation, reasonable attorneys’ fees and other costs and expenses of defense) directly resulting from i) UABRF’s or any of its Representative’s negligence, willful malfeasance, intentional misconduct, omission or material breach of any term of this Agreement; and ii) UABRF’s practice of the Licensed Patents prior to the Effective Date;; and iii) UABRF’s compliance with, and performance of UABRF’s representations and warranties given under, and UABRF’s obligations pursuant to, this Agreement.

 

 

Article 12

Miscellaneous

 

12.1       Entire Agreement. This Agreement is the sole and entire agreement by and between the Parties regarding the subject matter set forth in this Agreement, and supersedes all prior agreements. All previous negotiations, statements and preliminary instruments by the Parties with respect to the subject matter hereof are merged in this Agreement.

 

12.2       No Inducement. No Party has been induced, persuaded or motivated by any promise or representation made by the other Party to enter into this Agreement.

 

12.3       Independent Contractors. The Parties are independent contractors. No Party has the authority to bind or act on behalf of the other Party. The Parties do not intend to create an employer/employee relationship.

 

12.4       No Third Party Beneficiaries. This Agreement is for the exclusive benefit of the Parties and their successors and permitted assignees. No other Person shall have any rights under this Agreement, unless and only to the extent permitted by Applicable Law.

 

12.5       Assignment. The Licensee shall not sell, assign, transfer or otherwise dispose of this Agreement including by operation of law to a Third Party without the prior written consent of UABRF, which consent shall not be unreasonably withheld, except that Licensee shall be permitted to assign this Agreement in the case of: (i) an assignment to a wholly owned Affiliate of Licensee, (ii) the sale of substantially all of the stock or assets of Licensee, or (iii) any merger or acquisition or business combination resulting in a change of control of Licensee, provided that any assignee (a) shall have the knowledge, expertise and experience to perform this Agreement and (b) shall ratify this Agreement and abide by all of its terms and conditions provisions. Any attempted assignment of this Agreement not in compliance with the terms of this subsection will be null and void. No assignment will relieve any Party of the performance of any accrued obligation that such Party may then have pursuant to this Agreement.

 

12.6       Amendments. Any and all modifications to this Agreement shall only be effective and binding if in writing and signed by a duly authorized representative of each Party.

 

12.7       Notices. Any notice, request, approval or consent required to be given under this Agreement will be sufficiently given if in writing and delivered to a Party in person, by recognized overnight courier or mailed in such Party’s national postal service, postage prepaid to the address appearing below such Party’s signature on the last page of this Agreement, or at such other address as each Party so designates in accordance with these criteria. Notice shall be deemed effective upon receipt if delivered in person or by overnight courier or five (5) business days after mailing with the Party’s national postal service.

 

 

12.8       Disputes.

 

(a)

Equitable Relief. Either Party may seek temporary equitable and injunctive relief in a court of competent jurisdiction in the event of a breach or threatened breach by the other Party of its obligations under this Agreement, without the requirement to post a bond.

 

(b)

Internal Resolution. In the event of any dispute arising out of or relating to this Agreement or to a breach thereof, including its interpretation, performance or termination, the Parties shall try to settle such conflicts amicably between themselves.

 

(c)

Mediation. In the event the Parties are still unable to resolve the dispute, the dispute or conflict may then be submitted by a Party to a mediator, mutually agreed to by the Parties, for nonbinding mediation. The Parties shall cooperate with the mediator in an effort to resolve such dispute.

 

(d)

Arbitration. If the dispute is not resolved within [*****] days of its submission to the mediator, either Party may submit the dispute for binding arbitration. The arbitration shall be conducted by one (1) arbitrator, to be appointed by mutual agreement of the Parties. The arbitration shall be conducted in accordance with the rules and organization agreed to by the Parties at the time or if no agreement can be reached, by the commercial rules of the American Arbitration Association, which shall administer the arbitration. The arbitration, including the rendering of the award, shall take place in [*****] and shall be the exclusive forum for resolving such dispute. The decision of the arbitrator shall be final and binding upon the Parties and the expense of the arbitration, including, without limitation, the award of attorneys’ fees to the prevailing Party, shall be paid as the arbitrator determines.

 

12.9       Rights and Remedies. The rights and remedies provided by this Agreement are cumulative, and the use of any one right or remedy by any Party shall not preclude or waive the right to use any or all other remedies. Such rights and remedies are given in addition to any other rights the Parties may have by law, statute, ordinance or otherwise.

 

12.10       Waiver. No term of this Agreement can be waived except by the written consent of the Party waiving compliance. No waiver of a provision, breach or default shall apply to any other provision or subsequent breach or default or be deemed continuous, nor will any single or partial exercise of a right or power preclude any other further exercise of any rights or remedies provided by law or equity.

 

12.11       Severability. In the event that any provision contained in this Agreement is determined to be invalid, void or illegal, such provision shall be deemed deleted from the Agreement and shall not affect the validity of the remaining provisions of this Agreement.

 

12.12       Force Majeure. No Party shall be liable for any failure to perform its obligations under this Agreement to the extent such failure to perform is due to circumstances reasonably beyond such Party’s control, provided that the affected Party uses reasonable efforts to overcome or avoid the effects of such cause and continues to perform its obligations to the extent possible.

 

 

12.13       Survivability. All rights and obligations of the Parties which by intent or meaning have validity beyond or by their nature apply or are to be performed or exercised after the termination or expiration of this Agreement shall survive the termination or expiration of this Agreement for the period so specified, if any, or for perpetuity.

 

12.14       Governing Law. This Agreement, and the application or interpretation hereof, shall be governed exclusively by its terms and by the laws of the State of Alabama.

 

12.15       Jurisdiction. The Licensee consents on behalf of itself and its Affiliates to the personal jurisdiction of the federal and state courts located in the State of Alabama with respect to all claims or other causes of action arising out of this Agreement.

 

12.16       Interpretation. Whenever used in this Agreement and when required by the context, the singular number shall include the plural and the plural the singular. Pronouns of one gender shall include all genders, masculine, feminine and neuter.

 

12.17       Captions. The captions as to contents of particular sections or paragraphs contained in this Agreement are inserted for convenience and are in no way to be construed as part of this Agreement or as a limitation on the scope of the particular sections or paragraphs to which they refer.

 

12.18       Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

 

 

The remainder of this page intentionally left blank

 

 

IN WITNESS WHEREOF, the Licensee and UABRF have each caused its duly authorized representative to execute this Agreement, effective as of the Effective Date.

 

UABRF:			THE LICENSEE:
The UAB Research Foundation			Incysus, Ltd.
By:	/s/ Authorized Signatory		By:	/s/ William Ho
			Name:	William Ho
			Title:	CEO

	By:
	Name:
	Title:

 

Addresses For Notices and Payments:	Address For Notices:
For Delivery by Hand or Courier Service:   The UAB Research Foundation Attention: Executive Director 701 20th Street South Administration Building 770 Birmingham, AL 35233   For Delivery by U.S. Postal Service:   The UAB Research Foundation Attention: Executive Director 1720 2nd Avenue South Administration Building 770 Birmingham, AL 35294-0107	Incysus, Ltd. Clarendon House 2 Church Street Hamilton, HM11 Bermuda

 

 

EXHIBIT A

LICENSED PATENTS

(dated as of the Effective Date)

 

[*****]

 

  

EXHIBIT B

DEVELOPMENT AND COMMERCIALIZATION PLAN

 

[*****]

 

 

EXHIBIT C

MILESTONES

 

[*****] 

 

 

 

EXHIBIT C

(Continued)

 

 

[*****]

 

 

EXHIBIT D

FORM OF STOCK PURCHASE AGREEMENT

  

 

 

EXHIBIT E

FORM OF DEVELOPMENT AND COMMERICIALIZATION PROGRESS REPORT

 

Licensee Name

Address

City, State, Zip

 

Progress Report covering the period January- December, 20__ for the License between Licensee and UABRF dated ________________

 

As required under Article 3 of the above-referenced license agreement, the following details the progress made during the reporting period in commercializing the licensed technology.

§

[*****]

§

[*****]

 

 

EXHIBIT F

RESEARCH PLAN 

 

The following research and development priorities will be addressed.

 

[*****]

 

 

 

Exhibit 10.9

 

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain identified information marked with [*****] has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

First Amendment to Exclusive License Agreement between the UAB Research Foundation
(“UABRF”) and Incvsus, Ltd. (“Licensee”)

 

This First Amendment to Exclusive License Agreement (this “First Amendment”) is made effective as of December 14, 2016 (the “First Amendment Effective Date”) by and between Incysus, Ltd. (“Licensee”) and The UAB Research Foundation (“UABRF”). Licensee and UABRF may be each individually referred to as a “Party” and collectively, the “Parties”.

 

RECITALS

 

WHEREAS, Licensee and UABRF previously entered into that certain Exclusive License Agreement dated effective as of March 10, 2016 (“Agreement”);

 

WHEREAS, subsequent to the Effective Date of the Agreement, certain intellectual property has been conceived by employees of both Parties: [*****], an employee of the University of Alabama at Birmingham and [*****], an employee of the Licensee;

 

WHEREAS, the intellectual property is described in UABRF intellectual property disclosure number [*****] entitled “[*****]” which was disclosed to UABRF on [*****];

 

WHEREAS, the Parties have filed for patent protection with respect to such intellectual property and have filed U.S Provisional Patent No. [*****] entitled “[*****]”, filed with the United States Patent and Trademark Office on [*****] (the “Jointly Owned Patent”);

 

WHEREAS, the Licensee is interested in obtaining exclusive rights with respect to the intellectual property and all of the patent applications covering such intellectual property, including but not limited to, the Jointly Owned Patent, by licensing from UABRF all of its right, title and interest in the same;

 

WHEREAS, the Parties wish to amend the Agreement to grant these rights to the Licensee and to amend Article 4 of the Agreement regarding Protection Activities.

 

NOW, THEREFORE, for good and valuable consideration, the Parties agree to amend the Agreement as follows:

 

AGREEMENT

 

1.       All capitalized terms used herein shall bear the meaning ascribed to them in the Agreement unless otherwise defined herein.

 

2.       Inclusion of the Jointly Owned Patent as part of the Licensed Patents. As of the First Amendment Effective Date, the Jointly Owned Patent shall comprise part of the Licensed Patents as described in Section 1.13 of the Agreement and Exhibit A of the Agreement is hereby amended to read as follows (with new language being shown in italics and underlined):

 

Exhibit A. Licensed Patents (dated as of the First Amendment Effective Date)

 

(a)

[*****];

(b)

[*****]

 

 

3.       Grant of License to UABRF’s right, title and Interest in the Jointly Owned Patent. With respect to the Jointly Owned Patent (and any other jointly owned patent which comprises part of the Licensed Patents), the grant made by UABRF to the Licensee in Section 2.1 of the Agreement is limited to all of UABRF’s right, title and interest in the Jointly Owned Patent and any other jointly owned patent which forms part of the Licensed Patents.

 

4.       Amendment to Section 2.4 of the Agreement. The first sentence of Section 2.4 of the Agreement is hereby deleted in its entirety and is replaced with the following language (with the new language shown in italics and underlined):

 

“All of UABRF’s right, title and interest in the Licensed Patents remains with UABRF”.

 

5.       Amendment to Section 10.3(b) of the Agreement. Section 10.3(b) of the Agreement is deleted in its entirety and replaced with the following language (with the new language shown in italics and underlined):

 

“To UABRF’s best knowledge and based on information and representations and warranties made to it by the Inventors, UABRF has no knowledge of any defects to its right, title and interest in the Licensed Patents and there have been no claims made against UABRF asserting their invalidity or non-enforceability, and UABRF is not aware that any such claims exist.”

 

6.       Amendment to Article 4 of the Agreement. Article 4 is hereby amended by including the following language as Section 4.1(g) of the Agreement (with the new language shown in italics and underlined):

 

“Jointly Owned Patents. With respect to the Jointly Owned Patent and any other patent application that is filed to protect intellectual property that is jointly owned by the Licensee and UABRF, the Parties agree that [*****] shall, from the First Amendment Effective Date, be primarily responsible for undertaking all Protection Activities relating to such Licensed Patents. [*****] has selected [*****] as legal counsel to assist it in the process and [*****] shall reasonably cooperate with [*****] and its designated legal counsel in connection with the Protection Activities. With respect to such jointly owned patents [*****] legal counsel will assume a primary role in drafting responses to office actions. However, [*****] counsel is not representing [*****] and shall share with [*****] legal counsel all relevant information regarding such Protection Activities so that [*****] legal counsel may review and consult with and advise [*****]. Licensee and UABRF shall both approve all Protection Activities undertaken in connection with jointly owned intellectual property and Licensed Patents covering the same.”

 

7.       All other terms and conditions of the Agreement shall remain in full force and effect.

 

{Signatures on following page}

 

 

IN WITNESS WHEREOF, Licensee and UABRF have each caused its duly authorized representative to execute this First Amendment, effective as of the date written above.

 

UABRF: The UAB Research Foundation			Licensee: Incysus, Ltd.
By:	/s/ Authorized Signatory		By:	/s/ William Ho
			Name: William Ho
Date Signed: December 13, 2016			Title: CEO
			Date Signed: December 12, 2016

 

 

 

 

 

Exhibit 10.10

 

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain identified information marked with [*****] has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

Second Amendment to Exclusive License Agreement between The UAB Research
Foundation (“UABRF”) and Incysus, Ltd.

 

This Second Amendment to Exclusive License Agreement (this “Second Amendment”) is made effective as of January 26, 2017 (the “Second Amendment Effective Date”) by and between The UAB Research Foundation (“UABRF”) and Incysus, Ltd. (“Licensee”). Licensee and UABRF may be each individually referred to as a party and collectively, the parties (“Party” or “Parties”).

 

RECITALS

 

WHEREAS, UABRF and Licensee previously entered into that certain Exclusive License Agreement dated effective as of March 10, 2016 (“Agreement”);

 

WHEREAS, the Parties have previously amended the Agreement by executing that certain First Amendment, as of December 14, 2016, in which UABRF licensed to the Licensee it’s right, title and interest in certain jointly owned intellectual property jointly owned by the Parties and which was conceived subsequent to the Effective Date of the Agreement (the “First Amendment”);

 

WHEREAS, subsequent to the Effective Date of the Agreement, further intellectual property has been conceived by [*****] and other employees of the University of Alabama at Birmingham which is solely owned by UABRF and which the Parties are interested in including in the Licensed Patents;

 

WHEREAS, such additional intellectual property described in UABRF intellectual property disclosure number [*****] entitled “[*****]” was developed by [*****] while employed by the University of Alabama at Birmingham (the “Inventors”);

 

WHEREAS, UABRF has filed for patent protection with respect to such additional intellectual property and has filed US Provisional Patent Application No. [*****] entitled “[*****]” filed [*****] (the “Additional Patent”);

 

WHEREAS, the Parties wish to amend the Agreement to extend the scope of the Agreement to include the additional intellectual property; and

 

NOW, THEREFORE, for good and valuable consideration, the Parties agree to amend the Agreement as follows:

 

AGREEMENT

 

1.       All capitalized terms used herein shall bear the meaning ascribed to them in the Agreement unless otherwise defined herein.

 

2.       Inclusion of Additional Licensed Patent. As of the Second Amendment Effective Date, the Additional Patent shall comprise part of the Licensed Patents as described in Section 1.13 of the Agreement and Exhibit A of the Agreement is hereby amended to read as follows (with new language being shown in italics and underlined:

 

 

Exhibit A. Licensed Patents (dated as of the Effective Date)

 

(a)

[*****]

(b)

[*****]

(c)

[*****]

 

3.       Updating of Exhibit B. As of the Second Amendment Effective Date, Exhibit B of the Agreement is deleted in its entirety and replaced with the document marked as Exhibit B attached to this Second Amendment

 

4.       All other terms and conditions of the Agreement shall remain in full force and effect.

 

{Signatures on following page}

 

 

IN WITNESS WHEREOF, UABRF and Licensee have each caused its duly authorized representative to execute this Second Amendment, effective as of the date written above.

 

UABRF:			Company:
The UAB Research Foundation			Incysus, Ltd.,
By:	/s/ Authorized Signatory		By:	/s/ Tom Cirrito
			Name: Tom Cirrito
			Title: Board Member

Date Signed:

1/26/17

Date Signed:

April 25, 2017

  

 

 

EXHIBIT B

 

[*****] 

 

 

Exhibit 10.11

 

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain identified information marked with [*****] has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

Third Amendment to Exclusive License Agreement between The UAB Research
Foundation (“UABRF”) and Incvsus, Ltd.

 

This Third Amendment to Exclusive License Agreement (this “Third Amendment”) is made effective as of the date of the last signature of the Parties (as evidenced below their signatures on the signature page) (the “Third Amendment Effective Date”) by and between The UAB Research Foundation (“UABRF”) and Incysus, Ltd. (“Licensee”). Licensee and UABRF may be each individually referred to as a party and collectively, the parties (“Party” or “Parties”).

 

RECITALS

 

WHEREAS, UABRF and Licensee previously entered into that certain Exclusive License Agreement dated effective as of March 10, 2016 (“Original Agreement”);

 

WHEREAS, the Parties have previously amended the Original Agreement by executing that certain First Amendment, as of December 14, 2016, in which UABRF licensed to the Licensee it’s right, title and interest in certain jointly owned intellectual property jointly owned by the Parties and which was conceived subsequent to the Effective Date of the Agreement (the “First Amendment”) (together, the “Original Agreement” and the “First Amendment” constitute the “Agreement”);

 

WHEREAS, the Parties are, contemporaneous with the execution of this Third Amendment, also amending the Agreement by executing that certain Second Amendment pursuant to which the Licensee is licensing additional intellectual property and an additional patent application is being included in Licensed Patents; and

 

WHEREAS, the Parties wish to further amend the Agreement to clarify when payments under section 5.7 of the Agreement are due.

 

NOW, THEREFORE, for good and valuable consideration, the Parties agree to amend the Agreement as follows:

 

AGREEMENT

 

1.       All capitalized terms used herein shall bear the meaning ascribed to them in the Agreement unless otherwise defined herein.

 

2.       Section 5.7. Section 5.7 is deleted in its entirety and replaced with the following language:

 

“With respect to the first calendar year in which the cumulative Net Sales accomplished by the Licensee, its Affiliates and sublicensees reaches or exceeds the threshold amount set forth in the first column of the table below, the Licensee shall pay to UABRF the corresponding lump sum amount set forth in the second column. The three lump sum payments due to UABRF under this section shall be paid within [*****] of the close of the calendar year in which the obligation to pay is triggered. The lump sum payments due under this section 5.7 are in addition to the royalty amounts due pursuant to section 5.5 of this Agreement.

 

 

Cumulative Net Sales	Lump Sum Amount Due
[*****]	[*****]
[*****]	[*****]
[*****]	[*****]

 

3.       All other terms and conditions of the Agreement shall remain in full force and effect.

 

IN WITNESS WHEREOF, UABRF and Licensee have each caused its duly authorized representative to execute this Third Amendment, effective as of the date written above.

 

UABRF: The UAB Research Foundation			Licensee: Incysus, Ltd.
By:	/s/ Authorized Signatory		By:	/s/ Tom Cirrito
			Name: Tom Cirrito
Date Signed: June 16, 2017			Title: Board Member
			Date Signed:  April 25, 2017

 

 

 

Exhibit 10.12

 

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain identified information marked with [*****] has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

Fourth Amendment to Exclusive License Agreement between The UAB Research
Foundation (“UABRF”) and Incysus Therapeutics, Inc.

 

This Fourth Amendment to Exclusive License Agreement (this “Fourth Amendment”) is made effective as of the date of the last signature of the Parties (as evidenced below their signatures on the signature page) (the “Fourth Amendment Effective Date”) by and between The UAB Research Foundation (“UABRF”) and Incysus Therapeutics, Inc. (previously known as Incysus, Ltd.) (“Licensee”). Licensee and UABRF may be each individually referred to as a party and collectively, the parties (“Party” or “Parties”).

 

RECITALS

 

WHEREAS, UABRF and Licensee previously entered into that certain Exclusive License Agreement dated effective as of March 10, 2016 (“Original Agreement”);

 

WHEREAS, the Parties have previously amended the Original Agreement by executing those certain First, Second and Third Amendments, effective as of December 16, 2016, January 26, 2017 and June 16, 2017, respectively (together, the Original Agreement and all amendments, the “Agreement”);

 

WHEREAS, since the Third Amendment Effective Date, additional intellectual property has been conceived by [*****] and employees of the Licensee and thus is jointly owned by the Licensee and UABRF;

 

WHEREAS, such additional intellectual property is described in UABRF intellectual property disclosure number [*****] entitled “[*****]”;

 

WHEREAS, the Licensee has filed for patent protection with respect to such additional intellectual property and has filed US Provisional Patent Application No. [*****], entitled “[*****]” and filed on [*****] (the “Additional Jointly Owned Patent”);

 

WHEREAS, the Licensee wishes to obtain exclusive rights to such additional intellectual property and the Additional Jointly Owned Patent and UABRF is willing to grant to the Licensee the right to exclusively use of all of UABRF’s right, title and interest in and to such additional intellectual property and to exclusively practice all of UABRF’s rights in and to the Additional Jointly Owned Patent;

 

WHEREAS, the Parties wish to amend the Agreement to include the additional intellectual property and the Additional Jointly Owned Patent;

 

WHEREAS, as of May 7, 2018, the Licensee discontinued business as Incysus, Ltd. in the country of Bermuda and reincorporated in the United States of America under the laws of the State of Delaware as Incysus Therapeutics, Inc.; and

 

 

WHERAS, the Parties wish to update the Agreement with the new corporate details of the Licensee.

 

NOW, THEREFORE. for good and valuable consideration, the Parties agree to amend the Agreement as follows:

 

AGREEMENT

 

1.       All capitalized terms used herein shall bear the meaning ascribed to them in the Agreement unless otherwise defined herein.

 

2.       Inclusion of Additional Jointly Owned Patent. As of the Fourth Amendment Effective Date, the Additional Jointly Owned Patent shall comprise part of the Licensed Patents as described in Section 1.13 of the Agreement and Exhibit A of the Agreement is hereby amended to read as follows (with new language being shown in italics and underlined:

 

Exhibit A. Licensed Patents (dated as of the Effective Date)

 

(a)

[*****]

(b)

[*****]

(c)

[*****]

(d)

[*****]

 

3.       Update Certain Corporate Information regarding the Licensee. The Parties acknowledge that the Licensee has changed corporate structure and jurisdiction of incorporation and that it discontinued business as Incysus, Ltd. in the country of Bermuda and reincorporated in the United States of America under the laws of the State of Delaware as Incysus Therapeutics, Inc. All references to Incysus, Ltd. shall be deleted and replaced with Incysus Therapeutics, Inc. In addition, the address for notices relating to the licensee and appearing below the signature of the Licensee shall be deleted in its entirety and replaced with the following language:

 

Incysus Therapeutics, Inc.

79 Madison Avenue

New York, NY 10016.

 

4.       All other terms and conditions of the Agreement shall remain in full force and effect.

 

[Signatures on following page]

 

 

 

IN WITNESS WHEREOF, UABRF and Licensee have each caused its duly authorized representative to execute this Fourth Amendment.

 

UABRF:			Company:
The UAB Research Foundation			Incysus, Ltd.,
By:	/s/ Authorized Signatory		By:	/s/ William Ho
			Name: William Ho
			Title: CEO

 

Date Signed:

11/26/17

Date Signed:

November 15, 2018

 

  

 

Exhibit 10.13

 

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain identified information marked with [*****] has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

 

 

EXCLUSIVE LICENSE AGREEMENT

 

between

 

EMORY UNIVERSITY,

 

CHILDREN’S HEALTHCARE OF ATLANTA, INC.,

 

UAB RESEARCH FOUNDATION,

 

and

 

Incysus, LTD.

 

 

TABLE OF CONTENTS

 

ARTICLE 1.	DEFINITIONS	3
ARTICLE 2.	GRANT OF LICENSE	8
ARTICLE 3.	CONSIDERATION FOR LICENSE	11
ARTICLE 4.	REPORTS AND ACCOUNTING	13
ARTICLE 5.	PAYMENTS	14
ARTICLE 6.	DILIGENCE AND COMMERCIALIZATION	15
ARTICLE 7.	PATENT PROSECUTION	16
ARTICLE 8.	INFRINGEMENT	17
ARTICLE 9.	LIMITED WARRANTY AND EXCLUSION OF WARRANTIES	18
ARTICLE 10.	DAMAGES, INDEMNIFICATION AND INSURANCE	19
ARTICLE 11.	CONFIDENTIALITY	21
ARTICLE 12.	TERM AND TERMINATION	22
ARTICLE 13.	ASSIGNMENT	24
ARTICLE 14.	ARBITRATION	24
ARTICLE 15.	MISCELLANEOUS	25
ARTICLE 16.	NOTICES	27
APPENDIX A	COMPANY’S DEVELOPMENT PLAN	34
APPENDIX B	LICENSED PATENTS	35
APPENDIX C	U.S. GOVERNMENT LICENSE(S)	36
APPENDIX D	RUNNING ROYALTY PERCENTAGES	37
APPENDIX E	MINIMUM ROYALTIES	38
APPENDIX F	MILESTONE PAYMENTS	39
APPENDIX G	LICENSE MAINTENANCE FEES	40
APPENDIX H	DEVELOPMENT MILESTONES AND DATES	41

 

 

THIS EXCLUSIVE LICENSE AGREEMENT is made and entered into as of the 10^th day of June, 2016, (hereinafter referred to as the “Effective Date”) by and between EMORY UNIVERSITY, a nonprofit Georgia corporation with offices located at 1599 Clifton Road NE, 4^th Floor, Mailstop 1599/001/1AZ Atlanta, Georgia 30322, (hereinafter referred to as "EMORY"), CHILDREN’S HEALTHCARE OF ATLANTA, INC., a Georgia nonprofit corporation with principal offices located at 1600 Tullie Circle, NE, Atlanta, GA 30329, (hereinafter referred to as “CHILDREN’S”), The UAB Research Foundation, a non-profit 501(c)(3) corporation incorporated in the State of Alabama with principal offices located at 701 20^th Street South, AB 770, Birmingham, AL 35233 (hereinafter referred to as “UABRF”), and Incysus, Ltd., a corporation having a principal place of business located at Clarendon House, 2 Church Street, Hamilton, HM11 Bermuda (hereinafter referred to as "COMPANY").

 

WHEREAS, EMORY, CHILDREN’S and UABRF, (hereinafter together, “LICENSOR”) are the owners of all right, title, and interest in inventions and technology, developed by their respective employees and are responsible for their protection and commercial development; and

 

WHEREAS, CHILDREN’S is a joint owner with EMORY in inventions and technology, developed by certain employees of EMORY; and

 

WHEREAS, LICENSOR has developed certain inventions and technology related to “[*****]” and “[*****],” which is in part described in EMORY File Nos. [*****] and UABRF Case Nos. [*****]; and

 

WHEREAS, EMORY has entered into an agreement with UABRF whereby EMORY takes the lead in seeking, negotiating and administering licenses to certain Licensed Technology; and

 

WHEREAS, EMORY has entered into an agreement with CHILDREN’S whereby EMORY may take the lead in seeking, negotiating and administering licenses to the Licensed Technology; and

 

WHEREAS, COMPANY wishes to obtain and LICENSOR wishes to grant certain rights to pursue the development and commercialization of the Licensed Technology in accordance with the terms and conditions of the Agreement;

 

NOW, THEREFORE, for and in consideration of the mutual covenants and the premises herein, the parties, intending to be legally bound, hereby agree as follows.

 

Article 1.        DEFINITIONS

 

The following terms as used herein shall have the following meaning:

 

"Affiliate" shall mean any corporation or non-corporate business entity which controls, is controlled by, or is under common control with a party to this Agreement. A corporation or non-corporate business entity shall be regarded as in control of another corporation if it owns, or directly or indirectly controls, at least fifty (50%) percent of the voting stock of the other corporation, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity.

 

 

"Agreement" or "License Agreement" shall mean this Agreement, including all APPENDICES.

 

“COMPANY’s Development Plan” shall mean the plan detailed in APPENDIX A of this Agreement, which may be amended upon written agreement by the parties.

 

"Dollars" shall mean United States dollars.

 

"Field of Use" shall mean all fields.

 

"Indemnitees" shall mean the Inventors and their respective heirs, executors, administrators and legal representatives and each of EMORY, CHILDREN’S, UABRF, their Affiliates, their trustees, directors, officers, employees, agents, contractors, and students, successors and legal representatives.

 

“Inventors” shall mean the inventors of the Licensed Patents.

 

"Licensed Patents" shall mean the patents and/or patent applications identified in APPENDIX B, together with any and all substitutions, extensions, divisionals, continuations, continuations-in-part (to the extent that the claimed subject matter of such continuations-in-part is disclosed in the parent License Patent and rights to the continuations-in-part are not obligated to a third party), foreign counterparts of such patent applications and any patents which issue thereon anywhere in the world, including reexamined and reissued patents.

 

"Licensed Product(s)" shall mean any process, service or product covered by a Valid Claim of any Licensed Patent or that incorporates or uses any Licensed Technology. For the avoidance of doubt, a process, service or product is a Licensed Product if it incorporates Licensed Technology and adds additional features.

 

"Licensed Know-How" shall mean tangible and intangible technical information found in research notebooks, folders, e-files (CDs, diskettes, tape, hard drives, external drives, third-party note taking applications, cloud and flash storage) containing the researchers and/or inventors’ work related to the Licensed Patents including but not limited to:

 

 

Preclinical

 

Materials, methods, techniques and observations related to:

 

	a)	Preclinical animal efficacy and toxicity data
	b)	Viral transduction of immune effector cells
	c)	Generation of chemotherapy resistant immune effector cells
	d)	Transducing CARs into immune effector cells

 

Regulatory

 

Pre-IDE briefing documents

Pre-IDE meeting submission and minutes

IDE application/submission

IDE approval

Pre-IND briefing documents (if any)

Pre-IND submission

Pre-IND meeting notes

Pre-IND meeting minutes

IND submission

IND meeting notes and minutes

IND correspondence and approvals

Any regulatory correspondence, submissions, requests for meeting, minutes and approval of protocol changes

All IRB submissions, comments, revisions and resubmissions (if any) related to clinical trials

 

CMC

 

Manufacturing SOPs/Protocols related to CMC

 

	a)	Manufacturing SOPs/Protocols for CMC for single and multi-site cross validation
	b)	All analytical data and analysis performed in preparation for CMC submission, including data for validation and qualification of assays
	c)	All third party contracts and correspondence including, data, SOPs, and analysis generated in preparation for CMC submission (e.g., CROs that contributed mycobacterial analysis, mass spec, viral contamination analysis etc.)
	d)	Most recent Pharm/Tox data updates
	e)	Any data and analysis prepared for CMC filing, including third party contractors
	f)	Regulatory documents related to anticipated CMC filings

 

 

Clinical

 

Draft Clinical trial protocol(s)

Final Clinical trial protocol(s)

Statistical design(s) and protocols for clinical trials

Any minutes/submissions/correspondence from CRTC (Cancer center Translational Research Committee) meeting

Any minutes/submissions/correspondence from NIH RAC

Any minutes/submissions/correspondence from Brain Tumor Working Group

Copies of all grants and grant applications that funded the research and clinical studies

All existing manuscripts in preparation or submission covering the research or clinical studies

Any pharmacy reports related to study drug shipping, handling, and distribution to investigators, including pharmacy contacts at each clinical site

 

Contact information for study participants, including but not limited to investigators, scientific advisors, statisticians, nurse coordinators, quality and regulatory personnel.

 

Any interim and final results from clinical studies including:

 

a)

Current patient responses and disease free survival, including follow up data and chart entries to verify response and survival

b)

Redacted patient case record forms (CRFs), lab tests, CT’s, Pet scans,

c)

Most recent Pharm/Tox data and patient safety updates, and

 

(collectively, “Know-How”), which are known, learned, invented, or developed solely by the Inventors and disclosed to LICENSOR by the Inventors as of the Effective Date to the extent that (i) in the reasonable judgment of COMPANY and LICENSOR, such Know-How is required for the manufacture, use, development, testing, marketing, export, import, offer for sale or sale of any Licensed Product and (ii) LICENSOR possesses the right to license the use of such Know-How to COMPANY for commercial purposes.

 

“Licensed Technology” means Licensed Patents and Licensed Know-How.

 

"Licensed Territory" means the world.

 

"Net Selling Price" of Licensed Products shall mean the gross selling price paid by a purchaser of a Licensed Product to COMPANY, an Affiliate or Sublicensee of COMPANY, or any other party authorized by COMPANY to sell Licensed Products less the following discounts:

 

	a)	customary trade, quantity and cash discounts actually allowed and taken, including rebates granted to managed health care or governmental organizations;
	b)	credits actually given for retroactive price reductions, rejected or returned Licensed Products;
	c)	freight, postage, shipping, transportation and insurance costs, if actually paid and separately itemized on the invoice paid by the purchaser; and
	d)	excise taxes, customs duties and other governmental charges included in the invoiced amount.

 

 

Where a Sale is deemed [*****] of Licensed Products for other than a selling price stated in cash, the term "Net Selling Price" shall mean the average gross selling price billed by COMPANY in consideration of the Sale of comparable Licensed Products during the [*****] period immediately preceding such Sale, without [*****]. If no Sales of Licensed Products have occurred in the preceding [*****], then the parties shall, in good faith, negotiate the cash value of such Sale. In the event that the parties cannot agree on the Net Selling Price within [*****] of beginning such negotiations, the Net Selling Price shall be determined by a mutually agreeable qualified appraiser.

 

Notwithstanding the foregoing in this Section, amounts received by COMPANY, its Affiliates or Sublicensees of COMPANY or its Affiliates for the sale of Licensed Products among COMPANY, its Affiliates and Sublicensees for resale shall not be included in the computation of Net Selling Price hereunder.

 

“Prosecution and Maintenance” or “Prosecute and Maintain” shall mean, with respect to a particular patent application or patent, the preparation, filing, prosecution and maintenance of such patent or patent application, as well as re-examinations, reissues, applications for patent term extensions and the like with respect to such patent or patent application, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to such patent or patent application.

 

“Regulatory Documents” means any document or information prepared for submission to, or submitted to any Governmental Authority with respect to the Licensed Patents that have been provided to LICENSOR and/or an Inventor. Regulatory Documents shall include, but not be limited to, documents related to investigational new drug applications.

 

"Sale," “Sell” or "Sold" shall mean the sale, transfer, exchange, or other disposition of Licensed Products whether by gift or otherwise by COMPANY, its Affiliates, Sublicensees or any third party authorized by COMPANY to make such sale, transfer, exchange or disposition. Sales of Licensed Products shall be deemed consummated upon the first to occur of: (a) receipt of payment from the purchaser; (b) delivery of Licensed Products to the purchaser or a common carrier; (c) release of Licensed Products from consignment; (d) if deemed Sold by use, when first put to such use; or (e) if otherwise transferred, exchanged, gifted, or disposed of, when such transfer, exchange, gift, or other disposition occurs.

 

 

To the extent that a Licensed Product is provided for a Humanitarian Purpose or is distributed under an Investigational New Drug Application (“IND”) or its domestic or foreign equivalent, the distribution will not be considered a Sale if the Net Selling Price does not exceed the Absorbed Cost thereof. Licensed Product distributed for a “Humanitarian Purpose” shall mean: 1) distribution through programs providing Licensed Product to government agencies or not-for-profit organizations established for charitable, humanitarian, or educational purposes such as organizations classified by the Internal Revenue Service under 501(c)(3) or (4),or any national or international equivalent thereof; and 2) distribution through programs providing Licensed Products to individual physicians, pharmacies or patients in countries that are listed, at the time of first sale of any Licensed Product by the World Bank, as a low or low middle income country which are listed in attached APPENDIX I. If the actual Net Selling Price of products distributed for a Humanitarian Purpose or under an IND exceeds the Absorbed Costs, the distribution shall be deemed to be a Sale. For these purposes, “Absorbed Costs” shall mean the amounts allocated by COMPANY for distribution of a Licensed Product calculated in accordance with reasonable cost accounting methods consistent with the way COMPANY allocates such costs to other products and which shall be calculated from: (i) direct labor used in support of manufacturing operations; (ii) materials; (iii) overhead costs including facility and administrative expenses; and (iv) reasonable third party costs.

 

"U.S. Government Licenses" shall mean the non-exclusive license to the U.S. Government or agencies thereof pursuant to NIH grant No.: [*****], copies of which are attached hereto as APPENDIX C.

 

"Valid Claim" shall mean a claim in an unexpired patent or pending patent application so long as such claim shall not have been irrevocably abandoned or held invalid in an unappealable decision of a court or other authority of competent jurisdiction in the relevant country.

 

Article 2.     GRANT OF LICENSE

 

2.1       License. LICENSOR hereby grants COMPANY and its Affiliates an exclusive, sublicenseable right and license, subject to Sections 2.2 through 2.6, in and to the Licensed Patents to make, have made, use, advance, manufacture, have manufactured, commercialize, have commercialized, use, have used, import, export, rent, lease, distribute, offer for sale, and sell, or have sold Licensed Products in the Field of Use in the Licensed Territory during the term of this Agreement. LICENSOR hereby grants COMPANY and its Affiliates an exclusive right and license, subject to Sections 2.2 through 2.7 in and to their interest in the Licensed Know-How to develop, have developed, make, have made, advance, manufacture, have manufactured, commercialize, use, have used, import, export, rent, lease, distribute, offer for sale, and sell, or have sold Licensed Products in the Field of Use in the Licensed Territory during the term of this Agreement. LICENSOR shall use reasonable efforts to transfer or provide to COMPANY a copy of Licensed Know-How requested by the COMPANY, which has not been previously provided, within [*****] of any written request. LICENSOR shall use reasonable efforts to transfer or provide to COMPANY a copy of all Regulatory Documents (i) within [*****] of LICENSOR’s receipt of such from the Inventors or (ii) within [*****] of the submission or receipt of such Regulatory Documents by LICENSOR, whichever shall occur first. For the avoidance of doubt, LICENSOR shall promptly after the Effective Date transfer to COMPANY a copy any investigational new drug application related to any Licensed Patent.

 

 

2.2     Government Rights. COMPANY acknowledges that LICENSOR and COMPANY may have certain obligations and the United States government may have certain rights in the Licensed Technology if such was developed with any assistance through grants or contracts from the United States. COMPANY hereby warrants that it shall take all action necessary to satisfy and to enable LICENSOR to satisfy such obligations. If the United States government should take action which [*****], LICENSOR or COMPANY may [*****] upon reasonable prior notice or [*****] upon reasonable prior notice to [*****] (including without limitation with respect to [*****]). LICENSOR will provide reasonable prior notice to enable COMPANY to [*****]. COMPANY shall [*****] prior to the date of such action.

 

2.3     Research Agreement. In the event COMPANY or its Affiliates wish to conduct research on the Licensed Patents or any Licensed Product with Inventors or LICENSOR, this research will be the subject of a separate research collaboration agreement between EMORY, UABRF, or CHILDREN’S (as applicable) and COMPANY to be negotiated in good faith by the relevant Parties.

 

2.4     Retained License. The exclusive license granted herein is further conditional on the right retained by LICENSOR, on behalf of themselves, their employees and research collaborators, to make, have made, use, import, and transfer Licensed Products and practice the Licensed Technology for non-commercial research, educational and non-commercial and humanitarian clinical purposes.

 

2.5     Sublicenses. Upon written approval from EMORY, on behalf of LICENSOR, such approval not to be unreasonably withheld, COMPANY may grant sublicenses to third parties (“Sublicensees”) with financial terms and conditions that are at least as favorable to LICENSOR and that are consistent with the other terms and conditions of this Agreement, provided that COMPANY shall be responsible for the obligations of its Sublicensees that are relevant to this Agreement and remain responsible for any reporting and any payment of all fees and royalties due under this Agreement. Subject to the sublicensing terms in this Section 2.5, Sublicensees may be permitted to further sublicense their rights to practice the Licensed Patents. COMPANY shall not enter into any sublicense without fully and completely complying with Section 15.1 herein.

 

2.5.1       COMPANY shall include in any sublicense granted pursuant to this Agreement, a provision requiring the Sublicensee to indemnify Indemnitees and maintain liability coverage to the same extent that COMPANY is so required pursuant to Section 10.3 of this Agreement.

 

 

2.5.2       COMPANY shall include in any sublicense granted pursuant to this Agreement, a provision that grants EMORY the right to audit the Sublicensee to the same extent that EMORY has the right to audit the COMPANY pursuant to Section 4.4 of this Agreement.

 

2.5.3       COMPANY shall provide EMORY with copies of all sublicense agreements and any amendments and terminations within [*****] of their execution date, which, if redacted, must include the relevant provisions under this Article 2 and [*****] terms of the sublicense; the disclosure of sublicense agreements to EMORY shall be subject to the confidentiality obligations set forth in this agreement.

 

2.5.4       COMPANY shall ensure that any sublicense or distributor agreements will include a provision that causes automatic termination of the sublicense or distribution agreement in the event that a Sublicensee or distributor challenges, either directly or indirectly, the validity, enforceability or scope of any claim within the Licensed Patents in a court or other governmental agency of competent jurisdiction, including in a reexamination or opposition proceeding.

 

2.5.5       If this Agreement terminates for any reason other than Expiration, (i) COMPANY shall notify the Sublicensee of the termination, (ii) the sublicense will terminate simultaneously with the termination of this Agreement, and (iii) upon mutual agreement, the Sublicensee may enter into a license agreement with LICENSOR with respect to the rights and terms originally sublicensed to it by COMPANY.

 

2.5.6       Subject to the sublicensing terms in this Section 2.5, Sublicensees may be permitted, on a case-by-case basis, to further sublicense their rights to practice the Licensed Patents.  Prior to the execution of any sublicense agreement which allows a Sublicensee to further sublicense, COMPANY shall present to EMORY a reasonably detailed business justification for the proposed sublicense, as well as [*****], for LICENSOR’s review and approval, such approval not to be unreasonably withheld.  COMPANY shall proceed with execution of the proposed sublicense agreement only with EMORY’s prior written consent, such consent not to be unreasonably withheld.

 

2.6     No Implied License. The license and rights granted in this Agreement shall not be construed to confer any rights upon COMPANY, its Affiliates, or Sublicensees by implication, estoppel, or otherwise as to any technology not specifically identified in this Agreement as Licensed Technology.

 

2.7     U.S. Manufacturing. To the extent that any Licensed Technology is developed using any funding from the United States government, COMPANY agrees to use its best efforts to substantially manufacture in the United States, any Licensed Products sold in the United States unless any waivers required are obtained from the United States government. COMPANY shall notify EMORY if it desires to request any such waivers, which request EMORY or UABRF (as applicable) shall make to the United States government on COMPANY’s behalf.

 

 

Article 3. CONSIDERATION FOR LICENSE

 

3.1     License Fee. As partial consideration for the license granted to COMPANY under this Agreement, COMPANY shall pay EMORY on behalf of the LICENSOR a license fee in the amount of [*****] Dollars within [*****] of the Effective Date of this Agreement.

 

3.2     Running Royalties. As partial consideration for the license granted to COMPANY under this Agreement, COMPANY shall pay EMORY on behalf of the LICENSOR a total royalty equal to the percentage set forth on APPENDIX D times the Net Selling Price of all Licensed Products Sold during the term of this Agreement by COMPANY, its Affiliates, its Sublicensees or any third party authorized by COMPANY to Sell Licensed Products. Royalties shall be due and payable on a quarterly basis (March 31, June 30, September 30 and December 31) [*****] following the end of the calendar quarter in which such amounts were received by COMPANY.

 

3.2.1       Global Access Sales. Notwithstanding the foregoing, COMPANY, its Affiliates or Sublicensees shall pay EMORY on behalf of the LICENSOR [*****] total royalty on Net Sales of Licensed Products sold in a country that is listed, at the time of first sale of any Licensed Product in any country, by the World Bank as a low or low middle income country or which is listed in attached APPENDIX I, if the Net Selling Price of such Licensed Products exceeds the Absorbed Cost thereof. Should the Net Selling Price of such Licensed Products not exceed the Absorbed Cost thereof, such sales shall be treated as Humanitarian and no royalty shall be due.

 

3.2.2       Reduction of Royalties-Third Party Royalties. If, at any time, COMPANY discovers that any Licensed Product or the use thereof in the Field of Use or the practice of any Licensed Patent infringes claims of an unexpired patent or patents other than those in the Licensed Patents, COMPANY may, if it has not already done so, negotiate with the owner of such patents for a license on such terms as COMPANY deems appropriate. Should the license with the owner of such patents require the payment of royalties or other consideration to such owner, then the royalties otherwise payable under this Agreement may be reduced by the amount payable [*****] to the other patent owner(s). Notwithstanding the foregoing, however, in no event shall the royalties due to EMORY on behalf of the LICENSOR on Net Sales of such Licensed Products in any country be reduced by more than [*****] of the Running Royalty Percent as identified in APPENDIX D. If a combination product incorporates a product based on a patent (other than a Licensed Patent) to which COMPANY has secured rights via an agreement with the patent owner and the owner of such patent requires the payment of royalties or other consideration to such owner, then the royalties otherwise payable under this Agreement may be reduced by the amount payable [*****] to the other patent owner(s), but in no event shall the royalties payable under this Agreement be reduced by more than [*****].

 

 

3.2.3      Minimum Royalties. In the event that, following the first Sale of a Licensed Product (“First Sale”), the aggregate royalties paid to EMORY on behalf of the LICENSOR during any calendar year pursuant to Section 3.2 hereof do not exceed the minimum royalty set forth in APPENDIX E, COMPANY shall pay to EMORY on behalf of the LICENSOR no later than [*****] following the last day of such calendar year the difference between such minimum royalty amount and the actual royalties paid.

 

3.3     Sublicensee Payments. Within [*****] of receipt by COMPANY, COMPANY shall pay to EMORY on behalf of the LICENSOR as specified below, a percentage of any fees or payments paid to COMPANY by a Sublicensee (“Sublicensee Percentage”) as consideration for a sublicense grant under this Agreement. Such Sublicense Percentage shall be applied to any payments made to COMPANY by a Sublicensee, including but not limited to any initial licensing fees, milestone fees, maintenance fees, and premium equity payments, to the extent any such premium equity payment is directly attributable to the sublicense of the Licensed Patents and Licensed Technology.

 

Percentage	Sublicense Executed
15%	Prior to completion of a Phase I clinical trial
10%	After completion of any Phase I clinical trial
5%	After completion of any Phase II clinical trial
2%	After completion of any Phase IIb clinical trial
1%	After completion of any Phase III clinical trial

 

For purposes of this Agreement, premium equity payments shall mean the positive difference between the amount paid for COMPANY equity by a Sublicensee and the fair market value of said equity. The fair market value shall be the amount paid in the last round of financing if within [*****], or, if no round of financing occurred in that time, shall be agreed upon by the parties.

 

3.4     Milestone Payments. COMPANY shall pay to EMORY on behalf of the LICENSOR a Milestone Payment in the amount specified in APPENDIX F no later than [*****] after the occurrence of the corresponding Milestone Event. To the extent that a Milestone Payment is due to the COMPANY from a Sublicensee, the COMPANY shall pay to EMORY on behalf of the LICENSOR the amount of the Milestone Payment due.

 

3.5     License Maintenance Fees. In the event no Milestone Payment has been paid to EMORY on behalf of the LICENSOR prior to an anniversary of the Effective Date as set forth on APPENDIX G, COMPANY shall pay to EMORY on behalf of the LICENSOR the corresponding Maintenance Fee. No Maintenance Fee pursuant to this Section 3.5 shall be payable by COMPANY in the event it has achieved at least one Milestone Event and paid the corresponding Milestone Payment.

 

3.6     Reimbursement for Patent Expenses.

 

3.6.1      COMPANY shall reimburse EMORY on behalf of the LICENSOR for all fees, costs, and expenses incurred by EMORY and/or LICENSOR after the Effective Date and during the term of this Agreement related to Prosecuting or Maintaining the Licensed Patents in the Licensed Territory. COMPANY shall deliver such payment to EMORY on behalf of the LICENSOR within [*****] after EMORY on behalf of the LICENSOR provides COMPANY with detailed invoices of the amount of such fees, costs, and expenses. To the extent that COMPANY does not remit payment of any uncontested amounts within [*****] of notification, a late payment charge of [*****] will be assessed against the COMPANY.

 

3.6.2       COMPANY shall reimburse EMORY on behalf of the LICENSOR for all fees, costs, and expenses incurred by LICENSOR as of the Effective Date related to Prosecuting or Maintaining the Licensed Patents. These fees, costs, and expenses incurred up to the Effective Date are estimated to be [*****], however this amount may be subject to reasonably change upon final notification to COMPANY. COMPANY shall deliver such payment to EMORY on behalf of the LICENSOR the earlier of [*****] from the Effective Date or [*****] of the [*****] and receipt by COMPANY of a detailed invoice of such costs.

 

3.7     Tax Payments. All payments made to EMORY on behalf of the LICENSOR under this Agreement shall be made free and clear of any tax, withholding or other governmental charge or levy (other than taxes imposed on the net income of LICENSOR), all such non-excluded amounts being “Taxes.” Should the COMPANY be obligated by law to withhold any Taxes on such payments, the payment due hereunder shall be increased such that after the withholding of the appropriate amount EMORY on behalf of the LICENSOR receives the amount that would have been paid but for the Taxes withheld. Should LICENSOR be obligated to pay such Taxes, and such Taxes were not satisfied by way of withholding, COMPANY shall promptly reimburse EMORY on behalf of the LICENSOR for such payment, in an amount such that after the payment of the Taxes, LICENSOR has received the same amount that it would have received had such Taxes not been payable.

 

 

Article 4.       REPORTS AND ACCOUNTING

 

4.1.    Progress Reports. Within [*****] after [*****] of each calendar year, COMPANY shall provide EMORY on behalf of the LICENSOR with a written report detailing the activities of the COMPANY relevant to the COMPANY’s Development Plan and the development and commercialization of Licensed Products. For avoidance of doubt, non-receipt of such written report within the specified time period shall [*****].

 

4.2.    Royalty Reports. Beginning [*****], during the term of this Agreement, COMPANY shall provide EMORY on behalf of the LICENSOR written reports [*****] until the first Sale of a Licensed Product and quarterly thereafter showing:

 

	i.	the occurrence of any event triggering a Milestone Payment obligation or any other payment in accordance with Article 3;
	ii.	a summary of all reports provided to COMPANY by COMPANY'S Sublicensees, including the names and addresses of all Sublicensees;
	iii.	the amount of any consideration received by COMPANY from Sublicensees and an explanation of the contractual obligation satisfied by such consideration;
	iv.	within a given fiscal quarter, the gross selling price and the number of units of all Licensed Products (identified by product number/name) Sold in each country of the Licensed Territory, together with the calculations of Net Selling Price;
	v.	within a given fiscal quarter, the royalties payable in Dollars which accrued hereunder; and
	vi.	within a given fiscal quarter, the exchange rates, if any, used in determining the amount due.

 

4.3.    Records. During the term of this Agreement and for a period of [*****] thereafter, COMPANY shall keep at its principal place of business true and accurate records of all Sales in accordance with generally accepted accounting principles in the respective country where such Sales occur and in such form and manner so that all royalties owed to EMORY on behalf of the LICENSOR may be readily and accurately determined. COMPANY shall furnish EMORY on behalf of the LICENSOR copies of such records upon EMORY’s request.

 

 

4.4.    Right to Audit. EMORY on behalf of the LICENSOR shall have the right, upon prior notice to COMPANY, its Affiliates or a Sublicensee, not more than once in each [*****] period and the calendar year immediately following termination of the Agreement, through an independent certified public accountant selected by EMORY on behalf of the LICENSOR, to have access during normal business hours as may be reasonably necessary to examine the records of COMPANY, its Affiliates or Sublicensee to include, but not be limited to, sales invoice registers, sales analysis reports, original invoices, inventory records, price lists, sublicense and distributor agreements, accounting general ledgers, and sales tax returns, in order to verify the accuracy of the of the calculation of any payment due under this Agreement. If such independent public accountant's report shows any underpayment of royalties by COMPANY, its Affiliates or Sublicensees, within [*****] after COMPANY'S receipt of such report, COMPANY, or its Affiliates, shall remit or shall cause its Sublicensees to remit to EMORY on behalf of the LICENSOR:

 

	(i)	the amount of such underpayment; and
	(ii)	if such underpayment exceeds [*****] percent of the total royalties owed for the fiscal year then being reviewed, the reasonably necessary fees and expenses of such independent public accountant performing the audit.

 

Otherwise, EMORY's accountant's fees and expenses shall be borne by LICENSOR in accordance with the terms of the agreements between EMORY and CHOA and EMORY and UABRF.

 

Article 5.       PAYMENTS

 

5.1.    Payment Due Dates. Royalties shall accrue commencing upon the first Sale of a Licensed Product in the Licensed Field of Use in any country in the Licensed Territory. Royalties and sublicense fees payable to EMORY on behalf of the LICENSOR as a result of activities occurring during the period covered by each royalty report provided for under Article 4 of this Agreement shall be due and payable on the date such royalty report is due. All other payments required under this Agreement, if not specified otherwise in this Agreement, shall be payable within [*****] of the receipt by Company of payment or other due date of each payment.

 

5.2.    Payment Delivery. Unless otherwise requested by EMORY, all payments due to LICENSOR under this Agreement shall be made in person or via the United States mail or private carrier to the following address:

 

Emory University

Attn: Director, Office of Technology Transfer

1599 Clifton Rd. 4th Floor

Atlanta, Georgia 30322

Facsimile: (404) 727-1271

 

Any payment in excess of [*****] dollars or originating outside of the United States shall be made by wire transfer to an account of EMORY for and on behalf of LICENSOR designated by EMORY from time to time and royalty reports shall be sent by facsimile or express courier to the Director, Office of Technology Transfer on the same date. Royalty reports may also be transmitted via email to OTT-Legal@EMORY.edu, provided that if no confirmation of receipt is received, COMPANY agrees to forward the report via facsimile or express courier.

 

5.3.    Currency Conversion. Except as hereinafter provided in this Section 5.3, all royalties shall be paid in U.S. Dollars. If any Licensed Products are Sold for consideration other than Dollars, the Net Selling Price of such Licensed Products shall first be determined in the foreign currency of the country in which such Licensed Products are Sold and then converted to Dollars at a ninety (90)-day trailing average published by the Wall Street Journal (U.S. editions), Bloomberg or equivalent for conversion of the foreign currency into Dollars on the last day of the quarter for which such payment is due.

 

5.4.    Interest. Royalties and other payments required to be paid by COMPANY pursuant to this Agreement shall, if overdue, bear interest until payment at a rate [*****]. The interest payment shall be due from the day the original payment was due until the day that the payment was received by EMORY. The payment of such interest shall not foreclose EMORY and/or LICENSOR from exercising any other rights it may have because any payment is overdue. Should any overdue payment be collected through a third party service due to non-payment, COMPANY agrees to pay any fees charged by such service in addition to any overdue delinquency.

 

 

Article 6.       DILIGENCE AND COMMERCIALIZATION

 

6.1.     Diligence. COMPANY represents and warrants that it has the necessary expertise and will, as appropriate, acquire the necessary resources to fully develop and commercialize Licensed Products. COMPANY shall use its best efforts, either directly or through Affiliates or Sublicensees, throughout the term of this Agreement to comply with COMPANY's Development Plan and to bring Licensed Products to market through a thorough, vigorous, and diligent program for exploitation of the rights and license granted in this Agreement to COMPANY and to create, supply, and service in the Licensed Territory as extensive a market as reasonably possible and shall include substantially similar diligence and commercialization terms in any sublicense agreement. In no instance shall COMPANY's best efforts be less than efforts customary in COMPANY's industry for similar technologies utilizing those resources that would be employed by COMPANY of a product or compound of similar market potential at a similar stage in its development or product life as the Licensed Products (taking into account, without limitation, issues of safety and efficacy, product profile, intellectual property situation, regulatory environment and other relevant scientific and commercial factors). If EMORY on behalf of the LICENSOR reasonably determines that COMPANY is failing to meet its diligence requirement for any particular Licensed Product, EMORY on behalf of the LICENSOR may, upon [*****] prior written notice specifying the details of the suspected breach, terminate or partially terminate this Agreement and grant third parties rights in the Licensed Technology, unless within such [*****] period, COMPANY can provide reasonable evidence of meeting the requirements under this Agreement.

 

6.2.    Development Milestones. COMPANY shall adhere to the schedule of development milestones and dates set forth in APPENDIX H. If COMPANY fails to meet any deadline set forth in APPENDIX H, due to a failure to reasonably demonstrate sufficient diligence through the expenditure of time, money or effort in planning, working and undertaking objectives in accordance with the Development Plan, EMORY on behalf of the LICENSOR, may, upon [*****] prior written notice, terminate or partially terminate this Agreement and grant third parties rights in the Licensed Patents and Licensed Technology unless COMPANY cures its failure within a [*****] remedy period. If COMPANY fails to meet any deadline set forth in APPENDIX H and such failure is not attributable to [*****], and COMPANY has reasonably demonstrated sufficient diligence [*****], then EMORY on behalf of the LICENSOR and COMPANY agree to enter good-faith negotiations to adjust the development milestones. If, upon [*****] following the passing of a development milestone, the parties are unable to reach agreement on restating the milestone deadlines, EMORY on behalf of the LICENSOR may terminate or partially terminate this Agreement and grant third parties rights in the Licensed Patents and Licensed Technology. The Parties acknowledge and agree that the Development Plan, and the development and commercialization milestones, each set forth on attached Exhibits A and H, are reasonable. If, following the first adjustment of the development milestones, COMPANY fails to meet the restated milestone deadlines and such failure is not attributable to [*****], then EMORY on behalf of the LICENSOR may, upon written notice, terminate or partially terminate this Agreement and grant third parties rights in the Licensed Technology.

 

6.3.    Sublicensee Performance. LICENSOR agrees that a Sublicensee’s or Affiliate’s performance of its diligence obligations regarding a Licensed Product as set forth in the sublicense agreement shall be deemed to be performance by COMPANY of its diligence obligations for such Licensed Product under this License Agreement, including, but not limited to, those set forth in Article 6 hereof. COMPANY further agrees to attach copies of pertinent portions of this Agreement, as jointly redacted by COMPANY and EMORY, to executed sublicense agreements and to provide a report on a Sublicensee’s performance as part of its reporting obligations under Article 4.

 

 

Article 7.      PATENT PROSECUTION

 

7.1.    Licensed Patents. The Prosecution and Maintenance of the Licensed Patents shall be the primary responsibility of EMORY on behalf of the LICENSOR. EMORY on behalf of the LICENSOR shall select such legal counsel as it deems appropriate to assist it in this process, provided that such counsel is reasonably acceptable to COMPANY.

 

7.1.1        Comment. EMORY on behalf of the LICENSOR shall provide COMPANY with copies of all filings and official correspondence pertaining to such Prosecution and Maintenance of the Licensed Patents so as to give COMPANY an opportunity to advise and reasonably cooperate with EMORY on behalf of the LICENSOR in such Prosecution and Maintenance. In the event LICENSOR desires to transfer the prosecution of any of the Licensed Patents to new patent counsel, COMPANY’s written consent shall be obtained, which consent shall not be unreasonably withheld or delayed.

 

7.1.2        New Applications. COMPANY shall notify EMORY on behalf of the LICENSOR in writing of the countries in which COMPANY wishes additional patent applications to be filed under the Licensed Patents, including but not limited to national phase filings and regional registrations. LICENSOR shall, at COMPANY’s expense, promptly file such additional patent applications. LICENSOR may, at its own expense, file patent applications in any country in which COMPANY elects not to file and such applications shall not be subject to any license granted to COMPANY hereunder.

 

7.1.3        Reimbursement. If COMPANY should fail to timely make reimbursement for patent expenses for any Licensed Patent, LICENSOR, in addition to any other remedies under the Agreement, shall have no further obligation to Prosecute or Maintain such Licensed Patent(s). COMPANY, upon [*****] written notice, may advise EMORY on behalf of the LICENSOR that it no longer wishes to pay expenses for Prosecution or Maintenance of one or more Licensed Patents. LICENSOR may, at its sole option, elect to pay such expenses and, if so, such patents or patent applications shall cease to be subject to any license granted to COMPANY hereunder.

 

7.1.4        Information to the COMPANY. EMORY on behalf of the LICENSOR shall use reasonable efforts to provide COMPANY with copies of all patent correspondence relating to the Licensed Patents. EMORY on behalf of the LICENSOR shall provide copies of all patent applications and all filings, correspondence and other related documentation pertaining to prosecutorial matters arising from the patent prosecution activities, including, but not limited to, all office actions, requests for examinations and restriction requirements.

 

 

7.2     Extension of Licensed Patents. LICENSOR shall direct Prosecution and Maintenance of the Licensed Patents, including any extension to the term of the Licensed Patents. COMPANY, at its expense, may request in writing at least [*****] before expiration of the Licensed Patent that LICENSOR have the normal term of any Licensed Patents extended or restored under any country's procedure for extending patent term. Royalties shall be payable until the end of the extended term of the patent. In the event that COMPANY does not elect to extend a Licensed Patent, LICENSOR may, at its own expense, effect such extension and, if LICENSOR elects to pay such expenses, such extended Licensed Patents shall not be subject to any license granted hereunder subsequent to its non-extended expiration date.

 

Article 8.       INFRINGEMENT

 

8.1     The Parties shall promptly notify each other of any suspected infringement of any Licensed Patents.

 

8.1.1      During the Term, COMPANY shall, at its expense, have the right to enforce any Licensed Patents against such infringer and may defend any declaratory judgment action brought against it alleging the invalidity of a Licensed Patent. COMPANY agrees to defend LICENSOR against any counterclaim brought against it in such action. LICENSOR shall cooperate with reasonable requests from COMPANY in such effort, at COMPANY'S expense, including being joined as a party to such action, if necessary. COMPANY shall reimburse LICENSOR for actual costs incurred, including reasonable attorneys’ fees, as part of any action brought by COMPANY.

 

8.1.2      COMPANY shall use its best efforts to terminate any suspected infringement of any Licensed Patents or resolve any other actual or potential claim(s) or cause(s) of action without resorting to litigation, which may include negotiating and executing a sublicense agreement that complies with the terms of this Agreement. COMPANY understands and agrees that any sublicense entered into under this Section must satisfy all requirements of a sublicense as set forth in Section 2.5, including obtaining written approval from EMORY on behalf of the LICENSOR. Before COMPANY commences an action with respect to any infringement or potential infringement or commences an action filed by, or responds to an allegation raised by, a third party, it shall give careful consideration to the views and the potential effects on the public interest in making its decision whether or not to sue or how to respond. LICENSOR shall use reasonable efforts in accordance with their own policies and procedures to cooperate with COMPANY in connection with any such remedial action undertaken by COMPANY under this Section, and COMPANY shall be responsible for any costs and expenses incurred by LICENSOR associated with such cooperation.

 

 

8.1.3      COMPANY shall not enter into any settlement agreement, voluntary dismissal, consent judgment, agreement pursuant to Section 8.1.2., or other voluntary final disposition in any action regarding the Licensed Patents, without the express written consent of EMORY on behalf of LICENSOR, which shall not be unreasonably withheld. For the avoidance of doubt, COMPANY acknowledges that it shall not be unreasonable for LICENSOR to withhold consent to any settlement agreement, voluntary dismissal, consent judgment, agreement pursuant to Section 8.1.2., or other voluntary final disposition in any action regarding the Licensed Patents that does not include a complete release of such party from all liability or that contains or contemplates any payment by, or injunctive or equitable relief binding upon such party. Any amounts received shall first be applied in satisfaction of the actual and reasonable costs and expenses incurred by COMPANY and any balance shall be deemed to be proceeds of Sales of Licensed Products in the fiscal quarter received.

 

8.2     If COMPANY fails, within [*****] after receiving notice of a potential infringement, to institute an action against such infringer or notifies LICENSOR that it does not plan to institute such action, then LICENSOR shall have the right to do so at its own expense. COMPANY shall cooperate with LICENSOR in such effort including being joined as a party to such action if necessary. LICENSOR shall be entitled to retain all damages or costs awarded in such action. Should either LICENSOR or COMPANY be a party to a suit under the provisions of this Article and thereafter elect to abandon such suit, the abandoning party shall give timely notice to the other party who may, at its discretion, continue prosecution of such suit at its own expense.

 

Article 9.       LIMITED WARRANTY AND EXCLUSION OF WARRANTIES

 

9.1     Representation by LICENSOR. Each of the entities comprising the LICENSOR represents and warrants that it has the right and authority to enter into this Agreement and that, to the best of its knowledge, neither the execution of this Agreement nor the performance of its obligations hereunder will constitute a breach of the terms and provisions of any other agreement to which it is a party. EMORY represents that, to the best of its knowledge, as of the Effective Date, the LICENSOR is the owner of the Licensed Technology and has the right to issue licenses to the same. LICENSOR does not warrant the validity of the Licensed Patents licensed hereunder and makes no representation whatsoever with regard to the scope of the Licensed Patents or that such Licensed Patents or Licensed Technology may be exploited by COMPANY or its Affiliates or Sublicensees without infringing other patents.

 

 

 

9.2     Merchantability and Exclusion of Warranties. COMPANY possesses the necessary expertise and skill in the technical areas pertaining to the Licensed Products and Licensed Technology to make, and has made, its own evaluation of the capabilities, safety, utility and commercial application of the Licensed Products and Licensed Technology. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, COMPANY MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, REGARDING THE RESULTS OF ITS EFFORTS TO DEVELOP, MANUFACTURE OR COMMERCIALIZE ANY LICENSED PRODUCT. LICENSOR DOES NOT MAKE ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE LICENSED TECHNOLOGY OR LICENSED PRODUCTS AND EXPRESSLY DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER IMPLIED WARRANTIES WITH RESPECT TO THE CAPABILITIES, SAFETY, UTILITY, OR COMMERCIAL APPLICATION OF THE LICENSED TECHNOLOGY OR LICENSED PRODUCTS.

 

Article 10.       DAMAGES, INDEMNIFICATION AND INSURANCE

 

10.1   No Liability. LICENSOR shall not be liable to COMPANY or COMPANY'S Affiliates, or customers and/or Sublicensees of COMPANY or COMPANY’S Affiliates, for compensatory, special, incidental, indirect, consequential or exemplary damages resulting from the manufacture, testing, design, labeling, use or sale of Licensed Products.

 

10.2   Indemnification. COMPANY shall defend, indemnify, and hold harmless the Indemnitees, from and against any and all claims, demands, loss, liability, expense, or damage (including reasonable investigative costs, court costs and attorneys' fees) (“Claims”) Indemnitees may suffer, pay, or incur as a result of claims, demands or actions against any of the Indemnitees to the extent caused by or resulting from, in whole or in part, COMPANY'S or COMPANY'S Affiliates, contractors, agents, or Sublicensees manufacture, testing, design, use, Sale, or labeling of any Licensed Products or the use of any Licensed Technology or the use of any Licensed Product by any third party, including any consumer or customer, except to the extent caused by the negligence or willful misconduct of LICENSOR, and/or any of their Affiliates, and/or their respective contractors, agents or employees, including the Inventors. COMPANY'S obligations under this Article shall survive the expiration or termination of this Agreement for any reason.

 

 

COMPANY agrees to provide attorneys reasonably acceptable to LICENSOR to defend against such a claim. LICENSOR shall cooperate with COMPANY in any defense of such claim. COMPANY shall not settle any such claims, demands or actions under this Section 10.2, without the express, prior written consent of LICENSOR, which consent shall not be unreasonably withheld or delayed. COMPANY'S obligations under this Article shall survive the expiration or termination of this Agreement for any reason.

 

10.3   Insurance. Without limiting COMPANY'S indemnity obligations under the preceding paragraph, COMPANY shall, prior to any clinical trial or Sale of any Licensed Product, cause to be in force a products liability insurance policy. Such policy shall:

 

	(i)	provide product liability coverage in an amount that is customary for the stage of development, but no less than [*****] per occurrence;
	(ii)	insure Indemnitees for all claims, damages, and actions mentioned in Section 10.2 of this Agreement;
	(iii)	include contractual liability coverage for all liability which may be incurred by Indemnitees in connection with this Agreement;
	(iv)	include clinical trial coverage (if excluded from product liability coverage), COMPANY agrees to secure separate clinical trial Errors & Omissions Liability coverage that meets all policy requirements as outlined in Section 10.3;
	(v)	require the insurance carrier to provide EMORY on behalf of the LICENSOR with no less than [*****] written notice of any change in the terms or coverage of the policy or its cancellation; and
	(vi)	If written on a “claims made” basis, the Company agrees to provide coverage for ten years after the contract is completed.

 

All insurance coverage required under this Agreement shall be primary to any coverage carried by EMORY, CHILDREN’S, and UABRF, shall waive all rights of subrogation against any additional insured and shall be placed with insurers whose A.M. Best’s rating is at least A-X.

 

As detailed in Section 2.5, COMPANY agrees to require any Sublicensee under Section 2.5 of this Agreement to maintain insurance coverage consistent with this Section 10.3.

 

10.4   Notification. COMPANY shall provide to EMORY on behalf of the LICENSOR prior to its first clinical trial or commercial Sale of any Licensed Product, certificates of insurance evidencing the coverages required in section 10.3 above and adding each entity constituting the LICENSOR as additional insureds.

 

 

10.5   Notice of Claims. COMPANY shall promptly notify EMORY on behalf of the LICENSOR of all claims involving the Indemnitees and shall advise EMORY of the amounts that might be needed to defend and pay any such claims. EMORY on behalf of the LICENSOR shall promptly notify COMPANY of any and all claims brought to the LICENSOR’s attention relating to COMPANY’s indemnity obligations under this Agreement.

 

Article 11.       CONFIDENTIALITY

 

11.1   Treatment of Confidential Information. Except as otherwise provided hereunder, during the term of this Agreement and for a period of [*****] thereafter:

 

	(i)	COMPANY and its Affiliates and Sublicensees shall retain in confidence and use only for purposes of this Agreement, any written information and data supplied by LICENSOR under this Agreement and marked as proprietary;
	(ii)	LICENSOR shall retain in confidence and use only for purposes of this Agreement any written information and data supplied by COMPANY under this Agreement and marked as proprietary.

 

For purposes of this Agreement, all such information and data which a party is obligated to retain in confidence shall be called "Confidential Information."

 

11.2   Right to Disclose. To the extent that it is reasonably necessary to fulfill its obligations or exercise its rights under this Agreement, or any rights which survive termination or expiration hereof, each party may disclose Confidential Information to its Affiliates, Sublicensees, consultants, outside contractors, governmental regulatory authorities and clinical investigators on condition that such entities or persons agree:

 

	(i)	to keep the Confidential Information confidential for at least the same time periods and to the same extent as each party is required to keep it confidential;
	(ii)	to use the Confidential Information only for such purposes as such parties are authorized to use it.

 

11.3   Release from Restrictions. Each party or its Affiliates or Sublicensees may use or disclose Confidential Information to the government or other regulatory authorities to the extent that such disclosure is reasonably necessary for the prosecution and enforcement of patents, or to obtain or maintain any regulatory approval, including authorizations to conduct clinical trials, or commercially market or obtain pricing approval of any Licensed Products, provided that such party is otherwise entitled to engage in such activities under this Agreement.

 

 

The obligation not to disclose Confidential Information shall not apply to any part of such Confidential Information that:

 

	(i)	is or becomes patented, published or otherwise part of the public domain, other than by unauthorized acts of the party obligated not to disclose such Confidential Information (for purposes of this Article 11 the "receiving party") or its Affiliates or Sublicensees in contravention of this Agreement;
	(ii)	is disclosed to the receiving party or its Affiliates or Sublicensees by a third party provided that such Confidential Information was not obtained by such third party in violation of any legal obligation; or
	(iii)	prior to disclosure under this Agreement, was already in the possession of the receiving party, its Affiliates or Sublicensees, provided that such Confidential Information was not obtained directly or indirectly from the other party under this Agreement; or
	(iv)	results from research and development by the receiving party or its Affiliates or Sublicensees, independent of the disclosing party’s Confidential Information; or
	(v)	is required by law to be disclosed by the receiving party, provided that the receiving party uses its best efforts to notify the other party immediately upon learning of such requirement in order to give the other party reasonable opportunity to oppose such requirement; or
	(vi)	COMPANY and EMORY on behalf of the LICENSOR agree in writing may be disclosed.

 

Article 12.       TERM AND TERMINATION

 

12.1.  Term. Unless sooner terminated as otherwise provided in this Agreement, the term of this Agreement (“Term”) shall commence on the Effective Date hereof and shall continue in full force and effect until the later of fifteen (15) years from the date of the first commercial Sale on a country by country basis or the expiration of the last to expire of the Licensed Patents in that country (“Expiration”).

 

12.2.  Termination. EMORY, on behalf of LICENSOR, shall have the right to terminate this Agreement upon the occurrence of a material breach by COMPANY. Without limitation, any one or more of the following shall each be deemed a material breach of this Agreement by COMPANY:

 

	12.2.1.	[*****]; or
	12.2.2.	[*****]; or
	12.2.3.	[*****]; or
	12.2.4.	[*****]; or
	12.2.5.	[*****]; or
	12.2.6.	[*****]; or
	12.2.7.	the breach by COMPANY of any other material term of this Agreement.

 

 

Notwithstanding the foregoing, if the Company challenges the validity or enforceability of any Licensed Patent in a court or other governmental agency of competent jurisdiction, this Agreement shall terminate immediately.

 

EMORY on behalf of the LICENSOR shall provide COMPANY written notice describing the breach, which notice shall include EMORY’s intention to terminate the Agreement on behalf of the LICENSOR. If COMPANY does not cure the breach within [*****] after receipt of such notice, this Agreement will terminate immediately. If COMPANY disputes such breach in good faith by written notice to EMORY within the [*****] period, the matter will be submitted to dispute resolution as described under Article 14. EMORY’s right to terminate shall be suspended until resolution of the dispute. The procedures set forth in this Section 12.2 shall not prejudice LICENSOR’s right to receive royalties or other sums due hereunder and shall not prejudice any cause of action or claim due to any breach or default by the COMPANY.

 

12.3.  Notice of Bankruptcy. COMPANY must inform EMORY on behalf of the LICENSOR of its intention to file a voluntary petition in bankruptcy or of another's intention to file an involuntary petition in bankruptcy to be received at least [*****] prior to filing such a petition. If COMPANY files a petition of bankruptcy [*****].

 

12.4.  Failure to Enforce. The failure of EMORY on behalf of the LICENSOR, at any time, or for any period of time, to enforce any of the provisions of this Agreement, shall not be construed as a waiver of such provisions or as a waiver of the right of EMORY or the LICENSOR thereafter to enforce each and every such provision of this Agreement.

 

12.5.  Termination by COMPANY. COMPANY shall have the right to terminate this Agreement at its sole discretion upon [*****] written notice to EMORY, on behalf of the LICENSOR. Such termination shall not relieve COMPANY of any obligations accruing prior to the date of termination, including the payment of any amounts due to EMORY on behalf of the LICENSOR under this Agreement through the effective date of such termination.

 

12.6.  Effect. If this Agreement is terminated for any reason other than Expiration, COMPANY shall return, or at LICENSOR's direction, destroy, all tangible materials (including plans, documents, samples, biological materials, models and the like) pertaining to the Licensed Technology supplied to COMPANY by LICENSOR, retaining one archival copy in its corporate legal department as required solely for compliance with any continuing obligations. Upon termination of this Agreement for any reason, in the event LICENSOR requests in writing to COMPANY, COMPANY shall provide LICENSOR, at LICENSOR’s sole cost and expense, [*****]. In the event this Agreement terminates or expires for any reason except material breach by COMPANY, LICENSOR shall not [*****] for a period of two (2) years without the written consent of COMPANY. For clarity, in the event this Agreement terminates due to a material breach by COMPANY, LICENSOR shall have the right to [*****] without any delay by COMPANY. Upon termination of this Agreement, COMPANY shall cease manufacturing, processing, producing, using, importing or Selling Licensed Products; provided, however, that COMPANY may continue to Sell in the ordinary course of business for a period of [*****] reasonable quantities of Licensed Products which are fully manufactured and in COMPANY’s normal inventory at the date of termination if (a) all monetary obligations of COMPANY to LICENSOR have been satisfied and (b) royalties on such sales are paid to LICENSOR in the amounts and in the manner provided in this Agreement. However, nothing herein shall be construed to release either party of any obligation which matured prior to the effective date of such termination.

 

 

12.7.  Regulatory Information: In the event LICENSOR [*****], COMPANY shall [*****] the right to [*****]. Should COMPANY [*****] during the term of this Agreement, COMPANY may [*****] for development, use or sale of Licensed Product(s).

 

Article 13.       ASSIGNMENT

 

COMPANY may grant, transfer, convey, or otherwise assign any or all of its rights and obligations under this Agreement in conjunction with (i) the transfer of all, or substantially all, of the business interests of COMPANY or (ii) any merger or acquisition or business combination resulting in a change of control of COMPANY. Except as otherwise permitted under this Agreement, LICENSOR's written consent, which shall not be unreasonably withheld, shall be required prior to any other assignment of COMPANY'S rights or obligations under this Agreement. This Agreement shall be assignable by each entity that comprises the LICENSOR to any other nonprofit corporation affiliated with EMORY, CHILDREN’S, or UABRF upon prior written notice to COMPANY.

 

Article 14.        Dispute Resolution

 

14.1.  Negotiation. Any dispute related to this License Agreement shall be settled in accordance with the procedures specified in this Section. COMPANY and EMORY on behalf of the LICENSOR agree to attempt to settle any claim or controversy arising out of this Agreement through consultation and negotiation in good faith and spirit of mutual cooperation. Any dispute between the parties relating to this Agreement will first be submitted in writing to a senior executive of COMPANY and EMORY on behalf of the LICENSOR (the “Dispute Notice”), who will promptly meet and confer in an effort to resolve such dispute. Any agreed decisions of the executives will be final and binding on the parties. All negotiations pursuant to this Section are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

 

14.2.  Mediation. If the parties are unable to resolve any dispute by negotiation within [*****] of the Dispute Notice, then either party may initiate mediation upon written notice to the other party demanding mediation (the “Mediation Notice”), whereupon the dispute will be mediated by a mutually acceptable mediator to be chosen within [*****] after the Mediation Notice. The parties will share the costs of the mediator equally. If the parties cannot agree upon selection of a mediator within [*****] of the notice, then upon request of either party, the AAA shall appoint the mediator. Mediation shall take place in [*****] and shall proceed under the then current American Arbitration Association Model Commercial Mediation Procedures to the extent that the Model Procedure does not conflict with provisions of this article.

 

14.3.  Arbitration. Any dispute which has not been resolved by negotiation or mediation as described above within [*****] of the Dispute Notice, shall be settled by arbitration. The Arbitrators shall not have the ability to determine the validity or enforceability of any Licensed Patent. Arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association by three arbitrators, one to be appointed by EMORY on behalf of the LICENSOR, one to be appointed by COMPANY, and one to be appointed by the two arbitrators appointed by EMORY and COMPANY. Arbitration shall take place in [*****], and the decision of the arbitrators shall be enforceable, but not appealable, in any court of competent jurisdiction.

 

14.4.  Costs. The fees and expenses, but not attorney’s fees, incurred in connection with any mediation or arbitration shall be borne by the party initiating the mediation or arbitration proceeding (or equally by both parties if both parties jointly initiate such proceeding) subject to reimbursement by the party which does not prevail in such proceeding promptly upon the termination thereof in the event that the party initiating such proceeding is the prevailing party.

 

14.5.  Continued Obligations. Each party shall continue to perform its undisputed obligations under this Agreement, including payments due, pending final resolution of any dispute arising out of or relating to this Agreement; provided, however that a party may suspend performance during any period in which the other party fails to perform its undisputed obligations.

 

       

Article 15.       MISCELLANEOUS

 

15.1   Export Controls. COMPANY acknowledges that Licensed Products and Licensed Technology may be subject to United States laws and regulations controlling the export of technical data, biological materials, chemical compositions, computer software, laboratory prototypes and other commodities and that LICENSOR's obligations under this Agreement are contingent upon compliance with applicable United States export laws and regulations. The transfer of technical data and commodities may require a license from the cognizant agency of the United States government or written assurances by COMPANY that COMPANY shall not export data or commodities to certain foreign countries without the prior approval of certain United States agencies. EMORY on behalf of the LICENSOR neither represents that an export license shall not be required nor that, if required, such export license shall issue.

 

15.2   Legal Compliance. COMPANY shall comply with all laws and regulations relating to its manufacture, processing, producing, using, importing Selling, labeling or distribution of Licensed Products and Licensed Technology and shall not take any action which would cause LICENSOR or COMPANY to violate any laws or regulations.

 

15.3   Independent Contractor. COMPANY'S relationship to LICENSOR shall be that of a licensee only. COMPANY shall not be the agent of LICENSOR and shall have no authority to act for, or on behalf of, LICENSOR in any matter. Persons retained by COMPANY as employees or agents shall not, by reason thereof, be deemed to be employees or agents of LICENSOR.

 

15.4   Patent Marking. COMPANY shall mark Licensed Products Sold in the United States with United States patent numbers. Licensed Products manufactured or Sold in other countries shall be marked in compliance with the applicable intellectual property laws in force in such foreign countries.

 

15.5   Use of Names. COMPANY shall obtain the prior written approval of the applicable LICENSOR or its Affiliate for the use of its trade name, trademark, service marks, or other protectable indicia prior to making use of its name for any purpose, except as required by law. Each of the entities making up LICENSOR shall obtain the prior written approval of COMPANY prior to making use of its or its Affiliates’ Trade name, trademark, service marks, or other protectable indicia for any purpose, except as required by law. As an exception to the foregoing, both COMPANY and each of the entities making up LICENSOR shall have the right to publicize the existence of this Agreement; however, neither COMPANY nor LICENSOR shall disclose the terms and conditions of this Agreement without the other party’s consent, except as required by law.

 

 

15.6   Place of Execution. This Agreement and any subsequent modifications or amendments hereto shall be deemed to have been executed in the State of Georgia, U.S.A.

 

15.7   Governing Law. This Agreement and all amendments, modifications, alterations, or supplements hereto, and the rights of the parties hereunder, shall be construed under and governed by the laws of the State of Georgia and the United States of America.

 

15.8   Venue. Only courts in the State of Georgia, U.S.A., shall have jurisdiction to hear and decide any controversy or claim between the parties arising under or relating to this Agreement.

 

15.9   Entire Agreement. This Agreement constitutes the entire agreement between LICENSOR and COMPANY with respect to the subject matter hereof and shall not be modified, amended or terminated, except as herein provided or except by another agreement in writing executed by the parties hereto.

 

15.10 Survival. Articles 3, 4, 5, 9, 10, 11, 12.6, 12.7, 14, and 15 shall survive termination of this Agreement for any reason.

 

15.11 Severability. All rights and restrictions contained herein may be exercised and shall be applicable and binding only to the extent that they do not violate any applicable laws and are intended to be limited to the extent necessary so that they will not render this Agreement illegal, invalid or unenforceable. If any provision or portion of any provision of this Agreement, not essential to the commercial purpose of this Agreement, shall be held to be illegal, invalid or unenforceable by a court of competent jurisdiction, it is the intention of the parties that the remaining provisions or portions thereof shall constitute their agreement with respect to the subject matter hereof, and all such remaining provisions, or portions thereof, shall remain in full force and effect. To the extent legally permissible, any illegal, invalid or unenforceable provision of this Agreement shall be replaced by a valid provision which shall implement the commercial purpose of the illegal, invalid, or unenforceable provision. In the event that any provision essential to the commercial purpose of this Agreement is held to be illegal, invalid or unenforceable and cannot be replaced by a valid provision which will implement the commercial purpose of this Agreement, this Agreement and the rights granted herein shall terminate.

 

15.12 Force Majeure. Any delays in, or failure of performance of any party to this Agreement, shall not constitute a default hereunder, or give rise to any claim for damages, if and to the extent caused by occurrences beyond the control of the party affected, including, but not limited to, acts of God, strikes or other concerted acts of workmen, civil disturbances, fires, floods, explosions, riots, war, rebellion, sabotage, acts of governmental authority or failure of governmental authority to issue licenses or approvals which may be required.

 

15.13 Counterparts. This Agreement may be executed by facsimile and in counterparts, each of which is deemed an original, but all of which together shall constitute one and the same instrument

 

 

Article 16.       NOTICES

 

All notices, statements, and reports required to be given by one party to the other shall be in writing. Progress and Royalty reports required under Article 4 may be delivered electronically with a copy to OTT-Legal@emory.edu.

 

Except for progress and royalty reports required under Article 4, all reports shall be hand delivered, sent by private overnight mail service, or sent by registered or certified U.S. mail, postage prepaid, return receipt requested and addressed as follows:

 

If to LICENSOR:	Emory University
	Office of Technology Transfer
	1599 Clifton Rd., 4th Floor
	Atlanta, Georgia 30322
	ATTN: Director
	Facsimile: (404) 727-1271
With copies to:	Children’s Healthcare of Atlanta
	Attn: Marie-Christine Reames
	Office of Technology Transfer
	1687 Tullie Circle NE,
	Atlanta, Georgia 30329
	Facsimile: (404) 785-9470
	UAB Research Foundation
	701 20th Street South, AB 770
	Birmingham, Alabama 35233
	(1720 2nd Avenue South, AB 770
	Birmingham, AL 35294)
	Attention Executive Director
If to COMPANY:	Incysus, Ltd.
	Clarendon House
	2 Church Street
	Hamilton, HM11 Bermuda
With copies to:	Jill E. Anderson
	Moses & Singer LLP
	The Chrysler Building
	405 Lexington Avenue
	New York, NY 10174
	Fascimile: (917) 206-4377

 

 

Such notices or other communications shall be effective upon receipt by an employee, agent or representative of the receiving party authorized to receive notices or other communications sent or delivered in the manner set forth above. Either party hereto may change the address to which notices to such party are to be sent by giving notice to the other party at the address and in the manner provided above. Any notice may be given, in addition to the manner set forth above by facsimile provided that the party giving such notice obtains acknowledgement by facsimile that such notice has been received by the party to be notified. Notice made in this manner shall be deemed to have been given when such acknowledgement has been transmitted.

 

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

 

IN WITNESS WHEREOF, Each of the LICENSOR and COMPANY have caused this Agreement to be signed by their duly authorized representatives as of the day and year indicated below.

 

EMORY UNIVERSITY			INCYSUS, LTD.
By:	/s/ Authorized Signatory		By:	/s/ William Ho
			Name:	William Ho
			Title:	President and Chief Executive Officer
Date:	June 7, 2016

LIC.__.___			Date:	June 10, 2016

 

CHILDREN’S HEALTHCARE OF ATLANTA, INC.:
By:	/s/ Authorized Signatory
Date	June 7, 2016
THE UAB RESEARCH FOUNDATION
By:	/s/ Authorized Signatory
Date:	June 7, 2016

 

 

       

APPENDIX A

 

COMPANY’S DEVELOPMENT PLAN

 

[*****]

 

 

APPENDIX B

 

LICENSED PATENTS

 

[*****]

 

APPENDIX C

 

U. S. GOVERNMENT LICENSE(S)

 

[*****]

 

 

APPENDIX D

 

RUNNING ROYALTY PERCENTAGES

 

Cumulative Annual Net Sales less than [*****]	Percentage of Net Selling Price
Countries in which Licensed Patents exist	[*****]
Countries in which Licensed Patents do not exist	[*****]
Cumulative Annual Net Sales over [*****] and below [*****]	Percentage of Net Selling Price
Countries in which Licensed Patents exist	[*****]
Countries in which Licensed Patents do not exist	[*****]
Cumulative Annual Net Sales over [*****]	Percentage of Net Selling Price
Countries in which Licensed Patents exist	[*****]
Countries in which Licensed Patents do not exist	[*****]

 

 

APPENDIX E

 

MINIMUM ROYALTIES

 

 

Calendar Year after First Sale	Minimum Royalty
Year 3 (3rd calendar year following First Sale)	$500,000
Year 4	$1,000,000
Year 5 and subsequent years	$1,500,000

 

For clarity, the above minimum royalties shall only be payable should pivotal results demonstrate the Licensed [*****].

 

 

APPENDIX F

 

MILESTONES

 

Milestone Event			Milestone Payment
a)	[*****]		[*****]
b)	[*****]		[*****]
c)	[*****]		[*****]
d)	[*****]		[*****]
e)	[*****]		[*****]
f)	[*****]		[*****]

 

 

APPENDIX G

 

LICENSE MAINTENANCE FEES

 

Effective Date Anniversary		License Maintenance Fee
Fourth Anniversary		$ 250,000
Fifth Anniversary		$ 500,000
Sixth and Each Subsequent Anniversary		$ 1,000,000

 

 

APPENDIX H

 

DEVELOPMENT MILESTONES AND DATES

 

[*****]

 

 

APPENDIX I

 

List of Low and Low Middle Income Countries

 

1.	Afghanistan	South Asia	Low income
2.	Bangladesh	South Asia	Low income
3.	Benin	Sub-Saharan Africa	Low income
4.	Burkina Faso	Sub-Saharan Africa	Low income
5.	Burundi	Sub-Saharan Africa	Low income
6.	Cambodia	East Asia & Pacific	Low income
7.	Central African Republic	Sub-Saharan Africa	Low income
8.	Chad	Sub-Saharan Africa	Low income
9.	Comoros	Sub-Saharan Africa	Low income
10.	Congo, Dem. Rep.	Sub-Saharan Africa	Low income
11.	Eritrea	Sub-Saharan Africa	Low income
12.	Ethiopia	Sub-Saharan Africa	Low income
13.	Gambia, The	Sub-Saharan Africa	Low income
14.	Guinea	Sub-Saharan Africa	Low income
15.	Guinea-Bissau	Sub-Saharan Africa	Low income
16.	Haiti	Latin America & Caribbean	Low income
17.	Kenya	Sub-Saharan Africa	Low income
18.	Korea, Dem. Rep.	East Asia & Pacific	Low income
19.	Liberia	Sub-Saharan Africa	Low income
20.	Madagascar	Sub-Saharan Africa	Low income
21.	Malawi	Sub-Saharan Africa	Low income
22.	Mali	Sub-Saharan Africa	Low income
23.	Mozambique	Sub-Saharan Africa	Low income
24.	Myanmar	East Asia & Pacific	Low income
25.	Nepal	South Asia	Low income
26.	Niger	Sub-Saharan Africa	Low income
27.	Rwanda	Sub-Saharan Africa	Low income
28.	Sierra Leone	Sub-Saharan Africa	Low income
29.	Somalia	Sub-Saharan Africa	Low income
30.	Tajikistan	Europe & Central Asia	Low income
31.	Tanzania	Sub-Saharan Africa	Low income
32.	Togo	Sub-Saharan Africa	Low income
33.	Uganda	Sub-Saharan Africa	Low income
34.	Zimbabwe	Sub-Saharan Africa	Low income
35.	Armenia	Europe & Central Asia	Lower middle income
36.	Bhutan	South Asia	Lower middle income
37.	Bolivia	Latin America & Caribbean	Lower middle income
38.	Cameroon	Sub-Saharan Africa	Lower middle income
39.	Cabo Verde	Sub-Saharan Africa	Lower middle income
40.	Congo, Rep.	Sub-Saharan Africa	Lower middle income
41.	Côte d'Ivoire	Sub-Saharan Africa	Lower middle income
42.	Djibouti	Middle East & North Africa	Lower middle income

 

 

43.	Egypt, Arab Rep.	Middle East & North Africa	Lower middle income
44.	El Salvador	Latin America & Caribbean	Lower middle income
45.	Georgia	Europe & Central Asia	Lower middle income
46.	Ghana	Sub-Saharan Africa	Lower middle income
47.	Guatemala	Latin America & Caribbean	Lower middle income
48.	Guyana	Latin America & Caribbean	Lower middle income
49.	Honduras	Latin America & Caribbean	Lower middle income
50.	India	South Asia	Lower middle income
51.	Indonesia	East Asia & Pacific	Lower middle income
52.	Kiribati	East Asia & Pacific	Lower middle income
53.	Kosovo	Europe & Central Asia	Lower middle income
54.	Kyrgyz Republic	Europe & Central Asia	Lower middle income
55.	Lao PDR	East Asia & Pacific	Lower middle income
56.	Lesotho	Sub-Saharan Africa	Lower middle income
57.	Mauritania	Sub-Saharan Africa	Lower middle income
58.	Micronesia, Fed. Sts.	East Asia & Pacific	Lower middle income
59.	Moldova	Europe & Central Asia	Lower middle income
60.	Mongolia	East Asia & Pacific	Lower middle income
61.	Morocco	Middle East & North Africa	Lower middle income
62.	Nicaragua	Latin America & Caribbean	Lower middle income
63.	Nigeria	Sub-Saharan Africa	Lower middle income
64.	Pakistan	South Asia	Lower middle income
65.	Papua New Guinea	East Asia & Pacific	Lower middle income
66.	Paraguay	Latin America & Caribbean	Lower middle income
67.	Philippines	East Asia & Pacific	Lower middle income
68.	Samoa	East Asia & Pacific	Lower middle income
69.	São Tomé and Principe	Sub-Saharan Africa	Lower middle income
70.	Senegal	Sub-Saharan Africa	Lower middle income
71.	Solomon Islands	East Asia & Pacific	Lower middle income
72.	South Sudan	Sub-Saharan Africa	Lower middle income
73.	Sri Lanka	South Asia	Lower middle income
74.	Sudan	Sub-Saharan Africa	Lower middle income
75.	Swaziland	Sub-Saharan Africa	Lower middle income
76.	Syrian Arab Republic	Middle East & North Africa	Lower middle income
77.	Timor-Leste	East Asia & Pacific	Lower middle income
78.	Ukraine	Europe & Central Asia	Lower middle income
79.	Uzbekistan	Europe & Central Asia	Lower middle income
80.	Vanuatu	East Asia & Pacific	Lower middle income
81.	Vietnam	East Asia & Pacific	Lower middle income
82.	West Bank and Gaza	Middle East & North Africa	Lower middle income
83.	Yeman, Rep	Middle East & North Africa	Lower middle income
84.	Zambia	Sub-Saharan Africa	Lower middle income

 

 

APPENDIX J

 

Template for Progress Reports

 

COMPANY

Address

City, State, Zip

 

Progress Report covering the period [January-June, YR or July-December, YR] for the License between COMPANY, Emory University, Children’s Hospital of Atlanta and UAB Research Foundation dated          ________________, Emory Ref. LIC.___._____

 

As required under Article 4 of the above-referenced license agreement, the following details the progress made during the reporting period in commercializing the licensed technology.

[*****]

 

 

 

 

Exhibit 10.14

 

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain identified information marked with [*****] has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

First Amendment to Exclusive License Agreement between Emory University (“Emory”), Children’s Healthcare of Atlanta, Inc. (“CHOA”), The UAB Research Foundation (“UABRF”) and Incysus, Ltd.

 

This First Amendment to Exclusive License Agreement (this “First Amendment”) is made effective as of the date of the last signature of the Parties (as evidenced below their signatures on the signature page) (the “First Amendment Effective Date”) by and between Emory University, Children’s Healthcare of Atlanta, Inc., The UAB Research Foundation (hereinafter together the “LICENSOR”) and Incysus, Ltd. (“COMPANY”). COMPANY and Licensor may be each individually referred to as a party and collectively, the parties (“Party” or “Parties”).

 

RECITALS

 

WHEREAS, Licensor and COMPANY previously entered into that certain Exclusive License Agreement dated effective as of June 10^th, 2016 (“Agreement”);

 

WHEREAS, COMPANY has entered into certain research agreements with The Board of Trustees of The University of Alabama at Birmingham (“UAB”) to conduct research experiments and manufacturing validation related to the Licensed Patents (collectively, the “UAB Research Agreements”).

 

COMPANY has expended the necessary diligence, resources and effort to bring Licensed Products to the DEVELOPMENT MILESTONES AND DATES as outlined in Appendix H of the Agreement;

 

WHEREAS, in connection with the UAB Research Agreements, COMPANY has encountered unforeseen delays under the DEVELOPMENT MILESTONES AND DATES due to difficulty procuring certain know-how and due to the uncertain biology and patient variability related to GMP manufacture of gamma delta T cells, both of which are required to develop the Licensed Patents;

 

WHEREAS, COMPANY and UAB continue to expend effort and make progress towards completing [*****];

 

WHEREAS, the Parties wish to amend the Agreement to modify the DEVELOPMENT MILESTONES AND DATES under. Appendix H of the Agreement and increase the amount of time for Reimbursement for current patent expenses under section 7.1.3 of the Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the Parties agree to amend the Agreement as follows:

 

 

AGREEMENT

 

1.       All capitalized terms used herein shall bear the meaning ascribed to them in Article 1, DEFINITIONS of the Agreement unless otherwise defined herein.

 

2.       Replace APPENDIX H, DEVELOPMENT MILESTONES AND DATES, in its entirety with the following:

 

APPENDIX H

 

DEVELOPMENT MILESTONES AND DATES

 

[1.

[*****]; and

 

2.

[*****]; and

 

3.

[*****]; and

 

4.

[*****].

 

3. Replace Section 3.6.1 of the Agreement,

 

“3.6,1. COMPANY shall reimburse EMORY on behalf of the LICENSOR for all fees, costs, and expenses incurred by EMORY and/or LICENSOR after the Effective Date and during the term of this Agreement related to Prosecuting or Maintaining the Licensed Patents in the Licensed Territory. COMPANY shall deliver such payment to EMORY on behalf of the LICENSOR within [*****] after EMORY on behalf of the LICENSOR provides COMPANY with detailed invoices of the amount of such fees, costs, and expenses. To the extent that COMPANY does not remit payment of any uncontested amounts within [*****] of notification, a late payment charge of [*****] will be assessed against the COMPANY.”

 

with

 

“3.6.1. COMPANY shall reimburse EMORY on behalf of the LICENSOR for all fees, costs, and expenses incurred by EMORY and/or LICENSOR after [*****], and during the term of this Agreement related to Prosecuting or Maintaining the Licensed Patents in the Licensed Territory. COMPANY shall deliver such payment to EMORY on behalf of the LICENSOR within [*****] after EMORY on behalf of the LICENSOR provides COMPANY with detailed invoices of the amount of such fees, costs, and expenses. To the extent that COMPANY does not remit payment of any uncontested amounts within [*****] of notification, a late payment charge of [*****] will be assessed against the COMPANY.”

 

4. Replace Section 3.6.2 of the Agreement,

 

 

“3.6.2. COMPANY shall reimburse EMORY on behalf of the LICENSOR for all fees, costs, and expenses incurred by LICENSOR as of the Effective Date related to Prosecuting or Maintaining the Licensed Patents. These fees, costs, and expenses incurred up to the Effective Date are estimated to be [*****], however this amount may be subject to reasonably change upon final notification to COMPANY. COMPANY shall deliver such payment to EMORY on behalf of the LICENSOR the earlier of [*****] from the Effective Date or [*****] days of the [*****] and receipt by COMPANY of a detailed invoice of such costs.”

 

with

 

“3.6.2. COMPANY shall reimburse EMORY on behalf of the LICENSOR for all fees, costs, and expenses incurred by LICENSOR, as of [*****], related to Prosecuting or Maintaining the Licensed Patents. These fees, costs, and expenses incurred up to [*****] are estimated to be [*****], however this amount may be subject to reasonably change upon final notification to COMPANY on or around [*****]. COMPANY shall deliver such payment to EMORY on behalf of the LICENSOR by [*****] or within [*****] of the [*****] and receipt by COMPANY of a detailed invoice of such costs. COMPANY shall promptly notify EMORY within [*****].”

 

5. All other terms and conditions of the Agreement shall remain in full force and effect.

 

{REMAINDER OF PAGE LEFT INTENTIONALLY BLANK}

 

 

 

IN WITNESS WHEREOF, Emory and COMPANY have each caused its duly authorized representative to execute this First Amendment, effective as of the date written above.

 

 

EMORY:			COMPANY:
Emory University			Incysus, Ltd.
By:	/s/ Authorized Signatory		By:	/s/ William Ho
			Name: William Ho
			Title: President & CEO

 

Date Signed:

10/9/17

Date Signed:

Oct. 2, 2017

 

CHILDREN’S HEALTHCARE OF ATLANTA, INC.:
By:	/s/ Authorized Signatory

 

Date Signed:

10/5/17

 

THE UAB RESEARCH FOUNDATION
By:	/s/ Authorized Signatory

 

Date Signed:

October 2, 2017

 

 

 

Exhibit 10.15

 

Pursuant to Item 601(b)(10)(iv) of Regulation S-K, certain identified information marked with [*****] has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

 

Second Amendment to Exclusive License Agreement between Emory University (“Emory”), Children’s Healthcare of Atlanta, Inc. (“CHOA”), The UAB Research Foundation (“UABRF”) and Incysus , Ltd.

 

This Second Amendment to Exclusive License Agreement (this “Second Amendment”) is made effective as of the date of the last signature of the Parties (as evidenced below their signatures on the signature page) (the “Second Amendment Effective Date”) by and between Emory University, Children’s Healthcare of Atlanta, Inc., The UAB Research Foundation (hereinafter together the “LICENSOR”) and Incysus Therapeutics, Inc. (“COMPANY”). COMPANY and Licensor may be each individually referred to as a party and collectively, the parties (“Party” or “Parties”).

 

RECITALS

 

WHEREAS, Licensor and Incysus, Ltd. previously entered into that certain Exclusive License Agreement dated effective as of June 10^th, 2016 (“Agreement”), as amended on October 7^th, 2017;

 

WHEREAS, on May 7, 2018, Incysus, Ltd. changed its name and incorporation to Incysus Therapeutics, Inc. in the State of Delaware; and

 

WHEREAS, the Parties wish to amend the Agreement to replace Incysus, Ltd with Incysus Therapeutics, Inc. as a party to the Agreement, to reflect Incysus’ new corporate information in the Agreement, to modify Section 15.12 and to revise the license maintenance fees under Appendix G of the Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the Parties agree to amend the Agreement as follows:

 

AGREEMENT

 

1.       All capitalized terms used herein shall bear the meaning ascribed to them in Article 1, DEFINITIONS of the Agreement unless otherwise defined herein.

 

2.       Incysus Therapeutics, Inc., or any other name by which Incysus Therapeutics, Inc. may be titled, having a place of business at 79 Madison Avenue, New York, NY 10016, shall replace Incysus, Ltd. as a party to the Original Agreement.

 

 

3.       Delete Section 15.12 in its entirety and replace with the following:

 

Section 15.12 Force Majeure. No Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make previously owed payments to the other Party hereunder) when and to the extent such failure or delay is caused by or results from acts beyond the impacted Party’s (“Impacted Party”) reasonable control, including, without limitation, the following force majeure events (“Force Majeure Event(s)”) that frustrates the purpose of this Agreement: (a) acts of God; (b) flood, fire, earthquake or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot or other civil unrest; (d) government order or law; (e) actions, embargoes or blockades in effect on or after the date of this Agreement; (f) action by any governmental authority; (g) national or regional emergency; (h) strikes, labor stoppages or slowdowns or other industrial disturbances; (i) epidemic, pandemic or similar influenza or bacterial infection (which is defined by the United States Center for Disease Control as virulent human influenza or infection that may cause global outbreak, or pandemic, or serious illness); (j) emergency state; (k) shortage of adequate medical supplies and equipment; (l) shortage of power or transportation facilities; and (m) other similar events beyond the reasonable control of the Impacted Party.

 

The Impacted Party shall provide the other Party with written notice of a Force Majeure Event within [*****] after the Impacted Party, acting in good faith and using reasonable diligence, reasonably determines that a Force Majeure Event will impact its operations to the extent that its performance under this Agreement will be delayed or frustrated, including with such notice the Impacted Party’s reasonable estimate of the duration of the Force Majeure Event and the expected time of performance by the Impacted Party, if any. The Impacted Party shall use diligent efforts to end the failure or delay and ensure the effects of such Force Majeure Event are minimized and shall resume its performance under the Agreement as soon as reasonably practicable after the removal of the cause of the Force Majeure Event. In addition to such other rights and remedies as may be available to Licensor, if Company is the Impacted Party, Licensor shall have the right to immediately terminate this Agreement by providing written notice thereof to Licensor if any Force Majeure Event continues, or is expected to continue, for more than [*****].

 

4.       Replace APPENDIX G, LICENSE MAINTENANCE FEES. in its entirety with the following:

 

APPENDIX G

 

LICENSE MAINTENANCE FEES

 

Effective Date Anniversary	License Maintenance Fee
78th Month Anniversary (December 10, 2022)	$250,000
90th Month Anniversary (December 10, 2023)	$500,000
Eighth and Each Subsequent Anniversary	$1,000,000

 

5.       All other terms and conditions of the Agreement shall remain in full force and effect.

 

 

IN WITNESS WHEREOF, Emory and Company have each caused its duly authorized representative to execute this Second Amendment, effective as of the date written above.

 

EMORY:			COMPANY:
Emory University			Incysus Therapeutics, Inc.
By:	/s/ Authorized Signatory		By:	/s/ William Ho
			Name: William Ho
			Title: President & CEO

 

Date Signed:

07/14/20

Date Signed:

07/14/20

 

CHILDREN’S HEALTHCARE OF ATLANTA, INC.:
By:	/s/ Authorized Signatory

 

Date Signed:

07/14/20

 

THE UAB RESEARCH FOUNDATION:
By:	/s/ Authorized Signatory

 

Date Signed:

07/14/20

 

 

 

 

 

Exhibit 10.16

 

Incysus, Inc.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is entered into as of August 22, 2016, by and between William Ho (the “Executive”) and Incysus, Inc. (the “Company”).

 

Recitals

 

A.       The Company desires the association and services of Executive and his skills, abilities, background and knowledge, and is willing to engage Executive’s services on the terms and conditions set forth in this Agreement.

 

B.       Executive desires to be in the employ of the Company, and is willing to accept such employment on the terms and conditions set forth in this Agreement.

 

C.       This Agreement supersedes any and all prior and contemporaneous oral or written employment agreements or arrangements between Executive and the Company or any predecessor thereof.

 

Agreement

 

In consideration of the foregoing, the parties agree as follows:

 

1.                  Employment by the Company.

 

1.1           Position; Duties; Location; Board Position. Subject to the terms and conditions of this Agreement, Executive shall hold the position of President and Chief Executive Officer. Executive’s activities shall be as directed by the Board of Directors of Incysus, Ltd. (the “Board”) and shall include such duties and activities as typically associated with Executive’s position, and as otherwise may be assigned to Executive from time to time. The Company reserves the right to change or modify Executive’s title and/or duties as business needs may require. Executive shall devote Executive’s business energies, interest, abilities and productive time to the proper and efficient performance of Executive’s duties under this Agreement. Executive shall report to the Board.

 

1.2           Policies and Procedures. The employment relationship between the parties shall be governed by this Agreement and by the policies and practices established by the Board. In the event that the terms of this Agreement differ from or are in conflict with the Company’s policies or practices, this Agreement shall control.

 

 

1.3           Exclusive Employment; Agreement not to Participate in Company’s Competitors. Except with the prior written consent of the Board, Executive will not, during the period of employment by the Company, directly or indirectly, undertake or engage in any employment, occupation or business activity that competes, directly or indirectly, with the business of the Company. Notwithstanding anything to the contrary contained herein, the parties agree that Executive may continue his service to AlephPoint Capital and any of its related entities, including ownership interest, management and employment, with such changes to the terms and responsibilities thereof as may be desirable in his sole discretion, provided that: (i) such service does not interfere with Executive’s duties under this Agreement or the CIIA, (ii) any conflicts of interest arising from such service are handled in accordance with the applicable provisions of the Company’s Bye-Laws, and (iii) Executive manages AlephPoint Capital as a vehicle for the management of his own assets and those of certain investors and/or relationships, and does not proactively solicit additional funds to be managed by AlephPoint Capital, until such time (if ever) that the Company determines not to pursue the development of its primary product candidate.

 

1.4           Start Date. Executive’s employment with the Company pursuant to this Agreement shall commence on August 22, 2016 (the “Start Date”).

 

2.                  At-Will Employment.

 

Executive’s employment relationship with the Company is, and shall at all times remain, at-will. This means that either Executive or the Company may terminate the employment relationship at any time, for any reason or for no reason, with or without cause or advance notice.

 

3.                  Compensation and Benefits.

 

3.1           Salary. The Company shall pay Executive at a rate equal to $721.15 per week less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices. Upon the Company’s close of the next round of funding after the date hereof that exceeds $10,000,000 in raised capital (a “Qualified Series A Financing”), the Company shall increase Executive pay such that Executive shall receive a base salary at the annualized rate of $250,000 (the “Base Salary”), less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices. The Base Salary shall be prorated for any partial year of employment on the basis of a 365-day year. The Base Salary may be adjusted from time to time in the Company’s discretion.

 

3.2           Performance Bonus. Each calendar year, Executive will be eligible to earn an additional bonus (in the form of cash or equity, at the Company’s sole discretion) based on the Board’s assessment of Executive’s individual performance and overall Company performance. In order to earn and receive the bonus, Executive must remain employed by the Company through and including the bonus payout date, which will be on or before March 15^th of the year following the year to which it relates. The determination of whether Executive has earned a bonus and the amount thereof shall be determined by the Board (and/or a committee thereof) in its sole and absolute discretion. The Company reserves the right to modify the bonus criteria and targets from year to year.

 

 

3.3           Standard Company Benefits. Executive shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any benefit plan or arrangement that may be in effect from time to time and made available to similarly situated Company employees. The Company shall pay 100% of the premium associated with group health insurance for Executive as an individual, and 60% of the premium associated with group health insurance for Executive’s dependents, if applicable. The Company reserves the right to modify, add or eliminate benefits from time to time.

 

3.4           Expense Reimbursements. The Company will reimburse Executive for all reasonable business expenses Executive incurs in conducting his duties hereunder, pursuant to the Company’s usual expense reimbursement practices.

 

4.                  Proprietary Information Obligations.

 

As a condition of employment, Executive agrees to execute and abide by the Employee Confidential Information and Inventions Assignment Agreement to be executed of even date herewith (the “CIIA”).

 

5.                  Termination of Employment.

 

5.1           Termination For Any Reason Prior To A Qualified Series A Financing; Termination For Cause Or Executive’s Resignation Following A Qualified Series A Financing. If (a) Executive’s employment is terminated for any reason, whether by the Company or by Executive, prior to a Qualified Series A Financing, or (b) following a Qualified Series A Financing, Executive’s employment is terminated by the Company for Cause (defined below) or Executive resigns for any reason, the Company shall pay Executive any earned but unpaid base salary accrued through the date of termination and all accrued but unused vacation, at the rates then in effect, less standard deductions and withholdings. The Company shall thereafter have no further obligations to Executive, except as may otherwise be required by law.

 

5.2           Termination Without Cause Following A Qualified Series A Financing. If, following a Qualified Series A Financing, Executive’s employment is terminated by the Company without Cause, then the Company shall pay Executive any earned but unpaid base salary accrued through the date of termination and all accrued but unused vacation, at the rates then in effect, less standard deductions and withholdings. In addition, subject to Section 5.6, Executive shall receive the following (the “Severance Benefits”):

 

(a)            The Company shall pay Executive, as severance, an amount equal to six months of Executive’s Base Salary at the time of termination; provided, however, that if the date of Executive’s termination is after January 1, 2018, the amount of severance paid to Executive by the Company shall increase from six months to twelve months. The amount specified in this Section 5.2(a) shall be paid to Executive in six (or twelve, as applicable) equal monthly installments beginning ten days following the effective date of the Release and will be subject to required withholding.

 

 

(b)           Vesting of Executive’s then-outstanding, unvested equity as of his employment termination date shall accelerate such that Executive shall be deemed vested in any additional equity that would have vested had Executive remained employed with the Company for an additional one year following the date of Executive’s employment termination (the “Acceleration.”) The Acceleration shall be determined as of the date of Executive’s employment termination, and shall not assume the achievement of any Company or performance based milestones following Executive’s employment termination date; provided, that if any such milestones are achieved within one year following the date of Executive’s employment termination, Executive shall be deemed vested in any additional equity that would have vested upon the occurrence of any such milestone at the time of occurrence.

 

5.3           Definition of Cause. “Cause” shall mean the occurrence of any of the following: (i) Executive’s conviction of any felony or any crime involving fraud or dishonesty; (ii) Executive’s participation in a fraud, act of dishonesty or other act of gross misconduct against the Company; (iii) Executive’s violation of any statutory or fiduciary duty, or duty of loyalty, owed to the Company; or (iv) Executive’s material violation of material Company policy. Whether a termination is for Cause shall be decided by the Board in its sole and exclusive judgment and discretion. Prior to a termination for Cause pursuant to (iv) above, to the extent such event(s) is capable of being cured by Executive and to the extent it is the first such instance giving rise to the notice described herein, (A) the Company shall give the Executive notice of such event(s), which notice shall specify in reasonable detail the circumstances constituting Cause, (B) Executive shall have thirty (30) days after the delivery of such notice to cure the event(s) giving rise to Cause, the existence of such cure to be determined by the Board in good faith, and (C) Executive’s termination for Cause shall be effective thirty (30) days following the expiration of the cure period in which the event(s) giving rise to cause was not cured, provided that the Company reserves the right put Executive on a paid leave of absence during such period and terminate Executive’s access to Company systems and property so long as such measures do not substantially interfere with Executive’s ability to cure the Cause of his termination during the cure period.

 

5.4           Effect of Termination. Executive agrees that should his employment be terminated for any reason, he shall be deemed to have resigned from any and all positions with the Company and its affiliated entities including Incysus, Ltd., including, but not limited, to a position on the Board.

 

 

5.5           Section 409A Compliance. It is intended that any benefits under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), provided under Treasury Regulations Sections 1.409A-1(b)(4), and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement (whether severance payments, if any, or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. Severance benefits shall not commence until the Executive has a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “separation from service”). Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of termination to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i), and if any of the payments set forth herein are deemed to be “deferred compensation,” then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided prior to the earliest of (i) the expiration of the six-month period measured from the date of termination, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such period, all payments deferred pursuant to this paragraph shall be paid in a lump sum, and any remaining payments due shall be paid as otherwise provided herein. No interest shall be due on any amounts so deferred. Finally, if the period during which Executive may consider and sign a release in connection with the receipt of severance benefits spans two calendar years, the payment of severance will not be made or begin until the later calendar year.

 

5.6           Release. As a condition precedent to receipt of the Severance Benefits, Executive shall furnish to the Company an executed waiver and release of claims in a form to be provided by the Company, which shall include confidentiality, non-disclosure, non-disparagement and non-solicit provisions, and an obligation for Executive to provide reasonable transition assistance and consulting services to the Company on an as-needed basis through the first anniversary of Executive’s employment termination date (the “Release”) within the time period specified therein, but in no event later than forty-five days following Executive’s termination.

 

6.                  General Provisions.

 

6.1           Representations and Warranties. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that Executive’s execution and performance of this Agreement will not violate or breach any other agreements between the Executive and any other person or entity.

 

6.2           Advertising Waiver. Executive agrees to permit the Company, and persons or other organizations authorized by the Company, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company in which Executive’s name and/or pictures of Executive appear. Executive hereby waives and releases any claim or right Executive may otherwise have arising out of such use, publication or distribution.

 

6.3           D&O Insurance. Executive shall be entitled to indemnification from the Company pursuant to, and in accordance with the terms of, (i) the Company’s charter and bylaws, to the extent that indemnification of Executive is provided for therein, and (ii) any D&O insurance policy covering Executive purchased by the Company.

 

 

6.4           Miscellaneous. This Agreement, along with the CIIA, constitutes the complete, final and exclusive embodiment of the entire agreement between Executive and the Company with regard to its subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both Executive and a duly authorized member of the Board. This Agreement will bind the heirs, personal representatives, successors and assigns of both Executive and the Company, and inure to the benefit of both Executive and the Company, and to his and its heirs, successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified so as to be rendered enforceable. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of New York. Any ambiguity in this Agreement shall not be construed against either party as the drafter. Any waiver of a breach of this Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach. This Agreement may be executed in counterparts and facsimile signatures will suffice as original signatures.

 

[Signature Page Follows]

 

 

In Witness Whereof, the parties have executed this Agreement as of the day and year first written above.

 

Incysus, inc.

 

	By:	/s/Steve Lisi
	Name:	Steve Lisi
	Title:	Chief Business Officer and Chief Financial Officer

Accepted and agreed:
/s/William Ho
William Ho

 

 

 

Exhibit 10.17

 

AMENDMENT TO EMPLOYMENT AGREEMENT

 

 

This amendment (this “Amendment”) to that certain Employment Agreement, dated August 22, 2016 (the “Agreement”) by and between William Ho (“Employee”) and Incysus Therapeutics, Inc. (the “Company”) is entered into as of this 6th day of November, 2019.

 

WHEREAS, Incysus, Inc., was merged into Incysus Therapeutics, Inc. as of August 13, 2019;

 

WHEREAS, on November 6, 2019 the Board of Directors of the Company (the “Board”) voted to adjust certain aspects of Employee’s compensation terms; and

 

WHEREAS, the parties wish to amend the Agreement to reflect the Board’s decision.

 

In consideration and in furtherance of your continued at-will employment with the Company, you and the Company agree as follows:

 

1.	All references in the Agreement to “Incysus, Inc.” shall hereafter refer to “Incysus Therapeutics, Inc.”.

 

2.

The below existing language in the Agreement shall be entirely replaced by the replacement language beneath it:

 

Existing language: “3.1 Salary. The Company shall pay Executive at a rate equal to $721.15 per week less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices. Upon the Company’s close of the next round of funding after the date hereof that exceeds $10,000,000 in raised capital (a “Qualified Series A Financing”), the Company shall increase Executive pay such that Executive shall receive a base salary at the annualized rate of $250,000 (the “Base Salary”), less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices. The Base Salary shall be prorated for any partial year of employment on the basis of a 365-day year. The Base Salary may be adjusted from time to time in the Company’s discretion.”

 

Replacement language: “3.1 Salary. The Company shall pay Executive at an annualized rate of $250,000, less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices (the “Base Salary”). The Base Salary shall be prorated for any partial year of employment on the basis of a 365-day year. The Base Salary may be adjusted from time to time in the Company’s discretion. Upon the Company’s close of the next round of funding after the date hereof that equals or exceeds $20,000,000 in raised capital (a “Qualified Financing”), the Company shall increase Executive pay such that Executive shall receive (i) a Base Salary at the annualized rate of $350,000, (ii) a $150,000 cash bonus, and (iii) equity/options to be determined by the Board at the then 409(a) valuation, to be paid within 45 days after the closing of the Qualified Financing (the “Qualified Financing Bonus”).”

 

3.

The below existing language in the Agreement shall be entirely replaced by the replacement language beneath it:

 

Existing language: “5.1 Termination For Any Reason Prior To A Qualified Series A Financing; Termination For Cause Or Executive’s Resignation Following A Qualified Series A Financing. If (a) Executive’s employment is terminated for any reason, whether by the Company or by Executive, prior to a Qualified Series A Financing, or (b) following a Qualified Series A Financing, Executive’s employment is terminated by the Company for Cause (defined below) or Executive resigns for any reason, the Company shall pay Executive any earned but unpaid base salary accrued through the date of termination and all accrued but unused vacation, at the rates then in effect, less standard deductions and withholdings. The Company shall thereafter have no further obligations to Executive, except as may otherwise be required by law.

 

 

5.2 Termination Without Cause Following A Qualified Series A Financing. If, following a Qualified Series A Financing, Executive’s employment is terminated by the Company without Cause, then the Company shall pay Executive any earned but unpaid base salary accrued through the date of termination and all accrued but unused vacation, at the rates then in effect, less standard deductions and withholdings. In addition, subject to Section 5.6, Executive shall receive the following (the “Severance Benefits”):

 

(a)       The Company shall pay Executive, as severance, an amount equal to six months of Executive’s Base Salary at the time of termination; provided, however, that if the date of Executive’s termination is after January 1, 2018, the amount of severance paid to Executive by the Company shall increase from six months to twelve months. The amount specified in this Section 5.2(a) shall be paid to Executive in six (or twelve, as applicable) equal monthly installments beginning ten days following the effective date of the Release and will be subject to required withholding.

 

(b)       Vesting of Executive’s then-outstanding, unvested equity as of his employment termination date shall accelerate such that Executive shall be deemed vested in any additional equity that would have vested had Executive remained employed with the Company for an additional one year following the date of Executive’s employment termination (the “Acceleration.”) The Acceleration shall be determined as of the date of Executive’s employment termination, and shall not assume the achievement of any Company or performance based milestones following Executive’s employment termination date; provided, that if any such milestones are achieved within one year following the date of Executive’s employment termination, Executive shall be deemed vested in any additional equity that would have vested upon the occurrence of any such milestone at the time of occurrence.

 

Replacement language: “5.1 Termination For Cause Or Executive’s Resignation. If (a) Executive’s employment is terminated by the Company for Cause (defined below) or Executive resigns for any reason, the Company shall pay Executive any earned but unpaid base salary accrued through the date of termination and all accrued but unused vacation, at the rates then in effect, less standard deductions and withholdings. The Company shall thereafter have no further obligations to Executive, except as may otherwise be required by law.

 

5.2 Termination Without Cause. If, Executive’s employment is terminated by the Company without Cause, then the Company shall pay Executive any earned but unpaid base salary and bonuses accrued through the date of termination and all accrued but unused vacation, at the rates then in effect, less standard deductions and withholdings. In addition, subject to Section 5.6, Executive shall receive the following (the “Severance Benefits”):

 

(a)       The Company shall pay Executive, as severance, an amount equal to twelve months of Executive’s Base Salary at the time of termination. The amount specified in this Section 5.2(a) shall be paid to Executive in twelve equal monthly installments beginning ten days following the effective date of the Release and will be subject to required withholding.

 

(b)       Vesting of Executive’s then-outstanding, unvested equity as of his employment termination date shall accelerate such that Executive shall be deemed vested in any additional equity that would have vested had Executive remained employed with the Company for an additional one year following the date of Executive’s employment termination (the “Acceleration.”) The Acceleration shall be determined as of the date of Executive’s employment termination, and shall not assume the achievement of any Company or performance based milestones following Executive’s employment termination date; provided, that if any such milestones are achieved within one year following the date of Executive’s employment termination, Executive shall be deemed vested in any additional equity that would have vested upon the occurrence of any such milestone at the time of occurrence,

 

 

4.             A Section 6.5 shall be added and the below language shall be added beneath it:

 

Added language: “6.5 Arbitration. To ensure the timely and economical resolution of disputes that may arise in connection with Executive’s employment with the Company, Executive and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance, negotiation, execution, or interpretation of this Agreement, CIIA, or Executive’s employment, or the termination of Executive’s employment, including but not limited to all statutory claims, with the exception of discrimination and harassment claims, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16 (the “FAA”), and to the fullest extent permitted by law, by final, binding and confidential arbitration by a single arbitrator conducted in New York, New York by Judicial Arbitration and Mediation Services Inc. (“JAMS”) under the then applicable JAMS rules (at the following web address: https://wwwjamsadr.com/rules-employment-arbitration/); provided, however, this arbitration provision shall not apply to sexual harassment and discrimination claims to the extent prohibited by applicable law that is not preempted by the FAA. A hard copy of the rules will be provided to Executive upon request. A hard copy of the rules will be provided to Executive upon request. By agreeing to this arbitration procedure, both Executive and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. In addition, all claims, disputes, or causes of action under this section, whether by Executive or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The Arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration. The Company acknowledges that Executive will have the right to be represented by legal counsel at any arbitration proceeding. Questions of whether a claim is subject to arbitration under this Agreement) shall be decided by a federal court in the State of New York. However, procedural questions which grow out of the dispute and bear on the final disposition are matters for the arbitrator. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award; and (c) be authorized to award any or all remedies that Executive or the Company would be entitled to seek in a court of law. Executive and the Company shall equally share all JAMS’ arbitration fees, provided, however, that the prevailing party shall be entitled to recover its costs and expenses, including the costs of arbitration, mediation, litigation, arbitration fees, court fees, filing fees, and reasonable attorneys’ fees incurred in connection with such an action. Nothing in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction. To the extent applicable law prohibits mandatory arbitration of sexual harassment or discrimination claims and is not preempted by the FAA, in the event Executive intends to bring multiple claims, including a sexual harassment or discrimination claim, the sexual harassment and/or discrimination claims may be publicly filed with a court, while any other claims will remain subject to mandatory arbitration.”

 

This Amendment may be executed in several counterparts, all of which taken together shall constitute one single agreement between the parties. Except as amended hereby, all of the terms and conditions of the Agreement shall remain and continue in full force and effect.

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

 

Incysus Therapeutics, Inc.			William Ho, an individual
By:	/s/ Travis Whitfill		/s/ William Ho
Name:	Travis Whitfill		William Ho
Title:	Director

 

 

 

Exhibit 10.18

 

Incysus Therapeutics, inc.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is entered into as of November 1, 2018 (the “Effective Date”), by and between Lawrence S. Lamb, PhD (the “Executive”) and Incysus Therapeutics, Inc. (the “Company”).

 

Recitals

 

A.       The Company desires the association and services of Executive and his skills, abilities, background and knowledge, and is willing to engage Executive’s services on the terms and conditions set forth in this Agreement.

 

B.       Executive desires to be in the employ of the Company, and is willing to accept such employment on the terms and conditions set forth in this Agreement.

 

Agreement

 

In consideration of the foregoing, the parties agree as follows:

 

1.                  Employment by the Company.

 

1.1              Position; Duties; Location. Subject to the terms and conditions of this Agreement, Executive shall hold the position of Executive Vice President, Chief Scientific Officer. Executive’s activities shall be as directed by the Company’s Chief Executive Officer (the “CEO”) and its Board of Directors (the “Board”) and shall include such duties and activities as typically associated with Executive’s position, and as otherwise may be assigned to Executive from time to time. The Company reserves the right to change or modify Executive’s title and/or duties as business needs may require. Executive shall devote Executive’s business energies, interest, abilities and productive time to the proper and efficient performance of Executive’s duties under this Agreement. Executive shall report to the Board and shall work primarily from New York City and/or Birmingham, AL, provided that the Company reserves the right to require business travel.

 

1.2              Policies and Procedures. The employment relationship between the parties shall be governed by this Agreement and by the policies and practices established by the Board. In the event that the terms of this Agreement differ from or are in conflict with the Company’s policies or practices, this Agreement shall control.

 

1.3              Exclusive Employment; Agreement not to Participate in Company’s Competitors. Except with the prior written consent of the Board, Executive will not, during the period of employment by the Company, undertake or engage in any other employment, or directly or indirectly, undertake or engage in any employment, directorships, occupation, or business activity that competes with directly or indirectly, or is known by Executive to be adverse or antagonistic to the business, prospective business, or financial or other interests of the Company. Notwithstanding the above, Executive may continue to hold his current non-administrative academic appointment at the University of Alabama at Birmingham provided such position does not interfere with Executive’s job duties for the Company. Executive may further hold other non-tenured, non-administrative academic appointments as visiting professor, professor emeritus, or a similar position at other research institutions mutually agreed upon by the Company and the Executive, provided such position does not interfere with Executive’s job duties for the Company.

 

 

1.4              Start Date. Executive’s employment with the Company pursuant to this Agreement commenced on January 1, 2019 (the “Start Date”).

 

2.                  At-Will Employment.

 

Executive’s employment relationship with the Company is, and shall at all times remain, at-will. This means that either Executive or the Company may terminate the employment relationship at any time, for any reason or for no reason, with or without cause or advance notice.

 

3.                  COMPENSATION AND BENEFITS.

 

3.1              Salary. Beginning on the Effective Date, Executive shall earn a base salary of $240,000 per annum, less payroll deductions and all required withholdings (the “Base Salary”). The Company shall increase the Base Salary to the then fair-market compensation of a similar role in a company of a similar stage as determined solely by the Board less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices following the pricing of an initial public offering of the Company’s common stock and listing thereof on the Nasdaq Stock Market or New York Stock Exchange (or their constituent exchanges) (such event referred to as the “completion of an IPO”). The Base Salary shall be prorated for any partial year of employment on the basis of a 365-day year. The Base Salary may be adjusted from time to time in the Company’s discretion.

 

3.2              Performance Bonus. Each full calendar year, Executive will be eligible to earn an additional bonus (in the form of cash or equity, at the Company’s sole discretion) based on the Board’s assessment of Executive’s individual performance and overall Company performance. In order to earn and receive the bonus, Executive must remain employed by the Company through and including the bonus payout date, which will be on or before March 15th of the year following the year to which it relates. The determination of whether Executive has earned a bonus and the amount thereof shall be determined by the Board (and/or a committee thereof) in its sole and absolute discretion. The Company reserves the right to modify the bonus criteria and targets from year to year.

 

3.3              Stock Options. Subject to approval by the Board, the Company anticipates granting Executive options to purchase an aggregate of approximately 401,936 shares of the Company’s common stock, which represents approximately 2.5% of the shares outstanding as of the close of the Qualified Series A financing, with an exercise price per share equal to the fair market value per share determined by the Board as of the date of grant (the “Option”). The Option will be issued pursuant to the Company’s 2018 Equity Incentive Plan (the “Plan”) and a stock option agreement, and will include both time-based and milestone vesting as follows: (A) the time-based vesting portion of the Option will apply to 160,775 shares of the Company’s common stock (“Tenure Option”), which will have a four-year vesting schedule, under which 25% of the shares subject to the Tenure Option will vest 12 months after the vesting commencement date, and 1/48th of the shares subject to the Tenure Option will vest at the end of each month thereafter; and (B) the milestone-based portion of the Option will apply to 241,161 shares of the Company’s common stock (the “Milestone Option”), subject to Employee remaining a Service Provider, as defined by the Plan, as of the date of vesting of the applicable portion of the Milestone Option, (i) 60,290 shares of the Company’s common stock subject to the Milestone Option (~15% of the option grant) will vest on the date six (6) months after the completion of an IPO, (ii) 90,435 shares of the Company’s common stock subject to the Milestone Option (~22.5% of the option grant) will vest vest upon the initiation of a Phase I trial of the Company’s gamma-delta (γδ) T cell immunotherapy program in combination with a checkpoint inhibitor therapy for the treatment of glioblastoma, and (iii) 90,435 shares of the Company’s common stock subject to the Milestone Option (~22.5% of the option grant) will vest upon the initiation of a Phase I trial of the Company’s gamma-delta (y8) T cell immunotherapy for an indication other than those that have been submitted to the Food and Drug Administration as of the date of this Agreement (which, for the avoidance of doubt, are (a) treatment of leukemia and lymphoma patients undergoing haploidentical stem cell transplantation and (b) glioblastoma). No right to any common stock or any portion of the Option shall be deemed to be earned or accrued until such time that vesting occurs, nor does this grant confer any right to continued vesting of the Option or employment with the Company.

 

 

3.4              Standard Company Benefits. Executive shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any benefit plan or arrangement that may be in effect from time to time and made available to similarly situated Company employees. The Company shall pay 100% of the premium associated with group health insurance for Executive as an individual, and 75% of the premium associated with group health insurance for Executive’s dependents, if applicable. The Company reserves the right to modify, add or eliminate benefits from time to time.

 

3.5              Expense Reimbursements. The Company will reimburse Executive for all reasonable business expenses Executive incurs in conducting his duties hereunder, pursuant to the Company’s usual expense reimbursement practices.

 

4.                  Proprietary Information Obligations.

 

As a condition of employment, Executive agrees to execute and abide by the Employee Confidential Information and Inventions Assignment Agreement to be executed of even date herewith (the “CIIAA”).

 

5.                  Termination of Employment.

 

5.1              Executive’s Resignation For Any Reason. If (a) Executive resigns from employment with the Company for any reason, the Company shall pay Executive any earned but unpaid base salary accrued through the date of termination and all accrued but unused vacation, at the rates then in effect, less standard deductions and withholdings. The Company shall thereafter have no further obligations to Executive, except as may otherwise be required by law.

 

5.2              Termination Without Cause. If, following the final closing of the Qualified Series A Financing, Executive’s employment is terminated by the Company without Cause, then the Company shall pay Executive any earned but unpaid base salary accrued through the date of termination and all accrued but unused vacation, at the rates then in effect, less standard deductions and withholdings. In addition, subject to Section 5.6, Executive shall receive the following (the “Severance Benefits”):

 

 

(a)               The Company shall pay Executive, as severance, an amount equal to three months of Base Salary at the time of termination; provided, that Executive has complied with Section 5.6 below and is not otherwise in breach of the CIIAA, provided, however, that such severance amount will be six months (instead of three months) after the Company completion of an IPO. The amount specified in this Section 5.2(a) shall be paid to Executive: (i) if termination occurs prior to the completion of an IPO, in three equal monthly installments, or (jj) if termination occurs after completion of an IPO, in six equal monthly installments, in either case beginning ten days following the effective date of the Release and will be subject to any required withholdings.

 

(b)              Vesting of Executive’s then-outstanding, unvested equity will cease as of the end of the last complete month of service preceding his employment termination date and shall not assume the achievement of any Company or performance based milestones following Executive’s employment termination date

 

5.3              Definition of Cause. “Cause” shall mean the occurrence of any of the following: (i) Executive’s conviction of any felony or any crime involving fraud or dishonesty; (ii) Executive’s participation in fraud, misrepresentation of facts, act of dishonesty or act of gross misconduct against the Company and/or its Board that results in material financial or reputational harm to the Company; (iii) Executive’s material violation of any statutory or fiduciary duty, or duty of loyalty, owed to the Company and/or its Board; or (iv) Executive’s material violation of material Company policy. Prior to a termination for Cause pursuant to (iv) above, to the extent such event(s) is capable of being cured by Executive and to the extent it is the first such instance giving rise to the notice described herein, (A) the Company shall give the Executive a single notice of such event(s), which notice shall specify in reasonable detail the circumstances constituting Cause, (B) Executive shall have thirty (30) days after the delivery of such notice to cure the event(s) giving rise to Cause, the existence of such cure to be determined by the Board, provided that the Company reserves the right put Executive on a paid leave of absence during such period and terminate Executive’s access to Company systems and property so long as such measures do not substantially interfere with Executive’s ability to cure the Cause of his termination during the cure period.

 

5.4              Effect of Termination. Executive agrees that should his employment be terminated for any reason, he shall be deemed to have resigned from any and all positions, including any director and/or officer positions with the Company and its affiliated entities.

 

 

5.5              Section 409A Compliance. It is intended that any benefits under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), provided under Treasury Regulations Sections 1.409A-1(b)(4), and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement (whether severance payments, if any, or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. Severance benefits shall not commence until the Executive has a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “separation from service”). Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of termination to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i), and if any of the payments set forth herein are deemed to be “deferred compensation,” then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided prior to the earliest of (i) the expiration of the six-month period measured from the date of termination, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such period, all payments deferred pursuant to this paragraph shall be paid in a lump sum, and any remaining payments due shall be paid as otherwise provided herein. No interest shall be due on any amounts so deferred. Finally, if the period during which Executive may consider and/sign a release in connection with the receipt of severance benefits spans two calendar years, the payment of severance will not be made or begin until the later calendar year.

 

5.6              Release. As a condition precedent to receipt of the Severance Benefits, Executive shall furnish to the Company an executed waiver and release of claims in a form to be provided by the Company, which shall include confidentiality, non-disclosure, non-disparagement and non-solicit provisions, and an obligation for Executive to provide reasonable transition assistance and consulting services to the Company on an as-needed basis through the first anniversary of Executive’s employment termination date (the “Release”) within the time period specified therein, but in no event later than forty-five days following Executive’s termination. Executive acknowledges and agrees that such transition services shall be fully compensated by the benefits described herein and the post-termination payments contemplated under the CIIAA.

 

6.                  General Provisions.

 

6.1              Representations and Warranties. Executive represents and warrants that Executive is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that Executive’s execution and performance of this Agreement will not violate or breach any other agreements between the Executive and any other person or entity.

 

6.2              Advertising Waiver. Executive agrees to permit the Company, and persons or other organizations authorized by the Company, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company in which Executive’s name and/or pictures of Executive appear. Executive hereby waives and releases any claim or right Executive may otherwise have arising out of such use, publication or distribution.

 

6.3              D&O Insurance. Executive shall be entitled to indemnification from the Company pursuant to, and in accordance with the terms of, (i) the Company’s charter and bylaws, to the extent that indemnification of Executive is provided for therein, and (ii) any D&O insurance policy covering Executive purchased by the Company.

 

 

6.4              Disputes.

 

(a)               Equitable and Legal Relief. Either Party may seek equitable and legal relief in the event of a breach or threatened breach by the other Party of its obligations under this Agreement, subject to the prior satisfaction of Sections (b)-(d) hereof.

 

(b)              Internal Resolution. In the event of any dispute arising out of or relating to this Agreement or to a breach thereof, including its interpretation, performance or termination, the Parties shall try to settle such conflicts amicably between themselves prior to undertaking any other legal or equitable relief.

 

(c)               Mediation. In the event the Parties are still unable to resolve the dispute following attempt(s) at internal resolution, the dispute may then be submitted by a Party to a mediator, mutually agreed to by the Parties, for nonbinding mediation. The Parties shall cooperate with the mediator in an effort to resolve such dispute.

 

(d)              Arbitration. If the dispute is not resolved within sixty (60) days of its submission to the mediator undertaken pursuant to Section (c), either Party may submit the dispute for binding arbitration. The arbitration shall be conducted by one (1) arbitrator, to be appointed by mutual agreement of the parties. The arbitration shall be conducted in accordance with the rules and organization agreed to by the Parties at the time or if no agreement can be reached, by the commercial rules of the American Arbitration Association, which shall administer the arbitration. The arbitration, including the rendering of the award, shall take place in the State of New York and shall be the exclusive forum for resolving such dispute. The decision of the arbitrator shall be final and binding upon the Parties and the expense of the arbitration, including, without limitation, the award of attorneys’ fees to the prevailing Party, shall be paid as the arbitrator determines.

 

6.5              Miscellaneous. This Agreement, along with the CIIAA, constitutes the complete, final and exclusive embodiment of the entire agreement between Executive and the Company with regard to its subject matter. Executive acknowledges and agrees that this Agreement expressly supersedes and replaces any prior agreements, understandings, or negotiations concerning stock, stock options, restricted stock, or other Company equity. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations, including, but not limited to the Consulting Agreement, dated January 1, 2018, between Executive and the Company, with the exception of Sections 4, 5, 6, 11, 15, 16, and 17, which shall remain in effect; and the Advisor Agreement between Employee and Company dated February 23, 2016, with the exception of Section 2, which shall remain in effect. In addition, the Restricted Stock Purchase Agreement, dated February 23, 2016 shall remain in full force and effect in its entirety. This Agreement may not be modified or amended except in a writing signed by both Executive and a duly authorized member of the Board. This Agreement will bind the heirs, personal representatives, successors and assigns of both Executive and the Company, and inure to the benefit of both Executive and the Company, and to his and its heirs, successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified so as to be rendered enforceable. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of New York. Any ambiguity in this Agreement shall not be construed against either party as the drafter. Any waiver of a breach of this Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach. This Agreement may be executed in counterparts and facsimile signatures will suffice as original signatures.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.

 

	INCYSUS THERAPEUTICS, INC.
	By:	/s/William Ho
		Name: William Ho
		Title:   President & CEO
Accepted and agreed:
/s/Lawrence S Lamb
Lawrence S. Lamb, Phd

 

 

 

Exhibit 10.19

 

 

 

March 18, 2019

 

Melissa Beleen

209 Beacon Falls Court

Cary, NC 27519

 

Dear Melissa:

 

We are delighted to offer you a position as the Vice President of Clinical Operations for Incysus Therapeutics, Inc. (“Incysus” or “Company”) in our Birmingham, AL office. The terms of our offer are conditioned on you commencing your employment with us no later than April I, 2019 (the “Start Date”).

 

I.                    COMPENSATION

 

A.                  You will receive a salary at the annualized rate of $208,000.00, less all applicable withholdings and payable in accordance with current payroll practices in effect. Should the Company make an initial public offering, Incysus will, at that time and in its sole discretion, increase your annual salary to what is a competitive market rate at that time for companies with a comparable pre-IPO valuation, structure, and design.

 

B.                  You will also be eligible to earn an annual discretionary bonus (in the form of cash and/or equity at the Company’ s sole discretion) with a target amount equal to 20% of your base salary. The amount of this bonus will be based, in part, on your performance and the annual performance of the Company during the calendar year. Any equity and/or option-based compensation will be subject to time-based and/or milestone-based vesting in addition to other terms and conditions below. The Company will pay you this bonus, if any, by no later than March 15th of the following calendar year. The bonus is not earned until paid and no pro-rated amount will be paid if your employment terminates for any reason prior to the payment date.

 

C.                  Upon your Start Date, subject to the approval of the Incysus Board of Directors, the Company will grant you an option to purchase 107,354 shares of Company Common Stock at the fair market value as determined by the Board as of the date of grant (the “Option”). The anticipated Option grant will be governed by the terms and conditions of the Company’s 2018 Equity Incentive Plan (the “Plan”) and your grant agreement, and will include time-based vesting, as described below. No right to any stock or option is earned or accrued until such time that vesting occurs, nor does this grant confer any right to continued vesting or employment. The terms of this Option grant are as follows: one-fourth 1/4th of the shares vest one year and a day after the vesting commencement date, and none before such date; the balance of the shares vest in a series of 36 successive equal monthly installments measured from the day after the first anniversary of the vesting commencement date, subject to your continuous service as of each such date.

 

D.                  During your employment, you will be eligible to participate in the standard benefits and Paid Time Off plans offered to similarly situated employees by the Company from time to time, subject to plan terms and generally applicable Company policies. A full description of these benefits is available upon request. The Company may change compensation and benefits from time to time in its discretion. You will also be eligible to enroll and participate in the Company’s 401(k) Plan as administered by Transamerica (www.ta-retirement.com).

 

E.                   The Company will reimburse you for all reasonable business expenses you incur in conducting your duties hereunder, pursuant to the Company’s usual expense reimbursement policy.

 

 

II.                  TERMINATION

 

The periodic salary payments described above do not affect your status as an at-will employee of Incysus. The Company may terminate your employment, for any reason or no reason at all, without notice or further obligation hereunder. As a Vice President, you are required to provide at least 60 days’ written notice of your intention to terminate your employment (the “Notice Period”). However, if, at the time of your termination, your title is other than a Vice President, the amount of notice you are required to give will be governed by Incysus’ policies in effect at the time. Your fiduciary duties and your obligations to Incysus as an employee will continue, and you will cooperate in the transition of your responsibilities. Incysus shall have the right, in its sole discretion, to direct that you no longer come in to the office during the Notice Period or to shorten the Notice Period.

 

III.                CONFIDENTIALITY AGREEMENT

 

In connection with your employment with the Company, you will receive and have access to Company confidential information and trade secrets. Accordingly, enclosed with this offer letter is an Employee Confidential Information and Inventions Assignment Agreement (“CUA”) which contains restrictive covenants and prohibits unauthorized use or disclosure of the Company’s confidential information and trade secrets, among other obligations. Please review the CIIA and only sign it after careful consideration.

 

IV.                CONFIDENTIALITY

 

You agree to keep, and to instruct any counsel representing you in your negotiations with the Company to keep, this offer letter and its terms strictly confidential and not to disclose or discuss this offer letter, its terms, or any of the discussions relating to it, with anyone; provided, however, that you may: (1) discuss this offer letter and its terms with your counsel, immediate family, and financial and tax advisors; or (2) disclose this offer letter and its terms as mandated by legal process or by law. In addition, you agree to inform any prospective employer’s General Counsel, Head of Human Resources, or if no such positions exist, your hiring contact, of your post-employment obligations to Incysus. You agree that prior to disclosing this offer letter or its terms to a third party, you will advise the third party of the confidentiality obligations set forth in this Section and instruct the third party to keep this Offer Letter and its terms strictly confidential.

 

V.                  PRE-EMPLOYMENT REQUIREMENTS

 

We ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting, or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third-party confidential information to the Company, including that of your former employer, and that you will not in any way utilize any such information in performing your duties for the Company.

 

The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Your job offer, therefore, is contingent upon a clearance of such a background investigation and/or reference check, if any. You agree to assist as needed and to complete any documentation at the Company’s request to meet these conditions.

 

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

 

 

VI.                ARBITRATION

 

To ensure the timely and economical resolution of disputes that may arise in connection with your employment with the Company, you and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance, negotiation, execution, or interpretation of this letter agreement, the PIIA, or your employment, or the termination of your employment, including but not limited to all statutory claims, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration by a single arbitrator conducted in New York, New York by Judicial Arbitration and Mediation Services Inc. (“JAMS” ) under the then applicable JAMS rules (at the following web address: https://www.jamsadr.com/rules-employment-arbitration/); provided, however, this arbitration provision shall not apply to sexual harassment claims to the extent prohibited by applicable law. A hard copy of the rules will be provided to you upon request. By agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. In addition, all claims, disputes, or causes of action under this provision, whether by you or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The Arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration. The Company acknowledges that you will have the right to be represented by legal counsel at any arbitration proceeding. Questions of whether a claim is subject to arbitration under this agreement shall be decided by the arbitrator. Likewise, procedural questions which grow out of the dispute and bear on the final disposition are also matters for the arbitrator. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award; and (c) be authorized to award any or all remedies that you or the Company would be entitled to seek in a court of law. You and the Company shall equally share all JAMS’ arbitration fees. Each party is responsible for its own attorneys’ fees, except as expressly set forth in your PIIA. Nothing in this letter agreement is intended to prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction. To the extent applicable law prohibits mandatory arbitration of sexual harassment claims, in the event you intend to bring multiple claims, including a sexual harassment claim, the sexual harassment claim may be publicly filed with a court, while any other claims will remain subject to mandatory arbitration.

 

VII.             MISCELLANEOUS

 

This letter, along with any agreements relating to proprietary rights between you and the Company, constitutes the entire agreement between you and Incysus with respect to the subject matters referred to herein, and supersedes all prior or contemporaneous negotiations, promises, covenants, agreements and representations of every kind or nature with respect thereto, all of which have become merged and finally integrated into this agreement. The provisions in this agreement are severable. Any provisions in this agreement held to be unenforceable or invalid in any jurisdiction shall not affect the enforceability of the remaining provisions of this agreement. In addition, if any provision of this agreement is held to be excessively broad as to degree, duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

 

If you fail to commence employment by the Start Date, this offer will become null and void. If the above terms are acceptable to you, we request that you signify your acceptance of the terms of this letter by signing and dating the copy enclosed and returning it to Incysus.

 

 

Sincerely,

/s/ William T. Ho

William T. Ho,

Chief Executive Officer

 

AGREED TO AND ACCEPTED BY:

 

/s/ Melissa Beleen		19 March 2019
Melissa Beleen		DATE

 

Enclosures

Duplicate Original Letter

Employee Confidential Information and Inventions Assignment Agreement

 

 

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We consent to the inclusion in this Registration Statement on Form S-1 of IN8bio, Inc. of our report dated September 10, 2020 on our audits of the financial statements of IN8bio, Inc as of December 31, 2019 and 2018 and for the years then ended. We also consent to the reference to our firm under the heading “Experts.”

 

/s/ CohnReznick LLP

 

Roseland, New Jersey

October 16, 2020