Confidential Draft Submission No. 2 submitted to the Securities and Exchange Commission on March 23, 2018. This draft registration statement has not been filed publicly with the Securities and Exchange Commission and all information contained herein remains confidential.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Unity Biotechnology, Inc.
(Exact name of Registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization) |
2834 (Primary Standard Industrial Classification Code Number) |
26-4726035 (I.R.S. Employer Identification Number) |
3280 Bayshore Blvd
Brisbane, California 94005
(650) 416-1192
(Address, including zip code, and telephone number, including area code, of Registrants principal executive offices)
Keith R. Leonard Jr.
Chairman and Chief Executive Officer
Unity Biotechnology, Inc.
3280 Bayshore Blvd, Suite 100
Brisbane, California 94005
(650) 416-1192
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to: | ||||
Brian J. Cuneo, Esq. Alan C. Mendelson, Esq. Mark V. Roeder, Esq. Latham & Watkins LLP 140 Scott Drive Menlo Park, California 94025 Telephone: (650) 328-4600 Facsimile: (650) 463-2600 |
Tamara L. Tompkins, Esq. General Counsel and Corporate Secretary Unity Biotechnology, Inc., Suite 100 3280 Bayshore Blvd Brisbane, California 94005 Telephone: (650) 416-1192 Facsimile: (415) 656-4371 |
Alan F. Denenberg, Esq. Stephen Salmon, Esq. Davis Polk & Wardwell LLP 1600 El Camino Real Menlo Park, California 94025 Telephone: (650) 752-2004 Facsimile: (650) 752-3604 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ (Do not check if a smaller reporting company) | Smaller reporting company | ☐ | |||
Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☒
CALCULATION OF REGISTRATION FEE
| ||||
Title of each class of securities to be registered |
Proposed maximum aggregate offering price(1) |
Amount of registration fee | ||
Common Stock, $0.0001 par value per share |
$ | $ | ||
| ||||
|
(1) | Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. Includes shares that the underwriters have the option to purchase. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
The sole purpose of this amendment is to provide certain exhibits to the Registration Statement, as indicated in Item 16 of Part II of this amendment. No change is made to the preliminary prospectus constituting Part I of the Registration Statement or Items 13, 14, 15 or 17 of Part II of the Registration Statement. Accordingly, this amendment consists only of the facing page, this explanatory note, Part II and the signature page to the Registration Statement.
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the sale of common stock being registered. All amounts are estimates except for the Securities and Exchange Commission, or SEC, registration fee, the Financial Industry Regulatory Authority, Inc., or FINRA, filing fee and The Nasdaq Global Select Market listing fee.
Item |
Amount to be paid |
|||
SEC registration fee |
$ | * | ||
FINRA filing fee |
* | |||
The Nasdaq Global Select Market Listing fee |
* | |||
Printing and engraving expenses |
* | |||
Legal fees and expenses |
* | |||
Accounting fees and expenses |
* | |||
Blue Sky, qualification fees and expenses |
* | |||
Transfer Agent fees and expenses |
* | |||
Miscellaneous expenses |
* | |||
|
|
|||
Total |
$ | * | ||
|
|
* | To be completed by amendment. |
Item 14. Indemnification of Directors and Officers.
As permitted by Section 102 of the Delaware General Corporation Law, we have adopted provisions in our amended and restated certificate of incorporation and amended and restated bylaws, to be in effect immediately prior to the consummation of this offering, that will limit or eliminate the personal liability of our directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
| any breach of the directors duty of loyalty to us or our stockholders; |
| any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
| any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or |
| any transaction from which the director derived an improper personal benefit. |
These limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. Our amended and restated certificate of incorporation will also authorize us to indemnify our officers, directors and other agents to the fullest extent permitted under Delaware law.
As permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws will provide that:
| we may indemnify our directors, officers, and employees to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; |
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| we may advance expenses to our directors, officers and employees in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; and |
| the rights provided in our amended and restated bylaws are not exclusive. |
Our amended and restated certificate of incorporation, attached as Exhibit 3.2 hereto, and our amended and restated bylaws, to be attached as Exhibit 3.4 hereto, will provide for the indemnification provisions described above and elsewhere herein. We have entered into separate indemnification agreements with our directors and officers which may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements generally require us, among other things, to indemnify our officers and directors against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct. These indemnification agreements also generally require us to advance any expenses incurred by the directors or officers as a result of any proceeding against them as to which they could be indemnified. In addition, we have purchased a policy of directors and officers liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances. These indemnification provisions and the indemnification agreements may be sufficiently broad to permit indemnification of our officers and directors for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended, or the Securities Act.
The form of Underwriting Agreement, to be attached as Exhibit 1.1 hereto, provides for indemnification by the underwriters of us and our officers who sign this Registration Statement and directors for specified liabilities, including matters arising under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
The following list sets forth information as to all securities we have sold since January 1, 2015, which were not registered under the Securities Act.
1. | In January 2015, we issued an aggregate of 7,575,756 shares of our Series A-2 convertible preferred stock to seven accredited investors at $0.297 per share for aggregate proceeds to us of approximately $2.3 million. |
2. | In January 2015, we issued a warrant to purchase 1,122,334 shares of Series A-2 convertible preferred stock at an exercise price of $0.223 per share to Nathaniel E. David. |
3. | In June 2015, we issued 20,000 shares of our common stock to The Board of Trustees of the University of Arkansas in consideration of services rendered to us under a license agreement with said stockholder. |
4. | In June and November 2015, we issued convertible promissory notes in the aggregate principal amount of approximately $4.0 million to six accredited investors. |
5. | In January 2016 we issued 5,000 shares of our common stock to Wilson Sonsini Goodrich & Rosati, P.C. in consideration of services rendered to us. |
6. | In February 2016, we issued an aggregate of 13,780,723 shares of our Series A-2 convertible preferred stock to six accredited investors at $0.297 per share in consideration of the cancellation of outstanding debt owed to such investors. |
7. | In February 2016, we issued 1,573,340 and 393,335 shares of our common stock to Ascentage Pharma Group Corp. Ltd. and The Regents of the University of Michigan, respectively, as license fee payments under a license agreement with said stockholders. In October 2016, we issued 200,000 shares of our common stock to The Mayo Foundation for Education and Research as a license fee payment under a license agreement with such stockholder. |
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8. | In February, April, May, July, August, September and October 2016, we issued convertible promissory notes in the aggregate principal amount of approximately $16.9 million to nine accredited investors. |
9. | In October 2016 and March, April, May and June 2017, we issued an aggregate of 43,584,440 shares of our Series B convertible preferred stock, including (i) 32,623,207 shares of Series B convertible preferred stock issued upon conversion of convertible promissory notes issued by us, at a per share price of $4.11, and (ii) 10,961,233 shares of Series B convertible preferred stock issued upon conversion of convertible promissory notes issued by us, in exchange for approximately $17.1 million in cancellation of indebtedness, for a total amount raised (including the cancellation of indebtedness) of approximately $151.2 million. |
10. | In December 2017, we issued 37,500 shares of our common stock to the University of North Carolina at Chapel Hill Foundation, Inc. in consideration of services rendered to us by an individual related to such entity. |
11. | In March 2018, we issued an aggregate of 10,592,232 shares of our Series C convertible preferred stock at a per share price of $5.1972 for a total amount raised of approximately $55.0 million. |
12. | Since December 31, 2015, we granted stock options and stock awards outside of our 2013 Equity Incentive Plan, covering an aggregate of 2,343,998 shares of common stock, at a weighted-average exercise price of $1.16 per share. |
13. | Since December 31, 2015, we granted stock options and stock awards to employees, directors and consultants under our 2013 Equity Incentive Plan, covering an aggregate of 17,613,184 shares of common stock, at a weighted-average exercise price of $0.79 per share. Of these, options covering an aggregate of 320,383 shares were cancelled without being exercised and 458,781 unvested shares were repurchased concurrent with employee terminations. |
14. | Since December 31, 2015, we issued an aggregate of 8,127,103 shares of common stock at a weighted-average exercise price of $0.47 to employees, directors and consultants for cash consideration in the aggregate amount of approximately $3.8 million upon the exercise of stock options and stock awards. |
We claimed exemption from registration under the Securities Act for the sale and issuance of securities in the transactions described in paragraphs (1) through (11) by virtue of Section 4(a)(2) and/or Regulation D promulgated thereunder as transactions not involving any public offering. All of the purchasers of unregistered securities for which we relied on Section 4(a)(2) and/or Regulation D represented that they were accredited investors as defined under the Securities Act. We claimed such exemption on the basis that (a) the purchasers in each case represented that they intended to acquire the securities for investment only and not with a view to the distribution thereof and that they either received adequate information about the registrant or had access, through employment or other relationships, to such information and (b) appropriate legends were affixed to the stock certificates issued in such transactions.
We claimed exemption from registration under the Securities Act for the sales and issuances of securities in the transactions described in paragraphs (12) through (14) above under Section 4(a)(2) of the Securities Act in that such sales and issuances did not involve a public offering or under Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation, as provided by Rule 701.
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Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
Incorporated by Reference |
||||||||||||||||
Exhibit Number |
Exhibit Description |
Form | Date | Number | Filed | |||||||||||
1.1* | Form of Underwriting Agreement. | |||||||||||||||
3.1 | Amended and Restated Certificate of Incorporation, as amended, currently in effect. | X | ||||||||||||||
3.2 | Form of Amended and Restated Certificate of Incorporation, to be in effect immediately prior to the consummation of this offering. | X | ||||||||||||||
3.3 | Bylaws, currently in effect. | X | ||||||||||||||
3.4 | Form of Amended and Restated Bylaws, to be in effect immediately prior to the consummation of this offering. | X | ||||||||||||||
4.1 | Reference is made to exhibits 3.1 through 3.4. | |||||||||||||||
4.2* | Form of Common Stock Certificate. | |||||||||||||||
4.3 | Amended and Restated Investors Rights Agreement, dated as of October 14, 2016, by and among Unity Biotechnology, Inc. and the investors party thereto. | X | ||||||||||||||
5.1* | Opinion of Latham & Watkins LLP. | |||||||||||||||
10.1(a) | Lease Agreement, dated as of May 13, 2016, by and between Unity Biotechnology, Inc. and BMR-Bayshore Boulevard L.P. | X | ||||||||||||||
10.1(b) | First Amendment to Lease Agreement, dated as of May 23, 2017, by and between Unity Biotechnology, Inc. and BMR-Bayshore Boulevard L.P. | X | ||||||||||||||
10.2(a) | Space License Agreement, dated as of October 20, 2016, by and between Unity Biotechnology, Inc. and BMR-Bayshore Boulevard L.P. | X | ||||||||||||||
10.2(b) | First Amendment to Space License Agreement, dated as of December 5, 2016, by and between Unity Biotechnology, Inc. and BMR-Bayshore Boulevard L.P. | X | ||||||||||||||
10.2(c) | Second Amendment to Space License Agreement, dated as of January 30, 2017, by and between Unity Biotechnology, Inc. and BMR-Bayshore Boulevard L.P. | X | ||||||||||||||
10.3(a)# | 2013 Equity Incentive Plan. | X | ||||||||||||||
10.3(b)# | Form of Stock Option Agreement under 2013 Equity Incentive Plan. | X | ||||||||||||||
10.4(a)# | 2018 Incentive Award Plan. | X | ||||||||||||||
10.4(b)# | Form of Stock Option Grant Notice and Stock Option Agreement under the 2018 Incentive Award Plan. | X |
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Incorporated by Reference |
||||||||||||||||
Exhibit Number |
Exhibit Description |
Form | Date | Number | Filed | |||||||||||
10.4(c)# | Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under the 2018 Incentive Award Plan. | X | ||||||||||||||
10.4(d)# | Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2018 Incentive Award Plan. | X | ||||||||||||||
10.5# | 2018 Employee Stock Purchase Plan. | |||||||||||||||
10.6# | Non-Employee Director Compensation Program. | X | ||||||||||||||
10.7# | Form of Indemnification Agreement for directors and officers. | X | ||||||||||||||
10.8#* | Employment Agreement, dated January 29, 2018, by and between Unity Biotechnology, Inc. and Keith R. Leonard Jr. | X | ||||||||||||||
10.9# | Employment Agreement, dated January 29, 2018, by and between Unity Biotechnology, Inc. and Nathaniel E. David. | X | ||||||||||||||
10.10# | Employment Agreement, dated January 29, 2018, by and between Unity Biotechnology, Inc. and Robert C. Goeltz II. | X | ||||||||||||||
10.11# | Employment Agreement, dated January 29, 2018, by and between Unity Biotechnology, Inc. and Jamie Dananberg. | X | ||||||||||||||
10.12# | Employment Agreement, dated January 29, 2018, by and between Unity Biotechnology, Inc. and Daniel G. Marquess. | X | ||||||||||||||
10.13# | Employment Agreement, dated January 29, 2018, by and between Unity Biotechnology, Inc. and Tamara L. Tompkins. | X | ||||||||||||||
10.14(a) | Compound Library and Option Agreement, dated as of February 2, 2016, by and between Ascentage Pharma Group Corp. Ltd. and Unity Biotechnology, Inc. |
X | ||||||||||||||
10.14(b) | APG1252 License Agreement, dated as of February 2, 2016, by and between Ascentage Pharma Group Corp. Ltd. and Unity Biotechnology, Inc. | X | ||||||||||||||
10.14(c)* | Research Services Agreement, dated as of February 2, 2016, by and between Ascentage Pharma Group Corp. Ltd. and Unity Biotechnology, Inc. | |||||||||||||||
23.1* | Consent of Independent Registered Public Accounting Firm. | |||||||||||||||
23.2* | Consent of Latham & Watkins LLP (included in Exhibit 5.1). | |||||||||||||||
24.1* | Power of Attorney. Reference is made to the signature page to the Registration Statement. |
* | To be filed by amendment. |
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| Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and this exhibit has been filed separately with the SEC. |
# | Indicates management contract or compensatory plan. |
(b) Financial Statement Schedules. Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Brisbane, California on , 2018.
Unity Biotechnology, Inc. | ||
By: |
| |
Keith R. Leonard Jr. Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Keith R. Leonard Jr., Robert C. Goeltz II and Tamara L. Tompkins, and each of them acting individually, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Registration Statement, including post-effective amendments or any abbreviated registration statement and any amendments thereto filed pursuant to Rule 462(b) increasing the number of securities for which registration is sought, and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, with full power of each to act alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date | ||
Keith R. Leonard Jr. |
Chairman, Chief Executive Officer and Director (Principal Executive Officer) |
, 2018 | ||
Robert C. Goeltz II |
Chief Financial Officer (Principal Financial and Accounting Officer) |
, 2018 | ||
Kristina M. Burow |
Director | , 2018 | ||
Graham K. Cooper |
Director | , 2018 | ||
Nathaniel E. David |
President and Director | , 2018 | ||
David L. Lacey |
Director | , 2018 | ||
Robert T. Nelson |
Director | , 2018 | ||
Camille D. Samuels |
Director | , 2018 |
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Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
UNITY BIOTECHNOLOGY, INC.
Unity Biotechnology, Inc., a corporation organized and existing under the laws of the State of Delaware (the Corporation), certifies that:
1. The name of the Corporation is Unity Biotechnology, Inc. The Corporation was originally incorporated under the name Forge, Inc. The Corporations original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on March 30, 2009, was amended on June 25, 2013, amended and restated on June 28, 2013 and further amended on January 28, 2015, June 23, 2015, February 12, 2016 and October 14, 2016.
2. This Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, and has been duly approved by the written consent of the stockholders of the Corporation in accordance with Section 228 of the General Corporation Law of the State of Delaware.
3. The text of the Certificate of Incorporation is amended and restated to read as set forth in EXHIBIT A attached hereto.
IN WITNESS WHEREOF, Unity Biotechnology, Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by Keith Leonard, a duly authorized officer of the Corporation, on March 15, 2018.
/s/ Keith R. Leonard |
Keith R. Leonard, Jr., Chief Executive Officer |
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EXHIBIT A
ARTICLE I
The name of the Corporation is Unity Biotechnology, Inc.
ARTICLE II
The purpose of this corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.
ARTICLE III
The address of the Corporations registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, 19801. The name of the registered agent at such address is The Corporation Trust Company.
ARTICLE IV
The total number of shares of stock that the corporation shall have authority to issue is two hundred forty-three million two hundred eighty-three thousand eight hundred eighteen (243,283,818) shares, consisting of one hundred forty million (140,000,000) shares of Common Stock, $0.0001 par value per share, and one hundred three million two hundred eighty-three thousand eight hundred eighteen (103,283,818) shares of Preferred Stock, $0.0001 par value per share. The first Series of Preferred Stock shall be designated Series A Preferred Stock and shall consist of forty-one million seven hundred thirty-nine thousand one hundred forty-nine (41,739,149) shares. The Series A Preferred Stock shall further be divided into series of stock, designated as Series A-1 Preferred Stock, consisting of nine million eighty-five thousand seven hundred thirty-eight (9,085,738) shares, and Series A-2 Preferred Stock consisting of thirty-two million six hundred fifty-three thousand four hundred eleven (32,653,411) shares. The second Series of Preferred Stock shall be designated Series B Preferred Stock and shall consist of fifty million (50,000,000) shares. The third Series of Preferred Stock shall be designated Series C Preferred Stock and shall consist of eleven million five hundred forty four thousand six hundred sixty-nine (11,544,669) shares.
ARTICLE V
The terms and provisions of the Common Stock and Preferred Stock are as follows:
1. Definitions. For purposes of this ARTICLE V, the following definitions shall apply:
(a) Board of Directors shall mean the board of directors of the Corporation.
(b) Convertible Securities shall mean any evidences of indebtedness, shares or other securities convertible into or exchangeable for Common Stock.
(c) Conversion Price shall mean the Series A Conversion Price, the Series B Conversion Price or the Series C Conversion Price, as applicable.
(d) Corporation shall mean Unity Biotechnology, Inc.
(e) Distribution shall mean the transfer of cash or other property without consideration whether by way of dividend or otherwise, other than dividends on Common Stock payable in Common Stock,
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or the purchase or redemption of shares of the Corporation by the Corporation or its subsidiaries for cash or property other than: (i) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, (ii) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) repurchase of capital stock of the Corporation in connection with the settlement of disputes with any stockholder, and (iv) any other repurchase or redemption of capital stock of the Corporation approved by the holders of (a) at least a majority of the Common Stock and (b) at least sixty percent (60%) of the outstanding shares of Preferred Stock of the Corporation, voting as a single class on as-converted basis; provided, that any repurchases of capital stock of the Corporation pursuant to clauses (i) through (iii) shall be at a price no greater than the then-fair market value of such capital stock.
(f) Filing Date shall mean the date of the filing and certification of this Amended and Restated Certificate of Incorporation by the Secretary of State of the State of Delaware.
(g) Liquidation Preference shall mean for the Series A Preferred Stock, the Series A Liquidation Preference, shall mean for the Series B Preferred Stock, the Series B Liquidation Preference, and shall mean for the Series C Preferred Stock, the Series C Liquidation Preference.
(h) Options shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.
(i) Original Issue Price shall mean for the Series A Preferred Stock, the Series A Original Issue Price, shall mean for the Series B Preferred Stock, the Series B Original Issue Price, and shall mean for the Series C Preferred Stock, the Series C Original Issue Price.
(j) Preferred Stock shall mean the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock.
(k) Recapitalization shall mean any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event.
(l) Series A Conversion Price shall mean $0.293 per share for the Series A-1 Preferred Stock and $0.297 per share for the Series A-2 Preferred Stock (in each case, subject to adjustment from time to time after the Filing Date for Recapitalizations).
(m) Series A Liquidation Preference shall equal, on a per share basis, the Series A Original Issue Price, plus an amount equal to any dividends declared but unpaid thereon, computed to the date payment thereof is made available.
(n) Series A Original Issue Price shall mean $0.293 per share for the Series A-1 Preferred Stock and $0.297 per share for the Series A-2 Preferred Stock (in each case, subject to adjustment from time to time after the Filing Date for Recapitalizations).
(o) Series A Preferred Stock shall mean the Series A-1 Preferred Stock together with the Series A-2 Preferred Stock.
(p) Series B Conversion Price shall mean $4.11 per share (subject to adjustment from time to time after the Filing Date for Recapitalizations).
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(q) Series B Liquidation Preference shall equal, on a per share basis, the Series B Original Issue Price, plus an amount equal to any dividends declared but unpaid thereon, computed to the date payment thereof is made available.
(r) Series B Original Issue Price shall mean $4.11 per share (subject to adjustment from time to time after the Filing Date for Recapitalizations).
(s) Series B Preferred Stock shall mean the Series B Preferred Stock.
(t) Series C Conversion Price shall mean $5.1972 per share (subject to adjustment from time to time after the Filing Date for Recapitalizations).
(u) Series C Liquidation Preference shall equal, on a per share basis, the Series C Original Issue Price, plus an amount equal to any dividends declared but unpaid thereon, computed to the date payment thereof is made available.
(v) Series C Original Issue Price shall mean $5.1972 per share (subject to adjustment from time to time after the Filing Date for Recapitalizations).
(w) Series C Preferred Stock shall mean the Series C Preferred Stock.
2. Dividends.
(a) Preferred Stock. The holders of shares of Series C Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend (other than dividends on the Common Stock payable solely in Common Stock) on the Series B Preferred Stock, Series A Preferred Stock and Common Stock, at the rate of six percent (6%) of the Series C Original Issue Price per annum on each outstanding share of Series C Preferred Stock then outstanding; payable when, as and if declared by the Board of Directors. Such dividends shall not be cumulative. Only after payment of the dividends to the holders of Series C Preferred Stock, the holders of shares of Series B Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend (other than dividends on the Common Stock payable solely in Common Stock) on the Series A Preferred Stock and Common Stock, at the rate of six percent (6%) of the Series B Original Issue Price per annum on each outstanding share of Series B Preferred Stock then outstanding; payable when, as and if declared by the Board of Directors. Such dividends shall not be cumulative. Only after payment of the dividends to the holders of Series C Preferred Stock and Series B Preferred Stock, the holders of shares of Series A Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend (other than dividends on the Common Stock payable solely in Common Stock) on the Common Stock, at the rate of six percent (6%) of the Series A Original Issue Price per annum on each outstanding share of Series A Preferred Stock then outstanding; payable when, as and if declared by the Board of Directors. Such dividends shall not be cumulative.
(b) Additional Dividends. After the payment or setting aside for payment of the dividends described in Section V.2(a), any additional dividends (other than dividends on Common Stock payable solely in Common Stock) set aside or paid in any fiscal year shall be set aside or paid among the holders of the Preferred Stock and Common Stock then outstanding on a pari passu basis in proportion to the greatest whole number of shares of Common Stock which would be held by each such holder if all shares of Preferred Stock were converted at the then-effective Conversion Rate.
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(c) Non-Cash Distributions. Whenever a Distribution provided for in this Section V.2 shall be payable in property other than cash, the value of such Distribution shall be deemed to be the fair market value of such property as determined in good faith by the Board of Directors (including a majority of the Investor Directors).
(d) Consent to Certain Distributions. A distribution can be made without regard to any preferential dividends arrears amount or any preferential rights amount in connection with (i) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase, (ii) repurchases of Common Stock issued to or held by employees, officers, directors or consultants of the Corporation or its subsidiaries pursuant to rights of first refusal contained in agreements providing for such right, (iii) repurchases of Common Stock or Preferred Stock in connection with the settlement of disputes with any stockholder, or (iv) any other repurchase or redemption of Common Stock or Preferred Stock approved by the holders of at least sixty percent (60%) of the outstanding shares of Preferred Stock of the Corporation, voting as a single class on an as-converted basis; provided, that any repurchases of capital stock of the Corporation pursuant to clauses (i) through (iii) shall be at a price no greater than the then-fair market value of such capital stock.
3. Liquidation Rights.
(a) Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event (as defined below), prior to and in preference to any Distribution of any of the assets of the Corporation to the holders of the Series B Preferred Stock, Series A Preferred Stock or Common Stock, by reason of their ownership of such stock, the holders of the shares of Series C Preferred Stock shall be paid, on a pari passu basis, an amount per share equal to the Series C Liquidation Preference. 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 C Preferred Stock the full amount to which they shall be entitled under this Section V.3(a), the holders of shares of Series C 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. After the payment or setting aside for payment to the holders of the Series C Preferred Stock of the full amount of the Series C Liquidation Preference, prior to any Distribution of any of the assets of the Corporation to the holders of the Series A Preferred Stock or Common Stock, by reason of their ownership of such stock, the holders of Series B Preferred Stock shall be paid, on a pari passu basis, an amount per share equal to the Series B Liquidation Preference. 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 B Preferred Stock the full amount to which they shall be entitled under this Section V.3(a), the holders of shares of Series B 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. After the payment or setting aside for payment to the holders of the Series C Preferred Stock and Series B Preferred Stock of the full amount of the Series C Liquidation Preference and Series B Liquidation Preference, prior to any Distribution of any of the assets of the Corporation to the holders of the Common Stock, by reason of their ownership of such stock, the holders of Series A Preferred Stock shall be paid, on a pari passu basis, an amount per share equal to the Series A Liquidation Preference. 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 Section V.3(a), 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.
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(b) Remaining Assets. After the payment or setting aside for payment to the holders of Preferred Stock of the full amounts specified in Section V.3(a), the entire remaining assets of the Corporation legally available for distribution shall be distributed pro rata to holders of the Common Stock of the Corporation in proportion to the number of shares of Common Stock held by them.
(c) Shares not Treated as Both Preferred Stock and Common Stock in any Distribution. Shares of Preferred Stock shall not be entitled to be converted into shares of Common Stock in order to participate in any Distribution, or series of Distributions, as shares of Common Stock, without first forgoing participation in the Distribution, or series of Distributions, as shares of Preferred Stock. Notwithstanding the foregoing, if a holder of Preferred Stock would receive an amount per share greater than its respective Liquidation Preference if such share were converted to Common Stock, then each share of Preferred Stock shall be treated as if such holder had converted such holders shares of Preferred Stock into shares of Common Stock immediately prior to the liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event and each such holder will share ratably in any distribution in connection with such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event on an as-if-converted to Common Stock basis while foregoing participation as Preferred Stock.
(d) Reorganization. For purposes of this Section V.3, a liquidation, dissolution or winding up of the Corporation shall be deemed to be occasioned by, or to include, (i) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions to which the Corporation is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction or series of related transactions in which the holders of the securities of the Corporation outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in the Corporation held by such holders prior to such transaction or series of related transactions, at least a majority of the total outstanding securities of the Corporation or such other surviving or resulting entity (or if the Corporation or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent); (ii) a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Corporation and its subsidiaries taken as a whole by means of any transaction or series of related transactions, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly-owned subsidiary of the Corporation; or (iii) any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (clauses (i), (ii) and (iii), a Deemed Liquidation Event). The treatment of any transaction or series of related transactions as a liquidation, dissolution or winding up pursuant to clause (i) or (ii) of the preceding sentence may be waived by the consent or vote of the holders of at least sixty percent (60%) of the outstanding shares of the Preferred Stock (voting together as a single class on an as-converted to Common Stock basis).
(e) Valuation of Non-Cash Consideration. If any assets of the Corporation distributed to stockholders in connection with any liquidation, dissolution, or winding up of the Corporation are other than cash, then the value of such assets shall be their fair market value as determined in good faith by the Board of Directors, including a majority of the Investor Directors, except that any publicly-traded securities to be distributed to stockholders in a liquidation, dissolution, or winding up of the Corporation shall be valued as follows:
(i) if the securities are then traded on a national securities exchange, then the value of the securities shall be deemed to be the average of the closing prices of the securities on such exchange over the ten (10) trading day period ending five (5) trading days prior to the Distribution; and
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(ii) if the securities are actively traded over-the-counter, then the value of the securities shall be deemed to be the average of the closing bid prices of the securities over the ten (10) trading day period ending five (5) trading days prior to the Distribution.
In the event of a merger or other acquisition of the Corporation by another entity, the Distribution date shall be deemed to be the date such transaction closes.
For the purposes of this Section V.3(e), 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 prices shall be deemed to be: (i) for securities traded primarily on the New York Stock Exchange, the NYSE MKT or a Nasdaq 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.
(f) Allocation of Escrow and Contingent Consideration. In the event of a Deemed Liquidation Event pursuant to Section V.3(d)(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 agreement or plan of merger or consolidation for such transaction 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 Sections 3(a) and 3(b) 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 Sections 3(a) and 3(b) after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Section 3(f), consideration placed into escrow or retained as holdback to be available for satisfaction of indemnification or similar obligations in connection with such Deemed Liquidation Event shall be deemed to be Additional Consideration.
4. Conversion. The holders of the Preferred Stock shall have conversion rights as follows:
(a) Right to Convert. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Corporation or any transfer agent for the Preferred Stock, into that number of fully-paid, nonassessable shares of Common Stock determined by dividing the Original Issue Price for the relevant series by the Conversion Price for such series. (The number of shares of Common Stock into which each share of Preferred Stock of a series may be converted is hereinafter referred to as the Conversion Rate for each such series.) Upon any decrease or increase in the Conversion Price for any series of Preferred Stock, as described in this Section V.4, the Conversion Rate for such series shall be appropriately increased or decreased.
(b) Automatic Conversion. Each share of Preferred Stock shall automatically be converted into fully-paid, non-assessable shares of Common Stock at the then effective Conversion Rate for such share (i) immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the Securities Act), covering the offer and sale of the Corporations Common Stock, provided that (x) the aggregate gross proceeds to the Corporation are not less than $30,000,000 and (y) the price per share to the public is not less than the Series C Original Issue Price (a Qualified Public Offering), or (ii) upon the receipt by the Corporation of a written request for such conversion from the holders of at least sixty percent (60%) of the Preferred Stock then outstanding (voting together as a single class and on an as-converted basis), or, if later, the effective date for conversion specified in such requests (each of the events referred to in (i) and (ii) are referred to herein as an Automatic Conversion Event).
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(c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued upon conversion of 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 then fair market value of a share of Common Stock as determined by the Board of Directors (including at least a majority of the Investor Directors). For such purpose, all shares of Preferred Stock held by each holder of Preferred Stock shall be aggregated, and any resulting fractional share of Common Stock shall be paid in cash. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock, and to receive certificates therefor, he shall either (A) surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock or (B) notify the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and execute an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, and shall give written notice to the Corporation at such office that he elects to convert the same; provided, however, that on the date of an Automatic Conversion Event, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent; provided further, however, that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such Automatic Conversion Event unless either the certificates evidencing such shares of Preferred Stock are delivered to the Corporation or its transfer agent as provided above, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. On the date of the occurrence of an Automatic Conversion Event, each holder of record of shares of Preferred Stock shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, notwithstanding that the certificates representing such shares of Preferred Stock shall not have been surrendered at the office of the Corporation, that notice from the Corporation shall not have been received by any holder of record of shares of Preferred Stock, or that the certificates evidencing such shares of Common Stock shall not then be actually delivered to such holder.
The Corporation shall, as soon as practicable after such delivery, or after such agreement and indemnification, issue and deliver at such office to such holder of Preferred Stock, (i) a certificate or certificates for the number of shares of Common Stock to which the holder shall be entitled as aforesaid, (ii) a certificate for the number of the shares of Preferred Stock (if any) represented by the surrendered certificate that were not converted into Common Stock and (iii) a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock, and an amount equal to all dividends declared or accrued but unpaid payable (i) in shares of Common Stock at the Conversion Price in effect at the time of the conversion, or (ii) in cash, as determined in good faith by the Board of Directors (including at least a majority of the Investor Directors). Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date; provided, however, that if the conversion is in connection with an underwritten offer of securities registered pursuant to the Securities Act or a merger, sale, financing, or liquidation of the Corporation or other event, the conversion may, at the option of any holder tendering Preferred Stock for conversion, be conditioned upon the closing of such transaction or upon the occurrence of such event, in which case the person(s) entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such transaction or the occurrence of such event.
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(d) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definition. For purposes of this paragraph 4(d), Additional Shares of Common shall mean all shares of Common Stock issued (or, pursuant to paragraph 4(d)(iii), deemed to be issued) by the Corporation after the Filing Date, other than issuances or deemed issuances of:
(1) shares of Common Stock upon the conversion of the Preferred Stock;
(2) shares of Common Stock and options, warrants or other rights to purchase Common Stock issued or issuable to employees, officers or directors of, or consultants or advisors to the Corporation or any subsidiary pursuant to stock grants, restricted stock purchase agreements, option plans, purchase plans, incentive programs or similar arrangements, shares of or options, warrants or other rights to purchase Common Stock net of any stock repurchases or expired or terminated options pursuant to the terms of any option plan, restricted stock purchase agreement or similar arrangement, provided, that such issuances are approved by the Board of Directors (including at least a majority of the Investor Directors);
(3) shares of Common Stock upon the exercise or conversion of Options or Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security;
(4) shares of Common Stock issued or issuable as a dividend or distribution on Preferred Stock or pursuant to any event for which adjustment is made pursuant to Sections V.4(e), V.4(f) or V.4(g) hereof;
(5) shares of Common Stock issued or issuable in a registered public offering under the Securities Act;
(6) shares of Common Stock or Options or Convertible Securities issued or issuable in connection with bona fide acquisitions, mergers or similar transactions, provided, that such issuances are approved by the Board of Directors (including at least a majority of the Investor Directors);
(7) shares of Common Stock issued or issuable to banks, equipment lessors, real property lessors, financial institutions or other persons engaged in the business of making loans pursuant to a debt financing, commercial leasing or real property leasing transaction, the principal purpose of which is other than the raising of capital through the sale of equity securities of the Corporation, approved by the Board of Directors (including at least a majority of the Investor Directors);
(8) shares of Common Stock issued or issuable in connection with any settlement of any action, suit, proceeding or litigation approved by the Board of Directors (including at least a majority of the Investor Directors);
(9) shares of Common Stock issued or issuable 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 at least a majority of the Investor Directors);
(10) shares of Common Stock issued or issuable 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 at least a majority of the Investor Directors); and
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(11) any right, option or warrant to acquire any security convertible into the securities excluded from the definition of Additional Shares of Common pursuant to subsections (1) through (10) above.
(ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a particular series of Preferred Stock shall be made in respect of the issuance of Additional Shares of Common unless the consideration per share (as determined pursuant to paragraph 4(d)(v)) for an Additional Share of Common issued or deemed to be issued by the Corporation is less than the Conversion Price in effect on the date of, and immediately prior to such issue, for such series of Preferred Stock.
(iii) Deemed Issue of Additional Shares of Common. In the event the Corporation at any time or from time to time after the Filing Date shall issue or amend any Options or Convertible 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 (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number) of Common Stock issuable upon the exercise of such Options or, in the case of Convertible Securities, the conversion or exchange of such Convertible Securities or, in the case of Options for Convertible Securities, the exercise of such Options and the conversion or exchange of the underlying securities, shall be deemed to have been issued as of the time of such issue or amendment, as applicable, or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that in any such case in which shares are deemed to be issued:
(1) no further adjustment in the Conversion Price of any series of Preferred Stock shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock in connection with the exercise of such Options or conversion or exchange of such Convertible Securities;
(2) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the Corporation or in the number of shares of Common Stock issuable upon the exercise, conversion or exchange thereof (other than a change pursuant to the anti-dilution provisions of such Options or Convertible Securities such as this Section V.4(d) or pursuant to Recapitalization provisions of such Options or Convertible Securities such as Sections V.4(e), V.4(f) and V.4(g) hereof), the Conversion Price of each series of Preferred Stock and any subsequent adjustments based thereon shall be recomputed to reflect such change as if such change had been in effect as of the original issue thereof (or upon the occurrence of the record date with respect thereto);
(3) no readjustment pursuant to clause (2) above shall have the effect of increasing the Conversion Price of a series of Preferred Stock to an amount above the Conversion Price that would have resulted from any other issuances of Additional Shares of Common and any other adjustments provided for herein between the original adjustment date and such readjustment date;
(4) upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities which shall not have been exercised, the Conversion Price of each Series of Preferred Stock computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto) and any subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:
(a) in the case of Convertible Securities or Options for Common Stock, the only Additional Shares of Common issued were the shares of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of
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such exercised Options plus the consideration actually received by the Corporation upon such exercise or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange, and
(b) in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Corporation for the Additional Shares of Common deemed to have been then issued was the consideration actually received by the Corporation for the issue of such exercised Options, plus the consideration deemed to have been received by the Corporation (determined pursuant to Section V.4(d)(v)) upon the issue of the Convertible Securities with respect to which such Options were actually exercised; and
(5) if such record date shall have been fixed and such Options or Convertible Securities are not issued on the date fixed therefor, the adjustment previously made in the Conversion Price which became effective on such record date shall be canceled as of the close of business on such record date, and thereafter the Conversion Price shall be adjusted pursuant to this paragraph 4(d)(iii) as of the actual date of their issuance.
(iv) Adjustment of Conversion Price Upon Issuance of Additional Shares of Common. In the event this Corporation at any time or from time to time after the Filing Date shall issue Additional Shares of Common (including Additional Shares of Common deemed to be issued pursuant to paragraph 4(d)(iii)) without consideration or for a consideration per share less than the applicable Conversion Price of a series of Preferred Stock in effect on the date of and immediately prior to such issue, then, the Conversion Price of the affected series of Preferred Stock shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on an as-converted basis immediately prior to such issue plus the number of shares which the aggregate consideration received by the Corporation for the total number of Additional Shares of Common so issued would purchase at such Conversion Price, and the denominator of which shall be the number of shares of Common Stock outstanding on an as-converted basis immediately prior to such issue plus the number of such Additional Shares of Common so issued. Notwithstanding the foregoing, the Conversion Price shall not be reduced at such time if the amount of such reduction would be less than $0.001, but any such amount shall be carried forward, and a reduction will be made with respect to such amount at the time of, and together with, any subsequent reduction which, together with such amount and any other amounts so carried forward, equal $0.001 or more in the aggregate. For the purposes of this Section V.4(d)(iv), all shares of Common Stock issuable upon conversion of all outstanding shares of Preferred Stock and the exercise and/or conversion of any other outstanding Convertible Securities and all outstanding Options shall be deemed to be outstanding.
(v) Determination of Consideration. For purposes of this Section V.4(d), the consideration received by the Corporation for the issue (or deemed issue) of any Additional Shares of Common shall be computed as follows:
(1) Cash and Property. Such consideration shall:
(a) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation after deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with such issuance;
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(b) 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 (including at least a majority of the Investor Directors); and
(c) in the event Additional Shares of Common 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 (a) and (b) above, as reasonably determined in good faith by the Board of Directors (including a majority of the Investor Directors).
(2) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common deemed to have been issued pursuant to paragraph 4(d)(iii) shall be determined by dividing
(x) 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
(y) 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.
(e) Adjustments for Subdivisions or Combinations of Common Stock. In the event the outstanding shares of Common Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Common Stock, the Conversion Price of each series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Common Stock shall be combined (by reverse split, reclassification or otherwise) into a lesser number of shares of Common Stock, the Conversion Prices in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.
(f) Adjustments for Subdivisions or Combinations of Preferred Stock. In the event the outstanding shares of Preferred Stock or a series of Preferred Stock shall be subdivided (by stock split, by payment of a stock dividend or otherwise), into a greater number of shares of Preferred Stock, the Dividend Rate, Original Issue Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Preferred Stock or a series of Preferred Stock shall be combined (by reverse split, reclassification or otherwise) into a lesser number of shares of Preferred Stock, the Dividend Rate, Original Issue Price and Liquidation Preference of the affected series of Preferred Stock in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.
(g) Adjustments for Reclassification, Exchange and Substitution. Subject to Section V.3 (Liquidation Rights), if the Common Stock issuable upon conversion of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares
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provided for above), then, in any such event, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive, each holder of such Preferred Stock shall have the right thereafter to convert such shares of Preferred Stock into a number of shares of such other class or classes of stock which a holder of the number of shares of Common Stock deliverable upon conversion of such series of Preferred Stock immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other shares.
(h) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section V.4, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Stock.
(i) Waiver of Adjustment of Conversion Price. Notwithstanding anything herein to the contrary, (i) any downward adjustment of the Conversion Price of any shares of Series A Preferred Stock may be waived by the consent or vote of the holders of at least 66.67% of the outstanding shares of Series A Preferred Stock either before or after the issuance causing the adjustment; (ii) any downward adjustment of the Conversion Price of any shares of Series B Preferred Stock may be waived by the consent or vote of the holders of at least a majority of the outstanding shares of Series B Preferred Stock either before or after the issuance causing the adjustment; and (iii) any downward adjustment of the Conversion Price of any shares of Series C Preferred Stock may be waived by the consent or vote of the holders of at least a majority of the outstanding shares of Series C Preferred Stock either before or after the issuance causing the adjustment. Any such waiver shall bind all future holders of shares of such series of Preferred Stock.
(j) Notices of Record Date. In the event that this Corporation shall propose at any time:
(i) to declare any Distribution upon its Common Stock, whether in cash, property, stock or other securities, whether or not a regular cash dividend and whether or not out of earnings or earned surplus;
(ii) to effect any reclassification or recapitalization of its Common Stock outstanding involving a change in the Common Stock; or
(iii) to voluntarily liquidate or dissolve or to enter into any transaction deemed to be a liquidation, dissolution or winding up of the corporation pursuant to Section 3(d);
then, in connection with each such event, this Corporation shall send to the holders of the Preferred Stock at least 10 days prior written notice of the date on which a record shall be taken for such Distribution (and specifying the date on which the holders of Common Stock shall be entitled thereto and, if applicable, the amount and character of such Distribution) or for determining rights to vote in respect of the matters referred to in (ii) and (iii) above.
Such written notice shall be given by first class mail (or express courier), postage prepaid, addressed to the holders of Preferred Stock at the address for each such holder as shown on the books of the Corporation and shall be deemed given on the date such notice is mailed.
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The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the consent or vote of the holders of at least 60% of the outstanding shares of Preferred Stock, voting as a single class on as-converted basis.
(k) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all then outstanding shares of the 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 Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.
(l) Taxes. The Corporation shall pay any and all issue and other similar taxes (but not including, for the avoidance of doubt, any income or similar tax) that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of 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 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.
5. Voting.
(a) Election of Directors.
(i) The holders of outstanding shares of Series A Preferred Stock shall, voting together as a single class, be entitled to elect two (2) members of the Board of Directors (such members, the Series A Directors). Except as provided in Section V.5(a)(iii)(D) below, such directors shall be elected by a plurality vote, with the elected candidates being the candidates receiving the greatest number of affirmative votes (with each holder of Series A Preferred Stock entitled to cast one vote for or against each candidate with respect to each share of Series A Preferred Stock held by such holder) of the outstanding shares of Series A Preferred Stock, with votes cast against such candidates and votes withheld having no legal effect.
(ii) The holders of outstanding shares of Series B Preferred Stock shall, voting together as a single class, be entitled to elect one (1) member of the Board of Directors (the Series B Director and, together with the Series A Directors, the Investor Directors). Except as provided in Section V.5(a)(iii)(D) below, such director shall be elected by a plurality vote, with the elected candidate being the candidate receiving the greatest number of affirmative votes (with each holder of Series B Preferred Stock entitled to cast one vote for or against each candidate with respect to each share of Series B Preferred Stock held by such holder) of the outstanding shares of Series B Preferred Stock, with votes cast against such candidates and votes withheld having no legal effect.
(iii) The election of directors pursuant to clauses (i) and (ii) above shall occur (A) at the annual meeting of holders of capital stock, (B) at any special meeting of holders of capital stock if such meeting is called for the purpose of electing directors, (C) at any special meeting of holders of Series A Preferred Stock or Series B Preferred Stock, as applicable, called by holders or (D) by the written consent of the holders of not less than a majority of the outstanding shares of Series A Preferred Stock or Series B Preferred Stock, as applicable. If at any time a vacancy occurs among the directors elected by the holders of a class or series of Preferred Stock and at the time of such vacancy shares of such class or series are outstanding, the vacancy shall only be filled by the vote or written consent of the holders of the outstanding shares of such class or series of Preferred Stock, voting together as a separate class, in the manner and on the basis specified above or as otherwise provided by law.
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(iv) The holders of outstanding shares of Preferred Stock shall also be entitled to vote in the election of all other directors of the Corporation together with holders of all other shares of the Corporations outstanding capital stock entitled to vote thereon, voting as a single class, with each outstanding share of Preferred Stock entitled to the number of votes specified in Section V.5(d) hereof. The holders of outstanding shares of Preferred Stock may, in their sole discretion, determine not to elect one or more directors as provided herein from time to time, and during any such period the Board of Directors shall not be deemed unduly constituted solely as a result of such vacancy.
(b) Restricted Class Voting. Except as otherwise expressly provided herein or as required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together and not as separate classes.
(c) No Series Voting. Other than as provided herein or required by law, there shall be no series voting.
(d) Preferred Stock. Each holder of Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which the shares of Preferred Stock held by such holder could be converted as of the record date. The holders of shares of the Preferred Stock shall be entitled to vote on all matters on which the Common Stock shall be entitled to vote. Holders of Preferred Stock shall be entitled to notice of any stockholders meeting in accordance with the Bylaws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted), shall be disregarded.
(e) Adjustment in Authorized Common Stock. 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 Amended and Restated 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 Delaware General Corporation Law.
(f) Common Stock. Each holder of shares of Common Stock shall be entitled to one vote for each share thereof held.
(g) California Section 2115. To the extent that Section 2115 of the California General Corporation Law makes Section 708 subdivisions (a), (b) and (c) of the California General Corporation Law applicable to the Corporation, the Corporations stockholders shall have the right to cumulate their votes in connection with the election of directors as provided by Section 708 subdivisions (a), (b) and (c) of the California General Corporation Law.
6. Amendments and Changes.
(a) As long as any of the Preferred Stock shall be issued and outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, without first obtaining the approval (by vote or written consent as provided by law) of the holders of at least sixty percent (60%) of the outstanding shares of the Preferred Stock (in addition to any other vote required by law or the Certificate of Incorporation or bylaws), voting as a single class on as-converted basis, with any such act or transaction effected without such approval being null and void ab initio and of no force or effect:
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(i) amend, alter, repeal or waive any provision of the Certificate of Incorporation or bylaws of the Corporation if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Preferred Stock or any series thereof;
(ii) increase or decrease (other than for decreases resulting from conversion of the Preferred Stock) the authorized number of shares of Preferred Stock or any series thereof;
(iii) authorize or create any new class or series of equity security (including any security convertible into or exercisable for any equity security) having rights, preferences or privileges with respect to dividends, or payments upon liquidation senior to or on a parity with any series of Preferred Stock;
(iv) enter into any transaction or series of related transactions deemed to be a liquidation, dissolution or winding up of the Corporation, including, without limitation, any Deemed Liquidation Event;
(v) enter into any transaction with any of its officers, directors, employees or affiliates (or any of their affiliates), except (x) in the ordinary course of business and pursuant to the reasonable requirements of the Corporations business and upon fair and reasonable terms at least as fair to the Corporation as could have been reasonably obtained on an arms length basis, (y) as approved by the Board of Directors (including at least a majority of the Investor Directors) or (z) for any loan or advance (A) for ordinary travel, entertainment and similar expenses, (B) pursuant to any employee stock option plan or stock purchase agreement approved by the Board of Directors (including at least a majority of the Investor Directors), or (C) not in excess of $25,000 in the aggregate (if an advance);
(vi) authorize a merger, acquisition or a share exchange with any other corporation or sale of substantially all of the assets of the Corporation or any of its subsidiaries (other than a merger exclusively to effect a change of domicile of the Corporation) or effect any transaction which results in the holders of the Corporations capital stock prior to the transaction owning less than 50% of the voting power of the Corporations capital stock after the transaction;
(vii) voluntarily liquidate or dissolve;
(viii) increase or decrease the size of the Board of Directors;
(ix) authorize or undertake any public offering other than a Qualified Public Offering;
(x) enter into any exclusive license of any of the Corporations material intellectual property except as approved by the Board of Directors (including at least a majority of the Investor Directors);
(xi) declare or pay any Distribution with respect to the Preferred Stock or Common Stock of the Corporation as approved by the Board of Directors (including at least a majority of the Investor Directors);
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(xii) create or authorize the creation of any debt security unless such debt security has received the prior approval of the Board of Directors (including at least a majority of the Investor Directors);
(xiii) create, or hold capital stock in, any subsidiary that is not a wholly-owned subsidiary of the Corporation or dispose of any 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 any subsidiary assets;
(xiv) change the Corporations principal line of business outside of biotechnology drug development; or
(xv) amend this Section V.6.
(b) As long as any of the Series A Preferred Stock shall be issued and outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, without first obtaining the approval (by vote or written consent as provided by law) of the holders of at least 66.67% of the outstanding shares of the Series A Preferred Stock, voting together as a single class on an as-converted basis, amend, alter, repeal or waive any provision of the Certificate of Incorporation or bylaws of the Corporation if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock that affects the Series A Preferred as a series differently than the Preferred Stock as a class, with any such act or transaction effected without such approval being null and void ab initio and of no force or effect.
(c) As long as any of the Series B Preferred Stock shall be issued and outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, without first obtaining the approval (by vote or written consent as provided by law) of the holders of at least a majority of the outstanding shares of the Series B Preferred Stock, voting together as a single class on an as-converted basis, amend, alter, repeal or waive any provision of the Certificate of Incorporation or bylaws of the Corporation if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series B Preferred Stock that affects the Series B Preferred as a series differently than the Preferred Stock as a class, with any such act or transaction effected without such approval being null and void ab initio and of no force or effect.
(d) As long as any of the Series C Preferred Stock shall be issued and outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, without first obtaining the approval (by vote or written consent as provided by law) of the holders of at least a majority of the outstanding shares of the Series C Preferred Stock, voting together as a single class on an as-converted basis, amend, alter, repeal or waive any provision of the Certificate of Incorporation or bylaws of the Corporation if such action would adversely alter the rights, preferences, privileges or powers of, or restrictions provided for the benefit of the Series C Preferred Stock that affects the Series C Preferred as a series differently than the Preferred Stock as a class, with any such act or transaction effected without such approval being null and void ab initio and of no force or effect.
7. Notices. Any notice required by the provisions of this ARTICLE V to be given to the holders of Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at such holders address appearing on the books of the Corporation.
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8. No Reissuance of Preferred Stock. No share or shares of Preferred Stock acquired by the Corporation by reason of redemption, purchase, conversion or otherwise shall be reissued, and all such shares shall be canceled, retired and eliminated from the shares which the Corporation shall be authorized to issue.
ARTICLE VI
The Corporation is to have perpetual existence.
ARTICLE VII
Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.
ARTICLE VIII
Unless otherwise set forth herein, the number of directors that constitute the Board of Directors of the Corporation shall be fixed by, or in the manner provided in, the Bylaws of the Corporation.
ARTICLE IX
In furtherance and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.
ARTICLE X
1. To the fullest extent permitted by the General Corporation Law of the State of Delaware as currently in effect (the DGCL), a Director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for a breach of fiduciary duty as a Director. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of Directors, then the liability of a Director of the Corporation shall be automatically eliminated or limited to the fullest extent permitted by the DGCL, as so amended without further action by the Corporation. Neither any amendment nor repeal of this Section X.1, nor the adoption of any provision of this Corporations Certificate of Incorporation inconsistent with this Section X.1, shall eliminate or reduce the effect of this Section X.1, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Section X.1, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.
2. The Corporation shall have the power to indemnify (and with respect to Directors, shall indemnify), to the extent permitted by the DGCL as currently in effect, 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 (a Proceeding) by reason of the fact that he or she is or was a Director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a Director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such Proceeding. A right to indemnification or to advancement of expenses arising under a provision of this Certificate of Incorporation or a bylaw of the Corporation shall not be eliminated or impaired by an amendment to this Certificate of Incorporation or the Bylaws of the Corporation after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred (and with respect to Directors, such right to indemnification shall not be eliminated or impaired).
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ARTICLE XI
Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside of 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.
ARTICLE XII
In recognition and anticipation that (i) certain of the Covered Persons (as defined below) may serve as Directors or officers of the Corporation, (ii) certain holders of Preferred Stock and their respective Affiliated Companies (as defined below) engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, and (iii) the Corporation and its Affiliated Companies may engage in material business transactions with one or more holders of Preferred Stock and their respective Affiliated Companies, and that the Corporation is expected to benefit therefrom, the provisions of this ARTICLE XII are set forth to regulate and define the conduct of certain affairs of the Corporation as they may involve the Covered Persons, and the powers, rights, duties and liabilities of the Corporation and its officers, Directors and stockholders in connection therewith.
The Corporation and its Affiliated Companies renounce, to the fullest extent permitted by law, any interest or expectancy of the Corporation and its Affiliated Companies in, or in being offered an opportunity to participate in, any Excluded Opportunity (as defined below). As a result of such renunciation, to the fullest extent permitted by applicable law, (a) all Excluded Opportunities shall belong to the applicable holder of Preferred Stock and its Affiliated Companies, (b) no Covered Person shall have any duty to present any Excluded Opportunity to the Corporation or its Affiliated Companies, (c) the Covered Persons shall have the right to hold and exploit all Excluded Opportunities for their own account and benefit, or to direct, sell, assign or transfer any Excluded Opportunity to any other person or entity and (d) the Covered Persons cannot be, and shall not be, liable to the Corporation, its stockholders or its Affiliated Companies for breach of any fiduciary duty to the Corporation, its stockholders or its Affiliated Companies by reason of the fact that any Covered Person does not present any Excluded Opportunity to the Corporation or its Affiliated Companies or pursues, acquires or exploits any Excluded Opportunity for itself or directs, sells, assigns or transfers any Excluded Opportunity to any other person or entity.
Excluded Opportunity means any matter, transaction or interest or potential matter, transaction or interest (including without limitation those that might be the same as or similar to the business or activities of the Corporation or any of its Affiliated Companies) that is presented to, or acquired, created or developed by, or that otherwise comes into the possession of, any Covered Person unless such matter, transaction or interest is offered in writing to a Covered Person expressly and solely in such Covered Persons capacity as a Director or officer of the Corporation.
Affiliated Company means (a) in respect of any person or entity (other than the Corporation), (i) any entity that controls, is controlled by or is under common control with such person or entity (other than the Corporation and any entity that is controlled by the Corporation) and (ii) any investment fund managed by such person or entity or any person or entity that controls, is controlled by or is under common control with such person or entity, and (b) in respect of the Corporation, any entity controlled by the Corporation.
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Covered Persons means (a) a holder of Preferred Stock and any partner, member, director, officer, stockholder, employee or agent of such holder of Preferred Stock or any of its Affiliated Companies, and (b) any person serving as a Director, officer, employee or agent of the Corporation at the request of a holder of Preferred Stock or any of their respective Affiliated Companies.
Any person or entity purchasing or otherwise acquiring any interest in any shares of the Corporation shall be deemed to have notice of and to have consented to the provisions of this ARTICLE XII.
To the extent that any provision of this ARTICLE XII is found to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of any other provision of this ARTICLE XII.
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Exhibit 3.2
UNITY BIOTECHNOLOGY, INC.
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
Unity Biotechnology, Inc., a corporation organized and existing under and by virtue of the Delaware General Corporation Law, hereby certifies as follows:
The name of the Corporation is Unity Biotechnology, Inc. The original Certificate of Incorporation of the corporation was filed with the Secretary of State of the State of Delaware on March 30, 2009 under the name Forge, Inc. The Corporation changed its name to Unity Biotechnology, Inc. on January 28, 2015.
The Amended and Restated Certificate of Incorporation in the form of Exhibit A attached hereto has been duly adopted in accordance with the provisions of Sections 242, 245 and 228 of the Delaware General Corporation Law.
The text of the Amended and Restated Certificate of Incorporation as heretofore amended or supplemented is hereby restated and further amended to read in its entirety as set forth in Exhibit A attached hereto. The Amended and Restated Certificate of Incorporation shall be effective as of 9:00 a.m. Eastern Time on [______], 2018.
IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation has been signed this [___] day of [________], 2018.
UNITY BIOTECHNOLOGY, INC. | ||
By: | /s/ Keith R. Leonard Jr. | |
Keith R. Leonard Jr. | ||
Chief Executive Officer |
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
UNITY BIOTECHNOLOGY, INC.
ARTICLE I
NAME
The name of the corporation is Unity Biotechnology, Inc. (the Corporation).
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the Corporations registered office 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.
ARTICLE III
PURPOSE AND DURATION
The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law. The Corporation is to have a perpetual existence.
ARTICLE IV
CAPITAL STOCK
Section 1. This Corporation is authorized to issue two classes of capital stock which shall be designated, respectively, Common Stock and Preferred Stock. The total number of shares that the Corporation is authorized to issue is 310,000,000, of which 300,000,000 shares shall be Common Stock and 10,000,000 shares shall be Preferred Stock. The Common Stock shall have a par value of $0.0001 per share and the Preferred Stock shall have a par value of $0.0001 per share. Subject to the rights of the holders of any series of Preferred Stock, the number of authorized shares of any of the Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation with the power to vote thereon irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law or any successor provision thereof, and no vote of the holders of any of the Common Stock or Preferred Stock voting separately as a class shall be required therefor.
Section 2. Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (the Board of Directors) is hereby authorized to provide from time to time by resolution or resolutions for the creation and issuance, out of the authorized and unissued shares of Preferred Stock, of one or more series of Preferred Stock by filing a certificate (a Certificate of Designation) pursuant to the Delaware General Corporation Law, setting forth such resolution and, with respect to each such series, establishing the designation of such series and the number of shares to be included in such series and fixing
the voting powers (full or limited, or no voting power), preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions thereof, of the shares of each such series. Without limiting the generality of the foregoing, the resolution or resolutions providing for the establishment of any series of Preferred Stock may, to the extent permitted by law, provide that such series shall be superior to, rank equally with or be junior to the Preferred Stock of any other series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may be different from those of any and all other series at any time outstanding. Except as otherwise expressly provided in the resolution or resolutions providing for the establishment of any series of Preferred Stock, no vote of the holders of shares of Preferred Stock or Common Stock shall be a prerequisite to the issuance of any shares of any series of the Preferred Stock so authorized in accordance with this Amended and Restated Certificate of Incorporation. Unless otherwise provided in the Certificate of Designation establishing a series of Preferred Stock, the Board of Directors may, by resolution or resolutions, increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of such series and, if the number of shares of such series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.
ARTICLE V
BOARD OF DIRECTORS
For the management of the business and for the conduct of the affairs of the Corporation it is further provided that:
Section 1.
(a) The management of the business and the conduct of the affairs of the Corporation shall be vested in the Board of Directors. The number of directors which shall constitute the whole Board of Directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board of Directors. Except as otherwise expressly delegated by resolution of the Board of Directors, the Board of Directors shall have the exclusive power and authority to appoint and remove officers of the Corporation.
(b) Other than any directors elected by the separate vote of the holders of one or more series of Preferred Stock, the Board of Directors shall be and is divided into three classes, designated as Class I, Class II and Class III, as nearly equal in number as possible. Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors. At the first annual meeting of stockholders following the effectiveness of this Amended and Restated Certificate of Incorporation (the Qualifying Record Date), the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following the Qualifying Record Date, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following the Qualifying Record Date, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, at each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.
Notwithstanding the foregoing provisions of this Article V, Section 1(b), each director shall serve until his or her successor is duly elected and qualified or until his or her earlier death, resignation, disqualification, retirement or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
(c) Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, the Board of Directors or any individual director may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of sixty-six and two-thirds percent (66-2/3%) of the voting power of all the then outstanding shares of voting stock of the Corporation with the power to vote at an election of directors (the Voting Stock).
(d) Subject to the special rights of the holders of one or more series of Preferred Stock to elect directors, any vacancies on the Board of Directors resulting from death, resignation, disqualification, retirement, 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 the stockholders, and except as otherwise provided by law, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director, and shall not be filled by the stockholders. Any director appointed in accordance with the preceding sentence shall hold office for a term that shall coincide with the remaining term of the class to which the director shall have been appointed and until such directors successor shall have been elected and qualified or until his or her earlier death, resignation, disqualification, retirement or removal.
Section 2.
(a) In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal Bylaws of the Corporation. In addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by this Amended and Restated Certificate of Incorporation (including any Certificate of Designation in respect of one or more series of Preferred Stock), the adoption, amendment or repeal of the Bylaws of the Corporation by the stockholders of the Corporation shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all the then-outstanding shares of the Voting Stock, voting together as a single class.
(b) The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.
ARTICLE VI
STOCKHOLDERS
Section 1. Subject to the special rights of the holders of one or more series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation, and the taking of any action by written consent of the stockholders in lieu of a meeting of the stockholders is specifically denied.
Section 2. Subject to the special rights of the holders of one or more series of Preferred Stock, special meetings of the stockholders of the Corporation may be called, for any purpose or purposes, at any time by the Board of Directors, chief executive officer or president (in the absence of a chief executive officer), but such special meetings may not be called by stockholders or any other person or persons.
Section 3. Advance notice of stockholder nominations for the election of directors and of other business proposed to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.
ARTICLE VII
LIABILITY AND INDEMNIFICATION
Section 1. To the fullest extent permitted by the Delaware General Corporation Law, as the same exists or as may hereafter be amended, 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 Delaware General Corporation Law is amended after approval by the stockholders of this Article VII 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 Delaware General Corporation Law as so amended, automatically and without further action, upon the date of such amendment.
Section 2. The Corporation, to the fullest extent permitted by law, shall indemnify and advance expenses to any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she, or his or her testator or intestate, is or was a director or officer of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as a director or officer at the request of the Corporation or any predecessor to the Corporation.
Section 3. The Corporation, to the fullest extent permitted by law, may indemnify and advance expenses to any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she, or his or her testator or intestate, is or was an employee or agent of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as an employee or agent at the request of the Corporation or any predecessor to the Corporation.
Section 4. Neither any amendment nor repeal of this Article VII, nor the adoption by amendment of this certificate of incorporation of any provision inconsistent with this Article VII, shall eliminate or reduce the effect of this Article VII in respect of any matter occurring, or any action or proceeding accruing or arising (or that, but for this Article VII, would accrue or arise) prior to such amendment or repeal or adoption of an inconsistent provision.
ARTICLE VIII
EXCLUSIVE FORUM
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Corporation, (2) 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 Corporations stockholders, (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, this Amended and Restated Certificate of Incorporation or the Bylaws, or (4) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article VIII.
ARTICLE IX
AMENDMENTS
Notwithstanding any other provisions of this Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Voting Stock required by law or by this Amended and Restated Certificate of Incorporation (including any Certificate of Designation in respect of one or more series of Preferred Stock), the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class, shall be required to alter, amend or repeal Articles V, VI, VII and VIII and this Article IX.
* * * *
Exhibit 3.3
CERTIFICATE OF ADOPTION OF BYLAWS
OF
FORGE, INC.
The undersigned certifies that he or she is the duly elected, qualified and acting Secretary of Forge, Inc., a Delaware corporation (the Company), and that the foregoing bylaws, comprising sixteen (16) pages, were adopted as the bylaws of the Company on April 20, 2009 by the sole incorporator of the Company.
The undersigned has executed this certificate as of April 20, 2009.
/s/ Nathaniel David |
Nathaniel David, Secretary |
BYLAWS OF
FORGE, INC.
Adopted April 20, 2009
TABLE OF CONTENTS
Page | ||||||
ARTICLE I MEETINGS OF STOCKHOLDERS |
1 | |||||
1.1 |
Place of Meetings | 1 | ||||
1.2 |
Annual Meeting | 1 | ||||
1.3 |
Special Meeting | 1 | ||||
1.4 |
Notice of Stockholders Meetings | 1 | ||||
1.5 |
Quorum | 2 | ||||
1.6 |
Adjourned Meeting; Notice | 2 | ||||
1.7 |
Conduct of Business | 2 | ||||
1.8 |
Voting | 2 | ||||
1.9 |
Stockholder Action by Written Consent Without a Meeting | 3 | ||||
1.10 |
Record Date for Stockholder Notice; Voting; Giving Consents | 4 | ||||
1.11 |
Proxies | 5 | ||||
1.12 |
List of Stockholders Entitled to Vote | 5 | ||||
ARTICLE II DIRECTORS |
5 | |||||
2.1 |
Powers | 5 | ||||
2.2 |
Number of Directors | 5 | ||||
2.3 |
Election, Qualification and Term of Office of Directors | 5 | ||||
2.4 |
Resignation and Vacancies | 6 | ||||
2.5 |
Place of Meetings; Meetings by Telephone | 6 | ||||
2.6 |
Conduct of Business | 7 | ||||
2.7 |
Regular Meetings | 7 | ||||
2.8 |
Special Meetings; Notice | 7 | ||||
2.9 |
Quorum; Voting | 7 | ||||
2.10 |
Board Action by Written Consent Without a Meeting | 8 | ||||
2.11 |
Fees and Compensation of Directors | 8 | ||||
2.12 |
Removal of Directors | 8 | ||||
ARTICLE III COMMITTEES |
8 | |||||
3.1 |
Committees of Directors | 8 | ||||
3.2 |
Committee Minutes | 8 | ||||
3.3 |
Meetings and Actions of Committees | 8 | ||||
3.4 |
Subcommittees | 9 | ||||
ARTICLE IV OFFICERS |
9 | |||||
4.1 |
Officers | 9 | ||||
4.2 |
Appointment of Officers | 9 | ||||
4.3 |
Subordinate Officers | 9 | ||||
4.4 |
Removal and Resignation of Officers | 10 | ||||
4.5 |
Vacancies in Offices | 10 |
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TABLE OF CONTENTS
(Continued)
Page | ||||||
4.6 |
Representation of Shares of Other Corporations | 10 | ||||
4.7 |
Authority and Duties of Officers | 10 | ||||
ARTICLE V INDEMNIFICATION |
10 | |||||
5.1 |
Indemnification of Directors and Officers in Third Party Proceedings | 10 | ||||
5.2 |
Indemnification of Directors and Officers in Actions by or in the Right of the Company | 11 | ||||
5.3 |
Successful Defense | 11 | ||||
5.4 |
Indemnification of Others | 11 | ||||
5.5 |
Advanced Payment of Expenses | 11 | ||||
5.6 |
Limitation on Indemnification | 11 | ||||
5.7 |
Determination; Claim | 12 | ||||
5.8 |
Non-Exclusivity of Rights | 12 | ||||
5.9 |
Insurance | 13 | ||||
5.10 |
Survival | 13 | ||||
5.11 |
Effect of Repeal or Modification | 13 | ||||
5.12 |
Certain Definitions | 13 | ||||
ARTICLE VI STOCK |
14 | |||||
6.1 |
Stock Certificates; Partly Paid Shares | 14 | ||||
6.2 |
Special Designation on Certificates | 14 | ||||
6.3 |
Lost Certificates | 15 | ||||
6.4 |
Dividends | 15 | ||||
6.5 |
Stock Transfer Agreements | 15 | ||||
6.6 |
Registered Stockholders | 15 | ||||
6.7 |
Transfers | 15 | ||||
ARTICLE VII MANNER OF GIVING NOTICE AND WAIVER |
15 | |||||
7.1 |
Notice of Stockholder Meetings | 15 | ||||
7.2 |
Notice by Electronic Transmission | 16 | ||||
7.3 |
Notice to Stockholders Sharing an Address | 17 | ||||
7.4 |
Notice to Person with Whom Communication is Unlawful | 17 | ||||
7.5 |
Waiver of Notice | 17 | ||||
ARTICLE VIII GENERAL MATTERS |
17 | |||||
8.1 |
Fiscal Year | 17 | ||||
8.2 |
Seal | 17 | ||||
8.3 |
Annual Report | 17 | ||||
8.4 |
Construction; Definitions | 18 | ||||
ARTICLE IX AMENDMENTS |
18 |
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BYLAWS
ARTICLE I MEETINGS OF STOCKHOLDERS
1.1 Place of Meetings. Meetings of stockholders of Forge, Inc. (the Company) shall be held at any place, within or outside the State of Delaware, determined by the Companys board of directors (the Board). The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the DGCL). In the absence of any such designation or determination, stockholders meetings shall be held at the Companys principal executive office.
1.2 Annual Meeting. An annual meeting of stockholders shall be held for the election of directors at such date and time as may be designated by resolution of the Board from time to time. Any other proper business may be transacted at the annual meeting. The Company shall not be required to hold an annual meeting of stockholders, provided that (i) the stockholders are permitted to act by written consent under the Companys certificate of incorporation and these bylaws, (ii) the stockholders take action by written consent to elect directors and (iii) the stockholders unanimously consent to such action or, if such consent is less than unanimous, all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.
1.3 Special Meeting. A special meeting of the stockholders may be called at any time by the Board, Chairperson of the Board, Chief Executive Officer or President (in the absence of a Chief Executive Officer) or by one or more stockholders holding shares in the aggregate entitled to cast not less than 10% of the votes at that meeting.
If any person(s) other than the Board calls a special meeting, the request shall:
(i) be in writing;
(ii) specify the time of such meeting and the general nature of the business proposed to be transacted; and
(iii) be delivered personally or sent by registered mail or by facsimile transmission to the Chairperson of the Board, the Chief Executive Officer, the President (in the absence of a Chief Executive Officer) or the Secretary of the Company.
The officer(s) receiving the request shall cause notice to be promptly given to the stockholders entitled to vote at such meeting, in accordance with these bylaws, that a meeting will be held at the time requested by the person or persons calling the meeting. No business may be transacted at such special meeting other than the business specified in such notice to stockholders. Nothing contained in this paragraph of this section 1.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.
1.4 Notice of Stockholders Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Except as otherwise provided in the DGCL, the certificate of incorporation or these bylaws, the written notice of any 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.
1.5 Quorum. Except as otherwise provided by law, the certificate of incorporation or these bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. Where a separate vote by a class or series or classes or series is required, a majority of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter, except as otherwise provided by law, the certificate of incorporation or these bylaws.
If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting, or (ii) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time, in the manner provided in section 1.6, until a quorum is present or represented.
1.6 Adjourned Meeting; Notice. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. 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.
1.7 Conduct of Business. Meetings of stockholders shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board, if any, or in the absence of the foregoing persons by the Chief Executive Officer, or in the absence of the foregoing persons by the President, or in the absence of the foregoing persons by a Vice President, or in the absence of the foregoing persons by a chairperson designated by the Board, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting. The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business.
1.8 Voting. The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of section 1.10 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.
Except as may be otherwise provided in the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of capital stock held by such stockholder which has voting power upon the matter in question. Voting at meetings of
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stockholders need not be by written ballot and, unless otherwise required by law, need not be conducted by inspectors of election unless so determined by the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote thereon which are present in person or by proxy at such meeting. If authorized by the Board, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission (as defined in section 7.2 of these bylaws), provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxy holder.
Except as otherwise required by law, the certificate of incorporation or these bylaws, in all matters other than the election of directors, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Except as otherwise required by law, the certificate of incorporation or these bylaws, directors shall be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Where a separate vote by a class or series or classes or series is required, in all matters other than the election of directors, the affirmative vote of the majority of shares of such class or series or classes or series present in person or represented by proxy at the meeting shall be the act of such class or series or classes or series, except as otherwise provided by law, the certificate of incorporation or these bylaws.
1.9 Stockholder Action by Written Consent Without a Meeting. Unless otherwise provided in the certificate of incorporation, any action required by the DGCL to be taken at any annual or special meeting of stockholders of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, 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.
An electronic transmission (as defined in section 7.2) consenting to an action to be taken and transmitted by a stockholder or proxy holder, or by a person or persons authorized to act for a stockholder or proxy holder, shall be deemed to be written, signed and dated for purposes of this section, provided that any such electronic transmission sets forth or is delivered with information from which the Company can determine (i) that the electronic transmission was transmitted by the stockholder or proxy holder or by a person or persons authorized to act for the stockholder or proxy holder and (ii) the date on which such stockholder or proxy holder or authorized person or persons transmitted such electronic transmission.
In the event that the Board shall have instructed the officers of the Company to solicit the vote or written consent of the stockholders of the Company, an electronic transmission of a stockholder written consent given pursuant to such solicitation may be delivered to the Secretary or the President of the Company or to a person designated by the Secretary or the President. The Secretary or the President of the Company or a designee of the Secretary or the President shall cause any such written consent by electronic transmission to be reproduced in paper form and inserted into the corporate records.
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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 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 holders to take the action were delivered to the Company as provided in Section 228 of the DGCL. In the event that the action which is consented to is such as would have required the filing of a certificate under any provision of the DGCL, if such action had been voted on by stockholders at a meeting thereof, the certificate filed under such provision shall state, in lieu of any statement required by such provision concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.
1.10 Record Date for Stockholder Notice; Voting; Giving Consents. In order that the Company may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or 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 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 and which record date:
(i) in the case of determination of stockholders entitled to notice of or to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty nor less than ten days before the date of such meeting;
(ii) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board; and
(iii) in the case of determination of stockholders for any other action, shall not be more than 60 days prior to such other action.
If no record date is fixed by the Board:
(i) 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 next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;
(ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board is required by 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 Company in accordance with applicable law, or, if prior action by the Board is required by law, shall be at the close of business on the day on which the Board adopts the resolution taking such prior action; and
(iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
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 that the Board may fix a new record date for the adjourned meeting.
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1.11 Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.
1.12 List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger of the Company shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Company shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten days prior to the meeting: (i) 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 (ii) during ordinary business hours, at the Companys principal place of business. In the event that the Company determines to make the list available on an electronic network, the Company may take reasonable steps to ensure that such information is available only to stockholders of the Company. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
ARTICLE II DIRECTORS
2.1 Powers. The business and affairs of the Company shall be managed by or under the direction of the Board, except as may be otherwise provided in the DGCL or the certificate of incorporation.
2.2 Number of Directors. The Board shall consist of one or more members, each of whom shall be a natural person. Unless the certificate of incorporation fixes the number of directors, the number of directors shall be determined from time to time by resolution of the Board. No reduction of the authorized number of directors shall have the effect of removing any director before that director s term of office expires.
2.3 Election, Qualification and Term of Office of Directors. Except as provided in section 2.4 of these bylaws, and subject to sections 1.2 and 1.9 of these bylaws, directors shall be elected at each annual meeting of stockholders. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these bylaws may prescribe other qualifications for directors. Each director shall hold office until such directors successor is elected and qualified or until such directors earlier death, resignation or removal.
5
2.4 Resignation and Vacancies. Any director may resign at any time upon notice given in writing or by electronic transmission to the Company. A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation which is conditioned upon the director failing to receive a specified vote for reelection as a director may provide that it is irrevocable. Unless otherwise provided in the certificate of incorporation or these bylaws, when one or more directors resign from the Board, 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.
Unless otherwise provided in the certificate of incorporation or these bylaws:
(i) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.
(ii) 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 may 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.
If at any time, by reason of death or resignation or other cause, the Company should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the DGCL.
If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the voting stock at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the DGCL as far as applicable.
A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office and until such directors successor is elected and qualified, or until such directors earlier death, resignation or removal.
2.5 Place of Meetings; Meetings by Telephone. The Board may hold meetings, both regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
6
2.6 Conduct of Business. Meetings of the Board shall be presided over by the Chairperson of the Board, if any, or in his or her absence by the Vice Chairperson of the Board, if any, or in the absence of the foregoing persons by a chairperson designated by the Board, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.
2.7 Regular Meetings. Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.
2.8 Special Meetings; Notice. Special meetings of the Board for any purpose or purposes may be called at any time by the Chairperson of the Board, the Chief Executive Officer, the President, the Secretary or any two directors.
Notice of the time and place of special meetings shall be:
(i) delivered personally by hand, by courier or by telephone;
(ii) sent by United States first-class mail, postage prepaid;
(iii) sent by facsimile; or
(i) sent by electronic mail,
directed to each director at that directors address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the Companys records.
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least 24 hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not specify the place of the meeting (if the meeting is to be held at the Companys principal executive office) nor the purpose of the meeting.
2.9 Quorum; Voting. At all meetings of the Board, a majority of the total authorized number of directors shall constitute a quorum for the transaction of business. If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.
The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws.
7
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 these bylaws to a majority or other proportion of directors shall refer to a majority or other proportion of the votes of the directors.
2.10 Board Action by Written Consent Without a 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, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board 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.
2.11 Fees and Compensation of Directors. Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board shall have the authority to fix the compensation of directors.
2.12 Removal of Directors. Unless otherwise restricted by statute, the certificate of incorporation or these bylaws, any director or the entire Board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.
No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such directors term of office.
ARTICLE III COMMITTEES
3.1 Committees of Directors. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Company. The Board 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. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company, and may authorize the seal of the Company to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the Company.
3.2 Committee Minutes. Each committee shall keep regular minutes of its meetings and report the same to the Board when required.
3.3 Meetings and Actions of Committees. Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
(i) section 2.5 (Place of Meetings; Meetings by Telephone);
(ii) section 2.7 (Regular Meetings);
8
(iii) section 2.8 (Special Meetings; Notice);
(iv) section 2.9 (Quorum; Voting);
(v) section 2.10 (Board Action by Written Consent Without a Meeting); and
(vi) section 7.5 (Waiver of Notice)
with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members. However:
(i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;
(ii) special meetings of committees may also be called by resolution of the Board; and
(iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.
Any provision in the certificate of incorporation providing that one or more directors shall have more or less than one vote per director on any matter shall apply to voting in any committee or subcommittee, unless otherwise provided in the certificate of incorporation or these bylaws.
3.4 Subcommittees. Unless otherwise provided in the certificate of incorporation, these bylaws or the resolutions of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.
ARTICLE IV OFFICERS
4.1 Officers. The officers of the Company shall be a President and a Secretary. The Company may also have, at the discretion of the Board, a Chairperson of the Board, a Vice Chairperson of the Board, a Chief Executive Officer, one or more Vice Presidents, a Chief Financial Officer, a Treasurer, one or more Assistant Treasurers, one or more Assistant Secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.
4.2 Appointment of Officers. The Board shall appoint the officers of the Company, except such officers as may be appointed in accordance with the provisions of section 4.3 of these bylaws.
4.3 Subordinate Officers. The Board may appoint, or empower the Chief Executive Officer or, in the absence of a Chief Executive Officer, the President, to appoint, such other officers and agents as the business of the Company may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.
9
4.4 Removal and Resignation of Officers. Any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.
Any officer may resign at any time by giving written notice to the Company. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.
4.5 Vacancies in Offices. Any vacancy occurring in any office of the Company shall be filled by the Board or as provided in section 4.3.
4.6 Representation of Shares of Other Corporations. Unless otherwise directed by the Board, the President or any other person authorized by the Board or the President is authorized to vote, represent and exercise on behalf of the Company all rights incident to any and all shares of any other corporation or corporations standing in the name of the Company. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.
4.7 Authority and Duties of Officers. Except as otherwise provided in these bylaws, the officers of the Company shall have such powers and duties in the management of the Company as may be designated from time to time by the Board and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.
ARTICLE V INDEMNIFICATION
5.1 Indemnification of Directors and Officers in Third Party Proceedings. Subject to the other provisions of this Article V, the Company shall indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, 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 (a Proceeding) (other than an action by or in the right of the Company) by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such persons conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such persons conduct was unlawful.
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5.2 Indemnification of Directors and Officers in Actions by or in the Right of the Company. Subject to the other provisions of this Article V, the Company shall indemnify, to the fullest extent permitted by the DGCL, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Company, or is or was a director or officer of the Company serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
5.3 Successful Defense. To the extent that a present or former director or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding described in section 5.1 or section 5.2, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by such person in connection therewith.
5.4 Indemnification of Others. Subject to the other provisions of this Article V, the Company shall have power to indemnify its employees and agents to the extent not prohibited by the DGCL or other applicable law. The Board shall have the power to delegate to such person or persons the determination of whether employees or agents shall be indemnified.
5.5 Advanced Payment of Expenses. Expenses (including attorneys fees) incurred by an officer or director of the Company in defending any Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding upon receipt of a written request therefor (together with documentation reasonably evidencing such expenses) and an undertaking by or on behalf of the person to repay such amounts if it shall ultimately be determined that the person is not entitled to be indemnified under this Article V or the DGCL. Such expenses (including attorneys fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Company deems appropriate. The right to advancement of expenses shall not apply to any Proceeding for which indemnity is excluded pursuant to these bylaws.
5.6 Limitation on Indemnification. Subject to the requirements in section 5.3 and the DGCL, the Company shall not be obligated to indemnify any person pursuant to this Article V in connection with any Proceeding (or any part of any Proceeding):
(i) for which payment has actually been made to or on behalf of such person under any statute, insurance policy, indemnity provision, vote or otherwise, except with respect to any excess beyond the amount paid;
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(ii) for an accounting or disgorgement of profits pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of federal, state or local statutory law or common law, if such person is held liable therefor (including pursuant to any settlement arrangements);
(iii) for any reimbursement of the Company by such person of any bonus or other incentive-based or equity-based compensation or of any profits realized by such person from the sale of securities of the Company, as required in each case under the Securities Exchange Act of 1934, as amended (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), or the payment to the Company of profits arising from the purchase and sale by such person of securities in violation of Section 306 of the Sarbanes-Oxley Act), if such person is held liable therefor (including pursuant to any settlement arrangements);
(iv) initiated by such person, including any Proceeding (or any part of any Proceeding) initiated by such person against the Company or its directors, officers, employees, agents or other indemnitees, unless (a) the Board authorized the Proceeding (or the relevant part of the Proceeding) prior to its initiation, (b) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, (c) otherwise required to be made under section 5.7 or (d) otherwise required by applicable law; or
(v) if prohibited by applicable law.
5.7 Determination; Claim. If a claim for indemnification or advancement of expenses under this Article V is not paid by the Company or on its behalf within 90 days after receipt by the Company of a written request therefor, the claimant shall be entitled to an adjudication by a court of competent jurisdiction of his or her entitlement to such indemnification or advancement of expenses. To the extent not prohibited by law, the Company shall indemnify such person against all expenses actually and reasonably incurred by such person in connection with any action for indemnification or advancement of expenses from the Company under this Article V, to the extent such person is successful in such action. In any such suit, the Company shall, to the fullest extent not prohibited by law, have the burden of proving that the claimant is not entitled to the requested indemnification or advancement of expenses.
5.8 Non-Exclusivity of Rights. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article V shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the certificate of incorporation or any statute, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such persons official capacity and as to action in another capacity while holding such office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advancement of expenses, to the fullest extent not prohibited by the DGCL or other applicable law.
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5.9 Insurance. The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such persons status as such, whether or not the Company would have the power to indemnify such person against such liability under the provisions of the DGCL.
5.10 Survival. The rights to indemnification and advancement of expenses conferred by this Article V shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
5.11 Effect of Repeal or Modification. Any amendment, alteration or repeal of this Article V shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to such amendment, alteration or repeal.
5.12 Certain Definitions. For purposes of this Article V, references to the Company shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, 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 Article V with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article V, 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 Company shall include any service as a director, officer, employee or agent of the Company which 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 such person 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 Company as referred to in this Article V.
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ARTICLE VI STOCK
6.1 Stock Certificates; Partly Paid Shares. The shares of the Company shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Company. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Company by the Chairperson of the Board or Vice-Chairperson of the Board, or the President or a Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Company representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The Company shall not have power to issue a certificate in bearer form.
The Company may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, or upon the books and records of the Company in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the Company shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
6.2 Special Designation on Certificates. If the Company is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Company shall issue to represent such class or series of stock; provided that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the Company shall issue to represent such class or series of stock, a statement that the Company will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the Company shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to this section 6.2 or Sections 156,202(a) or 218(a) of the DGCL or with respect to this section 6.2 a statement that the Company will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated stock and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.
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6.3 Lost Certificates. Except as provided in this section 6.3, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Company and cancelled at the same time. The Company may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Company may require the owner of the lost, stolen or destroyed certificate, or such owners legal representative, to give the Company a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
6.4 Dividends. The Board, subject to any restrictions contained in the certificate of incorporation or applicable law, may declare and pay dividends upon the shares of the Companys capital stock. Dividends may be paid in cash, in property, or in shares of the Companys capital stock, subject to the provisions of the certificate of incorporation.
The Board may set apart out of any of the funds of the Company available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
6.5 Stock Transfer Agreements. The Company shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Company to restrict the transfer of shares of stock of the Company of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
6.6 Registered Stockholders. The Company:
(i) 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;
(ii) shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares; and
(iii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
6.7 Transfers. Transfers of record of shares of stock of the Company shall be made only upon its books by the holders thereof, in person or by an attorney duly authorized, and, if such stock is certificated, upon the surrender of a certificate or certificates for a like number of shares, properly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer.
ARTICLE VII MANNER OF GIVING NOTICE AND WAIVER
7.1 Notice of Stockholder Meetings. Notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholders address as it appears on the Companys records. An affidavit of the Secretary or an Assistant Secretary of the Company or of the transfer agent or other agent of the Company that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
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7.2 Notice by Electronic Transmission. Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the certificate of incorporation or these bylaws, any notice to stockholders given by the Company under any provision of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Company. Any such consent shall be deemed revoked if:
(i) the Company is unable to deliver by electronic transmission two consecutive notices given by the Company in accordance with such consent; and
(ii) such inability becomes known to the Secretary or an Assistant Secretary of the Company or to the transfer agent, or other person responsible for the giving of notice.
However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
Any notice given pursuant to the preceding paragraph shall be deemed given:
(i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;
(ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;
(iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and
(iv) if by any other form of electronic transmission, when directed to the stockholder.
An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Company that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
An electronic transmission means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Notice by a form of electronic transmission shall not apply to Sections 164,296, 311, 312 or 324 of the DGCL.
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7.3 Notice to Stockholders Sharing an Address. Except as otherwise prohibited under the DGCL, without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Company under the provisions of the DGCL, the certificate of incorporation or these 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. Any such consent shall be revocable by the stockholder by written notice to the Company. Any stockholder who fails to object in writing to the Company, within 60 days of having been given written notice by the Company of its intention to send the single notice, shall be deemed to have consented to receiving such single written notice.
7.4 Notice to Person with Whom Communication is Unlawful. Whenever notice is required to be given, under the DGCL, the certificate of incorporation or these bylaws, 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 which 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 Company is such as to require the filing of a certificate under 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.
7.5 Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person 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. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.
ARTICLE VIII GENERAL MATTERS
8.1 Fiscal Year. The fiscal year of the Company shall be fixed by resolution of the Board and may be changed by the Board.
8.2 Seal. The Company may adopt a corporate seal, which shall be in such form as may be approved from time to time by the Board. The Company may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
8.3 Annual Report. The Company shall cause an annual report to be sent to the stockholders of the Company to the extent required by applicable law. If and so long as there are fewer than 100 holders of record of the Companys shares, the requirement of sending an annual report to the stockholders of the Company is expressly waived (to the extent permitted under applicable law).
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8.4 Construction; Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term person includes both a corporation and a natural person.
ARTICLE IX AMENDMENTS
These bylaws may be adopted, amended or repealed by the stockholders entitled to vote. However, the Company may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.
A bylaw amendment adopted by stockholders which specifies the votes that shall be necessary for the election of directors shall not be further amended or repealed by the Board.
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Exhibit 3.4
AMENDED AND RESTATED BYLAWS OF
UNITY BIOTECHNOLOGY, INC.
(a Delaware corporation)
TABLE OF CONTENTS
Page | ||||||
ARTICLE I - CORPORATE OFFICES |
1 | |||||
1.1 |
REGISTERED OFFICE | 1 | ||||
1.2 |
OTHER OFFICES | 1 | ||||
ARTICLE II - MEETINGS OF STOCKHOLDERS |
1 | |||||
2.1 |
PLACE OF MEETINGS | 1 | ||||
2.2 |
ANNUAL MEETING | 1 | ||||
2.3 |
SPECIAL MEETING | 1 | ||||
2.4 |
ADVANCE NOTICE PROCEDURES FOR BUSINESS BROUGHT BEFORE A MEETING | 2 | ||||
2.5 |
ADVANCE NOTICE PROCEDURES FOR NOMINATIONS OF DIRECTORS | 6 | ||||
2.6 |
NOTICE OF STOCKHOLDERS MEETINGS | 9 | ||||
2.7 |
MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE | 10 | ||||
2.8 |
QUORUM | 10 | ||||
2.9 |
ADJOURNED MEETING; NOTICE | 10 | ||||
2.10 |
CONDUCT OF BUSINESS | 11 | ||||
2.11 |
VOTING | 11 | ||||
2.12 |
NO STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING | 11 | ||||
2.13 |
RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS | 11 | ||||
2.14 |
PROXIES | 12 | ||||
2.15 |
LIST OF STOCKHOLDERS ENTITLED TO VOTE | 12 | ||||
2.16 |
INSPECTORS OF ELECTION | 13 | ||||
ARTICLE III - DIRECTORS |
14 | |||||
3.1 |
POWERS | 14 | ||||
3.2 |
NUMBER OF DIRECTORS | 14 | ||||
3.3 |
ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS | 14 | ||||
3.4 |
RESIGNATION AND VACANCIES | 14 | ||||
3.5 |
PLACE OF MEETINGS; MEETINGS BY TELEPHONE | 15 | ||||
3.6 |
REGULAR MEETINGS | 15 | ||||
3.7 |
SPECIAL MEETINGS; NOTICE | 15 | ||||
3.8 |
QUORUM | 16 | ||||
3.9 |
BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING | 16 | ||||
3.10 |
FEES AND COMPENSATION OF DIRECTORS | 16 | ||||
3.11 |
REMOVAL OF DIRECTORS | 16 |
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TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE IV - COMMITTEES | 17 | |||||
4.1 |
COMMITTEES OF DIRECTORS | 17 | ||||
4.2 |
COMMITTEE MINUTES | 17 | ||||
4.3 |
MEETINGS AND ACTION OF COMMITTEES | 17 | ||||
ARTICLE V - OFFICERS | 18 | |||||
5.1 |
OFFICERS | 18 | ||||
5.2 |
APPOINTMENT OF OFFICERS | 18 | ||||
5.3 |
SUBORDINATE OFFICERS | 18 | ||||
5.4 |
REMOVAL AND RESIGNATION OF OFFICERS | 18 | ||||
5.5 |
VACANCIES IN OFFICES | 19 | ||||
5.6 |
REPRESENTATION OF SHARES OF OTHER CORPORATIONS | 19 | ||||
5.7 |
AUTHORITY AND DUTIES OF OFFICERS | 19 | ||||
ARTICLE VI - RECORDS AND REPORTS | 19 | |||||
6.1 |
MAINTENANCE AND INSPECTION OF RECORDS | 19 | ||||
6.2 |
INSPECTION BY DIRECTORS | 20 | ||||
ARTICLE VII - GENERAL MATTERS | 20 | |||||
7.1 |
EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS | 20 | ||||
7.2 |
STOCK CERTIFICATES; PARTLY PAID SHARES | 20 | ||||
7.3 |
SPECIAL DESIGNATION ON CERTIFICATES | 21 | ||||
7.4 |
LOST CERTIFICATES | 21 | ||||
7.5 |
CONSTRUCTION; DEFINITIONS | 21 | ||||
7.6 |
DIVIDENDS | 21 | ||||
7.7 |
FISCAL YEAR | 22 | ||||
7.8 |
SEAL | 22 | ||||
7.9 |
TRANSFER OF STOCK | 22 | ||||
7.10 |
STOCK TRANSFER AGREEMENTS | 22 | ||||
7.11 |
REGISTERED STOCKHOLDERS | 22 | ||||
7.12 |
WAIVER OF NOTICE | 23 | ||||
ARTICLE VIII - NOTICE BY ELECTRONIC TRANSMISSION | 23 | |||||
8.1 |
NOTICE BY ELECTRONIC TRANSMISSION | 23 | ||||
8.2 |
DEFINITION OF ELECTRONIC TRANSMISSION | 24 | ||||
ARTICLE IX - INDEMNIFICATION | 24 | |||||
9.1 |
INDEMNIFICATION OF DIRECTORS AND OFFICERS | 24 | ||||
9.2 |
INDEMNIFICATION OF OTHERS | 24 | ||||
9.3 |
PREPAYMENT OF EXPENSES | 25 | ||||
9.4 |
DETERMINATION; CLAIM | 25 |
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TABLE OF CONTENTS
(continued)
Page | ||||||
9.5 |
NON-EXCLUSIVITY OF RIGHTS | 25 | ||||
9.6 |
INSURANCE | 25 | ||||
9.7 |
OTHER INDEMNIFICATION | 25 | ||||
9.8 |
CONTINUATION OF INDEMNIFICATION | 26 | ||||
ARTICLE X - AMENDMENTS |
26 |
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AMENDED AND RESTATED
BYLAWS OF
UNITY BIOTECHNOLOGY, INC.
(Adopted March 13, 2018)
(Effective as of [______], 2018)
ARTICLE ICORPORATE OFFICES
1.1 REGISTERED OFFICE.
The registered office of Unity Biotechnology, Inc. (the Corporation) shall be fixed in the Corporations certificate of incorporation, as the same may be amended from time to time (the Certificate of Incorporation).
1.2 OTHER OFFICES.
The Corporations board of directors (the Board) may at any time establish other offices at any place or places where the Corporation is qualified to do business.
ARTICLE IIMEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS.
Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the Board. The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the General Corporation Law of the State of Delaware (the DGCL). In the absence of any such designation or determination, stockholders meetings shall be held at the Corporations principal executive office.
2.2 ANNUAL MEETING.
The Board shall designate the date and time of the annual meeting. At the annual meeting, directors shall be elected and other proper business properly brought before the meeting in accordance with Section 2.4 may be transacted.
2.3 SPECIAL MEETING.
Except as otherwise provided by the Certificate of Incorporation, a special meeting of the stockholders may be called at any time by the Board, chief executive officer or president (in the absence of a chief executive officer), but such special meetings may not be called by the stockholders or any other person or persons.
No business may be transacted at such special meeting other than the business specified in the notice to stockholders. Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.
2.4 ADVANCE NOTICE PROCEDURES FOR BUSINESS BROUGHT BEFORE A MEETING.
(i) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in a notice of meeting given by or at the direction of the Board, (b) if not specified in a notice of meeting, otherwise brought before the meeting by or at the direction of the Board or the chairperson of the Board, or (c) otherwise properly brought before the meeting by a stockholder present in person who (A)(1) was a beneficial owner of shares of the Corporation both at the time of giving the notice provided for in this Section 2.4 and at the time of the meeting, (2) is entitled to vote at the meeting and (3) has complied with this Section 2.4 in all applicable respects, or (B) properly made such proposal in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (as so amended and inclusive of such rules and regulations, the Exchange Act). The foregoing clause (c) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders. The only matters that may be brought before a special meeting are the matters specified in the notice of meeting given by or at the direction of the person calling the meeting pursuant to Section 2.3 of these bylaws, and stockholders shall not be permitted to propose business to be brought before a special meeting of the stockholders. For purposes of this Section 2.4, present in person shall mean that the stockholder proposing that the business be brought before the annual meeting of the Corporation, or, if the proposing stockholder is not an individual, a qualified representative of such proposing stockholder, appear at such annual meeting. A qualified representative of such proposing stockholder shall be, if such proposing stockholder is (x) a general or limited partnership, any general partner or person who functions as a general partner of the general or limited partnership or who controls the general or limited partnership, (y) a corporation or a limited liability company, any officer or person who functions as an officer of the corporation or limited liability company or any officer, director, general partner or person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company or (z) a trust, any trustee of such trust. Stockholders seeking to nominate persons for election to the Board must comply with Section 2.5 of these bylaws, and this Section 2.4 shall not be applicable to nominations except as expressly provided in Section 2.5 of these bylaws.
(ii) For business to be properly brought before an annual meeting by a stockholder, the stockholder must (a) provide Timely Notice (as defined below) thereof in writing and in proper form to the Secretary of the Corporation and (b) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.4. To be timely, a stockholders
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notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding years annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the ninetieth (90th) day prior to such annual meeting or, if later, the tenth (10th) day following the day on which public disclosure of the date of such annual meeting was first made (such notice within such time periods, Timely Notice). In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of Timely Notice as described above.
(iii) To be in proper form for purposes of this Section 2.4, a stockholders notice to the Secretary shall set forth:
(a) As to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporations books and records); and (B) the class or series and number of shares of the Corporation that are, directly or indirectly, owned of record or beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (A) and (B) are referred to as Stockholder Information);
(b) As to each Proposing Person, (A) the full notional amount of any securities that, directly or indirectly, underlie any derivative security (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a call equivalent position (as such term is defined in Rule 16a-1(b) under the Exchange Act) (Synthetic Equity Position) and that is, directly or indirectly, held or maintained by such Proposing Person with respect to any shares of any class or series of shares of the Corporation; provided that, for the purposes of the definition of Synthetic Equity Position, the term derivative security shall also include any security or instrument that would not otherwise constitute a derivative security as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination; and, provided, further, that any Proposing Person satisfying the requirements of Rule 13d-1(b)(1) under the Exchange Act (other than a Proposing Person that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic
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Equity Position held by such Proposing Person as a hedge with respect to a bona fide derivatives trade or position of such Proposing Person arising in the ordinary course of such Proposing Persons business as a derivatives dealer, (B) any rights to dividends on the shares of any class or series of shares of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, (C)(x) if such Proposing Person is (i) a general or limited partnership, syndicate or other group, the identity of each general partner and each person who functions as a general partner of the general or limited partnership, each member of the syndicate or group and each person controlling the general partner or member, (ii) a corporation or a limited liability company, the identity of each officer and each person who functions as an officer of the corporation or limited liability company, each person controlling the corporation or limited liability company and each officer, director, general partner and person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company or (iii) a trust, any trustee of such trust (each such person or persons set forth in the preceding clauses (i), (ii) and (iii), a Responsible Person), any fiduciary duties owed by such Responsible Person to the equity holders or other beneficiaries of such Proposing Person and any material interests or relationships of such Responsible Person that are not shared generally by other record or beneficial holders of the shares of any class or series of the Corporation and that reasonably could have influenced the decision of such Proposing Person to propose such business to be brought before the meeting, and (y) if such Proposing Person is a natural person, any material interests or relationships of such natural person that are not shared generally by other record or beneficial holders of the shares of any class or series of the Corporation and that reasonably could have influenced the decision of such Proposing Person to propose such business to be brought before the meeting, (D) any material shares or any Synthetic Equity Position in any principal competitor of the Corporation in any principal industry of the Corporation held by such Proposing Persons, (E) a summary of any material discussions regarding the business proposed to be brought before the meeting (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other record or beneficial holder of the shares of any class or series of the Corporation (including their names), (F) any material pending or threatened legal proceeding in which such Proposing Person is a party or material participant involving the Corporation or any of its officers or directors, or any affiliate of the Corporation, (G) any other material relationship between such Proposing Person, on the one hand, and the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation, on the other hand, (H) any direct or indirect material interest in any material contract or agreement of such Proposing Person with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement) and (I) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or
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consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (A) through (I) are referred to as Disclosable Interests); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these bylaws on behalf of a beneficial owner; and
(c) As to each item of business that the stockholder proposes to bring before the annual meeting, (A) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the bylaws of the Corporation, the language of the proposed amendment), (C) a reasonably detailed description of all agreements, arrangements and understandings between or among any of the Proposing Persons or between or among any Proposing Person and any other person or entity (including their names) in connection with the proposal of such business by such stockholder and (D) any other information relating to such item of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act; provided, however, that the disclosures required by this Section 2.4(iii) shall not include any disclosures with respect to any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these bylaws on behalf of a beneficial owner.
(iv) For purposes of this Section 2.4, the term Proposing Person shall mean (a) the stockholder providing the notice of business proposed to be brought before an annual meeting, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made and (c) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A) with such stockholder in such solicitation or associate (within the meaning of Rule 12b-2 under the Exchange Act for the purposes of these bylaws) of such stockholder or beneficial owner.
(v) A Proposing Person shall update and supplement its notice to the Corporation of its intent to propose business at an annual meeting, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.4 shall be true and correct as of the record date for notice of the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for notice of the meeting (in
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the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).
(vi) Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at an annual meeting that is not properly brought before the meeting in accordance with this Section 2.4. The presiding officer of the meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting in accordance with this Section 2.4, and if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.
(vii) This Section 2.4 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders, other than any proposal made in accordance with Rule 14a-8 under the Exchange Act and included in the Corporations proxy statement. In addition to the requirements of this Section 2.4 with respect to any business proposed to be brought before an annual meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in this Section 2.4 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the Corporations proxy statement pursuant to Rule 14a-8 under the Exchange Act.
(viii) For purposes of these bylaws, public disclosure shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
2.5 ADVANCE NOTICE PROCEDURES FOR NOMINATIONS OF DIRECTORS.
(i) Nominations of any person for election to the Board at an annual meeting or at a special meeting (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting) may be made at such meeting only (a) by or at the direction of the Board, including by any committee or persons authorized to do so by the Board or these bylaws, or (b) by a stockholder present in person (A) who was a beneficial owner of shares of the Corporation both at the time of giving the notice provided for in this Section 2.5 and at the time of the meeting, (B) is entitled to vote at the meeting and (C) has complied with this Section 2.5 as to such notice and nomination. The foregoing clause (b) shall be the exclusive means for a stockholder to make any nomination of a person or persons for election to the Board at an annual meeting or special meeting. For purposes of this Section 2.5, present in person shall mean that the stockholder proposing that the business be brought before the meeting of the Corporation, or, if the proposing stockholder is not an individual, a qualified representative of such stockholder, appear at such meeting. A qualified representative of such proposing stockholder shall be, if such proposing stockholder is (x) a general or limited partnership, any general partner or
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person who functions as a general partner of the general or limited partnership or who controls the general or limited partnership, (y) a corporation or a limited liability company, any officer or person who functions as an officer of the corporation or limited liability company or any officer, director, general partner or person who functions as an officer, director or general partner of any entity ultimately in control of the corporation or limited liability company or (z) a trust, any trustee of such trust.
(ii) Without qualification, for a stockholder to make any nomination of a person or persons for election to the Board at an annual meeting, the stockholder must (a) provide Timely Notice (as defined in Section 2.4(ii) of these bylaws) thereof in writing and in proper form to the Secretary of the Corporation, (b) provide the information with respect to such stockholder and its proposed nominee as required by this Section 2.5, and (c) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.5. Without qualification, if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting, then for a stockholder to make any nomination of a person or persons for election to the Board at a special meeting, the stockholder must (a) provide timely notice thereof in writing and in proper form to the Secretary of the Corporation at the principal executive offices of the Corporation, (b) provide the information with respect to such stockholder and its proposed nominee as required by this Section 2.5, and (c) provide any updates or supplements to such notice at the times and in the forms required by this Section 2.5. To be timely, a stockholders notice for nominations to be made at a special meeting must be delivered to, or mailed and received at, the principal executive offices of the Corporation not earlier than the one hundred twentieth (120th) day prior to such special meeting and not later than the ninetieth (90th) day prior to such special meeting or, if later, the tenth (10th) day following the day on which public disclosure (as defined in Section 2.4(ix) of these bylaws) of the date of such special meeting was first made. In no event shall any adjournment or postponement of an annual meeting or special meeting or the announcement thereof commence a new time period for the giving of a stockholders notice as described above.
(iii) To be in proper form for purposes of this Section 2.5, a stockholders notice to the Secretary shall set forth:
(a) As to each Nominating Person (as defined below), the Stockholder Information (as defined in Section 2.4(iii)(a) of these bylaws) except that for purposes of this Section 2.5, the term Nominating Person shall be substituted for the term Proposing Person in all places it appears in Section 2.4(iii)(a);
(b) As to each Nominating Person, any Disclosable Interests (as defined in Section 2.4(iii)(b), except that for purposes of this Section 2.5 the term Nominating Person shall be substituted for the term Proposing Person in all places it appears in Section 2.4(iii)(b) and the disclosure with respect to the business to be brought before the meeting in Section 2.4(iii)(b) shall be made with respect to the election of directors at the meeting);
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(c) As to each person whom a Nominating Person proposes to nominate for election as a director, (A) all information with respect to such proposed nominee that would be required to be set forth in a stockholders notice pursuant to this Section 2.5 if such proposed nominee were a Nominating Person, (B) all information relating to such proposed nominee that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14(a) under the Exchange Act (including such proposed nominees written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (C) a description of any direct or indirect material interest in any material contract or agreement between or among any Nominating Person, on the one hand, and each proposed nominee or his or her respective associates or any other participants in such solicitation, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Nominating Person were the registrant for purposes of such rule and the proposed nominee were a director or executive officer of such registrant (the disclosures to be made pursuant to the foregoing clauses (A) through (C) are referred to as Nominee Information), and (D) a completed and signed questionnaire, representation and agreement as provided in Section 2.5(vi); and
(d) The Corporation may require any proposed nominee to furnish such other information (A) as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation in accordance with the Corporations Corporate Governance Guidelines or (B) that could be material to a reasonable stockholders understanding of the independence or lack of independence of such proposed nominee.
(iv) For purposes of this Section 2.5, the term Nominating Person shall mean (a) the stockholder providing the notice of the nomination proposed to be made at the meeting, (b) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the nomination proposed to be made at the meeting is made and (c) any associate of such stockholder or beneficial owner or any other participant in such solicitation.
(v) A stockholder providing notice of any nomination proposed to be made at a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 2.5 shall be true and correct as of the record date for notice of the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for notice of the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).
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(vi) To be eligible to be a nominee for election as a director of the Corporation at an annual or special meeting, the proposed nominee must be nominated in the manner prescribed in Section 2.5 and must deliver (in accordance with the time period prescribed for delivery in a notice to such proposed nominee given by or on behalf of the Board), to the Secretary at the principal executive offices of the Corporation, (a) a completed written questionnaire (in a form provided by the Corporation) with respect to the background, qualifications, stock ownership and independence of such proposed nominee and (b) a written representation and agreement (in form provided by the Corporation) that such proposed nominee (A) is not and, if elected as a director during his or her term of office, will not become a party to (1) any agreement, arrangement or understanding with, and has not given and will not give any commitment or assurance to, any person or entity as to how such proposed nominee, if elected as a director of the Corporation, will act or vote on any issue or question (a Voting Commitment) or (2) any Voting Commitment that could limit or interfere with such proposed nominees ability to comply, if elected as a director of the Corporation, with such proposed nominees fiduciary duties under applicable law, (B) is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation or reimbursement for service as a director and (C) if elected as a director of the Corporation, will comply with all applicable corporate governance, conflict of interest, confidentiality, stock ownership and trading and other policies and guidelines of the Corporation applicable to directors and in effect during such persons term in office as a director (and, if requested by any proposed nominee, the Secretary of the Corporation shall provide to such proposed nominee all such policies and guidelines then in effect).
(vii) In addition to the requirements of this Section 2.5 with respect to any nomination proposed to be made at a meeting, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such nominations.
(viii) No proposed nominee shall be eligible for nomination as a director of the Corporation unless such proposed nominee and the Nominating Person seeking to place such proposed nominees name in nomination have complied with this Section 2.5, as applicable. The presiding officer at the meeting shall, if the facts warrant, determine that a nomination was not properly made in accordance with this Section 2.5, and if he or she should so determine, he or she shall so declare such determination to the meeting, the defective nomination shall be disregarded and any ballots cast for the proposed nominee in question (but in the case of any form of ballot listing other qualified nominees, only the ballots case for the nominee in question) shall be void and of no force or effect.
2.6 NOTICE OF STOCKHOLDERS MEETINGS.
Unless otherwise provided by law, the Certificate of Incorporation or these bylaws, the notice of any meeting of stockholders shall be sent or otherwise given in accordance with either Section 2.7 or Section 8.1 of these bylaws not less than ten (10) nor more than sixty (60) days before the date of
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the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.
2.7 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.
Notice of any meeting of stockholders shall be deemed given:
(i) if mailed, when deposited in the U.S. mail, postage prepaid, directed to the stockholder at his or her address as it appears on the Corporations records; or
(ii) if electronically transmitted as provided in Section 8.1 of these bylaws.
An affidavit of the secretary or an assistant secretary of the Corporation or of the transfer agent or any other agent of the Corporation that the notice has been given by mail or by a form of electronic transmission, as applicable, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
2.8 QUORUM.
Unless otherwise provided by law, the Certificate of Incorporation or these bylaws, the holders of a majority in voting power of the stock issued and outstanding and entitled to vote, present in person, or by remote communication, if applicable, or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If, however, a quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting or (ii) a majority in voting power of the stockholders entitled to vote at the meeting, present in person, or by remote communication, if applicable, or represented by proxy, shall have power to adjourn the meeting from time to time in the manner provided in Section 2.9 of these bylaws until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.
2.9 ADJOURNED MEETING; NOTICE.
When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (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.
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2.10 CONDUCT OF BUSINESS.
The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business.
2.11 VOTING.
The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.13 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.
Except as may be otherwise provided in the Certificate of Incorporation or these bylaws, each stockholder shall be entitled to one (1) vote for each share of capital stock held by such stockholder.
At all duly called or convened meetings of stockholders, at which a quorum is present, for the election of directors, a plurality of the votes cast shall be sufficient to elect a director. Except as otherwise provided by the Certificate of Incorporation, these bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, all other elections and questions presented to the stockholders at a duly called or convened meeting, at which a quorum is present, shall be decided by the majority of the votes cast affirmatively or negatively (excluding abstentions and broker non-votes) and shall be valid and binding upon the Corporation.
2.12 NO STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
Subject to the rights of the holders of the shares of any series of Preferred Stock or any other class of stock or series thereof having a preference over the Common Stock as to dividends or upon liquidation, and except as otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.
2.13 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.
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, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or 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 may fix, in advance, a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other such action.
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If the Board does not so fix a record date:
(i) 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 next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
(ii) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
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 may fix a new record date for the adjourned meeting.
2.14 PROXIES.
Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL. A proxy may be in the form of a telegram, cablegram or other means of electronic transmission which sets forth or is submitted with information from which it can be determined that the telegram, cablegram or other means of electronic transmission was authorized by the stockholder.
2.15 LIST OF STOCKHOLDERS ENTITLED TO VOTE.
The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) 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 (ii) during ordinary business hours, at the Corporations principal executive office. 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. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of
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remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.
2.16 INSPECTORS OF ELECTION.
Before any meeting of stockholders, the Board shall appoint an inspector or inspectors of election to act at the meeting or its adjournment and make a written report thereof. The number of inspectors shall be either one (1) or three (3). If any person appointed as inspector fails to appear or fails or refuses to act, then the chairperson of the meeting may, and upon the request of any stockholder or a stockholders proxy shall, appoint a person to fill that vacancy.
Such inspectors shall:
(i) determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies;
(ii) receive votes or ballots;
(iii) hear and determine all challenges and questions in any way arising in connection with the right to vote;
(iv) count and tabulate all votes;
(v) determine when the polls shall close;
(vi) determine the result; and
(vii) do any other acts that may be proper to conduct the election or vote with fairness to all stockholders.
The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are three (3) inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein. The inspectors of election may appoint such persons to assist them in performing their duties as they determine.
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ARTICLE IIIDIRECTORS
3.1 POWERS.
Subject to the provisions of the DGCL and any limitations in the Certificate of Incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board.
3.2 NUMBER OF DIRECTORS.
The authorized number of directors shall be determined from time to time by resolution of the Board, provided the Board shall consist of at least one member. No reduction of the authorized number of directors shall have the effect of removing any director before that directors term of office expires.
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.
Except as provided in Section 3.4 of these bylaws, each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until such directors successor is elected and qualified or until such directors earlier death, resignation or removal. Directors need not be stockholders unless so required by the Certificate of Incorporation or these bylaws. The Certificate of Incorporation or these bylaws may prescribe other qualifications for directors.
As provided in the Certificate of Incorporation, the directors of the Corporation shall be divided into three (3) classes.
3.4 RESIGNATION AND VACANCIES.
Any director may resign at any time upon notice given in writing or by electronic transmission to the Corporation. When one or more directors so resigns and the resignation is 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 as provided in this section in the filling of other vacancies.
Unless otherwise provided in the Certificate of Incorporation or these bylaws, vacancies and newly created directorships resulting from any increase in the authorized number of directors shall, unless the Board determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled only by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. 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 directors successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under these bylaws in the case of the death, removal or resignation of any director.
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3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE.
The Board may hold meetings, both regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the Certificate of Incorporation or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting pursuant to this bylaw shall constitute presence in person at the meeting.
3.6 REGULAR MEETINGS.
Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.
3.7 SPECIAL MEETINGS; NOTICE.
Special meetings of the Board for any purpose or purposes may be called at any time by the chairperson of the Board, the chief executive officer, the president, the secretary or a majority of the authorized number of directors.
Notice of the time and place of special meetings shall be:
(i) | delivered personally by hand, by courier or by telephone; |
(ii) | sent by United States first-class mail, postage prepaid; |
(iii) | sent by facsimile; or |
(iv) | sent by electronic mail, |
directed to each director at that directors address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the Corporations records.
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting. If the notice is sent by U.S. mail, it shall be deposited in the U.S. mail at least four (4) days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not specify the place of the meeting (if the meeting is to be held at the Corporations principal executive office) nor the purpose of the meeting.
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3.8 QUORUM.
At all meetings of the Board, a majority of the authorized number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the Certificate of Incorporation or these bylaws. If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.
3.9 BOARD ACTION BY WRITTEN CONSENT WITHOUT A 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, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board 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.
3.10 FEES AND COMPENSATION OF DIRECTORS.
Unless otherwise restricted by the Certificate of Incorporation or these bylaws, the Board shall have the authority to fix the compensation of directors.
3.11 REMOVAL OF DIRECTORS.
Except as otherwise provided by the DGCL or the Certificate of Incorporation, the Board of Directors or any individual director may be removed from office at any time, but only with cause by the affirmative vote of the holders of at least sixty six and two thirds percent (66-2/3%) of the voting power of all the then outstanding shares of voting stock of the Corporation with the power to vote at an election of directors (the Voting Stock).
No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such directors term of office.
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ARTICLE IVCOMMITTEES
4.1 COMMITTEES OF DIRECTORS.
The Board may designate one (1) or more committees, each committee to consist of one (1) or more of the directors of the Corporation. The Board may designate one (1) or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise all the powers and authority of the Board 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 to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the Corporation.
4.2 COMMITTEE MINUTES.
Each committee shall keep regular minutes of its meetings and report the same to the Board when required.
4.3 MEETINGS AND ACTION OF COMMITTEES.
Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
(i) | Section 3.5 (place of meetings and meetings by telephone); |
(ii) | Section 3.6 (regular meetings); |
(iii) | Section 3.7 (special meetings and notice); |
(iv) | Section 3.8 (quorum); |
(v) | Section 7.12 (waiver of notice); and |
(vi) | Section 3.9 (action without a meeting), |
with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members. However:
(i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;
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(ii) special meetings of committees may also be called by resolution of the Board or the chairperson of the applicable committee;
(iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee; and
(iv) the Board may adopt rules for the governance of any committee to override the provisions that would otherwise apply to the committee pursuant to this Section 4.3, provided that such rules do not violate the provisions of the Certificate of Incorporation or applicable law.
ARTICLE VOFFICERS
5.1 OFFICERS.
The officers of the Corporation shall be a president and a secretary. The Corporation may also have, at the discretion of the Board, a chairperson of the Board, a vice chairperson of the Board, a chief executive officer, a chief financial officer or treasurer, one (1) or more vice presidents, one (1) or more assistant vice presidents, one (1) or more assistant treasurers, one (1) or more assistant secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.
5.2 APPOINTMENT OF OFFICERS.
The Board shall appoint the officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 5.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.
5.3 SUBORDINATE OFFICERS.
The Board may appoint, or empower the chief executive officer or, in the absence of a chief executive officer, the president, to appoint, such other officers and agents as the business of the Corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS.
Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.
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Any officer may resign at any time by giving written notice to the Corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.
5.5 VACANCIES IN OFFICES.
Any vacancy occurring in any office of the Corporation shall be filled by the Board or as provided in Section 5.2.
5.6 REPRESENTATION OF SHARES OF OTHER CORPORATIONS.
The chairperson of the Board, the chief executive officer, the president, any vice president, the treasurer, the secretary or assistant secretary of this Corporation, or any other person authorized by the Board , the chief executive officer, the president or a vice president, is authorized to vote, represent and exercise on behalf of this Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this Corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.
5.7 AUTHORITY AND DUTIES OF OFFICERS.
All officers of the Corporation shall respectively have such authority and perform such duties in the management of the business of the Corporation as may be designated from time to time by the Board or the stockholders and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.
ARTICLE VIRECORDS AND REPORTS
6.1 MAINTENANCE AND INSPECTION OF RECORDS.
The Corporation shall, either at its principal executive office or at such place or places as designated by the Board, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws as amended to date, accounting books and other records.
Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporations stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such persons interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office in Delaware or at its principal executive office.
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6.2 INSPECTION BY DIRECTORS.
Any director shall have the right to examine the Corporations stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the Corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.
ARTICLE VIIGENERAL MATTERS
7.1 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.
The Board, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board 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.
7.2 STOCK CERTIFICATES; PARTLY PAID SHARES.
The shares of the Corporation shall be represented by certificates or shall be uncertificated. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock represented by a certificate shall be entitled to have a certificate signed by, or in the name of the Corporation by the chairperson or vice-chairperson of the Board, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.
The Corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the Corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the Corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
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7.3 SPECIAL DESIGNATION ON CERTIFICATES.
If the Corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
7.4 LOST CERTIFICATES.
Except as provided in this Section 7.4, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Corporation and cancelled at the same time. The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owners legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
7.5 CONSTRUCTION; DEFINITIONS.
Unless the context requires otherwise, the general provisions, rules of construction and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term person includes both a corporation and a natural person.
7.6 DIVIDENDS.
The Board, subject to any restrictions contained in either (i) the DGCL or (ii) the Certificate of Incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property or in shares of the Corporations capital stock.
The Board may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the Corporation, and meeting contingencies.
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7.7 FISCAL YEAR.
The fiscal year of the Corporation shall be fixed by resolution of the Board and may be changed by the Board.
7.8 SEAL.
The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board. The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
7.9 TRANSFER OF STOCK.
Shares of the Corporation shall be transferable in the manner prescribed by law and in these bylaws. Shares of stock of the Corporation shall be transferred on the books of the Corporation only by the holder of record thereof or by such holders attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates representing such shares endorsed by the appropriate person or persons (or by delivery of duly executed instructions with respect to uncertificated shares), with such evidence of the authenticity of such endorsement or execution, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing the names of the persons from and to whom it was transferred.
7.10 STOCK TRANSFER AGREEMENTS.
The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
7.11 REGISTERED STOCKHOLDERS.
The Corporation:
(i) 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;
(ii) shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares; and
(iii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
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7.12 WAIVER OF NOTICE.
Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person 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. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these bylaws.
ARTICLE VIIINOTICE BY ELECTRONIC TRANSMISSION
8.1 NOTICE BY ELECTRONIC TRANSMISSION.
Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the Certificate of Incorporation or these bylaws, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed revoked if:
(i) the Corporation is unable to deliver by electronic transmission two (2) consecutive notices given by the Corporation in accordance with such consent; and
(ii) such inability becomes known to the secretary or an assistant secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice.
However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
Any notice given pursuant to the preceding paragraph shall be deemed given:
(i) | if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; |
(ii) | if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; |
(iii) | if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and |
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(iv) | if by any other form of electronic transmission, when directed to the stockholder. |
An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
8.2 DEFINITION OF ELECTRONIC TRANSMISSION.
An electronic transmission means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
ARTICLE IXINDEMNIFICATION
9.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation shall indemnify and hold harmless, to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, any director or officer of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a Proceeding) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys fees) reasonably incurred by such person in connection with any such Proceeding. Notwithstanding the preceding sentence, except as otherwise provided in Section 9.4, the Corporation shall be required to indemnify a person in connection with a Proceeding initiated by such person only if the Proceeding was authorized in the specific case by the Board.
9.2 INDEMNIFICATION OF OTHERS.
The Corporation shall have the power to indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any employee or agent of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any Proceeding by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding.
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9.3 PREPAYMENT OF EXPENSES.
The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys fees) incurred by any officer or director of the Corporation, and may pay the expenses incurred by any employee or agent of the Corporation, in defending any Proceeding in advance of its final disposition; provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article IX or otherwise.
9.4 DETERMINATION; CLAIM.
If a claim for indemnification (following the final disposition of such Proceeding) or advancement of expenses under this Article IX is not paid in full within sixty (60) days after a written claim therefor has been received by the Corporation the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.
9.5 NON-EXCLUSIVITY OF RIGHTS.
The rights conferred on any person by this Article IX shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.
9.6 INSURANCE.
The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust enterprise or non-profit entity against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of the DGCL.
9.7 OTHER INDEMNIFICATION.
The Corporations obligation, if any, to indemnify or advance expenses to any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity shall be reduced by any amount such person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.
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9.8 CONTINUATION OF INDEMNIFICATION.
The rights to indemnification and to prepayment of expenses provided by, or granted pursuant to, this Article IX shall continue notwithstanding that the person has ceased to be a director or officer of the Corporation and shall inure to the benefit of the estate, heirs, executors, administrators, legatees and distributees of such person.
9.9 AMENDMENT OR REPEAL.
The provisions of this Article IX shall constitute a contract between the Corporation, on the one hand, and, on the other hand, each individual who serves or has served as a director or officer of the Corporation (whether before or after the adoption of these bylaws), in consideration of such persons performance of such services, and pursuant to this Article IX the Corporation intends to be legally bound to each such current or former director or officer of the Corporation. With respect to current and former directors and officers of the Corporation, the rights conferred under this Article IX are present contractual rights and such rights are fully vested, and shall be deemed to have vested fully, immediately upon adoption of theses bylaws. With respect to any directors or officers of the Corporation who commence service following adoption of these bylaws, the rights conferred under this provision shall be present contractual rights and such rights shall fully vest, and be deemed to have vested fully, immediately upon such director or officer commencing service as a director or officer of the Corporation. Any repeal or modification of the foregoing provisions of this Article IX shall not adversely affect any right or protection (i) hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification or (ii) under any agreement providing for indemnification or advancement of expenses to an officer or director of the Corporation in effect prior to the time of such repeal or modification.
ARTICLE XAMENDMENTS
Subject to the limitations set forth in Section 9.9 of these bylaws or the provisions of the certificate of incorporation, the Board is expressly empowered to adopt, amend or repeal the bylaws of the Corporation. Any adoption, amendment or repeal of the bylaws of the Corporation by the Board shall require the approval of a majority of the authorized number of directors. The stockholders also shall 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 at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the Voting Stock.
* * * * *
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UNITY BIOTECHNOLOGY, INC.
CERTIFICATE OF AMENDMENT AND RESTATEMENT OF BYLAWS
The undersigned hereby certifies that he or she is the duly elected, qualified, and acting Secretary of Unity Biotechnology, Inc., a Delaware corporation, and that the foregoing bylaws were amended and restated on , 201 by the Corporations board of directors.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this day of , 201 .
|
Tamara L. Tompkins |
Secretary |
Exhibit 4.3
UNITY BIOTECHNOLOGY, INC.
AMENDED AND RESTATED
INVESTORS RIGHTS AGREEMENT
March 15, 2018
TABLE OF CONTENTS
Page | ||||||
Section 1 Definitions |
1 | |||||
1.1 |
Certain Definitions |
1 | ||||
Section 2 Registration Rights |
4 | |||||
2.1 |
Requested Registration |
4 | ||||
2.2 |
Company Registration |
6 | ||||
2.3 |
Registration on Form S-3 |
8 | ||||
2.4 |
Expenses of Registration |
8 | ||||
2.5 |
Registration Procedures |
9 | ||||
2.6 |
Indemnification |
10 | ||||
2.7 |
Information by Holder |
12 | ||||
2.8 |
Restrictions on Transfer |
12 | ||||
2.9 |
Rule 144 Reporting |
13 | ||||
2.10 |
Market Stand-Off Agreement |
14 | ||||
2.11 |
Delay of Registration |
14 | ||||
2.12 |
Limitations on Subsequent Registration Rights |
14 | ||||
2.13 |
Termination of Registration Rights |
15 | ||||
Section 3 Covenants of the Company |
15 | |||||
3.1 |
Basic Financial Information and Inspection Rights |
15 | ||||
3.2 |
Confidentiality |
16 | ||||
3.3 |
Insurance |
16 | ||||
3.4 |
Employee Stock |
16 | ||||
3.5 |
Successor Indemnification |
17 | ||||
3.6 |
Expenses of Counsel |
17 | ||||
3.7 |
Indemnification Matters |
17 | ||||
3.8 |
Right to Conduct Activities |
17 | ||||
3.9 |
Tax Reporting |
18 | ||||
3.10 |
FCPA |
18 | ||||
3.11 |
Termination of Covenants |
18 | ||||
Section 4 Right of First Refusal |
19 | |||||
4.1 |
Right of First Refusal to Significant Holders |
19 | ||||
Section 5 Miscellaneous |
21 | |||||
5.1 |
Amendment |
21 | ||||
5.2 |
Notices |
21 | ||||
5.3 |
Governing Law |
22 | ||||
5.4 |
Successors and Assigns |
22 | ||||
5.5 |
Entire Agreement |
22 | ||||
5.6 |
Delays or Omissions |
22 | ||||
5.7 |
Severability |
23 | ||||
5.8 |
Titles and Subtitles |
23 | ||||
5.9 |
Counterparts |
23 | ||||
5.10 |
Telecopy Execution and Delivery |
23 |
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TABLE OF CONTENTS (continued)
|
Page | |||||
5.11 |
Jurisdiction; Venue |
23 | ||||
5.12 |
Further Assurances |
23 | ||||
5.13 |
Termination Upon a Deemed Liquidation Event |
23 | ||||
5.14 |
Conflict |
23 | ||||
5.15 |
Attorneys Fees |
23 | ||||
5.16 |
Aggregation of Stock |
24 | ||||
5.17 |
Amendment and Restatement of Prior Rights Agreement |
24 | ||||
5.18 |
Jury Trial |
24 |
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UNITY BIOTECHNOLOGY, INC.
AMENDED AND RESTATED
INVESTORS RIGHTS AGREEMENT
This Amended and Restated Investors Rights Agreement (this Agreement) is dated as of March 15, 2018, and is between Unity Biotechnology, Inc., a Delaware corporation (the Company), and the persons and entities listed on Exhibit A (each, an Investor and collectively, the Investors).
RECITALS
The Company and certain of the Investors are parties to that certain Amended and Restated Investors Rights Agreement dated as of October 14, 2016 (as amended, the Prior Rights Agreement).
The Company proposes to sell shares of the Companys Series C Preferred Stock to certain Investors pursuant to the Series C Preferred Stock Purchase Agreement of even date herewith (as may be amended from time to time, the Purchase Agreement) and it is a condition to the sale of the Series C Preferred Stock that the parties to the Prior Rights Agreement amend and restate the Prior Rights Agreement.
In consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound thereby, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:
(a) 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 or director of such Person or any venture capital or other investment fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company or investment advisor with, such Person.
(b) Certificate of Incorporation means the Companys amended and restated certificate of incorporation, as may be amended and/or amended and restated from time to time.
(c) Commission shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.
(d) Common Stock means the Common Stock of the Company.
(e) Conversion Stock shall mean shares of Common Stock issued upon conversion of the Series A Preferred Stock, the Series B Preferred Stock, or the Series C Preferred Stock.
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(f) Deemed Liquidation Event shall have the meaning set forth in the Certificate of Incorporation.
(g) Enforcement Action means any allegation, voluntary disclosure, investigation, prosecution or other enforcement action related to the FCPA or any other anti-corruption law.
(h) Exchange Act shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.
(i) Holder shall mean any Investor who holds Registrable Securities and any holder of Registrable Securities to whom the registration rights conferred by this Agreement have been duly and validly transferred in accordance with Section 5.4 of this Agreement.
(j) Indemnified Party shall have the meaning set forth in Section 2.6(c).
(k) Indemnifying Party shall have the meaning set forth in Section 2.6(c).
(l) Initial Closing shall have the meaning set forth in the Purchase Agreement.
(m) Initial Public Offering shall mean the Companys first bona fide firm commitment underwritten public offering pursuant to an effective registration statement filed under the Securities Act covering the offer and sale of the Companys Common Stock.
(n) Initiating Holders shall mean any Holder or Holders who in the aggregate hold at least a majority of the outstanding Registrable Securities.
(o) Investor Directors shall have the meaning set forth in the Voting Agreement.
(p) Investors shall mean the purchasers of Preferred Stock set forth on Exhibit A.
(q) New Securities shall have the meaning set forth in Section 4.1(a).
(r) Other Selling Stockholders shall mean persons other than Holders who, by virtue of agreements with the Company, are entitled to include their Other Shares in certain registrations hereunder.
(s) Other Shares shall mean shares of Common Stock, other than Registrable Securities (as defined below), (including shares of Common Stock issuable upon conversion of shares of any currently unissued series of Preferred Stock of the Company) with respect to which registration rights have been granted.
(t) Person means any individual, corporation, partnership, trust, limited liability company, association or other entity.
(u) Preferred Stock means shares of the Companys preferred stock, par value $0.0001 per share, including the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock.
(v) Purchase Agreement shall have the meaning set forth in the Recitals.
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(w) Recapitalization shall have the meaning set forth in the Certificate of Incorporation.
(x) Registrable Securities shall mean (i) shares of Common Stock issued or issuable pursuant to the conversion of the Shares and (ii) any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (i) above; provided, however, that Registrable Securities shall not include any shares of Common Stock described in clause (i) or (ii) above which have previously been registered or which have been sold to the public either pursuant to a registration statement or Rule 144, or which have been sold in a private transaction in which the transferors rights under this Agreement are not validly assigned in accordance with this Agreement, or any shares for which registration rights have terminated pursuant to Section 2.13.
(y) The terms register, registered and registration shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.
(z) Registration Expenses shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company and one special counsel for the Holders (not to exceed $75,000), blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses, fees and disbursements of other counsel for the Holders and the compensation of regular employees of the Company, which shall be paid in any event by the Company.
(aa) Restricted Securities shall mean any Registrable Securities required to bear the first legend set forth in Section 2.8(b).
(bb) Rule 144 shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.
(cc) Rule 145 shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission
(dd) Rule 415 shall mean Rule 415 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.
(ee) Right of First Refusal and Co-Sale Agreement shall mean that certain Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of even date herewith, by and between the Company and the investors party thereto.
(ff) Securities Act shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.
(gg) Selling Expenses shall mean 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 (other than the fees and disbursements of one special counsel to the Holders of up to $75,000 included in Registration Expenses).
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(hh) Series A Preferred Stock shall mean the shares of Series A-1 Preferred Stock of the Company and the shares of Series A-2 Preferred Stock of the Company.
(ii) Series B Preferred Stock shall mean the shares of Series B Preferred Stock of the Company.
(jj) Series C Preferred Stock shall mean the shares of Series C Preferred Stock of the Company.
(kk) Shares shall mean shares of the Companys Series A Preferred Stock, shares of the Companys Series B Preferred Stock and shares of the Companys Series C Preferred Stock.
(ll) Significant Holder shall mean a Holder that holds at least 1,500,000 Shares and/or Conversion Stock (as may be adjusted for Recapitalizations).
(mm) Voting Agreement shall mean that certain Amended and Restated Voting Agreement, dated as of even date herewith, by and between the Company, the founders and the investors party thereto,
(nn) Withdrawn Registration shall mean a forfeited demand registration under Section 2.1 in accordance with the terms and conditions of Section 2.4.
SECTION 2
REGISTRATION RIGHTS
2.1 Requested Registration.
(a) Request for Registration. Subject to the conditions set forth in this Section 2.1, if the Company shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration with respect to all or a part of the Registrable Securities (such request shall state the number of shares of Registrable Securities to be disposed of by such Initiating Holders), the Company will:
(i) promptly give written notice of the proposed registration to all other Holders; and
(ii) as soon as practicable, file and use its commercially reasonable efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered.
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(b) Limitations on Requested Registration. The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2.1:
(i) Prior to the earlier of (A) the five (5) year anniversary of the date of this Agreement or (B) one hundred eighty (180) days following the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public (or the subsequent date on which all market stand-off agreements applicable to the offering have terminated);
(ii) If the Initiating Holders propose to sell Registrable Securities and such other securities (if any) with aggregate proceeds (before deductions of underwriters commissions and expenses) which are less than $10,000,000;
(iii) In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification, or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;
(iv) After the Company has initiated two (2) such registrations pursuant to this Section 2.1 (counting for these purposes only (x) registrations which have been declared or ordered effective and pursuant to which securities have been sold, and (y) Withdrawn Registrations);
(v) During the period starting with the date sixty (60) days prior to the Companys good faith estimate of the date of filing or submission, as the case may be, of, and ending on a date one hundred eighty (180) days after the effective date of, a Company-initiated registration (or ending on the subsequent date on which all market stand-off agreements applicable to the offering have terminated); provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective;
(vi) If the Initiating Holders propose to dispose of shares of Registrable Securities that may be registered on Form S-3 pursuant to a request made under Section 2.3;
(vii) If the Initiating Holders do not request that such offering be firmly underwritten by underwriters selected by Company; or
(viii) If the Company and the Initiating Holders are unable to obtain the commitment of the underwriter described in clause (b)(vii) above to firmly underwrite the offer.
(c) Deferral. If (i) in the good faith judgment of the board of directors of the Company, the filing of a registration statement covering the Registrable Securities would be detrimental to the Company and the board of directors of the Company concludes, as a result, that it is in the best interests of the Company to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the board of directors of the Company, it would be detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to the limitations set forth in Section 2.1(b)(v) above) the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, and, provided further, that the Company shall not defer its obligation in this manner more than once in any twelve-month period.
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(d) Other Shares. The registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Section 2.1(e), include Other Shares, and may include securities of the Company being sold for the account of the Company.
(e) Underwriting. The right of any Holder to include all or any portion of its Registrable Securities in a registration pursuant to this Section 2.1 shall be conditioned upon such Holders participation in an underwriting and the inclusion of such Holders Registrable Securities to the extent provided herein. If the Company shall request inclusion in any registration pursuant to Section 2.1 of securities being sold for its own account, or if other persons shall request inclusion in any registration pursuant to Section 2.1, the Initiating Holders shall, on behalf of all Holders, offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Company or such other persons in such underwriting and the inclusion of the Companys and such persons other securities of the Company and their acceptance of the further applicable provisions of this Section 2 (including Section 2.10). The Company shall (together with all Holders and other persons proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 2.1, if the underwriters advise the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of Registrable Securities and Other Shares that may be so included shall be allocated as follows: (i) first, among all Holders requesting to include Registrable Securities in such registration statement based on the pro rata percentage of Registrable Securities held by such Holders, assuming conversion; (ii) second, to the Other Selling Stockholders; and (iii) third, to the Company, which the Company may allocate, at its discretion, for its own account, or for the account of other holders or employees of the Company.
If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 2.1(e), then the Company shall then offer to all Holders and Other Selling Stockholders who have retained rights to include securities in the registration the right to include additional Registrable Securities or Other Shares in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders and other Selling Stockholders requesting additional inclusion, as set forth above.
2.2 Company Registration.
(a) Company Registration. If the Company shall determine to register any of its securities either for its own account or the account of a security holder or holders, other than a registration pursuant to Sections 2.1 or 2.3, a registration relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating to a corporate reorganization or other Rule 145 transaction, or a registration on any registration form that does not permit secondary sales, the Company will:
(i) promptly give written notice of the proposed registration to all Holders; and
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(ii) use its commercially reasonable efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 2.2(b) below, and in any underwriting involved therein, all of such Registrable Securities as are specified in a written request or requests made by any Holder or Holders received by the Company within ten (10) days after such written notice from the Company is mailed or delivered. Such written request may specify all or a part of a Holders Registrable Securities.
(b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 2.2(a)(i). In such event, the right of any Holder to registration pursuant to this Section 2.2 shall be conditioned upon such Holders participation in such underwriting and the inclusion of such Holders 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, the Other Selling Stockholders and other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 2.2, if the underwriters advise the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the underwriters may (subject to the limitations set forth below) exclude all Registrable Securities from, or limit the number of Registrable Securities to be included in, the registration and underwriting. The Company shall so advise all holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated, as follows: (i) first, to the Company for securities being sold for its own account, (ii) second, to the Holders requesting to include Registrable Securities in such registration statement based on the pro rata percentage of Registrable Securities held by such Holders, assuming conversion and (iii) third, to the Other Selling Stockholders requesting to include Other Shares in such registration statement based on the pro rata percentage of Other Shares held by such Other Selling Stockholders, assuming conversion.
If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be excluded therefrom by written notice from the Company or the underwriter. The Registrable Securities or other securities so excluded shall also be withdrawn from such registration. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.
For purposes Section 2.1, unless such registration is for the Companys Initial Public Offering, a registration shall not be counted as effected if, as a result of an exercise of the underwriters cutback provisions in this Section 2.2(b), fewer than thirty percent (30%) of the total number of Registrable Securities that the Initiating Holders have requested to be included in such registration statement are actually included.
(c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.
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2.3 Registration on Form S-3.
(a) Request for Form S-3 Registration. After its Initial Public Offering, the Company shall use its commercially reasonable efforts to qualify for registration on Form S-3 or any comparable or successor form or forms. After the Company has qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 2 and subject to the conditions set forth in this Section 2.3, if the Company shall receive from a Holder or Holders of Registrable Securities that, in the aggregate, hold at least 3,000,000 shares of Registrable Securities (as may be adjusted for Recapitalizations) a written request that the Company effect any registration on Form S-3 or any similar short form registration statement with respect to all or part of the Registrable Securities (such request shall state the number of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by such Holder or Holders), the Company will take all such action with respect to such Registrable Securities as required by Section 2.1(a)(i) and 2.1(a)(ii).
(b) Limitations on Form S-3 Registration. The Company shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 2.3:
(i) In the circumstances described in either Sections 2.1(b)(i), 2.1(b)(iv) or 2.1(b)(vi);
(ii) If the Holders propose to sell Registrable Securities and such other securities (if any) with aggregate proceeds (before deductions of underwriters commissions and expenses) which are less than $10,000,000;
(iii) During the period starting with the date thirty (30) days prior to the Companys good faith estimate of the date of filing or submission, as the case may be, of, and ending on a date ninety (90) days after the effective date of, a Company-initiated registration (or ending on the subsequent date on which all market stand-off agreements applicable to the offering have terminated); provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective;; or
(iv) If, in a given twelve-month period, the Company has effected two (2) such registrations in such period.
(c) Deferral. The provisions of Section 2.1(c) shall apply to any registration pursuant to this Section 2.3.
(d) Underwriting. If the Holders of Registrable Securities requesting registration under this Section 2.3 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Section 2.1(e) shall apply to such registration. Notwithstanding anything contained herein to the contrary, registrations effected pursuant to this Section 2.3 shall not be counted as requests for registration or registrations effected pursuant to Section 2.1.
2.4 Expenses of Registration. All Registration Expenses incurred in connection with registrations pursuant to Sections 2.1, 2.2 and 2.3 shall be borne by the Company (including the expense, not to exceed $75,000, of one special counsel to the selling Holders); provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 2.1 and 2.3 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered or because a sufficient number of Holders shall have withdrawn so that the minimum offering conditions set forth in Sections 2.1 and 2.3 are no longer satisfied (in which case all participating Holders shall bear such expenses pro rata among each other based on the number of Registrable Securities requested to be so registered), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to a demand registration pursuant to Section 2.1; provided further that if, at the time of such withdrawal, the Holders (i) shall have learned of a
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material adverse change in the condition, business, or prospects of the Company that was not known to the Holders at the time of their request or could not have been reasonably known given the prior communication or information provided by the Company to the Holders and (ii) 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 Section 2.1. 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.
2.5 Registration Procedures. In the case of each registration effected by the Company pursuant to Section 2, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof. At its expense, the Company will use its commercially reasonable efforts to:
(a) Keep such registration effective for a period ending on the earlier of the date which is sixty (60) days from the effective date of the registration statement or such time as the Holder or Holders have completed the distribution described in the registration statement relating thereto;
(b) Prepare and file with the Commission 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 provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above;
(c) Notify each seller of Registrable Securities covered by such registration statement, 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;
(d) Furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;
(e) Use its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdiction as shall be reasonably requested by the Holders; provided, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;
(f) Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing, and following such notification promptly prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing;
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(g) Provide a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;
(h) Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; and
(i) In connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 2.1, enter into an underwriting agreement in form reasonably necessary to effect the offer and sale of Common Stock, provided such underwriting agreement contains reasonable and customary provisions, and provided further, that each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.
2.6 Indemnification.
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors, members, stockholders and partners, legal counsel, accountants and investment advisors and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this Section 2, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, (ii) any 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 Company of the Securities Act, any state securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by such registration, qualification or compliance, and the Company will reimburse each such Holder, each of its officers, directors, partners, legal counsel, accountants and investment advisors and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability or action; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder, any of such Holders officers, directors, partners, legal counsel, accountants or investment advisors, any person controlling such Holder, such underwriter or any person who controls any such underwriter, and stated to be specifically for use therein; and provided, further that, the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).
(b) To the extent permitted by law, each Holder will (severally and not jointly), if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers, partners, legal counsel and accountants and each underwriter, if any, of the Companys
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securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder, and each of their officers, directors and partners, and each person controlling each other such Holder, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular or other document (including any related registration statement, notification, or the like) incident to any such registration, qualification or compliance, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Holders, directors, officers, partners, legal counsel and accountants, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided that in no event shall any indemnity under this Section 2.6 exceed the proceeds from the offering received by such Holder (net of Selling Expenses), except in the case of fraud or willful misconduct by such Holder.
(c) Each party entitled to indemnification under this Section 2.6 (the Indemnified Party) shall give notice to the party required to provide indemnification (the Indemnifying Party) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such partys expense; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6, to the extent such failure is not prejudicial. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as 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 alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties relative intent,
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knowledge, access to information, and opportunity to correct or prevent such statement or omission. No Holder will be required under this Section 2.6(d) to contribute any amount in excess of the difference between (i) the proceeds from the offering received by such Holder (net of Selling Expenses) and (ii) any amounts paid or payable by such Holder pursuant to Section 2.6(b), except in the case of fraud or willful misconduct by such Holder. No person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
2.7 Information by Holder. Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this Section 2.
2.8 Restrictions on Transfer.
(a) The holder of each certificate representing Registrable Securities, by acceptance thereof, agrees to comply in all respects with the provisions of this Section 2.8. Each Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Restricted Securities, or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for the benefit of the Company to take and hold such Restricted Securities subject to, and to be bound by, the terms and conditions set forth in this Agreement, including, without limitation, this Section 2.8 and Section 2.10, and:
(i) There is then in effect a registration statement under the Securities Act covering such proposed disposition and the disposition is made in accordance with the registration statement; or
(ii) The Holder shall have given prior written notice to the Company of the Holders intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and, if requested by the Company, the Holder shall have furnished the Company, at the Holders expense, with (i) an opinion of counsel reasonably satisfactory to the Company to the effect that such disposition will not require registration of such Restricted Securities under the Securities Act or (ii) a no action letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered 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 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, in the case of clause (y), each transferee agrees in writing to be subject to the terms of this Section 2.8.
(b) Each certificate representing Registrable Securities shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws):
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (1) RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN AN AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT, AND (2) VOTING RESTRICTIONS AS SET FORTH IN AN AMENDED AND RESTATED VOTING AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.
The Holders consent to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer established in this Section 2.8.
(c) The first legend referring to federal and state securities laws identified in Section 2.8(b) stamped on a certificate evidencing the Restricted Securities and the stock transfer instructions and record notations with respect to the Restricted Securities shall be removed and the Company shall issue a certificate without such legend to the holder of Restricted Securities if (i) those securities are registered under the Securities Act, or (ii) the holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a sale or transfer of those securities may be made without registration or qualification.
2.9 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Restricted Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:
(a) Make and keep adequate current public information with respect to the Company available in accordance with Rule 144 under the Securities Act, at all times from and after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;
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(b) File with the Commission 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 it has become subject to such reporting requirements; and
(c) So long as a Holder owns any Restricted Securities, furnish to the Holder forthwith upon written request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.
2.10 Market Stand-Off Agreement. Each Holder shall not, without the prior written consent of the managing underwriter, sell or otherwise 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, of any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during the period from the filing of the registration statement for the Companys Initial Public Offering through the end of the 180-day period following the effective date of the registration statement (or such other longer period as may be required by an underwriter to accommodate applicable regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), provided that: all officers and directors of the Company and holders of at least one percent (1%) of the Companys voting securities are bound by and have entered into similar agreements. Subject to customary shareholding thresholds, any discretionary waiver or termination of the restrictions of any or all of such market stand-off 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, and the Company shall use its reasonable efforts to obtain from the managing underwriter(s) a provision in such market stand-off agreements. The obligations described in this Section 2.10 shall only apply to the Initial Public Offering and shall not apply to any shares acquired in the Initial Public Offering or in the open market following the Initial Public Offering (except, in the case of officers or directors of the Company, as may be required to comply with NASD, FINRA or other applicable laws or regulations). The Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in Section 2.8(b) with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day (or other) period. Each Holder agrees to execute a market stand-off agreement with said underwriters in customary form substantially consistent with the provisions of this Section 2.10.
2.11 Delay of Registration. No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.
2.12 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of Holders holding at least sixty percent (60%) of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights, other than rights to registration on Form S-3 or rights to include shares in a Company registration on terms which are no more favorable than the registration rights granted to the Holders hereunder.
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2.13 Termination of Registration Rights. The right of any Holder to request registration or inclusion in any registration pursuant to Sections 2.1, 2.2 or 2.3 shall terminate on the earlier of (i) such date, on or after the closing of the Companys first registered public offering of Common Stock, on which date all shares of Registrable Securities held or entitled to be held upon conversion by such Holder may immediately be sold under Rule 144 during any ninety (90) day period without the requirement for the Company to be in compliance with the current public information required under Rule 144(c)(1), (ii) five (5) years after the closing of the Companys Initial Public Offering, and (iii) upon a Deemed Liquidation Event.
SECTION 3
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees, as follows:
3.1 Basic Financial Information and Inspection Rights.
(a) Basic Financial Information. The Company will furnish the following reports to each Significant Holder:
(i) As soon as practicable after the end of each fiscal year of the Company, and in any event within one hundred eighty (180) days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its subsidiaries, if any, as at the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year, prepared in accordance with U.S. generally accepted accounting principles consistently applied and audited by an accounting firm acceptable to the Companys board of directors.
(ii) As soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five (45) days after the end of the first, second, and third quarterly accounting periods in each fiscal year of the Company, (A) an unaudited consolidated balance sheet of the Company and its subsidiaries, if any, as of the end of each such quarterly period, and (B) unaudited consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such period, prepared in accordance with U.S. generally accepted accounting principles consistently applied, subject to changes resulting from normal year-end audit adjustments, and (C) a current capitalization table.
(iii) At least thirty (30) days prior to the beginning of each fiscal year, an annual budget and operating plan for such fiscal year, in each case as approved by the Companys board of directors.
(iv) Such other information relating to the financial condition, business, prospects or corporate affairs of the Company as any Significant Holder may from time to time reasonably request, including capitalization tables following any material change in the capitalization or holdings of the Company; provided, however, that the Company shall not be obligated under this subsection (iv) or any other subsection of Section 3.1to provide information that (A) it deems in good faith to be a trade secret or similar confidential information or (B) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.
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(b) Inspection. The Company shall permit each Significant Holder, at such Significant Holders expense, to visit and inspect the Companys properties, examine its books of account and records, and discuss the Companys affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Significant Holder; provided, however, that the Company shall not be obligated pursuant to this Section 3.1(b) to provide access to any Significant Holder on more than two occasions in any 12 month period and provided, further, that the Company shall not be obligated pursuant to this Section 3.1(b) 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.
3.2 Confidentiality. Anything in this Agreement to the contrary notwithstanding, no Holder by reason of this Agreement shall have access to any trade secrets or classified information of the Company (unless covered by an enforceable confidentiality agreement, in a form acceptable to the Company). The Company shall not be required to comply with any information rights of Section 3 in respect of any Holder whom the Company reasonably determines to be a competitor or an officer, employee, director or holder of more than ten percent (10%) of a competitor. Each Holder acknowledges that the information received by them pursuant to this Agreement may be confidential and for its use only, and it will not use such confidential information in violation of the Exchange Act or reproduce, disclose or disseminate such information to any other person (other than its employees or agents having a need to know the contents of such information, and its attorneys, accountants and investment advisors), except that such Holder may disclose such proprietary or confidential information (i) to any Affiliate, partner, limited partner, prospective limited partner, subsidiary or parent of such Holder as long as such Affiliate, partner, limited partner, prospective limited partner, subsidiary or parent is advised of and agrees or has agreed to be bound by the confidentiality provisions of this Section 3.2 or comparable restrictions; (ii) at such time as it enters the public domain through no fault of such Holder; (iii) that is communicated to it free of any obligation of confidentiality; (iv) that is developed by Holder or its agents independently of and without reference to any confidential information communicated by the Company; or (v) as required by applicable law.
3.3 Insurance. The Company shall use its commercially reasonable efforts to obtain, within ninety (90) days of the date hereof, from financially sound and reputable insurers Directors and Officers liability insurance, in an amount and on terms and conditions satisfactory to the board of directors of the Company, and will use commercially reasonable efforts to cause such insurance policies to be maintained until such time as the board of directors of the Company determines that such insurance should be discontinued.
3.4 Employee Stock. Unless otherwise approved by the board of directors of the Company, including at least a majority of the Investor Directors, all future employees and consultants of the Company who purchase, receive options to purchase, or receive awards of shares of the Companys 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 2.10. In addition, unless otherwise approved by the board of directors of the Company, including at least a majority of the Investor Directors, the Company shall retain a right of first refusal on employee transfers until the Companys Initial Public Offering and shall have the right to repurchase unvested shares at cost upon termination of employment of a holder of restricted stock.
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3.5 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 of the Company as in effect immediately before such transaction, whether such obligations are contained in the Companys Bylaws, its Certificate of Incorporation, or elsewhere, as the case may be.
3.6 Expenses of Counsel. In the event of a transaction which is a Sale of the Company (as defined in the Voting Agreement), the reasonable fees and disbursements of one counsel for the Significant Holders (Investor Counsel), in their capacities as stockholders, shall be borne and paid by the Company up to a maximum of $75,000. Upon receipt of a term sheet, letter of intent, memorandum of understanding, or similar written instrument, describing a transaction which, based on the parties involved, consideration to be received and reasonable likelihood of consummation would constitute a Sale of the Company, the Company shall use its reasonable commercial efforts to obtain the ability to share with the Investor Counsel (and such counsels clients) within a reasonable period following receipt of such term sheet, letter of intent, memorandum of understanding, or similar instrument, and shall share the confidential information (including, without limitation, the final 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. In the event that Investor Counsel and Company counsel deem it appropriate, 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 and Investors shall, and shall direct their respective counsel to, execute and deliver such an agreement in form and substance reasonably acceptable to Investor Counsel and Company counsel..
3.7 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 a Fund 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 Fund Indemnitors). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Fund Director are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Fund Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Fund 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 Fund Director to the extent legally permitted and as required by the Companys Certificate of Incorporation or Bylaws of the Company (or any agreement between the Company and such Fund Director), without regard to any rights such Fund Director may have against the Fund Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund 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 Fund Indemnitors on behalf of any such Fund Director with respect to any claim for which such Fund Director has sought indemnification from the Company shall affect the foregoing and the Fund 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 Fund Director against the Company.
3.8 Right to Conduct Activities. The Company hereby agrees and acknowledges that certain of the Investors and certain of their respective Affiliates are professional investment funds (collectively, the Funds), and as such invest in numerous portfolio companies, some of which may be deemed competitive with the Companys business (as currently conducted or as may be conducted in the future). The Company hereby agrees that, to the extent permitted under applicable law, none of the Funds
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shall be liable to the Company for any claim arising out of, or based upon, (i) the investment by any such Fund in any entity competitive with the Company, or (ii) actions taken by any partner, officer or other representative of any such Fund 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. Furthermore, the Company acknowledges that the execution of this Agreement and the access to the Companys confidential information hereunder or thereunder shall in no way be construed to prohibit or restrict an institutional Investor or its investment advisor or such investment advisors other investment advisory clients from maintaining, making or considering investments in public or private companies, including, without limitation, companies that may compete either directly or indirectly with the Company, or from otherwise operating in the ordinary course of business; provided, however, that the foregoing shall not relieve (x) any of the Investors from liability associated with the unauthorized disclosure of the Companys 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; provided, further, that the Company shall not have an affirmative obligation on the basis of this Section 3.8 to indemnify or defend any Fund for any action brought by any stockholder of the Company, including any derivative action brought by a stockholder.
3.9 Tax Reporting. The Company will comply with any obligation imposed on the Company to make any filing (including any filing on Internal Revenue Service Form 5471) as a result of any interest that the Company holds in a non-U.S. Person or any activities that the Company conducts outside of the U.S. and shall include in such filing any information necessary to obviate (to the extent possible) any similar obligation to which any shareholder would otherwise be subject with respect to such interest or such activity. The Company shall promptly provide each Investor with a copy of any such filing.
3.10 FCPA. The Company represents that it shall not (and shall not permit any of its subsidiaries or affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to) promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, to any third party, including any Non-U.S. Official (as (as such term is defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended (the FCPA)), in each case, in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to) cease all of its or their respective activities, as well as remediate any actions taken by the Company, its subsidiaries or affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to) maintain systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company shall promptly notify each Investor if the Company becomes aware of any Enforcement Action (as defined in the Purchase Agreement). The Company shall, and shall cause any direct or indirect subsidiary or entity controlled by it, whether now in existence or formed in the future, to comply with the FCPA.
3.11 Termination of Covenants. The covenants set forth in this Section 3 (other than Sections 3.2, 3.5, 3.6, 3.7 and 3.8) shall terminate and be of no further force and effect (a) immediately following the closing of the Companys Initial Public Offering, (b) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act and (c) upon the consummation of a Deemed Liquidation Events, whichever occurs earlier; provided, that, with respect to clause (c), the covenants set forth in Section 3.1 shall only terminate if the consideration received by the Holders in such Deemed Liquidation Event is in the form of cash and/or publicly traded securities unless the Holders receive financial information from the acquiring company or other successor to the Company comparable to those set forth in Section 3.1, whichever event occurs first.
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SECTION 4
RIGHT OF FIRST REFUSAL
4.1 Right of First Refusal to Significant Holders. The Company hereby grants to each Significant Holder, the right of first refusal to purchase up to its pro rata share of New Securities (as defined in Section 4.1(a)) which the Company may, from time to time, propose to sell and issue after the date of this Agreement. A Significant Holders pro rata share, for purposes of this right of first refusal, is equal to the ratio of (a) the number of shares of Common Stock owned by such Significant Holder immediately prior to the issuance of New Securities (assuming full conversion of the Shares and full conversion or exercise of all outstanding convertible securities, rights, options and warrants held by said Significant Holder) to (b) the total number of shares of Common Stock outstanding immediately prior to the issuance of New Securities (assuming full conversion of the Shares and full conversion or exercise of all outstanding convertible securities, rights, options and warrants, and excluding any shares of Common Stock issued or issuable to employees or consultants of the Company upon exercise of stock options). Each Significant Holder shall have a right of over-allotment such that if any Significant Holder fails to exercise its right hereunder to purchase its pro rata share of New Securities, the other Significant Holders may purchase the non-purchasing Significant Holders portion on a pro rata basis. This right of first refusal shall be subject to the following provisions:
(a) New Securities shall mean any capital stock (including Common Stock and/or Preferred Stock) of the Company whether now authorized or not, and rights, convertible securities, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, exercisable or convertible into capital stock; provided that the term New Securities does not include:
(i) the Shares and the Conversion Stock;
(ii) securities or other rights issued or issuable to officers, employees, directors, consultants, or advisors to the Company (or any subsidiary) pursuant to stock grants, restricted stock purchase agreements, option plans, purchase plans, incentive programs or similar arrangements, securities or other rights to purchase Shares or Common Stock net of any stock repurchases or expired or terminated options pursuant to the terms of any option plan, restricted stock purchase agreement or similar arrangement, provided, that such issuances are approved by the Board of Directors (including at least a majority of the Investor Directors);
(iii) securities issued pursuant to the conversion or exercise of any outstanding convertible or exercisable securities as of the date of this Agreement;
(iv) securities issued or issuable as a dividend or distribution on Preferred Stock of the Company or pursuant to any event for which adjustment is made pursuant to Sections V.4(e), V.4(f) or V.4(g) of the Certificate of Incorporation;
(v) securities issued or issuable in an Initial Public Offering;
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(vi) securities issued or issuable in connection with bona fide acquisitions, mergers or similar transactions, provided, that such issuances are approved by the board of directors of the Company (including at least a majority of the Investor Directors);
(vii) securities issued or issuable to banks, equipment lessors, real property lessors, financial institutions or other persons engaged in the business of making loans pursuant to a debt financing, commercial leasing or real property leasing transaction, the principal purpose of which is other than the raising of capital through the sale of equity securities of the Company, approved by the board of directors of the Company (including at least a majority of the Investor Directors);
(viii) securities issued or issuable in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by the board of directors of the Company (including at least a majority of the Investor Directors);
(ix) 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 of the Company (including at least a majority of the Investor Directors);
(x) securities of the Company which are otherwise excluded by the affirmative vote or consent of the holders of at least sixty percent (60%) of the Registrable Securities; and
(xi) any right, option or warrant to acquire any security convertible into the securities excluded from the definition of New Securities pursuant to subsections (i) through (x) above.
(b) In the event the Company proposes to undertake an issuance of New Securities, it shall give each Significant Holder written notice of its intention, describing the type of New Securities, and their price and the general terms upon which the Company proposes to issue the same. Each Significant Holder shall have twenty (20) days after any such notice is mailed or delivered to agree to purchase all or a portion of such Holders pro rata share of such New Securities and to indicate whether such Holder desires to exercise its over-allotment option for the price and upon the terms specified in the notice by giving written notice to the Company, in substantially the form attached as Schedule 1, and stating therein the quantity of New Securities to be purchased.
(c) In the event the Holders fail to exercise fully the right of first refusal and over-allotment rights, if any, within said twenty (20) day period (the Election Period), the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within ninety (90) days from the date of said agreement) to sell that portion of the New Securities with respect to which the Significant Holders right of first refusal option set forth in this Section 4.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Companys notice to Significant Holders delivered pursuant to Section 4.1(b). In the event the Company has not sold within such ninety (90) day period following the Election Period, or such ninety (90) day period following the date of said agreement, the Company shall not thereafter issue or sell any New Securities, without first again offering such securities to the Significant Holders in the manner provided in this Section 4.1.
(d) In the event that the rights of a Significant Holder to purchase New Securities under this Section 4.1 are waived (or made inapplicable pursuant to Section 4.1(a)(a)(x) with respect to a particular offering of New Securities without such Significant Holders prior written consent (a Waived Investor) and any Significant Holder that participated in waiving such rights actually purchases New
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Securities in such offering, then the Company shall grant, and hereby grants, each Waived Investor the right to purchase, in a subsequent closing of such issuance on substantially the same terms and conditions, the same percentage of its full pro rata share of such New Securities as the highest percentage of any such purchasing Significant Holder.
(e) The right of first refusal granted under this Agreement shall expire upon, and shall not be applicable to, the Companys Initial Public Offering or a Deemed Liquidation Event, or when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, whichever occurs earlier.
SECTION 5
MISCELLANEOUS
5.1 Amendment. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the Company and the Holders holding at least sixty percent (60%) of the Registrable Securities; provided, however, that Holders purchasing shares of Preferred Stock in a Subsequent Closing (as defined in the Purchase Agreement) may become parties to this Agreement, by executing a counterpart of this Agreement without any amendment of this Agreement pursuant to this paragraph or any consent or approval of any other Holder; and provided, further, that if any amendment, waiver, discharge or termination operates in a manner that treats any Holder different from other Holders, the consent of such Holder shall also be required for such amendment, waiver, discharge or termination. Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each Holder and each future holder of all such securities of Holder. Each Holder acknowledges that by the operation of this paragraph, the holders of at least sixty percent (60%) of the Registrable Securities will have the right and power to diminish or eliminate all rights of such Holder under this Agreement. Notwithstanding anything in this Section 5.1 to the contrary, any amendment, waiver, discharge or termination hereof or any term hereof that materially and disproportionately affects the holders of any series of Preferred Stock relative to the holders of any other series of Preferred Stock shall require the prior written consent of a majority of the outstanding Shares of such disproportionately affected series of Preferred Stock.
5.2 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand, messenger or courier service addressed:
(a) if to an Investor, to the Investors address as shown in the Companys records, as may be updated in accordance with the provisions hereof;
(b) if to any Holder, to such address as shown in the Companys records, or, until any such Holder so furnishes an address to the Company, then to the address of the last holder of such shares for which the Company has contact information in its records; or
(c) if to the Company, to the attention of the Chief Executive Officer or Chief Financial Officer of the Company at Unity Biotechnology, Inc., 3280 Bayshore Boulevard, Brisbane, CA 94005, or at such other current address as the Company shall have furnished to the Investors or Holders, with a copy (which shall not constitute notice) to Alan C. Mendelson, Mark V. Roeder and Brian J. Cuneo, Latham & Watkins LLP, 140 Scott Drive, Menlo Park, CA 94025.
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Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service, freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid.
5.3 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware as applied to agreements entered into among Delaware residents to be performed entirely within Delaware, without regard to principles of conflicts of law which would result in the application of the laws of another jurisdiction.
5.4 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 is (i) an Affiliate of a Holder; (ii) a constituent partner, former partner or affiliated fund of such Holder that is a partnership; (iii) a member or former member of such Holder that is a limited liability company; (iv) an immediate family member living in the same household, a descendant, or a trust, in the case such Holder is an individual; or (v) a transferee or assignee of not less than 1,500,000 shares of Registrable Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like) or, if less, all of the Registrable Securities held by such Holder; provided that (a) such transfer or assignment of Registrable Securities is effected in accordance with the terms of Section 2.8, the Right of First Refusal and Co-Sale Agreement, and applicable securities laws, (b) the Company is given written notice prior to said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to which such registration rights are intended to be transferred or assigned and (c) the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Agreement, including without limitation the obligations set forth in Section 2.10. 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.
5.5 Entire Agreement. This Agreement and the exhibits hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein.
5.6 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in 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. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.
22
5.7 Severability. If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.
5.8 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.
5.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument.
5.10 Telecopy Execution and Delivery. A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.
5.11 Jurisdiction; Venue. Each of the parties hereto hereby submits and consents irrevocably to the exclusive jurisdiction of, and venue in, the courts in Wilmington, Delaware (or in the event of exclusive federal jurisdiction, the federal courts in Wilmington, Delaware) for the interpretation and enforcement of the provisions of this Agreement. Each of the parties hereto also agrees that the jurisdiction over the person of such parties and the subject matter of such dispute shall be effected by the mailing of process or other papers in connection with any such action in the manner provided for in Section 5.2 or in such other manner as may be lawful, and that service in such manner shall constitute valid and sufficient service of process.
5.12 Further Assurances. Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.
5.13 Termination Upon a Deemed Liquidation Event. Notwithstanding anything to the contrary herein, this Agreement (excluding any then-existing obligations) shall terminate upon the consummation of Deemed Liquidation Event.
5.14 Conflict. In the event of any conflict between the terms of this Agreement and the Certificate of Incorporation or its bylaws, the terms of the Certificate of Incorporation or its bylaws, as the case may be, will control.
5.15 Attorneys Fees. In the event that any suit or action is instituted to enforce any provisions in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.
23
5.16 Aggregation of Stock. All securities held or acquired by Affiliates or shall be aggregated together for purposes of determining the availability of any rights under this Agreement.
5.17 Amendment and Restatement of Prior Rights Agreement. The Prior Rights Agreement is hereby amended in its entirety and restated herein. All provisions of, rights granted and covenants made in the Prior Rights Agreement are hereby waived, released and superseded in their entirety and shall have no further force or effect.
5.18 Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT. If the waiver of jury trial set forth in this section is not enforceable, then any claim or cause of action arising out of or relating to this Agreement shall be settled by judicial reference pursuant to California Code of Civil Procedure Section 638 et seq. before a referee sitting without a jury, such referee to be mutually acceptable to the parties or, if no agreement is reached, by a referee appointed by the Presiding Judge of the California Superior Court for Santa Clara County. This paragraph shall not restrict a party from exercising remedies under the Uniform Commercial Code or from exercising pre-judgment remedies under applicable law.
5.19 Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of the Companys Series C Preferred Stock after the date hereof pursuant to the Purchase Agreement, any purchaser of such shares of Series C 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.
(signature page follows)
24
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
UNITY BIOTECHNOLOGY, INC. | ||
a Delaware corporation | ||
By: | /s/ Keith R. Leonard | |
Keith R. Leonard Jr. | ||
Chief Executive Officer |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTORS |
6 Dimensions Capital, L.P. |
By: 6 Dimensions Capital GP, LLC |
Its: General Partner |
By: /s/ Christina Chung |
Name: Christina Chung |
Title: Chief Financial Officer |
6 Dimensions Affiliates Fund, L.P |
By: 6 Dimensions Capital GP, LLC |
Its: General Partner |
By: /s/ Christina Chung |
Name: Christina Chung |
Title: Chief Financial Officer |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
Aaron VanDevender | ||
By: | /s/ Aaron VanDevender |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTORS | ||
ALTITUDE LIFE SCIENCE VENTURES FUND II, L.P. | ||
By: |
Altitude Life Science Ventures Fund II, LLC | |
Its: |
General Partner | |
By: |
/s/ David Maki |
Name: |
David Maki | |
Title: |
Managing Member |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
ARCH Venture Fund VIII Overage, L.P. | ||
By: | ARCH Venture Partners VIII, LLC | |
Its: | General Partner | |
By: | /s/ Robert T. Nelsen |
Name: | Robert T. Nelsen | |
Title: | Managing Director |
ARCH Venture Fund VII, L.P. | ||
By: | ARCH Venture Partners VII, L.P. | |
Its: | General Partner | |
By: | ARCH Venture Partners VII, LLC | |
Its: | General Partner | |
By: | /s/ Robert T. Nelsen |
Name: | Robert T. Nelsen | |
Title: | Managing Director |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
EcoR1 Capital Fund, L.P. | ||
By: | EcoR1 Capital, LLC | |
Its: | General Partner | |
By: | /s/ Oleg Nodelman |
Name: | Oleg Nodelman | |
Title: | Managing Director |
EcoR1 Capital Fund Qualified, L.P. | ||
By: | EcoR1 Capital, LLC | |
Its: | General Partner | |
By: | /s/ Oleg Nodelman |
Name: | Oleg Nodelman | |
Title: | Managing Director |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTORS | ||
Invus Opportunities Fund III LP | ||
By: | Invus Opportunities GP III LLC | |
Its: | General Partner | |
By: | /s/ Sacha Lainovic |
Name: | Sacha Lainovic | |
Title: | Managing Member |
Invus Opportunities Fund III US LP | ||
By: | Invus Opportunities GP III LLC | |
Its: | General Partner | |
By: | /s/ Sacha Lainovic |
Name: | Sacha Lainovic | |
Title: | Managing Member |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
By: |
/s/ Nathaniel David |
Name: |
Nathaniel David |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
PFM HEALTHCARE MASTER FUND, L.P. | ||
By: | Partner Investment Management, L.P. | |
Its: | Investment Adviser | |
By: | /s/ Yuan DuBord |
Name: | Yuan DuBord | |
Title: | CFO |
PFM HEALTHCARE PRINCIPALS FUND, L.P. | ||
By: | Partner Investment Management, L.P. | |
Its: | Investment Adviser | |
By: | /s/ Yuan DuBord |
Name: | Yuan DuBord | |
Title: | CFO |
PFM HEALTHCARE OPPORTUNITIES MASTER FUND, L.P. | ||
By: | Partner Investment Management, L.P. | |
Its: | Investment Adviser | |
By: | /s/ Yuan DuBord |
Name: | Yuan DuBord | |
Title: | CFO |
PFM HEALTHCARE EMERGING GROWTH MASTER FUND, L.P. | ||
By: | Partner Investment Management, L.P. | |
Its: | Investment Adviser | |
By: | /s/ Yuan DuBord |
Name: | Yuan DuBord | |
Title: | CFO |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
PARTNER INVESTMENTS, L.P. | ||
By: | Partner Investment Management, L.P. | |
Its: | Investment Adviser | |
By: | /s/ Yuan DuBord |
Name: | Yuan DuBord | |
Title: | CFO |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
PIVOTAL ALPHA LIMITED | ||
By: | /s/ Yuen Yui |
Name: | Yuen Yui | |
Title: | Director |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTORS | ||
Executed for and on behalf of Scottish Mortgage Investment Trust plc acting through its agent, Baillie Gifford & Co. | ||
By: | /s/ Graham Laybourn |
Name: | Graham Laybourn | |
Title: | Partner |
Executed for and on behalf of Edinburgh Worldwide Investment Trust plc acting through its agent, Baillie Gifford & Co. | ||
By: | /s/ Graham Laybourn |
Name: | Graham Laybourn | |
Title: | Partner |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTORS | ||
THE FOUNDERS FUND V, LP | ||
By: | The Founders Fund V Management, LLC | |
Its: | General Partner | |
By: | /s/ Scott Nolan |
Name: | Scott Nolan | |
Title: |
|
THE FOUNDERS FUND V PRINCIPALS FUND, LP | ||
By: | The Founders Fund V Management, LLC | |
Its: | General Partner | |
By: | /s/ Scott Nolan |
Name: | Scott Nolan | |
Title: |
|
THE FOUNDERS FUND V ENTREPRENEURS FUND, LP | ||
By: | The Founders Fund V Management, LLC | |
Its: | General Partner | |
By: | /s/ Scott Nolan |
Name: | Scott Nolan | |
Title: |
|
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTORS | ||
VENROCK ASSOCIATES VII, L.P. | ||
By: | Venrock Management VII, LLC | |
Its: | General Partner | |
VENROCK PARTNERS VII, L.P. | ||
By | Venrock Partners Management VII, LLC | |
Its: | General Partner | |
By: | /s/ David L. Stepp |
Name: | David L. Stepp | |
Title: | Authorized Signatory |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
LONGEVITY FUND 1 LP | ||
By: | Longevity Funds LLC, its general partner | |
By: | /s/ Laura Deming |
Name: | Laura Deming | |
Title: | Managing Member |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
LONGEVITY FUND 2 LP | ||
By: | Longevity Funds 2 LLC, its general partner | |
By: | /s/ Laura Deming |
Name: | Laura Deming | |
Title: | Managing Member |
(Signature page to the Amended and Restated Investors Rights Agreement)
The parties are signing this Amended and Restated Investors Rights Agreement as of the date stated in the introductory clause.
INVESTOR | ||
By: | /s/ Marisa Leonard |
Name: | Marisa Leonard | |
and |
By: | /s/ Marc Rogalski |
Name: | Marc Rogalski, jointly WROS |
(Signature page to the Amended and Restated Investors Rights Agreement)
EXHIBIT A
INVESTORS
Altitude Life Science Ventures Fund II, L.P.
Altitude Life Science Ventures
1014 Market St. Suite 200
Kirkland, WA 98033
ARCH Venture Fund VII, L.P.
c/o ARCH Venture Partners VII, L.P.
8755 West Higgins Road
Suite 1025
Chicago, IL 60631
with copies to:
ARCH Venture Partners
1700 Owens Street, Suite 535
San Francisco, CA 94158
With a mandatory copy (which shall not constitute notice) to:
Proskauer Rose LLP
One International Place
Boston, MA 02110
Attn: Ori Solomon
Phone: *****
Email: *****
ARCH Venture Fund VIII Overage, L.P.
c/o ARCH Venture Partners VIII, L.P.
8755 West Higgins Road
Suite 1025
Chicago, Illinois 60631
with copies to:
ARCH Venture Partners
1700 Owens Street, Suite 535
San Francisco, CA 94158
With a mandatory copy (which shall not constitute notice) to:
Proskauer Rose LLP
One International Place
Boston, MA 02110
Attn: Ori Solomon
Phone: *****
Email: *****
EcoR1 Capital Fund, L.P.
409 Illinois Street
San Francisco, CA 94158
Telephone: *****
*****
EcoR1 Capital Fund Qualified, L.P.
409 Illinois Street
San Francisco, CA 94158
Telephone: *****
*****
6 Dimensions Capital, L.P.
6 Dimensions Capital,
55 Cambridge Parkway, 8th Floor
Cambridge, MA 02142
6 Dimensions Affiliates Fund, L.P.
6 Dimensions Capital,
55 Cambridge Parkway, 8th Floor
Cambridge, MA 02142
Mayo Foundation for Medical Education and Research
Attn: Mayo Clinic Ventures
200 First Street SW
Rochester, MN 55905
Mayo Clinic
Attn: Mayo Clinic Treasury Services
200 First Street SW
Rochester, MN 55905
Longevity Fund 1 LP
555 Bryant St. #517
Palo Alto, CA 94301
Longevity Fund 2 LP
555 Bryant St. #517
Palo Alto, CA 94301
WuXi PharmaTech Healthcare Fund I L.P.
288 Fute Zhong Road
Waigaoqiao Free Trade Zone
Shanghai 200131 PRC
Attn: Edward Hu
Tel.: *****
Fax: *****
Nathaniel E. David
c/o Unity Biotechnology, Inc.
3280 Bayshore Boulevard
Brisbane, CA 94005
Venrock Associates VII, L.P.
3340 Hillview Avenue
Palo Alto, CA 94304
Venrock Partners VII, L.P.
3340 Hillview Avenue
Palo Alto, CA 94304
Scottish Mortgage Investment Trust PLC
c/o Baillie Gifford & Co
Calton Square, 1 Greenside Row
Edinburgh EH1 3AN, Scotland
United Kingdom
Edinburgh Worldwide Investment Trust PLC
c/o Baillie Gifford & Co
Calton Square, 1 Greenside Row
Edinburgh EH1 3AN, Scotland
United Kingdom
Fidelity Growth Company Commingled Pool
By: Fidelity Management Trust Company, as Trustee
Mag & Co.
c/o Brown Brothers Harriman & Co.
Attn: Corporate Actions /Vault
140 Broadway
New York, NY 10005
*****
Attn: Michael Lerman
15th Floor
Corporate Actions
Email: *****
Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company Fund
Attn: WAVELENGTH + CO Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company
Fund
State Street Bank & Trust
PO Box 5756
Boston, Massachusetts 02206
Email: *****
Fax number: *****
Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund
BNY Mellon
Attn: Stacey Wolfe
525 William Penn Place Rm 0400
Pittsburgh, PA 15259
Email: *****
Fax number: *****
Explore Holdings LLC
P.O. Box 94314
Seattle, WA 98124
Attn: Paul Dauber, Manager
VCVC IV LLC
Vulcan Inc.
Attn: Associate General Counsel
505 Fifth Avenue South, Suite 900
Seattle, WA 98104
PFM Healthcare Master Fund, L.P.
[c/o Partner Fund Management, L.P.
4 Embarcadero Center, #3500
San Francisco, CA 94111]
PFM HEALTHCARE PRINCIPALS FUND, L.P.
c/o Partner Fund Management, L.P.
4 Embarcadero Center, #3500
San Francisco, CA 94111
PFM HEALTHCARE OPPORTUNITIES MASTER FUND, L.P.
c/o Partner Investment Management, L.P.
4 Embarcadero Center, #3500
San Francisco, CA 94111
PFM HEALTHCARE EMERGING GROWTH MASTER FUND, L.P.
c/o Partner Fund Management, L.P.
4 Embarcadero Center, #3500
San Francisco, CA 94111
PARTNER INVESTMENTS, L.P.
c/o Partner Investment Management, L.P.
4 Embarcadero Center, #3500
San Francisco, CA 94111
THE FOUNDERS FUND V, LP
Founders Fund, LLC
1 Letterman Dr #420
San Francisco, CA 94129
(415) 230-5948
THE FOUNDERS FUND V PRINCIPALS FUND, LP
Founders Fund, LLC
1 Letterman Dr #420
San Francisco, CA 94129
(415) 230-5948
THE FOUNDERS FUND V ENTREPRENEURS FUND, LP
Founders Fund, LLC
1 Letterman Dr #420
San Francisco, CA 94129
(415) 230-5948
Scott Nolan
Founders Fund, LLC
One Letterman Drive, Building D, 5th Floor
San Francisco, California 94129
*****
Aaron VanDevender
c/o Founders Fund, LLC
Founders Fund
1 Letterman Dr #420
San Francisco, CA 94129
(415) 230-5948
Andalucia Ventures, LLC
1488 Pathfinder Ave
Westlake Village, CA 91362
Jamie Dananberg
*****
*****
Pathfinder Investment Fund, LLC
3507 Kyoto Gardens Drive, Suite 320
Palm Beach Gardens, FL 33410
Direct Dial: 561-508-4512
Cell: *****
CamaPlan fbo Susan Lundeen Smuck IRA
512 E. Township Line Road
5 Valley Square Ste. 200
Blue Bell, PA 19422
JYKB Investments, LLC
800 Berkeley Avenue
Menlo Park, CA 94025
Denise Frances Clements
*****
*****
Lundeen Smuck Revocable Trust
*****
*****
Cycad Group, LLC
1270 Coast Village Circle, Suite 100
Santa Barbara, CA 93108
Van R.H. Sternbergh III
*****
*****
*****
Pivotal Alpha Limited
c/o 23rd Floor, Nan Fung Tower,
88 Connaught Road C., Central,
Hong Kong
COM Investments, LLC
PO Box 2908
Kirkland, WA 98083
Crawford/Gerber Living Trust dated 10/7/09
Cynthia A Crawford Separate Property
Dianna Carlton
Holthouse Carlin & Van Trigt LLP
11444 W. Olympic Blvd., 11th floor
Los Angeles, CA 90064
Three Lakes Partners
Kenneth Bahk, PhD
Three Lakes Partners
4065 Commercial Ave
Northbrook, IL, 60062
Invus Opportunities Fund III LP
Invus Opportunities
c/o Carmen Taton or Benjamin Tsai
126 East 56th St, 20th Floor
New York, NY 10022
*****
Copy: Ben Tsai, *****
Invus Opportunities Fund III US LP
Invus Opportunities
c/o Carmen Taton or Benjamin Tsai
126 East 56th St, 20th Floor
New York, NY 10022
*****
Copy: Ben Tsai, *****
Marisa Leonard and Marc Rogalski, jointly WROS
*****
*****
SCHEDULE 1
NOTICE AND WAIVER/ELECTION OF
RIGHT OF FIRST REFUSAL
I do hereby waive or exercise, as indicated below, my rights of first refusal under the Amended and Restated Investors Rights Agreement dated as of [ ], 2018 (the Agreement):
1. | Waiver of [ ] days notice period in which to exercise right of first refusal: (please check only one) |
( ) | WAIVE in full, on behalf of all Holders, the [ ]-day notice period provided to exercise my right of first refusal granted under the Agreement. |
( ) | DO NOT WAIVE the notice period described above. |
2. | Issuance and Sale of New Securities: (please check only one) |
( ) | WAIVE in full the right of first refusal granted under the Agreement with respect to the issuance of the New Securities. |
( ) | ELECT TO PARTICIPATE in $ (please provide amount) in New Securities proposed to be issued by Unity Biotechnology, Inc., a Delaware corporation, representing LESS than my pro rata portion of the aggregate of $[ ] in New Securities being offered in the financing. |
( ) | ELECT TO PARTICIPATE in $ in New Securities proposed to be issued by Unity Biotechnology, Inc., a Delaware corporation, representing my FULL pro rata portion of the aggregate of $[ ] in New Securities being offered in the financing. |
( ) | ELECT TO PARTICIPATE in my full pro rata portion of the aggregate of $[ ] in New Securities being made available in the financing AND, to the extent available, the greater of (x) an additional $ (please provide amount) or (y) my pro rata portion of any remaining investment amount available in the event other Significant Holders do not exercise their full rights of first refusal with respect to the $[ ] in New Securities being offered in the financing. |
Date: ________________
(Print investor name) |
|
(Signature) |
|
(Print name of signatory, if signing for an entity) |
|
(Print title of signatory, if signing for an entity) |
This is neither a commitment to purchase nor a commitment to issue the New Securities described above. Such issuance can only be made by way of definitive documentation related to such issuance. The company will supply you with such definitive documentation upon request or if you indicate that you would like to exercise your first offer rights in whole or in part.
Exhibit 10.1A
LEASE
by and between
BMR-BAYSHORE BOULEVARD LP,
a Delaware limited partnership
and
UNITY BIOTECHNOLOGY, INC.,
a Delaware corporation
Table of Contents
1. | Lease of Premises | 1 | ||||||
2. | Basic Lease Provisions | 2 | ||||||
3. | Term | 5 | ||||||
4. | Tenant Improvements | 6 | ||||||
5. | Condition of Premises | 10 | ||||||
6. | Rentable Area | 11 | ||||||
7. | Rent | 12 | ||||||
8. | Rent Adjustments | 12 | ||||||
9. | Operating Expenses | 13 | ||||||
10. | Taxes on Tenants Property | 18 | ||||||
11. | Security Deposit | 19 | ||||||
12. | Use | 21 | ||||||
13. | Rules and Regulations, CC&Rs, Parking Facilities and Common Area | 24 | ||||||
14. | Project Control by Landlord | 25 | ||||||
15. | Quiet Enjoyment | 26 | ||||||
16. | Utilities and Services | 26 | ||||||
17. | Alterations | 30 | ||||||
18. | Repairs and Maintenance | 33 | ||||||
19. | Liens | 34 | ||||||
20. | Estoppel Certificate | 34 | ||||||
21. | Hazardous Materials | 35 | ||||||
22. | Odors and Exhaust | 38 | ||||||
23. | Insurance; Waiver of Subrogation | 39 | ||||||
24. | Damage or Destruction | 42 | ||||||
25. | Eminent Domain | 44 | ||||||
26. | Surrender | 45 | ||||||
27. | Holding Over | 46 | ||||||
28. | Indemnification and Exculpation | 46 | ||||||
29. | Assignment or Subletting | 47 | ||||||
30. | Subordination and Attornment | 52 | ||||||
31. | Defaults and Remedies | 52 | ||||||
32. | Bankruptcy | 58 |
i
33. | Brokers | 58 | ||||||
34. | Definition of Landlord | 59 | ||||||
35. | Limitation of Landlords Liability | 59 | ||||||
36. | Joint and Several Obligations | 59 | ||||||
37. | Representations | 60 | ||||||
38. | Confidentiality | 60 | ||||||
39. | Notices | 61 | ||||||
40. | Miscellaneous | 61 | ||||||
41. | Rooftop Installation Area | 63 | ||||||
42. | Option to Extend Term | 65 |
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LEASE
THIS LEASE (this Lease) is entered into as of this 13th day of May, 2016 (the Execution Date), by and between BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership (Landlord), and UNITY BIOTECHNOLOGY, INC., a Delaware corporation (Tenant).
RECITALS
A. WHEREAS, Landlord owns certain real property (the Property) and the improvements on the Property located at 3240, 3260 and 3280 Bayshore Boulevard in Brisbane, California, including the buildings located thereon; and
B. WHEREAS, Landlord wishes to lease to Tenant, and Tenant desires to lease from Landlord, certain premises on the first (1st) floor of the building located at 3280 Bayshore Boulevard, Brisbane, California (the Building), pursuant to the terms and conditions of this Lease, as detailed below.
AGREEMENT
NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:
1. Lease of Premises.
1.1. Effective on the (a) Phase I Premises Term Commencement Date (as defined below), Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the premises described on Exhibit A-1 attached hereto (the Phase I Premises), and (b) Phase II Premises Term Commencement Date (as defined below), Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the premises described on Exhibit A-2 attached hereto (the Phase II Premises, and, together with the Phase I Premises, the Premises), in each case for use by Tenant in accordance with the Permitted Use (as defined below) and no other uses. The Property and all landscaping, parking facilities, private drives and other improvements and appurtenances related thereto, including the Building, and other buildings located on the Property, are hereinafter collectively referred to as the Project. All portions of the Building that are for the non-exclusive use of the tenants of the Building only, and not the tenants of the Project generally, such as service corridors, stairways, elevators, public restrooms and public lobbies (all to the extent located in the Building), are hereinafter referred to as Building Common Area. All portions of the Project that are for the non-exclusive use of tenants of the Project generally, including driveways, sidewalks, parking areas, landscaped areas, and certain service corridors, stairways, elevators, public restrooms and public lobbies designated by Landlord from time to time (but excluding Building Common Area), are hereinafter referred to as Project Common Area. The Building Common Area and Project Common Area are collectively referred to herein as Common Area.
2. Basic Lease Provisions. For convenience of the parties, certain basic provisions of this Lease are set forth herein. The provisions set forth herein are subject to the remaining terms and conditions of this Lease and are to be interpreted in light of such remaining terms and conditions.
2.1. This Lease shall take effect upon the Execution Date and, except as specifically otherwise provided within this Lease, each of the provisions hereof shall be binding upon and inure to the benefit of Landlord and Tenant from the date of execution and delivery hereof by all parties hereto.
2.2. In the definitions below, each current Rentable Area (as defined below) is expressed in square feet. Rentable Area and Tenants Pro Rata Shares are all subject to adjustment as provided in this Lease.
Definition or Provision |
Means the Following (As of the Execution Date) | |
Approximate Rentable Area of Phase I Premises |
10,753 square feet | |
Approximate Rentable Area of Phase II Premises |
15,654 square feet | |
Approximate Rentable Area of Building |
55,898 square feet | |
Approximate Rentable Area of Project |
183,344 square feet | |
Tenants Pro Rata Share of Building (Phase I Premises) |
19.24% | |
Tenants Pro Rata Share of Building (Phase II Premises) |
28.01% | |
Tenants Pro Rata Share of Project (Phase I Premises) |
5.86% | |
Tenants Pro Rata Share of Project (Phase II Premises) |
8.54% |
2.3. Base Rent:
2.3.1 Phase I Premises: Initial monthly and annual installments of Base Rent for the Phase I Premises as of the Phase I Premises Term Commencement Date, subject to adjustment under this Lease:
Dates |
Square Feet of Rentable Area |
Base Rent per Square Foot of Rentable Area |
Monthly Base Rent |
Annual Base Rent |
||||||||||||
Months 1 - 12 |
10,753 | $ | 4.45 monthly | $ | 47,850.85 | $ | 574,210.20 |
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2.3.2 Phase II Premises: Initial monthly installments of Base Rent for the Phase II Premises as of the Phase II Premises Term Commencement Date shall be an amount equal to the product of (a) the Rentable Area of the Phase II Premises multiplied by (b) the then-current Base Rent per Square Foot of Rentable Area for the Phase I Premises, subject to adjustment under this Lease.
2.4. Term Commencement Date:
2.4.1 Phase I Premises: The Phase I Premises Term Commencement Date shall be the Execution Date. Landlord shall deliver possession of the Phase I Premises to Tenant on the Phase I Premises Term Commencement Date. Landlord shall have the Phase I Premises professionally cleaned prior to delivering the Phase I Premises to Tenant.
2.4.2 Phase II Premises: The Phase II Premises Term Commencement Date shall be the date that Landlord tenders possession of the Phase II Premises to Tenant with the Tenant Improvements (as defined below) Substantially Complete (as defined below); provided, however, that if the Phase II Premises Term Commencement Date is delayed by Tenant Delay (as defined below), then the Phase II Premises Term Commencement Date shall be the date that the Phase II Premises Term Commencement Date would have occurred but for such Tenant Delay. A Tenant Delay shall mean any act or omission by Tenant that causes a delay in Substantial Completion. Except as expressly set forth in this Lease, if there is an event which Landlord contends is a Tenant Delay, then Landlord shall give Tenant notice of such Tenant Delay (Tenant Delay Notice). If Tenant fails to remedy the Tenant Delay within one (1) business day after Tenants receipt of a Tenant Delay Notice, then a Tenant Delay shall be deemed to have occurred.
2.5. Term Expiration Date: The Term Expiration Date with respect to the entire Premises (including both the Phase I Premises and the Phase II Premises) shall be the date that is sixty-six (66) months after the Phase II Premises Term Commencement Date (provided, however, that the Term Expiration Date shall be subject to extension pursuant to Article 4 and Article 42 hereof).
2.6. Security Deposit: $450,000
2.7. Permitted Use: Office, R&D, vivarium and laboratory use in conformity with all federal, state, municipal and local laws, codes, ordinances, rules and regulations of Governmental Authorities (as defined below), committees, associations, or other regulatory committees, agencies or governing bodies having jurisdiction over the Premises, the Building, the Property, the Project, Landlord or Tenant, including both statutory and common law and hazardous waste rules and regulations (Applicable Laws)
2.8. Address for Rent Payment:
BMR Bayshore Boulevard LP
Attention Entity 139
P.O. Box 511415
Los Angeles, California 90051-7970
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2.9. Address for Notices to Landlord:
BMR-Bayshore Boulevard LP
17190 Bernardo Center Drive
San Diego, California 92128
Attn: Real Estate Legal Department
2.10. Address for Notices to Tenant:
Unity Biotechnology
Attention: Nathaniel David, CEO
3280 Bayshore Boulevard
Brisbane, CA 94005
with a copy to:
Unity Biotechnology
Attention: Keith Klein, General Counsel
3280 Bayshore Boulevard
Brisbane, CA 94005
2.11. Address for Invoices to Tenant:
Unity Biotechnology
Attention: David Buttaro
3280 Bayshore Boulevard
Brisbane, CA 94005
with a copy to:
Unity Biotechnology
Attention: Keith Klein, General Counsel
3280 Bayshore Boulevard
Brisbane, CA 94005
2.12. The following Exhibits are attached hereto and incorporated herein by reference:
Exhibit A-1 | Phase I Premises | |||
Exhibit A-2 | Phase II Premises | |||
Exhibit B | Tenant Improvement Plans | |||
Exhibit B-1 | Tenant Work Insurance Schedule | |||
Exhibit B-2 | Tenant Items | |||
Exhibit C | Acknowledgement of Phase II Premises Term Commencement Date and Term Expiration Date | |||
Exhibit D | Tenant Generator | |||
Exhibit E | Form of Letter of Credit | |||
Exhibit F | Rules and Regulations | |||
Exhibit G | Bill of Sale | |||
Exhibit H | Tenants Personal Property | |||
Exhibit I | Form of Estoppel Certificate |
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3. Term. The actual term of this Lease (as the same may be extended pursuant to Article 4 and/or Article 42 hereof, and as the same may be earlier terminated in accordance with this Lease, the Term) shall (a) with respect to the Phase I Premises, commence on the Phase I Premises Term Commencement Date, and (b) with respect to the Phase II Premises, commence on the Phase II Premises Term Commencement Date, and (in each case) shall end on the Term Expiration Date (as defined in Section 2.5 above), subject to earlier termination of this Lease as provided herein. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1933 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
3.1 Termination Option. In the event Tenant fails to satisfy the Series B Financing Condition (as defined below) on or before November 1, 2016, Landlord shall have the ongoing right to terminate this Lease (the Termination Option) at any time prior to Tenants satisfaction of the Series B Financing Condition. Landlord may exercise the Termination Option by delivering written notice to Tenant (the Termination Notice) informing Tenant that Landlord has elected to exercise the Termination Option and specifying the effective date of the termination (such date, the Termination Date). If Landlord delivers to Tenant the Termination Notice in accordance with this Section, then this Lease shall terminate on the Termination Date and, therefore, this Lease shall thereafter be of no further force or effect and neither party shall have any further rights or obligations under this Lease, except with respect to those terms, conditions and provisions that, by their express terms, survive the expiration or earlier termination of this Lease. Tenant shall surrender the Premises to Landlord on or before the Termination Date in accordance with all of the terms and conditions of this Lease. If Tenant does not so surrender the Premises in accordance with all of the terms and conditions of this Lease on or before the Termination Date, then Tenant, pursuant to Article 27, shall become a tenant at sufferance until the actual date that Tenant surrenders the Premises to Landlord in accordance with the terms and conditions of this Lease.
3.2 Termination Fee. In the event that Landlord exercises the Termination Option, Tenant shall, within three (3) business days of Tenants receipt of the Termination Notice, pay to Landlord an amount equal to Four Hundred Fifty Thousand Dollars ($450,000) (the Termination Fee) as consideration for the early termination of this Lease. If Tenant fails to timely pay the Termination Fee to Landlord, then Landlord shall have all of the rights and remedies set forth in this Lease for nonpayment of Rent (including the right to interest and the right to assess a late charge and the right to draw on the Security Deposit), and for purposes of any litigation instituted with regard to such amounts the same shall be considered Rent.
3.3 Series B Financing Condition. The Series B Financing Condition means that Tenant has demonstrated to Landlords reasonable satisfaction that Tenant has closed (including irrevocable receipt of all funds) on a Series B financing in the amount of at least Thirty-Four Million Dollars ($34,000,000). Tenant shall promptly notify Landlord upon satisfaction of the Series B Financing Condition, and Tenant shall otherwise notify Landlord of the status of the Series B financing within one (1) business day of Tenants receipt of any written request from Landlord.
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4. Tenant Improvements.
4.1. Subject to Section 4.8 below, Landlord shall use commercially reasonable efforts to tender possession of the Phase II Premises to Tenant on or before the date that is the later of (a) the date that is six (6) months after the Execution Date, or (b) the date that is four (4) months after the satisfaction of the Series B Financing Condition (such date, the Estimated Phase II Premises Term Commencement Date), with the work (the Tenant Improvements) required of Landlord described in the plans attached hereto as Exhibit B (the Tenant Improvement Plans) Substantially Complete (as defined below). Tenant agrees that in the event such work is not Substantially Complete on or before the Estimated Phase II Premises Term Commencement Date for any reason, then (a) this Lease shall not be void or voidable, (b) Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, (c) the Term Expiration Date shall be extended accordingly and (d) Tenant shall not, with respect to the Phase II Premises, be responsible for the payment of Base Rent or Tenants Adjusted Share of Operating Expenses (as defined below) until the actual Phase II Premises Term Commencement Date as described in Section 2.4.2 occurs. The term Substantially Complete or Substantial Completion means that the Tenant Improvements are substantially complete in accordance with the Tenant Improvement Plans, except for minor punch list items, and a temporary certificate of occupancy (or its equivalent) has been issued for the Phase II Premises. Notwithstanding anything in this Lease to the contrary, Landlords obligation to timely achieve Substantial Completion shall be subject to extension on a day-for-day basis as a result of Force Majeure (as defined below) and Tenant Delays. In the event that Tenant fails to satisfy the Series B Financing Condition on or before July 1, 2016, the Term Expiration Date shall be automatically extended on a day-for-day basis for each day thereafter until the Series B Financing Condition is satisfied (provided, however, that in no event shall the Term Expiration Date be so extended by more than six (6) months).
4.2. Tenant shall execute and deliver to Landlord written acknowledgment of the actual Phase II Premises Term Commencement Date and the Term Expiration Date within ten (10) days after Tenant takes occupancy of the Phase II Premises, in the form attached as Exhibit C hereto. Failure to execute and deliver such acknowledgment, however, shall not affect the Phase II Premises Term Commencement Date or Landlords or Tenants liability hereunder. Failure by Tenant to obtain validation by any medical review board or other similar governmental licensing of all or any portion of the Premises required for the Permitted Use by Tenant shall not serve to extend either the Phase I Premises Term Commencement Date or the Phase II Premises Term Commencement Date.
4.3. Landlord shall endeavor to permit Tenant to enter upon the Phase II Premises prior to the Phase II Premises Term Commencement Date for the purpose of installing improvements, cabling and information technology services, and the placement of personal property, fixtures, furniture and equipment (collectively, FF&E); provided, however, that, prior to any such entry, Tenant shall furnish to Landlord evidence satisfactory to Landlord in advance that insurance coverages required of Tenant under the provisions of Article 23 are in effect, and such entry shall be subject to all the terms and conditions of this Lease; and provided, further, that if the Phase II Premises Term Commencement Date is delayed due to such early access, then such delay shall constitute a Tenant Delay.
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4.4. Landlord shall cause the Tenant Improvements to be constructed in the Phase II Premises pursuant to the Tenant Improvements Plans at Landlords sole cost and expense (subject to the terms, conditions and provisions of this Article 4); provided, however, that Tenant shall (a) be solely responsible for any costs and expenses related to any Tenant Changes (pursuant to Section 4.5 below), and (b) pay to Landlord the Tenant Contribution Amount (pursuant to Section 4.7 below). All costs incurred by Landlord in connection with the Tenant Improvements including, without limitation, costs of (a) construction, (b) [intentionally omitted], (c) commissioning of mechanical, electrical and plumbing systems by a licensed, qualified commissioning agent hired by Landlord, (d) space planning, architect, engineering and other related services performed by third parties unaffiliated with Tenant, (e) building permits and other taxes, fees, charges and levies by Governmental Authorities (as defined below) for permits or for inspections of the Tenant Improvements, and (f) costs and expenses for labor, material, equipment and fixtures, shall be referred to in this Lease as the Tenant Improvement Costs. In the event that Tenant fails to comply with any of its obligations under this Lease and such failure causes Landlord to incur additional Tenant Improvement Costs, Tenant shall pay to Landlord as Additional Rent (as defined below) the amount of any such additional costs within thirty (30) days of receiving an invoice from Landlord. Notwithstanding anything to the contrary in this Lease (including, without limitation, the Tenant Improvement Plans), Landlord and Tenant acknowledge and agree that (a) the Tenant Improvements shall not include any of the items designated as Tenants responsibility on Exhibit B-2 attached hereto (such items, the Tenant Items), even if such Tenant Items are shown on the Tenant Improvement Plans (Landlord and Tenant further acknowledging and agreeing that any Tenant Items included on the Tenant Improvement Plans are for illustrative purposes only), (b) Landlord shall have no responsibility or obligation to pay for, purchase, procure, construct or install the Tenant Items, and (c) Tenant (not Landlord) shall be solely responsible for the purchase, installation, procurement and construction of any and all Tenant Items.
4.5. Any changes to the Tenant Improvement Plans requested by Tenant (each, a Tenant Change) shall be requested and instituted in accordance with the provisions of this Section 4.5 and shall be subject to the written approval of Landlord as provided herein.
4.5.1 Tenant may request Tenant Changes by notifying Landlord in writing in substantially the same form as the AIA standard change order form (a Tenant Change Request), which Tenant Change Request shall detail the nature and extent of any requested Tenant Changes.
4.5.2 All Tenant Change Requests shall be subject to Landlords prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. Landlord shall have ten (10) business days after receipt of a Tenant Change Request to notify Tenant in writing of Landlords approval or rejection of the Tenant Change and any rejection shall state the reasons therefor in reasonable detail. Landlords failure to respond within such ten (10) business day period shall be deemed approval by Landlord.
4.5.3 Notwithstanding anything to the contrary in this Lease, Tenant shall be solely responsible for all incremental costs and expenses related to any Tenant Changes (including, without limitation, costs of project management by Landlord (which fee shall equal three percent (3%) of the cost of the Tenant Change)). Tenant shall, within thirty (30) days of receiving an invoice therefore, pay to Landlord the amount of any such costs and expenses.
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4.5.4 Notwithstanding anything to the contrary in this Lease, in the event that any Tenant Change causes a delay in the Substantial Completion of the Tenant Improvements, such delay shall automatically constitute constitute a Tenant Delay (without Landlord being required to deliver a Tenant Delay Notice); provided, however, that Landlord shall, upon Tenants request, provide Tenant with a written notice setting forth the anticipated delay in Substantial Completion due to a Tenant Change.
4.5.5 The Tenant Improvement Plans shall be automatically updated to include any Tenant Changes approved by Landlord in accordance with this Section 4.5.
4.6. Landlord shall be permitted to make changes to the Tenant Improvement Plans (each, a Landlord Change) subject to the terms, conditions and provisions of this Section 4.6. Landlord shall be solely responsible for all costs and expenses related to any Landlord Changes.
4.6.1 Landlord may request Landlord Changes by notifying Tenant in writing in substantially the same form as the AIA standard change order form (a Landlord Change Request), which Landlord Change Request shall detail the nature and extent of any requested Landlord Changes.
4.6.2 Subject to Subsection 4.6.3, all Landlord Change Requests other than Landlord Permitted Changes (as defined below), shall be subject to Tenants prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. Tenant shall have five (5) days after receipt of a Landlord Change Request to notify Landlord in writing of Tenants approval or rejection of the Landlord Change. Tenants failure to respond within such five (5) day period shall be deemed approval by Tenant.
4.6.3 Notwithstanding anything to the contrary in this Lease, Landlord shall be permitted to make Landlord Permitted Changes (as defined below) to the Tenant Improvement Plans without obtaining Tenants consent. Landlord Permitted Changes shall mean (a) minor changes (such as slight relocation of switches and/or outlets) to accommodate unforeseen field conditions and (b) changes required by Applicable Laws or by a Governmental Authority.
4.6.4 The Tenant Improvement Plans shall be automatically updated to include any Landlord Permitted Changes or other Landlord Changes approved by Tenant in accordance with this Section 4.6.
4.7. In addition to any costs and expenses payable by Tenant in connection with Tenant Changes, Tenant shall pay to Landlord an amount equal to One Million Three Hundred Thousand Dollars ($1,300,000) (the Tenant Contribution Amount) as Tenants contribution to the Tenant Improvements. Tenant shall pay the Tenant Contribution Amount to Landlord in accordance with this Section 4.7.
4.7.1 On or before the Execution Date, Tenant shall pay to Landlord an amount equal to Four Hundred Fifty Thousand Dollars ($450,000) (the First Contribution). Landlord shall be permitted to apply the First Contribution to any Tenant Improvement Costs incurred by
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Landlord with respect to design work and permitting work on the Tenant Improvements. Notwithstanding anything to the contrary in this Lease, in the event that Landlord exercises the Termination Option, Landlord shall have no obligation to return any portion of the First Contribution applied to Tenant Improvements Costs incurred by Landlord.
4.7.2 Within three (3) business days after the satisfaction of the Series B Financing Condition, Tenant shall pay to Landlord an amount equal to Eight Hundred Fifty Thousand Dollars ($850,000) (the Second Contribution). Notwithstanding anything to the contrary in this Lease, in the event that Landlord exercises the Termination Option, Tenant shall have no obligation to pay to Landlord the Second Contribution.
4.7.3 If Landlord is delayed in commencing the Tenant Improvements due to Tenants failure to timely pay any portion of the Tenant Contribution Amount to Landlord, such delay shall automatically constitute a Tenant Delay (without Landlord being required to deliver a Tenant Delay Notice). If Tenant fails to pay, or is late in paying, any sum due to Landlord under this Section 4.7, then Landlord shall have all of the rights and remedies set forth in the Lease for nonpayment of Rent (as defined below) (including the right to interest and the right to assess a late charge), and for purposes of any litigation instituted with regard to such amounts the same shall be considered Rent.
4.8. Notwithstanding anything to the contrary in this Lease, Landlord shall have no obligation to commence or continue any work on the Tenant Improvements unless and until the Series B Financing Condition has been satisfied; provided, however, that Landlord shall continue the design work and permitting work on the Tenant Improvements prior to the satisfaction of the Series B Financing Condition until the First Contribution has been exhausted (and Landlord shall be permitted to apply the First Contribution toward Tenant Improvements Costs incurred in connection with such design work and permitting work). In the event that Landlord exercises the Termination Option, Landlord shall have no obligation to construct or complete any portion of the Tenant Improvements.
4.9. Tenant acknowledges that Landlord may be constructing the Tenant Improvements in the Phase II Premises after the Phase I Premises Term Commencement Date and during Tenants occupancy of the Phase I Premises for the Permitted Use. Tenant shall reasonably cooperate with Landlord throughout the construction process to enable Landlord to complete the Tenant Improvements in a timely and efficient manner (including, without limitation, permitting Landlord to enter the Phase I Premises, if necessary). Tenant acknowledges that Landlord may be constructing the Tenant Improvements during business hours and that such construction may result in noise, dust and other disturbances to Tenants use of the Phase I Premises. Notwithstanding anything to the contrary in this Lease, Tenant agrees that in no event shall (a) Landlord be required to alter its construction schedule to minimize such disturbances if such modification would delay Substantial Completion of the Tenant Improvements, or (b) Landlords construction of the Tenant Improvements in the Phase II Premises (i) cause Rent (as defined below) to abate under this Lease, (ii) give rise to any claim by Tenant for damages or (iii) constitute a forcible or unlawful entry, a detainer or an eviction of Tenant.
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4.10. Notwithstanding anything to the contrary in this Lease, if Substantial Completion has not occurred on or before the date that is eight (8) months after the satisfaction of the Series B Financing Condition (such date, the Outside Date), then Tenant shall be entitled to receive one (1) day of Base Rent abatement (with respect to the Phase II Premises only) for each day thereafter that Substantial Completion has not occurred; provided, however, that the Outside Date shall be subject to extension on a day-for-day basis as a result of (a) Force Majeure and (b) Tenant Delay. In the event that Tenant is entitled to Base Rent abatement under this Section, such Base Rent abatement shall be applied to Tenants obligations to pay Base Rent (with respect to the Phase II Premises) commencing on the actual Phase II Premises Term Commencement Date.
5. Condition of Premises.
5.1. Phase I Premises. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of the Phase I Premises, the Building or the Project, or with respect to the suitability of the Phase I Premises, the Building or the Project for the conduct of Tenants business. Tenant acknowledges that (a) it is fully familiar with the condition of the Phase I Premises and agrees to take the same in its condition as is as of the Phase I Premises Term Commencement Date and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Phase I Premises for Tenants occupancy or to pay for or construct any improvements to the Phase I Premises. Tenants taking of possession of the Phase I Premises shall, except as otherwise agreed to in writing by Landlord and Tenant, conclusively establish that the Phase I Premises, the Building and the Project were at such time in good, sanitary and satisfactory condition and repair.
5.2. Phase II Premises. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of the Phase II Premises, the Building or the Project, or with respect to the suitability of the Phase II Premises, the Building or the Project for the conduct of Tenants business. Tenant acknowledges that (a) it is fully familiar with the condition of the Phase II Premises and agrees to take the same in its condition as is as of the Phase II Premises Term Commencement Date and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Phase II Premises for Tenants occupancy or to pay for or construct any improvements to the Phase II Premises, except for the performance of the Tenant Improvements in the Phase II Premises. Notwithstanding anything to the contrary in this Lease, Landlord shall deliver the Phase II Premises to Tenant (y) with the heating, ventilating and air conditioning, electrical and plumbing systems serving the Phase II Premises in good working order, condition and repair, and (z) in compliance with All Applicable Laws ((y) and (z), Landlords Delivery Obligation). Tenants taking of possession of the Phase II Premises shall, except as otherwise agreed to in writing by Landlord and Tenant, conclusively establish that the Phase II Premises, the Building and the Project were at such time in good, sanitary and satisfactory condition and repair and that Landlords Delivery Obligation was satisfied; provided that, if Landlord fails to satisfy Landlords Delivery Obligation (a Delivery Shortfall), then Tenant may, as its sole and exclusive remedy, deliver notice of such failure to Landlord detailing the nature of such failure (a Shortfall Notice); provided, further, that any Shortfall Notice must be received by Landlord no later than the date (the Shortfall Notice Deadline) that is thirty (30) days after the actual Phase II Premises Term Commencement Date. In the event that Landlord receives a Shortfall Notice on or before the
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Shortfall Notice Deadline, Landlord shall, at Landlords expense and as Tenants sole and exclusive remedy, promptly remedy the Delivery Shortfall. Landlord shall not have any obligations or liabilities in connection with a failure to satisfy Landlords Delivery Obligation except to the extent such failure is identified by Tenant in a Shortfall Notice delivered to Landlord on or before the Shortfall Notice Deadline.
5.3. Existing Furniture. Concurrently with the execution of this Lease, Landlord and Tenant shall execute and deliver a Bill of Sale (the Bill of Sale) substantially in the form of Exhibit G attached hereto, whereby Landlord shall convey to Tenant any rights Landlord has in the unattached furniture within the Phase I Premises as of the Execution Date (collectively, the Existing Furniture); provided, however, that the Bill of Sale shall not apply to, and the Existing Furniture shall not include, any items that Tenant identifies to Landlord in writing on or before the date that is sixty (60) days after the Execution Date (any such items, the Non-Included Items). Landlord shall remove any Non-Included Items from the Phase I Premises within five (5) business days of Tenants written request.
6. Rentable Area.
6.1. The term Rentable Area shall reflect such areas as reasonably calculated by Landlords architect, as the same may be reasonably adjusted from time to time by Landlord in consultation with Landlords architect to reflect changes to the Premises, the Building or the Project, as applicable. Notwithstanding the foregoing to the contrary, in no event shall the Rentable Area of the Premises, the Building or the Project be deemed to have increased unless due to a physical change of the same.
6.2. The Rentable Area of the Building is generally determined by making separate calculations of Rentable Area applicable to each floor within the Building and totaling the Rentable Area of all floors within the Building. The Rentable Area of a floor is computed by measuring to the outside finished surface of the permanent outer Building walls. The full area calculated as previously set forth is included as Rentable Area, without deduction for columns and projections or vertical penetrations, including stairs, elevator shafts, flues, pipe shafts, vertical ducts and the like, as well as such items enclosing walls.
6.3. The term Rentable Area, when applied to the Premises, is that area equal to the usable area of the Premises, plus an equitable allocation of Rentable Area within the Building that is not then utilized or expected to be utilized as usable area, including that portion of the Building devoted to corridors, equipment rooms, restrooms, elevator lobby, atrium and mailroom.
6.4. The Rentable Area of the Project is the total Rentable Area of all buildings within the Project.
6.5. Review of allocations of Rentable Areas as between tenants of the Building and the Project shall be made as frequently as Landlord deems appropriate, including in order to facilitate an equitable apportionment of Operating Expenses (as defined below). If such review is by a licensed architect and allocations are certified by such licensed architect as being correct, then Tenant shall be bound by such certifications.
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7. Rent.
7.1. Tenant shall pay to Landlord as Base Rent for the Premises, commencing on (a) with respect to the Phase I Premises, the Phase I Premises Term Commencement Date, and (b) with respect to the Phase II Premises, the Phase II Premises Term Commencement Date, the sums set forth in Section 2.3, subject to the rental adjustments provided in Article 8 hereof. Base Rent shall be paid in equal monthly installments as set forth in Section 2.3, subject to the rental adjustments provided in Article 8 hereof, each in advance on the first day of each and every calendar month during the Term.
7.2. In addition to Base Rent, Tenant shall pay to Landlord as additional rent (Additional Rent) at times hereinafter specified in this Lease (a) Tenants Adjusted Share (as defined below) of Operating Expenses (as defined below), (b) the Property Management Fee (as defined below), (c) [intentionally omitted] and (d) any other amounts that Tenant assumes or agrees to pay under the provisions of this Lease that are owed to Landlord, including any and all other sums that may become due by reason of any default of Tenant or failure on Tenants part to comply with the agreements, terms, covenants and conditions of this Lease to be performed by Tenant, after notice and the lapse of any applicable cure periods.
7.3. Base Rent and Additional Rent shall together be denominated Rent. Rent shall be paid to Landlord, without abatement, deduction or offset, in lawful money of the United States of America to the address set forth in Section 2.8 or to such other person or at such other place as Landlord may from time designate in writing. In the event the Term commences or ends on a day other than the first day of a calendar month, then the Rent for such fraction of a month shall be prorated for such period on the basis of the number of days in the month and shall be paid at the then-current rate for such fractional month.
7.4. Tenants obligation to pay Rent shall not be discharged or otherwise affected by (a) any Applicable Laws now or hereafter applicable to the Premises, (b) any other restriction on Tenants use, (c) except as expressly provided herein, any casualty or taking or (d) any other occurrence; and Tenant waives all rights now or hereafter existing to terminate or cancel this Lease or quit or surrender the Premises or any part thereof, or to assert any defense in the nature of constructive eviction to any action seeking to recover rent. Tenants obligation to pay Rent with respect to any period or obligations arising, existing or pertaining to the period prior to the date of the expiration or earlier termination of the Term or this Lease shall survive any such expiration or earlier termination; provided, however, that nothing in this sentence shall in any way affect Tenants obligations with respect to any other period.
8. Rent Adjustments. Base Rent for the entire Premises (including the Phase I Premises and the Phase II Premises) shall be subject to an annual upward adjustment of three percent (3%) of the then-current Base Rent. The first such adjustment shall become effective commencing on the first (1st) annual anniversary of the Phase I Premises Term Commencement Date, and subsequent adjustments shall become effective on every successive annual anniversary for so long as this Lease continues in effect.
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9. Operating Expenses.
9.1. As used herein, the term Operating Expenses shall include:
(a) Government impositions, including property tax costs consisting of real and personal property taxes (including amounts due under any improvement bond upon the Building or the Project (including the parcel or parcels of real property upon which the Building, the other buildings in the Project and areas serving the Building and the Project are located)) or assessments in lieu thereof imposed by any federal, state, regional, local or municipal governmental authority, agency or subdivision (each, a Governmental Authority); taxes on or measured by gross rentals received from the rental of space in the Project; taxes based on the square footage of the Premises, the Building or the Project, as well as any parking charges, utilities surcharges or any other costs levied, assessed or imposed by, or at the direction of, or resulting from Applicable Laws or interpretations thereof, promulgated by any Governmental Authority in connection with the use or occupancy of the Project or the parking facilities serving the Project; taxes on this transaction or any document to which Tenant is a party creating or transferring an interest in the Premises; any fee for a business license to operate an office building; and any expenses, including the reasonable cost of attorneys or experts, reasonably incurred by Landlord in seeking reduction by the taxing authority of the applicable taxes, less tax refunds obtained as a result of an application for review thereof; and
(b) All other costs of any kind paid or incurred by Landlord in connection with the operation or maintenance of the Building and the Project, which shall include Project office rent at fair market rental for a commercially reasonable amount of space for Project management personnel, to the extent an office used for Project operations is maintained at the Project, plus customary expenses for such office, and costs of repairs and replacements to improvements within the Project as appropriate to maintain the Project as required hereunder, including costs of funding such reasonable reserves as Landlord, consistent with good business practice, may establish to provide for future repairs and replacements, or as any Lender (as defined below) may require; costs of utilities furnished to the Common Area; sewer fees; cable television; trash collection; cleaning, including windows; heating, ventilation and air-conditioning (HVAC); maintenance of landscaping and grounds; maintenance of drives and parking areas; maintenance of the roof; security services and devices; building supplies; maintenance or replacement of equipment utilized for operation and maintenance of the Project; license, permit and inspection fees; sales, use and excise taxes on goods and services purchased by Landlord in connection with the operation, maintenance or repair of the Building or Project systems and equipment; telephone, postage, stationery supplies and other expenses incurred in connection with the operation, maintenance or repair of the Project; accounting, legal and other professional fees and expenses incurred in connection with the Project; costs of furniture, draperies, carpeting, landscaping supplies, and other customary and ordinary items of personal property provided by Landlord for use in Common Area or in the Project office; Project office rent or rental value for a commercially reasonable amount of space, to the extent an office used for Project operations is maintained at the Project, plus customary expenses for such office; capital expenditures incurred (i) in replacing damaged, malfunctioning and/or obsolete equipment, (ii) for the primary purpose of reducing Operating Expenses or (iii) required by any Governmental Authority to comply with changes in Applicable Laws that take effect after the Execution Date or to ensure continued compliance with Applicable Laws in effect as of the Execution Date (any capital expenditure under (i), (ii) or (iii), a Permitted Capital Expenditure), in each case amortized over the useful life thereof, as reasonably determined by Landlord, in accordance with generally accepted accounting principles; costs of complying with Applicable Laws (except to the extent such costs are incurred to remedy non-compliance as of
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the Execution Date with Applicable Laws); costs to keep the Project in compliance with, or costs or fees otherwise required under or incurred pursuant to any CC&Rs (as defined below), including condominium fees; insurance premiums, including premiums for commercial general liability, property casualty, earthquake, terrorism and environmental coverages; portions of insured losses paid by Landlord as part of the deductible portion of a loss pursuant to the terms of insurance policies; service contracts; costs of services of independent contractors retained to do work of a nature referenced above; and costs of compensation (including employment taxes and fringe benefits) of all persons who perform regular and recurring duties connected with the day-to-day operation and maintenance of the Project, its equipment, the adjacent walks, landscaped areas, drives and parking areas, including janitors, floor waxers, window washers, watchmen, gardeners, sweepers, plow truck drivers, handymen, and engineering/maintenance/facilities personnel.
(c) Notwithstanding the foregoing, Operating Expenses shall not include any net income, franchise, capital stock, estate or inheritance taxes, or taxes that are the personal obligation of Tenant or of another tenant of the Project; capital expenditures other than Permitted Capital Expenditures; any leasing commissions; expenses that relate to preparation of rental space for a tenant or relocation of any tenant; legal fees, advertising and promotional expenses and similar costs incurred in procuring tenants for the Project; expenses of initial development and construction, including grading, paving, landscaping and decorating (as distinguished from maintenance, repair and replacement of the foregoing); legal expenses relating to other tenants; costs of repairs to the extent reimbursed by payment of insurance proceeds received by Landlord; interest upon loans to Landlord or secured by a mortgage or deed of trust covering the Project or a portion thereof (provided that interest upon a government assessment or improvement bond payable in installments shall constitute an Operating Expense under Subsection 9.1(a)); salaries of employees of Landlord above those performing property management and facilities management duties at the Project; depreciation claimed by Landlord for tax purposes (provided that this exclusion of depreciation is not intended to delete from Operating Expenses actual costs of repairs and replacements and reasonable reserves in regard thereto that are provided for in Subsection 9.1(b)); taxes that are excluded from Operating Expenses by the last sentence of Subsection 9.1(a); costs or expenses incurred in connection with the financing or sale of the Project or any portion thereof; costs expressly excluded from Operating Expenses elsewhere in this Lease or that are charged to or paid by Tenant under other provisions of this Lease; professional fees and disbursements and other costs and expenses related to the ownership (as opposed to the use, occupancy, operation, maintenance or repair) of the Project; costs or expenses incurred in connection with the removal, handling or disposal of (i) Pre-Existing Hazardous Materials (as defined below), or (ii) Hazardous Materials brought onto the Project by Landlord in violation of Applicable Laws in existence at the time such Hazardous Materials were brought onto the Project; expenses in connection with services or other benefits which are not offered to Tenant or for which Tenant is charged directly but which are provided to another tenant or occupant of the Building, without charge; charitable or political contributions; costs incurred in connection with the acquisition of art work (provided the costs to repair and maintain art work may be included in Operating Expenses); costs actually reimbursed by insurance; penalties, fines or interest incurred as a result of Landlords failure to make payment of taxes when due (provided such failure is not due, in whole or in part, to a default by Tenant under this Lease); costs for goods and/or services provided by affiliates of Landlord to the extent such costs materially exceed the costs for the same goods and/or services provided by unaffiliated third
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parties on a competitive basis; and any item that, if included in Operating Expenses, would involve a double collection for such item by Landlord. To the extent that Tenant uses more than Tenants Pro Rata Share of any item of Operating Expenses, Tenant shall pay Landlord for such excess in addition to Tenants obligation to pay Tenants Pro Rata Share of Operating Expenses (such excess, together with Tenants Pro Rata Share, Tenants Adjusted Share); provided, however, that Landlord shall not recover more than one hundred percent (100%) of Operating Expenses.
9.2. Tenant shall pay to Landlord on the first day of each calendar month of the Term, as Additional Rent, (a) the Property Management Fee (as defined below), (b) [intentionally omitted] and (c) Landlords estimate of Tenants Adjusted Share of Operating Expenses with respect to the Building and the Project, as applicable, for such month.
(w) The Property Management Fee shall equal three percent (3%) of Base Rent due from Tenant. Tenant shall pay the Property Management Fee in accordance with Section 9.2 with respect to the entire Term, including any extensions thereof or any holdover periods, regardless of whether Tenant is obligated to pay Base Rent, Operating Expenses or any other Rent with respect to any such period or portion thereof.
(x) [Intentionally omitted]
(y) Within ninety (90) days after the conclusion of each calendar year (or such longer period as may be reasonably required by Landlord), Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Operating Expenses, Tenants Adjusted Share of Operating Expenses, and the cost of providing utilities to the Premises for the previous calendar year (Landlords Statement). Any additional sum due from Tenant to Landlord shall be due and payable within thirty (30) days after receipt of an invoice therefor. If the amounts paid by Tenant pursuant to this Section exceed Tenants Adjusted Share of Operating Expenses for the previous calendar year, then Landlord shall credit the difference against the Rent next due and owing from Tenant; provided that, if the Lease term has expired, Landlord shall accompany Landlords Statement with payment for the amount of such difference.
(z) Any amount due under this Section for any period that is less than a full month shall be prorated for such fractional month on the basis of the number of days in the month.
9.3. Landlord may, from time to time, modify Landlords calculation and allocation procedures for Operating Expenses, so long as such modifications produce Dollar results substantially consistent with Landlords then-current practice at the Project. Landlord or an affiliate(s) of Landlord currently own other property(ies) adjacent to the Project or its neighboring properties (collectively, Neighboring Properties). In connection with Landlord performing services for the Project pursuant to this Lease, similar services may be performed by the same vendor(s) for Neighboring Properties. In such a case, Landlord shall reasonably allocate to each Building and the Project the costs for such services based upon the ratio that the square footage of the Building or the Project (as applicable) bears to the total square footage of all of the Neighboring Properties or buildings within the Neighboring Properties for which the services are performed, unless the scope of the services performed for any building or property
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(including the Building and the Project) is disproportionately more or less than for others, in which case Landlord shall equitably allocate the costs based on the scope of the services being performed for each building or property (including the Building and the Project). Since the Project consists of multiple buildings, certain Operating Expenses may pertain to a particular building(s) and other Operating Expenses to the Project as a whole. Landlord reserves the right in its sole discretion to allocate any such costs applicable to any particular building within the Project to such building, and other such costs applicable to the Project to each building in the Project (including the Building), with the tenants in each building being responsible for paying their respective proportionate shares of their buildings to the extent required under their leases. Landlord shall allocate such costs to the buildings (including the Building) in a reasonable, non-discriminatory manner, and such allocation shall be binding on Tenant.
9.4. Landlords annual statement shall be final and binding upon Tenant unless Tenant, within sixty (60) days after Tenants receipt thereof, shall contest any item therein by giving written notice to Landlord, specifying each item contested and the reasons therefor; provided that Tenant shall in all events pay the amount specified in Landlords annual statement, pending the results of the Independent Review and determination of the Accountant(s), as applicable and as each such term is defined below. If, during such thirty (30)-day period, Tenant reasonably and in good faith questions or contests the correctness of Landlords statement of Tenants Adjusted Share of Operating Expenses, Landlord shall provide Tenant with reasonable access to Landlords books and records to the extent relevant to determination of Operating Expenses, and such information as Landlord reasonably determines to be responsive to Tenants written inquiries. In the event that, after Tenants review of such information, Landlord and Tenant cannot agree upon the amount of Tenants Adjusted Share of Operating Expenses, then Tenant shall have the right to have an independent public accounting firm hired by Tenant on an hourly basis and not on a contingent-fee basis (at Tenants sole cost and expense) and approved by Landlord (which approval Landlord shall not unreasonably withhold or delay) audit and review such of Landlords books and records for the year in question as directly relate to the determination of Operating Expenses for such year (the Independent Review), but not books and records of entities other than Landlord. Landlord shall make such books and records available at the location where Landlord maintains them in the ordinary course of its business. Landlord need not provide copies of any books or records. Tenant shall commence the Independent Review within fifteen (15) days after the date Landlord has given Tenant access to Landlords books and records for the Independent Review. Tenant shall complete the Independent Review and notify Landlord in writing of Tenants specific objections to Landlords calculation of Operating Expenses (including Tenants accounting firms written statement of the basis, nature and amount of each proposed adjustment) no later than sixty (60) days after Landlord has first given Tenant access to Landlords books and records for the Independent Review. Landlord shall review the results of any such Independent Review. The parties shall endeavor to agree promptly and reasonably upon Operating Expenses taking into account the results of such Independent Review. If, as of the date that is sixty (60) days after Tenant has submitted the Independent Review to Landlord, the parties have not agreed on the appropriate adjustments to Operating Expenses, then the parties shall engage a mutually agreeable independent third party accountant with at least ten (10) years experience in commercial real estate accounting in the San Francisco area (the Accountant). If the parties cannot agree on the Accountant, each shall within ten (10) days after such impasse appoint an Accountant (different from the accountant and accounting firm that conducted the Independent Review) and, within ten
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(10) days after the appointment of both such Accountants, those two Accountants shall select a third (which cannot be the accountant and accounting firm that conducted the Independent Review). If either party fails to timely appoint an Accountant, then the Accountant the other party appoints shall be the sole Accountant. Within ten (10) days after appointment of the Accountant(s), Landlord and Tenant shall each simultaneously give the Accountants (with a copy to the other party) its determination of Operating Expenses, with such supporting data or information as each submitting party determines appropriate. Within ten (10) days after such submissions, the Accountants shall by majority vote select either Landlords or Tenants determination of Operating Expenses. The Accountants may not select or designate any other determination of Operating Expenses. The determination of the Accountant(s) shall bind the parties. If the parties agree or the Accountant(s) determine that the Operating Expenses actually paid by Tenant for the calendar year in question exceeded Tenants obligations for such calendar year, then Landlord shall, at Tenants option, either (a) credit the excess to the next succeeding installments of estimated Additional Rent or (b) pay the excess to Tenant within thirty (30) days after delivery of such results. If the parties agree or the Accountant(s) determine that Tenants payments of Operating Expenses for such calendar year were less than Tenants obligation for the calendar year, then Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of such results. If the Independent Review reveals or the Accountant(s) determine that the Operating Expenses billed to Tenant by Landlord and paid by Tenant to Landlord for the applicable calendar year in question exceeded by more than five percent (5%) what Tenant should have been billed during such calendar year, then Landlord shall pay the reasonable cost of the Independent Review and the reasonable cost of the Accountant(s). In all other cases Tenant shall pay the cost of the Independent Review and the Accountant(s).
9.5. Tenant shall not be responsible for Operating Expenses for the Phase I Premises with respect to any time period prior to the Phase I Premises Term Commencement Date. Tenant shall not be responsible for Operating Expenses for the Phase II Premises with respect to any time period prior to the Phase II Premises Term Commencement Date; provided, however, that if Landlord shall permit Tenant possession of the Phase II Premises prior to the Phase II Premises Term Commencement Date, and Tenant uses the Phase II Premises for any purpose other than the placement of FF&E as set forth in Section 4.3, then Tenant shall be responsible for Operating Expenses from such earlier date of possession (the Phase II Premises Term Commencement Date or such earlier date, as applicable, the Expense Trigger Date). Notwithstanding anything to the contrary, Landlord may annualize certain Operating Expenses incurred prior to the Phase I Premises Term Commencement Date (with respect to the Phase I Premises) or the Expense Trigger Date (with respect to the Phase II Premises) over the course of the budgeted year during which the Phase I Premises Term Commencement Date (with respect to the Phase I Premises) or the Expense Trigger Date (with respect to the Phase II Premises) occurs, and Tenant shall be responsible for the annualized portion of such Operating Expenses corresponding to the number of days during such year, commencing with the Phase I Premises Term Commencement Date (with respect to the Phase I Premises) or the Expense Trigger Date (with respect to the Phase II Premises), for which Tenant is otherwise liable for Operating Expenses pursuant to this Lease. Tenants responsibility for Tenants Adjusted Share of Operating Expenses shall continue to the latest of (a) the date of termination of the Lease, (b) the date Tenant has fully vacated the Premises and (c) if termination of the Lease is due to a default by Tenant, the date of rental commencement of a replacement tenant.
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9.6. Operating Expenses for the calendar year in which Tenants obligation to share therein commences and for the calendar year in which such obligation ceases shall be prorated on a basis reasonably determined by Landlord. Expenses such as taxes, assessments and insurance premiums that are incurred for an extended time period shall be prorated based upon the time periods to which they apply so that the amounts attributed to the Premises relate in a reasonable manner to the time period wherein Tenant has an obligation to share in Operating Expenses.
9.7. Within thirty (30) days after the end of each calendar month, Tenant shall submit to Landlord an invoice, or, in the event an invoice is not available, an itemized list, of all costs and expenses that (a) Tenant has incurred (either internally or by employing third parties) during the prior month and (b) for which Tenant reasonably believes it is entitled to reimbursements from Landlord pursuant to the terms of this Lease or that Tenant reasonably believes is the responsibility of Landlord pursuant to this Lease or Exhibit B.
9.8. In the event that the Building or Project is less than fully occupied during a calendar year, Tenant acknowledges that Landlord may extrapolate Operating Expenses that vary depending on the occupancy of the Building or Project, as applicable, to equal Landlords reasonable estimate of what such Operating Expenses would have been had the Building or Project, as applicable, been ninety-five percent (95%) occupied during such calendar year; provided, however, that Landlord shall not recover more than one hundred percent (100%) of Operating Expenses.
10. Taxes on Tenants Property.
10.1. Tenant shall be solely responsible for the payment of any and all taxes levied upon (a) personal property and trade fixtures located at the Premises and (b) any gross or net receipts of or sales by Tenant, and shall pay the same at least ten (10) days prior to delinquency.
10.2. If any such taxes on Tenants personal property or trade fixtures are levied against Landlord or Landlords property or, if the assessed valuation of the Building, the Property or the Project is increased by inclusion therein of a value attributable to Tenants personal property or trade fixtures, and if Landlord, after written notice to Tenant, pays the taxes based upon any such increase in the assessed value of the Building, the Property or the Project, then Tenant shall, upon demand, repay to Landlord the taxes so paid by Landlord.
10.3. If any improvements in or alterations to the Premises, whether owned by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, are assessed for real property tax purposes at a valuation higher than the valuation at which improvements conforming to Landlords building standards (the Building Standard) in other spaces in the Building are assessed, then the real property taxes and assessments levied against Landlord or the Building, the Property or the Project by reason of such excess assessed valuation shall be deemed to be taxes levied against personal property of Tenant and shall be governed by the provisions of Section 10.2. Any such excess assessed valuation due to improvements in or alterations to space in the Project leased by other tenants at the Project shall not be included in Operating Expenses. If the records of the applicable governmental assessors office are available and sufficiently detailed to serve as a basis for determining whether such Tenant improvements or alterations are assessed at a higher valuation than the Building Standard, then such records shall be binding on both Landlord and Tenant.
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11. Security Deposit.
11.1. Tenant shall deposit with Landlord, on or before the date that is fourteen (14) days after the Execution Date, the sum set forth in Section 2.6 (the Security Deposit), which sum shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease to be kept and performed by Tenant during the period commencing on the Execution Date and ending upon the expiration or termination of Tenants obligations under this Lease. If Tenant Defaults (as defined below) with respect to any provision of this Lease, including any provision relating to the payment of Rent, then Landlord may (but shall not be required to) use, apply or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenants default. If any portion of the Security Deposit is so used or applied, then Tenant shall, within ten (10) days following demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount, and Tenants failure to do so shall be a material breach of this Lease. The provisions of this Article shall survive the expiration or earlier termination of this Lease. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
11.2. In the event of bankruptcy or other debtor-creditor proceedings against Tenant, the Security Deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for all periods prior to the filing of such proceedings.
11.3. Landlord may deliver to any purchaser of Landlords interest in the Premises the funds deposited hereunder by Tenant, and thereupon Landlord shall be discharged from any further liability with respect to such deposit. This provision shall also apply to any subsequent transfers.
11.4. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, then the Security Deposit, or any balance thereof, shall be returned to Tenant (or, at Landlords option, to the last assignee of Tenants interest hereunder) within thirty (30) days after the expiration or earlier termination of this Lease.
11.5. If the Security Deposit shall be in cash, Landlord shall hold the Security Deposit in an account at a banking organization selected by Landlord; provided, however, that Landlord shall not be required to maintain a separate account for the Security Deposit, but may intermingle it with other funds of Landlord. Landlord shall be entitled to all interest and/or dividends, if any, accruing on the Security Deposit. Landlord shall not be required to credit Tenant with any interest for any period during which Landlord does not receive interest on the Security Deposit.
11.6. The Security Deposit may be in the form of cash, a letter of credit or any other security instrument acceptable to Landlord in its sole discretion. Tenant may at any time, except when Tenant is in Default (as defined below), deliver a letter of credit (the L/C Security) as the entire Security Deposit, as follows:
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(a) If Tenant elects to deliver L/C Security, then Tenant shall provide Landlord, and maintain in full force and effect throughout the Term and until the date that is four (4) months after the then-current Term Expiration Date, a letter of credit in the form of Exhibit E issued by an issuer reasonably satisfactory to Landlord, in the amount of the Security Deposit, with an initial term of at least one year. Landlord may require the L/C Security to be re-issued by a different issuer at any time during the Term if Landlord reasonably believes that the issuing bank of the L/C Security is or may soon become insolvent; provided, however, Landlord shall return the existing L/C Security to the existing issuer immediately upon receipt of the substitute L/C Security. If any issuer of the L/C Security shall become insolvent or placed into FDIC receivership, then Tenant shall immediately deliver to Landlord (without the requirement of notice from Landlord) substitute L/C Security issued by an issuer reasonably satisfactory to Landlord, and otherwise conforming to the requirements set forth in this Article. As used herein with respect to the issuer of the L/C Security, insolvent shall mean the determination of insolvency as made by such issuers primary bank regulator (i.e., the state bank supervisor for state chartered banks; the OCC or OTS, respectively, for federally chartered banks or thrifts; or the Federal Reserve for its member banks). If, at the Term Expiration Date, any Rent remains uncalculated or unpaid, then (i) Landlord shall with reasonable diligence complete any necessary calculations, (ii) Tenant shall extend the expiry date of such L/C Security from time to time as Landlord reasonably requires and (iii) in such extended period, Landlord shall not unreasonably refuse to consent to an appropriate reduction of the L/C Security. Tenant shall reimburse Landlords legal costs (as estimated by Landlords counsel, but not to exceed $2,500 in any one instance) in handling Landlords acceptance of L/C Security or its replacement or extension.
(b) If Tenant delivers to Landlord satisfactory L/C Security in place of the entire Security Deposit, Landlord shall remit to Tenant any cash Security Deposit Landlord previously held.
(c) Landlord may draw upon the L/C Security, and hold and apply the proceeds in the same manner and for the same purposes as the Security Deposit, if (i) an uncured Default (as defined below) exists, (ii) as of the date that is forty-five (45) days before any L/C Security expires (even if such scheduled expiry date is after the Term Expiration Date) Tenant has not delivered to Landlord an amendment or replacement for such L/C Security, reasonably satisfactory to Landlord, extending the expiry date to the earlier of (1) six (6) months after the then-current Term Expiration Date or (2) the date that is one year after the then-current expiry date of the L/C Security, (iii) the L/C Security provides for automatic renewals, Landlord asks the issuer to confirm the current L/C Security expiry date, and the issuer fails to do so within ten (10) business days, (iv) Tenant fails to pay (when and as Landlord reasonably requires) any bank charges for Landlords transfer of the L/C Security or (v) the issuer of the L/C Security ceases, or announces that it will cease, to maintain an office in the city where Landlord may present drafts under the L/C Security (and fails to permit drawing upon the L/C Security by overnight courier or facsimile). This Section does not limit any other provisions of this Lease allowing Landlord to draw the L/C Security under specified circumstances.
(d) Tenant shall not seek to enjoin, prevent, or otherwise interfere with Landlords draw under L/C Security, even if it violates this Lease. Tenant acknowledges that the only effect of a wrongful draw would be to substitute a cash Security Deposit for L/C Security, causing Tenant no legally recognizable damage. Landlord shall hold the proceeds of any draw in
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the same manner and for the same purposes as a cash Security Deposit. In the event of a wrongful draw, the parties shall cooperate to allow Tenant to post replacement L/C Security simultaneously with the return to Tenant of the wrongfully drawn sums, and Landlord shall upon request confirm in writing to the issuer of the L/C Security that Landlords draw was erroneous.
(e) If Landlord transfers its interest in the Premises, then Tenant shall at Tenants expense, within five (5) business days after receiving a request from Landlord, deliver (and, if the issuer requires, Landlord shall consent to) an amendment to the L/C Security naming Landlords grantee as substitute beneficiary. If the required Security Deposit changes while L/C Security is in force, then Tenant shall deliver (and, if the issuer requires, Landlord shall consent to) a corresponding amendment to the L/C Security.
12. Use.
12.1. Tenant shall use the Premises for the Permitted Use, and shall not use the Premises, or permit or suffer the Premises to be used, for any other purpose without Landlords prior written consent, which consent Landlord may withhold in its sole and absolute discretion. During the Term, Tenant shall, subject to Force Majeure, casualty and all of the other terms, conditions and provisions of this Lease, have access to the Premises twenty-four (24) hours per day, seven (7) days per week.
12.2. Tenant shall not use or occupy the Premises in violation of Applicable Laws; zoning ordinances; or the certificate of occupancy issued for the Building or the Project, and shall, upon five (5) days written notice from Landlord, discontinue any use of the Premises that is declared or claimed by any Governmental Authority having jurisdiction to be a violation of any of the above, or that in Landlords reasonable opinion violates any of the above. Tenant shall comply with any direction of any Governmental Authority having jurisdiction that shall, by reason of the nature of Tenants use or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to the Premises or with respect to the use or occupation thereof, and shall indemnify, save, defend (at Landlords option and with counsel reasonably acceptable to Landlord) and hold Landlord and its affiliates, employees, agents and contractors; and any lender, mortgagee, ground lessor or beneficiary (each, a Lender and, collectively with Landlord and its affiliates, employees, agents and contractors, the Landlord Indemnitees) harmless from and against any and all demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages, suits or judgments, and all reasonable expenses (including reasonable attorneys fees, charges and disbursements, regardless of whether the applicable demand, claim, action, cause of action or suit is voluntarily withdrawn or dismissed) incurred in investigating or resisting the same (collectively, Claims) of any kind or nature that arise before, during or after the Term as a result of Tenants breach of this Section.
12.3. Tenant shall not do or permit to be done anything that will invalidate or increase the cost of any fire, environmental, extended coverage or any other insurance policy covering the Building or the Project, and shall comply with all rules, orders, regulations and requirements of the insurers of the Building and the Project, and Tenant shall promptly, upon demand, reimburse Landlord for any additional premium charged for such policy by reason of Tenants failure to comply with the provisions of this Article.
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12.4. Tenant shall keep all doors opening onto public corridors closed, except for the door from the entry lobby into the main office area (so long as such doors are kept open in compliance with all Applicable Laws (including, without limitation, fire codes)), and otherwise when in use for ingress and egress.
12.5. No additional locks or bolts of any kind shall be placed upon any of the doors or windows by Tenant, nor shall any changes be made to existing locks or the mechanisms thereof without Landlords prior written consent. Tenant shall, upon termination of this Lease, return to Landlord all keys to offices and restrooms either furnished to or otherwise procured by Tenant. In the event any key so furnished to Tenant is lost, Tenant shall pay to Landlord the cost of replacing the same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such change. Notwithstanding the foregoing, Tenant may, at Tenants sole costs and expense as an Alteration (as defined below), install its own security system in the Premises (the Tenant Security System); provided, however, that (a) Tenants installation of the Tenant Security System shall be subject to all of the terms, conditions and provisions of this Lease governing Alterations (including, without limitation, Article 17), and (b) Tenant shall coordinate the installation and operation of the Tenant Security System with Landlord to assure that the Tenant Security System (i) does not prevent any Building security system from accommodating multiple tenants and (ii) does not interfere with (x) any Landlord security system in place as of the Execution Date (for which security system Landlord makes no warranties of any kind whatsoever), or (y) the Buildings systems and equipment. Tenant shall be solely responsible, at Tenants sole cost and expense, for monitoring and operating the Tenant Security System. Landlord may require Tenant, at Tenants sole cost and expense, to remove the Tenant Security System and restore the Building to its condition prior to the installation of the Tenant Security System upon the expiration or earlier termination of this Lease.
12.6. No awnings or other projections shall be attached to any outside wall of the Building. No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises other than Landlords standard window coverings. Neither the interior nor exterior of any windows shall be coated or otherwise sunscreened without Landlords prior written consent, nor shall any bottles, parcels or other articles be placed on the windowsills or items attached to windows that are visible from outside the Premises. No equipment, furniture or other items of personal property shall be placed on any exterior balcony without Landlords prior written consent.
12.7. No sign, advertisement or notice (Signage) shall be exhibited, painted or affixed by Tenant on any part of the Premises or the Building without Landlords prior written consent. Signage shall conform to Landlords design criteria. For any Signage, Tenant shall, at Tenants own cost and expense, (a) acquire all permits for such Signage in compliance with Applicable Laws and (b) design, fabricate, install and maintain such Signage in a first-class condition. Tenant shall be responsible for reimbursing Landlord for costs incurred by Landlord in removing any of Tenants Signage upon the expiration or earlier termination of the Lease. Interior signs on entry doors to the Premises and the directory tablet shall be inscribed, painted or affixed for Tenant by Landlord at Tenants sole cost and expense, and shall be of a size, color and type and be located in a place acceptable to Landlord. The directory tablet shall be provided exclusively for the display of the name and location of tenants only. Tenant shall not place anything on the exterior of the corridor walls or corridor doors other than Landlords standard lettering. At Landlords option, Landlord may install any Tenant Signage, and Tenant shall pay all costs associated with such installation within thirty (30) days after demand therefor.
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12.7.1 Subject to the terms, conditions and provisions of this Subsection 12.7.1, Tenant shall be entitled to install, at its sole cost and expense, one (1) building top sign on the side of the Building facing Bayshore Boulevard (the Building Top Sign). The graphics, materials, size, color, design, lettering, lighting (if any), specifications and exact location of the Building Top Sign (collectively, the Signage Specifications) shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld. In addition, the Building Top Sign and all Signage Specifications shall be subject to Tenants receipt of all required governmental permits and approvals, and shall be subject to any CC&Rs (as defined below). In the event Tenant does not receive the necessary permits and approvals for the Building Top Sign, Tenants and Landlords rights and obligations under the remaining provisions of this Lease shall not be affected. All costs associated with Tenants Signage (including the Building Top Sign) including, without limitation, costs of installation, design, construction, permits, maintenance and repair, shall be the sole responsibility of Tenant. Should Tenants Signage (including the Building Top Sign) require maintenance or repairs as determined in Landlords reasonable judgment, Landlord shall have the right to provide written notice thereof to Tenant and Tenant shall cause such repairs and/or maintenance to be performed within thirty (30) days after receipt of such notice from Landlord at Tenants sole cost and expense. Should Tenant fail to perform such maintenance and repairs within the period described in the immediately preceding sentence, Landlord shall have the right to cause such work to be performed and to charge Tenant, as Additional Rent, for the cost of such work. Upon the expiration or earlier termination of this Lease, Tenant shall, at Tenants sole cost and expense, cause the Building Top Sign to be removed from the Building and shall cause the exterior of the Building to be restored to the condition existing prior to the placement of the Building Top Sign. If Tenant fails to remove the Building Top Sign and to restore the exterior of the Building as provided in the immediately preceding sentence within thirty (30) days following the expiration or earlier termination of this Lease, then Landlord may perform such work, and all costs and expenses incurred by Landlord in so performing such work shall be reimbursed by Tenant to Landlord within ten (10) days after Tenants receipt of invoice therefore. The immediately preceding sentence shall survive the expiration or earlier termination of this Lease. Should the name of the original Tenant change, then the Building Top Sign may be modified at Tenants sole cost and expense to reflect the new name, but only if the new name does not (i) relate to an entity that is of a character, reputation, or associated with a political orientation or faction, that is inconsistent with the quality of the Building or would otherwise reasonably offend an institutional landlord of a project comparable to the Building, taking into consideration the level and visibility of the Building Top Sign or (ii) cause Landlord to be in default under any lease or license with another tenant of the Project.
12.8. Tenant may only place equipment within the Premises with floor loading consistent with the Buildings structural design unless Tenant obtains Landlords prior written approval. Tenant may place such equipment only in a location designed to carry the weight of such equipment.
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12.9. Tenant shall cause any equipment or machinery to be installed in the Premises so as to reasonably prevent sounds or vibrations therefrom from extending into the Common Area or other offices in the Project.
12.10. Tenant shall not (a) do or permit anything to be done in or about the Premises that shall in any way obstruct or interfere with the rights of other tenants or occupants of the Project, or injure or annoy them, (b) use or allow the Premises to be used for immoral, unlawful or objectionable purposes, (c) cause, maintain or permit any nuisance or waste in, on or about the Project or (d) take any other action that would in Landlords reasonable determination in any manner adversely affect other tenants quiet use and enjoyment of their space or adversely impact their ability to conduct business in a professional and suitable work environment. Notwithstanding anything in this Lease to the contrary, Tenant may not install any security systems (including cameras) outside the Premises or that record sounds or images outside the Premises without Landlords prior written consent, which Landlord may withhold in its sole and absolute discretion.
12.11. Notwithstanding any other provision herein to the contrary, Tenant shall be responsible for all liabilities, costs and expenses arising out of or in connection with the compliance of the Premises with the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., and any state and local accessibility laws, codes, ordinances and rules (collectively, and together with regulations promulgated pursuant thereto, the ADA), and Tenant shall indemnify, save, defend (at Landlords option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against Claims arising out of any such failure of the Premises to comply with the ADA. The Premises have not undergone inspection by a Certified Access Specialist (as defined in California Civil Code Section 55.52). For the avoidance of doubt, Lenders shall also include historic tax credit investors and new market tax credit investors. The provisions of this Section shall survive the expiration or earlier termination of this Lease.
12.12. In the event that the initial construction of the Tenant Improvements triggers a requirement for legal compliance work to be completed in the Common Area, Landlord shall, at Landlords sole cost and expense, cause such work to be completed.
12.13. Tenant shall maintain temperature and humidity in the Premises in accordance with ASHRAE standards at all times.
13. Rules and Regulations, CC&Rs, Parking Facilities and Common Area.
13.1. Tenant shall have the non-exclusive right, in common with others, to use the Common Area in conjunction with Tenants use of the Premises for the Permitted Use, and such use of the Common Area and Tenants use of the Premises shall be subject to the rules and regulations adopted by Landlord and attached hereto as Exhibit F, together with such other reasonable and nondiscriminatory rules and regulations as are hereafter promulgated by Landlord in its sole and absolute discretion (the Rules and Regulations), provided that such other reasonable rules and regulations hereafter promulgated by Landlord do not materially modify Tenants rights or obligations hereunder. Tenant shall and shall ensure that its contractors, subcontractors, employees, subtenants and invitees faithfully observe and comply with the Rules and Regulations. Landlord shall not be responsible to Tenant for the violation or non-performance by any other tenant or any agent, employee or invitee thereof of any of the Rules and Regulations.
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13.2. This Lease is subject to any recorded covenants, conditions or restrictions on the Project or Property, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time (the CC&Rs); provided that any such amendments, restatements, supplements or modifications do not materially modify Tenants rights or obligations hereunder. Tenant shall, at its sole cost and expense, comply with the CC&Rs.
13.3. Tenant shall have a non-exclusive, irrevocable license to use three (3) parking spaces per one thousand (1,000) square feet of Rentable Area of the Premises in the parking facilities serving the Project in common on an unreserved basis with other tenants of the Project during the Term at no additional cost.
13.4. Tenant agrees not to unreasonably overburden the parking facilities and agrees to cooperate with Landlord and other tenants in the use of the parking facilities. Nothing in this Section, however, is intended to create an affirmative duty on Landlords part to monitor parking.
14. Project Control by Landlord.
14.1. Landlord reserves full control over the Building and the Project to the extent not inconsistent with Tenants enjoyment of the Premises as provided by this Lease. This reservation includes Landlords right to subdivide the Project; convert the Building and other buildings within the Project to condominium units; change the size of the Project by selling all or a portion of the Project or adding real property and any improvements thereon to the Project; grant easements and licenses to third parties; maintain or establish ownership of the Building separate from fee title to the Property; make additions to or reconstruct portions of the Building and the Project; install, use, maintain, repair, replace and relocate for service to the Premises and other parts of the Building or the Project pipes, ducts, conduits, wires and appurtenant fixtures, wherever located in the Premises, the Building or elsewhere at the Project; and alter or relocate any other Common Area or facility, including private drives, lobbies, entrances and landscaping; provided, however, that such rights shall be exercised in a way that does not materially adversely affect Tenants beneficial use and occupancy of the Premises, including the Permitted Use and Tenants access to the Premises. Tenant acknowledges that Landlord specifically reserves the right to allow the exclusive use of corridors and restroom facilities located on specific floors to one or more tenants occupying such floors; provided, however, that Tenant shall not be deprived of the use of the corridors reasonably required to serve the Premises or of restroom facilities serving the floor upon which the Premises are located.
14.2. Possession of areas of the Premises necessary for utilities, services, safety and operation of the Building is reserved to Landlord.
14.3. Tenant shall, at Landlords request, promptly execute such further documents as may be reasonably appropriate to assist Landlord in the performance of its obligations hereunder; provided that Tenant need not execute any document that creates additional liability for Tenant or that deprives Tenant of the quiet enjoyment and use of the Premises as provided for in this Lease.
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14.4. Landlord may, at any and all reasonable times during non-business hours (or during business hours, if (a) with respect to Subsections 14.4(u) through 14.4(y), Tenant so requests, and (b) with respect to Subsection 14.4(z), if Landlord so requests), and upon twenty-four (24) hours prior notice (which may be oral or by email to the office manager or other Tenant-designated individual at the Premises; but provided that no time restrictions shall apply or advance notice be required if an emergency necessitates immediate entry), enter the Premises to (u) inspect the same and to determine whether Tenant is in compliance with its obligations hereunder, (v) supply any service Landlord is required to provide hereunder, (w) alter, improve or repair any portion of the Building other than the Premises for which access to the Premises is reasonably necessary, (x) post notices of nonresponsibility, (y) access the telephone equipment, electrical substation and fire risers and (z) show the Premises to prospective tenants during the final year of the Term and current and prospective purchasers and lenders at any time. In connection with any such alteration, improvement or repair as described in Subsection 14.4(w), Landlord may erect in the Premises or elsewhere in the Project scaffolding and other structures reasonably required for the alteration, improvement or repair work to be performed. In no event shall Tenants Rent abate as a result of Landlords activities pursuant to this Section; provided, however, that all such activities shall be conducted in such a manner so as to cause as little interference to Tenant as is reasonably possible. Landlord shall at all times retain a key with which to unlock all of the doors in the Premises. If an emergency necessitates immediate access to the Premises, Landlord may use whatever force is necessary to enter the Premises, and any such entry to the Premises shall not constitute a forcible or unlawful entry to the Premises, a detainer of the Premises, or an eviction of Tenant from the Premises or any portion thereof.
15. Quiet Enjoyment. Landlord covenants that Tenant, upon paying the Rent and performing its obligations contained in this Lease, may peacefully and quietly have, hold and enjoy the Premises, free from any claim by Landlord or persons claiming under Landlord, but subject to all of the terms and provisions hereof, provisions of Applicable Laws and rights of record to which this Lease is or may become subordinate. This covenant is in lieu of any other quiet enjoyment covenant, either express or implied.
16. Utilities and Services.
16.1. Tenant shall pay for all water (including the cost to service, repair and replace reverse osmosis, de-ionized and other treated water), gas, heat, light, power, telephone, internet service, cable television, other telecommunications and other utilities supplied to the Premises, together with any fees, surcharges and taxes thereon. If any such utility is not separately metered to Tenant, Tenant shall pay Tenants Adjusted Share of all charges of such utility jointly metered with other premises as Additional Rent or, in the alternative, Landlord may, at its option, monitor the usage of such utilities by Tenant and charge Tenant with the cost of purchasing, installing and monitoring such metering equipment, which cost shall be paid by Tenant as Additional Rent. Landlord may base its bills for utilities on reasonable estimates; provided that Landlord adjusts such billings promptly thereafter or as part of the next Landlords Statement to reflect the actual cost of providing utilities to the Premises. To the extent that Tenant uses more than Tenants Pro Rata Share of any utilities, then Tenant shall pay Landlord for Tenants Adjusted Share of such utilities to reflect such excess. In the event that the Building or Project is less than fully occupied during a calendar year, Tenant acknowledges that Landlord may extrapolate utility usage that varies depending on the occupancy of the Building or Project (as applicable) to equal
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Landlords reasonable estimate of what such utility usage would have been had the Building or Project, as applicable, been ninety-five percent (95%) occupied during such calendar year; provided, however, that Landlord shall not recover more than one hundred percent (100%) of the cost of such utilities. Tenant shall not be liable for the cost of utilities supplied to the Phase II Premises attributable to the time period prior to the Phase II Premises Term Commencement Date; provided, however, that, if Landlord shall permit Tenant possession of the Phase II Premises prior to the Phase II Premises Term Commencement Date and Tenant uses the Phase II Premises for any purpose other than placement of FF&E as set forth in Section 4.3, then Tenant shall be responsible for the cost of utilities supplied to the Phase II Premises from such earlier date of possession.
16.2. Landlord shall not be liable for, nor shall any eviction of Tenant result from, the failure to furnish any utility or service, whether or not such failure is caused by accidents; breakage; casualties (to the extent not caused by the party claiming Force Majeure); Severe Weather Conditions (as defined below); physical natural disasters (but excluding weather conditions that are not Severe Weather Conditions); strikes, lockouts or other labor disturbances or labor disputes (other than labor disturbances and labor disputes resulting solely from the acts or omissions of the party claiming Force Majeure); acts of terrorism; riots or civil disturbances; wars or insurrections; shortages of materials (which shortages are not unique to the party claiming Force Majeure); government regulations, moratoria or other governmental actions, inactions or delays; failures by third parties to deliver gas, oil or another suitable fuel supply, or inability of the party claiming Force Majeure, by exercise of reasonable diligence, to obtain gas, oil or another suitable fuel; or other causes beyond the reasonable control of the party claiming that Force Majeure has occurred (collectively, Force Majeure); or, to the extent permitted by Applicable Laws, Landlords negligence. In the event of such failure, Tenant shall not be entitled to termination of this Lease or any abatement or reduction of Rent, nor shall Tenant be relieved from the operation of any covenant or agreement of this Lease. Severe Weather Conditions means weather conditions that are materially worse than those that reasonably would be anticipated for the Property at the applicable time based on historic meteorological records. Notwithstanding anything to the contrary in this Lease, if, for more than ten (10) consecutive business days following written notice to Landlord and as a direct result of Landlords gross negligence or willful misconduct (and except to the extent that such failure is caused by any other factor, including any action or inaction of a Tenant Party (as defined below)), the provision of HVAC or other utilities to all or a material portion of the Premises that Landlord must provide pursuant to this Lease is interrupted (a Material Services Failure), then Tenants Base Rent and Operating Expenses (or, to the extent that less than all of the Premises are affected, a proportionate amount (based on the Rentable Area of the Premises that is rendered unusable) of Base Rent and Operating Expenses) shall thereafter be abated until the Premises are again usable by Tenant for the Permitted Use; provided, however, that, if Landlord is diligently pursuing the restoration of such HVAC and other utilities and Landlord provides substitute HVAC and other utilities reasonably suitable for Tenants continued use and occupancy of the Premises for the Permitted Use (e.g., supplying potable water or portable air conditioning equipment), then neither Base Rent nor Operating Expenses shall be abated. During any Material Services Failure, Tenant will cooperate with Landlord to arrange for the provision of any interrupted utility services on an interim basis via temporary measures until final corrective measures can be accomplished, and Tenant will permit Landlord the necessary access to the Premises to remedy such Material Service Failure. In the event of any interruption of HVAC or
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other utilities that Landlord must provide pursuant to this Lease, regardless of the cause, Landlord shall diligently pursue the restoration of such HVAC and other utilities. Notwithstanding anything in this Lease to the contrary, but subject to Article 24 (which shall govern in the event of a casualty), the provisions of this Section shall be Tenants sole recourse and remedy in the event of an interruption of HVAC or other utilities to the Premises.
16.3. Tenant shall pay for, prior to delinquency of payment therefor, any utilities and services that may be furnished to the Premises during or, if Tenant occupies the Premises after the expiration or earlier termination of the Term, after the Term, beyond those utilities provided by Landlord, including telephone, internet service, cable television and other telecommunications, together with any fees, surcharges and taxes thereon. Upon Landlords demand, utilities and services provided to the Premises that are separately metered shall be paid by Tenant directly to the supplier of such utilities or services.
16.4. Tenant shall not, without Landlords prior written consent, use any device in the Premises (including data processing machines) that will in any way (a) increase the amount of ventilation, air exchange, gas, steam, electricity or water required or consumed in the Premises based upon Tenants Pro Rata Share of the Building or Project (as applicable) beyond the existing capacity of the Building or the Project usually furnished or supplied for the Permitted Use or (b) exceed Tenants Pro Rata Share of the Buildings or Projects (as applicable) capacity to provide such utilities or services.
16.5. If Tenant shall require utilities or services in excess of those usually furnished or supplied for tenants in similar spaces in the Building or the Project by reason of Tenants equipment or extended hours of business operations, then Tenant shall first procure Landlords consent for the use thereof, which consent Landlord may condition upon the availability of such excess utilities or services, and Tenant shall pay as Additional Rent an amount equal to the cost of providing such excess utilities and services.
16.6. Landlord shall provide water in Common Area for lavatory and landscaping purposes only, which water shall be from the local municipal or similar source; provided, however, that if Landlord determines that Tenant requires, uses or consumes water provided to the Common Area for any purpose other than ordinary lavatory purposes, Landlord may install a water meter (Tenant Water Meter) and thereby measure Tenants water consumption for all purposes. Tenant shall pay Landlord for the costs of any Tenant Water Meter and the installation and maintenance thereof during the Term. If Landlord installs a Tenant Water Meter, Tenant shall pay for water consumed, as shown on such meter, as and when bills are rendered. If Tenant fails to timely make such payments, Landlord may pay such charges and collect the same from Tenant. Any such costs or expenses incurred or payments made by Landlord for any of the reasons or purposes stated in this Section shall be deemed to be Additional Rent payable by Tenant and collectible by Landlord as such.
16.7. Landlord reserves the right to stop service of the elevator, plumbing, ventilation, air conditioning and utility systems, when Landlord deems necessary or desirable, due to accident, emergency or the need to make repairs, alterations or improvements, until such repairs, alterations or improvements shall have been completed, and Landlord shall further have no responsibility or liability for failure to supply elevator facilities, plumbing, ventilation, air
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conditioning or utility service when prevented from doing so by Force Majeure or, to the extent permitted by Applicable Laws, Landlords negligence. Without limiting the foregoing, it is expressly understood and agreed that any covenants on Landlords part to furnish any service pursuant to any of the terms, covenants, conditions, provisions or agreements of this Lease, or to perform any act or thing for the benefit of Tenant, shall not be deemed breached if Landlord is unable to furnish or perform the same by virtue of Force Majeure or, to the extent permitted by Applicable Laws, Landlords negligence.
16.8. Subject to Section 16.9 below, Landlord shall (a) maintain and operate the existing shared HVAC systems (that serve both the Premises and other areas of the Building) used for the Permitted Use only (Base HVAC) and (b) subject to Subsection 16.8(a), furnish such Base HVAC (via the existing shared HVAC systems that serve both the Premises and other areas of the Building) as reasonably required (except as this Lease otherwise provides) for reasonably comfortable occupancy of the Premises twenty-four (24) hours a day, every day during the Term, subject to casualty, eminent domain or as otherwise specified in this Article. Notwithstanding anything to the contrary in this Section, Landlord shall have no liability, and Tenant shall have no right or remedy, on account of any interruption or impairment in HVAC services; provided that Landlord diligently endeavors to cure any such interruption or impairment.
16.9. Notwithstanding anything to the contrary in this Lease, any systems or equipment exclusively servicing the Premises, including (without limitation) any supplemental HVAC units or other HVAC components exclusively serving the Premises, exhaust fans, vacuum pumps, air compressors, server room systems/equipment or vivarium systems/equipment (any such system and/or equipment, a Premises Dedicated System), shall be the sole responsibility of Tenant and Landlord shall have no obligations with respect thereto. Tenant shall, at its sole cost and expense, maintain and keep any Premises Dedicated System in good condition and repair and shall otherwise be solely responsible for any repair, maintenance and/or replacement costs with respect to any such Premises Dedicated System. Tenant shall keep in full force and effect during the Term (and occupancy by Tenant, if any, after termination of this Lease) a preventative maintenance contract for quarterly, semi-annual, and annual inspections and maintenance for each Premises Dedicated System (in each case using a qualified, licensed, bonded service provider reasonably approved by Landlord). If requested in writing by Landlord, Tenant shall provide to Landlord copies of any Premises Dedicated System maintenance contracts and any Premises Dedicated System maintenance reports on a quarterly basis. In the event Landlord determines that Tenant is not properly maintaining a Premises Dedicated System, Landlord may take over Tenants responsibilities with respect to such Premises Dedicated System. Any costs or expenses incurred or payments made by Landlord as a result of Tenant failing to properly maintain a Premises Dedicated System, shall be deemed to be Additional Rent payable by Tenant within thirty (30) days of receiving an invoice therefor. Notwithstanding anything to the contrary in this Lease, Landlord shall have no liability, and Tenant shall have no right or remedy, on account of any interruption or impairment with respect to any Premises Dedicated System.
16.10. For any utilities serving the Premises for which Tenant is billed directly by such utility provider, Tenant agrees to furnish to Landlord within thirty (30) days after Landlords request, any utility usage information reasonably requested by Landlord, and within thirty (30) days after each calendar year during the Term, authorization to allow Landlord to access
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Tenants usage information necessary for Landlord to complete an ENERGY STAR® Statement of Performance (or similar comprehensive utility usage report (e.g., related to Labs 21), if requested by Landlord) and any other information reasonably requested by Landlord for the immediately preceding year; and Tenant shall comply with any other energy usage or consumption requirements required by Applicable Laws. Tenant shall retain records of utility usage at the Premises, including invoices and statements from the utility provider, for at least sixty (60) months, or such other period of time as may be requested by Landlord. Tenant acknowledges that any utility information for the Premises, the Building and the Project may be shared with third parties, including Landlords consultants and Governmental Authorities. In the event that Tenant fails to comply with this Section, after a five (5) day notice and cure period, Tenant hereby authorizes Landlord to collect utility usage information directly from the applicable utility providers, and Tenant shall pay Landlord a fee of One Thousand Dollars ($1,000) per month to collect such utility usage information. In addition to the foregoing, Tenant shall comply with all Applicable Laws related to the disclosure and tracking of energy consumption at the Premises. The provisions of this Section shall survive the expiration or earlier termination of this Lease.
16.11. Subject to the terms, conditions and provisions set forth in Exhibit D attached hereto, Tenant shall have the right to install and maintain (during the Term) the Tenant Generator in the Generator License Area (as such terms are defined in Exhibit D).
17. Alterations.
17.1. Tenant shall make no alterations, additions or improvements in or to the Premises or engage in any construction, demolition, reconstruction, renovation or other work (whether major or minor) of any kind in, at or serving the Premises (Alterations) without Landlords prior written approval, which approval Landlord shall not unreasonably withhold; provided, however, that, in the event any proposed Alteration affects (a) any structural portions of the Building, including exterior walls, the roof, the foundation or slab, foundation or slab systems (including barriers and subslab systems) or the core of the Building, (b) the exterior of the Building or (c) any Building systems, including elevator, plumbing, HVAC, electrical, security, life safety and power, then Landlord may withhold its approval in its sole and absolute discretion. Tenant shall, in making any Alterations, use only those architects, contractors, suppliers and mechanics of which Landlord has given prior written approval, which approval shall be in Landlords reasonable discretion. In seeking Landlords approval, Tenant shall provide Landlord, at least fifteen (15) business days in advance of any proposed construction, with plans, specifications, bid proposals, certified stamped engineering drawings and calculations by Tenants engineer of record or architect of record (including connections to the Buildings structural system, modifications to the Buildings envelope, non-structural penetrations in slabs or walls, and modifications or tie-ins to life safety systems), work contracts, requests for laydown areas and such other information concerning the nature and cost of the Alterations as Landlord may reasonably request. In no event shall Tenant use or Landlord be required to approve any architects, consultants, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony or may not have sufficient experience, in Landlords reasonable opinion, to perform work in an occupied Class A laboratory research building and in tenant-occupied lab areas. Notwithstanding the foregoing, Tenant may make strictly cosmetic changes to the Premises that do not require any permits or
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more than three (3) total contractors and subcontractors (Cosmetic Alterations) without Landlords consent; provided that (y) the cost of any Cosmetic Alterations does not exceed Twenty-Five Thousand Dollars ($25,000) in any one instance or Fifty Thousand Dollars ($50,000) annually, (z) such Cosmetic Alterations do not (i) require any structural or other substantial modifications to the Premises, (ii) require any changes to or adversely affect the Building systems, (iii) affect the exterior of the Building or (iv) trigger any requirement under Applicable Laws that would require Landlord to make any alteration or improvement to the Premises, the Building or the Project.
17.2. Tenant shall not construct or permit to be constructed partitions or other obstructions that might interfere with free access to mechanical installation or service facilities of the Building or with other tenants components located within the Building, or interfere with the moving of Landlords equipment to or from the enclosures containing such installations or facilities.
17.3. Tenant shall accomplish any work performed on the Premises or the Building in such a manner as to permit any life safety systems to remain fully operable at all times.
17.4. Any work performed on the Premises, the Building or the Project by Tenant or Tenants contractors shall be done at such times and in such manner as Landlord may from time to time designate. Tenant covenants and agrees that all work done by Tenant or Tenants contractors shall be performed in full compliance with Applicable Laws. Within thirty (30) days after completion of any Alterations, Tenant shall provide Landlord with complete as built drawing print sets and electronic CADD files on disc (or files in such other current format in common use as Landlord reasonably approves or requires) showing any changes in the Premises, as well as a commissioning report prepared by a licensed, qualified commissioning agent hired by Tenant and approved by Landlord for all new or affected mechanical, electrical and plumbing systems. Any such as built plans shall show the applicable Alterations as an overlay on the Building as-built plans; provided that Landlord provides the Building as built plans to Tenant.
17.5. Before commencing any Alterations, Tenant shall (a) give Landlord at least fifteen (15) business days prior written notice of the proposed commencement of such work and the names and addresses of the persons supplying labor or materials therefor so that Landlord may enter the Premises to post and keep posted thereon and therein notices or to take any further action that Landlord may reasonably deem proper for the protection of Landlords interest in the Project and (b) shall, if required by Landlord, secure, at Tenants own cost and expense, a completion and lien indemnity bond satisfactory to Landlord for such work (provided that Landlord shall only be permitted to impose such requirement with respect to Alterations costing in excess of Two Hundred Fifty Thousand Dollars ($250,000)).
17.6. Tenant shall repair any damage to the Premises caused by Tenants removal of any property from the Premises. During any such restoration period, Tenant shall pay Rent to Landlord as provided herein as if such space were otherwise occupied by Tenant. The provisions of this Section shall survive the expiration or earlier termination of this Lease.
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17.7. The Premises plus any Alterations; Tenant Improvements; attached equipment, fixtures and trade fixtures; laboratory casework and related appliances; and other additions and improvements attached to or built into the Premises made by either of the parties (including all floor and wall coverings; paneling; sinks and related plumbing fixtures; laboratory benches; exterior venting fume hoods; walk-in freezers and refrigerators; ductwork; conduits; electrical panels and circuits; attached machinery and equipment; and built-in furniture and cabinets, in each case, together with all additions and accessories thereto, but specifically excluding those items set forth in Exhibit H), shall (unless, prior to such construction or installation, Landlord elects otherwise in writing) at all times remain the property of Landlord, shall remain in the Premises and shall (unless, prior to construction or installation thereof, Landlord elects otherwise in writing) be surrendered to Landlord upon the expiration or earlier termination of this Lease. For the avoidance of doubt, the items listed on Exhibit H attached hereto (which Exhibit H may be updated by Tenant, subject to Landlords written consent) constitute Tenants property and shall be removed by Tenant upon the expiration or earlier termination of the Lease.
17.8. Notwithstanding any other provision of this Article to the contrary, in no event shall Tenant remove any improvement from the Premises as to which Landlord contributed payment, including the Tenant Improvements, without Landlords prior written consent, which consent Landlord may withhold in its sole and absolute discretion.
17.9. If Tenant shall fail to remove any of its property (including any furniture existing in the Premises as of the Execution Date) from the Premises prior to the expiration or earlier termination of this Lease, then Landlord may, at its option, remove the same in any manner that Landlord shall choose and store such effects without liability to Tenant for loss thereof or damage thereto, and Tenant shall pay Landlord, upon demand, any costs and expenses incurred due to such removal and storage or Landlord may, at its sole option and without notice to Tenant, sell such property or any portion thereof at private sale and without legal process for such price as Landlord may obtain and apply the proceeds of such sale against any (a) amounts due by Tenant to Landlord under this Lease and (b) any expenses incident to the removal, storage and sale of such personal property.
17.10. Tenant shall pay to Landlord an amount equal to three percent (3%) of the cost to Tenant of all Alterations to cover Landlords overhead and expenses for plan review, engineering review, coordination, scheduling and supervision thereof. For purposes of payment of such sum, Tenant shall submit to Landlord copies of all bills, invoices and statements covering the costs of such charges, accompanied by payment to Landlord of the fee set forth in this Section. Tenant shall reimburse Landlord for any extra expenses incurred by Landlord by reason of faulty work done by Tenant or its contractors, or by reason of delays caused by such work, or by reason of inadequate clean-up.
17.11. Within sixty (60) days after final completion of any Alterations performed by Tenant with respect to the Premises, Tenant shall submit to Landlord documentation showing the amounts expended by Tenant with respect to such Alterations, together with supporting documentation reasonably acceptable to Landlord.
17.12. Tenant shall take, and shall cause its contractors to take, commercially reasonable steps to protect the Premises during the performance of any Alterations, including covering or temporarily removing any window coverings so as to guard against dust, debris or damage.
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17.13. Tenant shall require its contractors and subcontractors performing work on the Premises to name Landlord and its affiliates and Lenders as additional insureds on their respective insurance policies.
18. Repairs and Maintenance.
18.1. Landlord shall repair and maintain the structural and exterior portions and Common Area of the Building and the Project, including roofing and covering materials; foundations (excluding any architectural slabs, but including any structural slabs); exterior walls; plumbing; fire sprinkler systems (if any); HVAC systems; elevators; and electrical systems installed or furnished by Landlord.
18.2. Except for services of Landlord, if any, required by Section 18.1, Tenant shall at Tenants sole cost and expense maintain and keep the Premises and every part thereof in good condition and repair, damage thereto from ordinary wear and tear excepted, and shall, within ten (10) days after receipt of written notice from Landlord, provide to Landlord any maintenance records that Landlord reasonably requests. Tenant shall, upon the expiration or sooner termination of the Term, surrender the Premises to Landlord in as good a condition as when received, ordinary wear and tear excepted; and shall, at Landlords request and Tenants sole cost and expense, remove any furniture existing in the Premises as of the Execution Date, all telephone and data systems, wiring and equipment from the Premises, and repair any damage to the Premises caused thereby. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof, other than as described in Article 4.
18.3. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance that is Landlords obligation pursuant to this Lease unless such failure shall persist for an unreasonable time after Tenant provides Landlord with written notice of the need of such repairs or maintenance. Tenant waives its rights under Applicable Laws now or hereafter in effect to make repairs at Landlords expense.
18.4. If any excavation shall be made upon land adjacent to or under the Building, or shall be authorized to be made, Tenant shall afford to the person causing or authorized to cause such excavation, license to enter the Premises for the purpose of performing such work as such person shall deem necessary or desirable to preserve and protect the Building from injury or damage and to support the same by proper foundations, without any claim for damages or liability against Landlord and without reducing or otherwise affecting Tenants obligations under this Lease. Landlord will endeavor to cause any parties performing work pursuant to this Section 18.4 to use commercially reasonable efforts to minimize interference with Tenants use and occupancy of the Premises.
18.5. This Article relates to repairs and maintenance arising in the ordinary course of operation of the Building and the Project. In the event of a casualty described in Article 24, Article 24 shall apply in lieu of this Article. In the event of eminent domain, Article 25 shall apply in lieu of this Article.
18.6. Costs incurred by Landlord pursuant to this Article shall constitute Operating Expenses, unless expressly excluded under the terms, conditions and provisions of this Lease.
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19. Liens.
19.1. Subject to the immediately succeeding sentence, Tenant shall keep the Premises, the Building and the Project free from any liens arising out of work or services performed, materials furnished to or obligations incurred by Tenant. Tenant further covenants and agrees that any mechanics or materialmans lien filed against the Premises, the Building or the Project for work or services claimed to have been done for, or materials claimed to have been furnished to, or obligations incurred by Tenant shall be discharged or bonded by Tenant within ten (10) days after the filing thereof, at Tenants sole cost and expense.
19.2. Should Tenant fail to discharge or bond against any lien of the nature described in Section 19.1, Landlord may, at Landlords election, pay such claim or post a statutory lien bond or otherwise provide security to eliminate the lien as a claim against title, and Tenant shall immediately reimburse Landlord for the costs thereof as Additional Rent. Tenant shall indemnify, save, defend (at Landlords option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against any Claims arising from any such liens, including any administrative, court or other legal proceedings related to such liens.
19.3. In the event that Tenant leases or finances the acquisition of office equipment, furnishings or other personal property of a removable nature utilized by Tenant in the operation of Tenants business, Tenant warrants that any Uniform Commercial Code financing statement shall, upon its face or by exhibit thereto, indicate that such financing statement is applicable only to removable personal property of Tenant located within the Premises. In no event shall the address of the Premises, the Building or the Project be furnished on a financing statement without qualifying language as to applicability of the lien only to removable personal property located in an identified suite leased by Tenant. Should any holder of a financing statement record or place of record a financing statement that appears to constitute a lien against any interest of Landlord or against equipment that may be located other than within an identified suite leased by Tenant, Tenant shall, within ten (10) days after filing such financing statement, cause (a) a copy of the lender security agreement or other documents to which the financing statement pertains to be furnished to Landlord to facilitate Landlords ability to demonstrate that the lien of such financing statement is not applicable to Landlords interest and (b) Tenants lender to amend such financing statement and any other documents of record to clarify that any liens imposed thereby are not applicable to any interest of Landlord in the Premises, the Building or the Project.
20. Estoppel Certificate. Tenant shall, within ten (10) days after receipt of written notice from Landlord, execute, acknowledge and deliver a statement in writing substantially in the form attached to this Lease as Exhibit I, or on any other commercially reasonable form reasonably requested by a current or proposed Lender or encumbrancer or proposed purchaser, (a) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect) and the dates to which rental and other charges are paid in advance, if any, (b) acknowledging that there are not, to Tenants knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (c) setting forth such further information with respect to this Lease or the Premises as may be requested thereon. Any such statements may be
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relied upon by any prospective purchaser or encumbrancer of all or any portion of the Property. If Tenant fails to deliver any such statement within such prescribed time, and then fails to deliver any such statement within two (2) business days after receipt of a second notice from Landlord, such failure shall, at Landlords option, constitute a Default (as defined below) under this Lease, and, in any event, shall be binding upon Tenant that the Lease is in full force and effect and without modification except as may be represented by Landlord in any certificate prepared by Landlord and delivered to Tenant for execution.
21. Hazardous Materials.
21.1. Tenant shall not cause or permit any Hazardous Materials (as defined below) to be brought upon, kept or used in or about the Premises, the Building or the Project in violation of Applicable Laws by Tenant or any of its employees, agents, contractors or invitees (collectively with Tenant, each a Tenant Party). If (a) Tenant breaches such obligation, (b) the presence of Hazardous Materials as a result of such a breach results in contamination of the Project, any portion thereof, or any adjacent property, (c) contamination of the Premises otherwise occurs during the Term or any extension or renewal hereof or holding over hereunder or (d) contamination of the Project occurs as a result of Hazardous Materials that are placed on or under or are released into the Project by a Tenant Party, then Tenant shall indemnify, save, defend (at Landlords option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against any and all Claims of any kind or nature, including (w) diminution in value of the Project or any portion thereof, (x) damages for the loss or restriction on use of rentable or usable space or of any amenity of the Project, (y) damages arising from any adverse impact on marketing of space in the Project or any portion thereof and (z) sums paid in settlement of Claims that arise before, during or after the Term as a result of such breach or contamination. This indemnification by Tenant includes costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work required by any Governmental Authority because of Hazardous Materials present in the air, soil or groundwater above, on, under or about the Project. Without limiting the foregoing, if the presence of any Hazardous Materials in, on, under or about the Project, any portion thereof or any adjacent property caused or permitted by any Tenant Party results in any contamination of the Project, any portion thereof or any adjacent property, then Tenant shall promptly take all actions at its sole cost and expense as are necessary to return the Project, any portion thereof or any adjacent property to a condition as close as commercially practicable to its condition existing prior to the time of such contamination; provided that Landlords written approval of such action shall first be obtained, which approval Landlord shall not unreasonably withhold; and provided, further, that it shall be reasonable for Landlord to withhold its consent if such actions could have a material adverse long-term or short-term effect on the Project, any portion thereof or any adjacent property. Tenants obligations under this Section shall not be affected, reduced or limited by any limitation on the amount or type of damages, compensation or benefits payable by or for Tenant under workers compensation acts, disability benefit acts, employee benefit acts or similar legislation. Notwithstanding the foregoing, Landlord shall indemnify, save, defend (at Tenants option and with counsel reasonably acceptable to Tenant) and hold the Tenant Parties harmless from and against any and all Claims resulting from the presence of Hazardous Materials at the Project in violation of Applicable Laws as of the Execution Date, unless placed at the Project by a Tenant Party (any such Hazardous Materials, Pre-Existing Hazardous Materials).
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21.2. Landlord acknowledges that it is not the intent of this Article to prohibit Tenant from operating its business for the Permitted Use. Tenant may operate its business according to the custom of Tenants industry so long as the use or presence of Hazardous Materials is strictly and properly monitored in accordance with Applicable Laws. As a material inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its business, Tenant agrees to deliver to Landlord (a) a list identifying each type of Hazardous Material to be present at the Premises that is subject to regulation under any environmental Applicable Laws in the form of a Tier II form pursuant to Section 312 of the Emergency Planning and Community Right-to-Know Act of 1986 (or any successor statute) or any other form reasonably requested by Landlord (other than customary amounts of typical office cleaning supplies used and stored in compliance with all Applicable Laws), (b) a list of any and all approvals or permits from Governmental Authorities required in connection with the presence of such Hazardous Material at the Premises and (c) correct and complete copies of (i) notices of violations of Applicable Laws related to Hazardous Materials and (ii) plans relating to the installation of any storage tanks to be installed in, on, under or about the Project (provided that installation of storage tanks shall only be permitted after Landlord has given Tenant its written consent to do so, which consent Landlord may withhold in its sole and absolute discretion) and closure plans or any other documents required by any and all Governmental Authorities for any storage tanks installed in, on, under or about the Project for the closure of any such storage tanks (collectively, Hazardous Materials Documents). Tenant shall deliver to Landlord updated Hazardous Materials Documents, within fourteen (14) days after receipt of a written request therefor from Landlord, not more often than once per year, unless (m) there are any changes to the Hazardous Materials Documents or (n) Tenant initiates any Alterations or changes its business, in either case in a way that involves any material increase in the types or amounts of Hazardous Materials, in which case Tenant shall deliver updated Hazardous Materials documents (without Landlord having to request them) before or, if not practicable to do so before, as soon as reasonably practicable after the occurrence of the events in Subsection 21.2(m) or (n). For each type of Hazardous Material listed, the Hazardous Materials Documents shall include (t) the chemical name, (u) the material state (e.g., solid, liquid, gas or cryogen), (v) the concentration, (w) the storage amount and storage condition (e.g., in cabinets or not in cabinets), (x) the use amount and use condition (e.g., open use or closed use), (y) the location (e.g., room number or other identification) and (z) if known, the chemical abstract service number. Notwithstanding anything in this Section to the contrary, Tenant shall not be required to provide Landlord with any documents containing information of a proprietary nature, unless such documents contain a reference to Hazardous Materials or activities related to Hazardous Materials. Landlord may, at Landlords expense, cause the Hazardous Materials Documents to be reviewed by a person or firm qualified to analyze Hazardous Materials to confirm compliance with the provisions of this Lease and with Applicable Laws. In the event that a review of the Hazardous Materials Documents indicates non-compliance with this Lease or Applicable Laws, Tenant shall, at its expense, diligently take steps to bring its storage and use of Hazardous Materials into compliance. Notwithstanding anything in this Lease to the contrary or Landlords review into Tenants Hazardous Materials Documents or use or disposal of hazardous materials, however, Landlord shall not have and expressly disclaims any liability related to Tenants or other tenants use or disposal of Hazardous Materials, it being acknowledged by Tenant that Tenant is best suited to evaluate the safety and efficacy of its Hazardous Materials usage and procedures.
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21.3. Tenant represents and warrants to Landlord that is not nor has it been, in connection with the use, disposal or storage of Hazardous Materials, (a) subject to a material enforcement order issued by any Governmental Authority or (b) required to take any remedial action.
21.4. At any time, and from time to time, prior to the expiration of the Term, Landlord shall have the right to conduct appropriate tests of the Project or any portion thereof to demonstrate that Hazardous Materials are present or that contamination has occurred due to the acts or omissions of a Tenant Party. Tenant shall pay all reasonable costs of such tests if such tests reveal that Hazardous Materials exist at the Project in violation of this Lease.
21.5. If underground or other storage tanks storing Hazardous Materials installed or utilized by Tenant are located on the Premises, or are hereafter placed on the Premises by Tenant (or by any other party, if such storage tanks are utilized by Tenant), then Tenant shall monitor the storage tanks, maintain appropriate records, implement reporting procedures, properly close any underground storage tanks, and take or cause to be taken all other steps necessary or required under the Applicable Laws. Tenant shall have no responsibility or liability for underground or other storage tanks installed by anyone other than Tenant unless Tenant utilizes such tanks, in which case Tenants responsibility for such tanks shall be as set forth in this Section.
21.6. Tenant shall promptly report to Landlord any actual or suspected presence of mold or water intrusion at the Premises.
21.7. Tenants obligations under this Article shall survive the expiration or earlier termination of the Lease. During any period of time needed by Tenant or Landlord after the termination of this Lease to complete the removal from the Premises of any such Hazardous Materials, Tenant shall be deemed a holdover tenant and subject to the provisions of Article 27.
21.8. As used herein, the term Hazardous Material means any toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous substance, material or waste that is or becomes regulated by Applicable Laws or any Governmental Authority.
21.9. Notwithstanding anything to the contrary in this Lease, Landlord shall have sole control over the equitable allocation of fire control areas (as defined in the Uniform Building Code as adopted by the city or municipality(ies) in which the Project is located (the UBC)) within the Project for the storage of Hazardous Materials. Notwithstanding anything to the contrary in this Lease, the quantity of Hazardous Materials allowed by this Section is specific to Tenant and shall not run with the Lease in the event of a Transfer (as defined in Article 29). In the event of a Transfer, if the use of Hazardous Materials by such new tenant (New Tenant) is such that New Tenant utilizes fire control areas in the Project in excess of New Tenants Pro Rata Share of the Building or the Project, as applicable, then New Tenant shall, at its sole cost and expense and upon Landlords written request, establish and maintain a separate area of the Premises classified by the UBC as an H occupancy area for the use and storage of Hazardous Materials, or take such other action as is necessary to ensure that its share of the fire control areas of the Building and the Project is not greater than New Tenants Pro Rata Share of the Building or the Project, as applicable. Notwithstanding anything in this Lease to the contrary,
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Landlord shall not have and expressly disclaims any liability related to Tenants or other tenants use or disposal of fire control areas, it being acknowledged by Tenant that Tenant and other tenants are best suited to evaluate the safety and efficacy of its Hazardous Materials usage and procedures.
22. Odors and Exhaust. Tenant acknowledges that Landlord would not enter into this Lease with Tenant unless Tenant assured Landlord that under no circumstances will any other occupants of the Building or the Project (including persons legally present in any outdoor areas of the Project) be subjected to odors or fumes (whether or not noxious), and that the Building and the Project will not be damaged by any exhaust, in each case from Tenants operations, including in Tenants vivarium. Landlord and Tenant therefore agree as follows:
22.1. Tenant shall not cause or permit (or conduct any activities that would cause) any release of any odors or fumes of any kind from the Premises.
22.2. If the Building has a ventilation system that, in Landlords judgment, is adequate, suitable, and appropriate to vent the Premises in a manner that does not release odors affecting any indoor or outdoor part of the Project, Tenant shall vent the Premises through such system. If Landlord at any time determines that any existing ventilation system is inadequate, or if no ventilation system exists, Tenant shall in compliance with Applicable Laws vent all fumes and odors from the Premises (and remove odors from Tenants exhaust stream) as Landlord requires. The placement and configuration of all ventilation exhaust pipes, louvers and other equipment shall be subject to Landlords approval. Tenant acknowledges Landlords legitimate desire to maintain the Project (indoor and outdoor areas) in an odor-free manner, and Landlord may require Tenant to abate and remove all odors in a manner that goes beyond the requirements of Applicable Laws.
22.3. Tenant shall, at Tenants sole cost and expense, provide odor eliminators and other devices (such as filters, air cleaners, scrubbers and whatever other equipment may in Landlords judgment be necessary or appropriate from time to time) to completely remove, eliminate and abate any odors, fumes or other substances in Tenants exhaust stream that, in Landlords judgment, emanate from Tenants Premises. Any work Tenant performs under this Section shall constitute Alterations.
22.4. Tenants responsibility to remove, eliminate and abate odors, fumes and exhaust shall continue throughout the Term. Landlords construction of the Tenant Improvements shall not preclude Landlord from requiring additional measures to eliminate odors, fumes and other adverse impacts of Tenants exhaust stream (as Landlord may designate in Landlords discretion). Tenant shall install additional equipment as Landlord requires from time to time under the preceding sentence. Such installations shall constitute Alterations.
22.5. If Tenant fails to install satisfactory odor control equipment within fifteen (15) business days after Landlords demand made at any time, then Landlord may, without limiting Landlords other rights and remedies, require Tenant to cease and suspend any operations in the Premises that, in Landlords determination, cause odors, fumes or exhaust. For example, if Landlord determines that Tenants production of a certain type of product causes odors, fumes or exhaust, and Tenant does not install satisfactory odor control equipment within fifteen (15)
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business days after Landlords request, then Landlord may require Tenant to stop producing such type of product in the Premises unless and until Tenant has installed odor control equipment satisfactory to Landlord.
23. Insurance; Waiver of Subrogation.
23.1. Landlord shall maintain insurance for the Building and the Project in amounts equal to full replacement cost (exclusive of the costs of excavation, foundations and footings, engineering costs or such other costs to the extent the same are not incurred in the event of a rebuild and without reference to depreciation taken by Landlord upon its books or tax returns) or such lesser coverage as Landlord may elect, provided that such coverage shall not be less than the amount of such insurance Landlords Lender, if any, requires Landlord to maintain, providing protection against any peril generally included within the classification Fire and Extended Coverage, together with insurance against sprinkler damage (if applicable), vandalism and malicious mischief. Landlord, subject to availability thereof, shall further insure, if Landlord deems it appropriate, coverage against flood, environmental hazard, earthquake, loss or failure of building equipment, rental loss during the period of repairs or rebuilding, Workers Compensation insurance and fidelity bonds for employees employed to perform services. Notwithstanding the foregoing, Landlord may, but shall not be deemed required to, provide insurance for any improvements installed by Tenant or that are in addition to the standard improvements customarily furnished by Landlord, without regard to whether or not such are made a part of or are affixed to the Building.
23.2. In addition, Landlord shall carry Commercial General Liability insurance with limits of not less than One Million Dollars ($1,000,000) per occurrence/general aggregate for bodily injury (including death), or property damage with respect to the Project.
23.3. Tenant shall, at its own cost and expense, procure and maintain during the Term the following insurance for the benefit of Tenant and Landlord (as their interests may appear) with insurers financially acceptable and lawfully authorized to do business in the state where the Premises are located:
(a) Commercial General Liability insurance on a broad-based occurrence coverage form, with coverages including but not limited to bodily injury (including death), property damage (including loss of use resulting therefrom), premises/operations, personal & advertising injury, and contractual liability with limits of liability of not less than $2,000,000 for bodily injury and property damage per occurrence, $2,000,000 general aggregate, which limits may be met by use of excess and/or umbrella liability insurance provided that such coverage is at least as broad as the primary coverages required herein.
(b) Commercial Automobile Liability insurance covering liability arising from the use or operation of any auto, including those owned, hired or otherwise operated or used by or on behalf of the Tenant. The coverage shall be on a broad-based occurrence form with combined single limits of not less than $1,000,000 per accident for bodily injury and property damage.
(c) Commercial Property insurance covering property damage to the full replacement cost value and business interruption. Covered property shall include all tenant improvements in the Premises (to the extent not insured by Landlord pursuant to Section 23.1)
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and Tenants Property including personal property, furniture, fixtures, machinery, equipment, stock, inventory and improvements and betterments, which may be owned by Tenant or Landlord and required to be insured hereunder, or which may be leased, rented, borrowed or in the care custody or control of Tenant, or Tenants agents, employees or subcontractors. Such insurance, with respect only to all Tenant Improvements, Alterations or other work performed on the Premises by Tenant (collectively, Tenant Work), shall name Landlord and Landlords current and future mortgagees as loss payees as their interests may appear. Such insurance shall be written on an all risk of physical loss or damage basis including the perils of fire, extended coverage, electrical injury, mechanical breakdown, windstorm, vandalism, malicious mischief, sprinkler leakage, back-up of sewers or drains, flood, earthquake, terrorism and such other risks Landlord may from time to time designate, for the full replacement cost value of the covered items with an agreed amount endorsement with no co-insurance. Business interruption coverage shall have limits sufficient to cover Tenants lost profits and necessary continuing expenses, including rents due Landlord under the Lease. The minimum period of indemnity for business interruption coverage shall be twelve (12) months plus twelve (12) months extended period of indemnity.
(d) Workers Compensation insurance as is required by statute or law, or as may be available on a voluntary basis and Employers Liability insurance with limits of not less than the following: each accident, Five Hundred Thousand Dollars ($500,000); disease ($500,000); disease (each employee), Five Hundred Thousand Dollars ($500,000).
(e) Pollution Legal Liability insurance is required if Tenant stores, handles, generates or treats Hazardous Materials, as determined solely by Landlord, on or about the Premises. Such coverage shall include bodily injury, sickness, disease, death or mental anguish or shock sustained by any person; property damage including physical injury to or destruction of tangible property including the resulting loss of use thereof, clean-up costs, and the loss of use of tangible property that has not been physically injured or destroyed; and defense costs, charges and expenses incurred in the investigation, adjustment or defense of claims for such compensatory damages. Coverage shall apply to both sudden and non-sudden pollution conditions including the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water. Claims-made coverage is permitted, provided the policy retroactive date is continuously maintained prior to the commencement date of this agreement, and coverage is continuously maintained during all periods in which Tenant occupies the Premises. Coverage shall be maintained with limits of not less than $1,000,000 per incident with a $2,000,000 policy aggregate and for a period of two (2) years thereafter.
(f) During all construction by Tenant at the Premises (including any Alterations), insurance required in Exhibit B-1 must be in place.
23.4. The insurance required of Tenant by this Article shall be with companies at all times having a current rating of not less than A- and financial category rating of at least Class VII in A.M. Bests Insurance Guide current edition. Tenant shall obtain for Landlord from the insurance companies/broker or cause the insurance companies/broker to furnish certificates of insurance evidencing all coverages required herein to Landlord. Landlord reserves the right to
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require complete, certified copies of all required insurance policies including any endorsements. No such policy shall be cancelable or subject to reduction of coverage or other modification or cancellation except after twenty (20) days prior written notice to Landlord from Tenant or its insurers (except in the event of non-payment of premium, in which case ten (10) days written notice shall be given). All such policies shall be written as primary policies, not contributing with and not in excess of the coverage that Landlord may carry. Tenants required policies shall contain severability of interests clauses stating that, except with respect to limits of insurance, coverage shall apply separately to each insured or additional insured. Tenant shall, at least twenty-five (25) days prior to the expiration of such policies, furnish Landlord with renewal certificates of insurance or binders. Tenant agrees that if Tenant does not take out and maintain such insurance, Landlord may (but shall not be required to) procure such insurance on Tenants behalf and at its cost to be paid by Tenant as Additional Rent. Commercial General Liability, Commercial Automobile Liability, Umbrella Liability and Pollution Legal Liability insurance as required above shall name Landlord, BioMed Realty, L.P., and BioMed Realty Trust, Inc., and their respective officers, employees, agents, general partners, members, subsidiaries, affiliates and Lenders (Landlord Parties) as additional insureds as respects liability arising from work or operations performed by or on behalf of Tenant, Tenants use or occupancy of Premises, and ownership, maintenance or use of vehicles by or on behalf of Tenant.
23.5. In each instance where insurance is to name Landlord Parties as additional insureds, Tenant shall, upon Landlords written request, also designate and furnish certificates evidencing such Landlord Parties as additional insureds to (a) any Lender of Landlord holding a security interest in the Building or the Project, (b) the landlord under any lease whereunder Landlord is a tenant of the real property upon which the Building is located if the interest of Landlord is or shall become that of a tenant under a ground lease rather than that of a fee owner and (c) any management company retained by Landlord to manage the Project.
23.6. Tenant assumes the risk of damage to any fixtures, goods, inventory, merchandise, equipment and leasehold improvements, and Landlord shall not be liable for injury to Tenants business or any loss of income therefrom, relative to such damage, all as more particularly set forth within this Lease. Tenant shall, at Tenants sole cost and expense, carry such insurance as Tenant desires for Tenants protection with respect to personal property of Tenant or business interruption.
23.7. Landlord and Tenant and their insurers hereby waive any and all rights of recovery or subrogation against the other party (and their respective officers, directors, employees, agents, general partners, members, subsidiaries, affiliates and lenders) with respect to any loss, damage, claims, suits or demands, howsoever caused, that are covered, or should have been covered, by valid and collectible insurance, including any deductibles or self-insurance maintained thereunder. If necessary, each party agrees to endorse the required insurance policies to permit waivers of subrogation as required hereunder and hold harmless and indemnify the other party (and such partys officers, directors, employees, agents, general partners, members, subsidiaries, affiliates and lenders) for any loss or expense incurred as a result of a failure to obtain such waivers of subrogation from insurers. Such waivers shall continue so long as such partys insurers so permit. Any termination of such a waiver shall be by written notice to the other party, containing a description of the circumstances hereinafter set forth in this Section. Landlord and Tenant, upon obtaining the policies of insurance required or permitted under this
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Lease, shall give notice to their respective insurance carriers that the foregoing waiver of subrogation is contained in this Lease. If such policies shall not be obtainable with such waiver or shall be so obtainable only at a premium over that chargeable without such waiver, then Landlord or Tenant (as applicable) shall notify the other party of such conditions.
23.8. Landlord may require insurance policy limits required under this Lease to be raised to conform with requirements of Landlords Lender or to bring coverage limits to levels then being required of new tenants within the Project.
23.9. Any costs incurred by Landlord pursuant to this Article shall constitute a portion of Operating Expenses.
23.10. The provisions of this Article shall survive the expiration or earlier termination of this Lease.
24. Damage or Destruction.
24.1. In the event of a partial destruction of (a) the Premises, (b) the Building, (c) the Common Area or (d) the Project ((a)-(d) collectively, the Affected Areas) by fire or other perils covered by extended coverage insurance not exceeding twenty-five percent (25%) of the full insurable value thereof, and provided that (x) the damage thereto is such that the Affected Areas may be repaired, reconstructed or restored within a period of six (6) months from the date of the happening of such casualty, (y) Landlord shall receive insurance proceeds sufficient to cover the cost of such repairs, reconstruction and restoration (except for any deductible amount provided by Landlords policy, which deductible amount, if paid by Landlord, shall constitute an Operating Expense) and (z) such casualty was not intentionally caused by a Tenant Party, then Landlord shall commence and proceed diligently with the work of repair, reconstruction and restoration of the Affected Areas and this Lease shall continue in full force and effect.
24.2. In the event of any damage to or destruction of the Building or the Project other than as described in Section 24.1, Landlord may elect to repair, reconstruct and restore the Building or the Project, as applicable, in which case this Lease shall continue in full force and effect. If Landlord elects not to repair, reconstruct and restore the Building or the Project, as applicable, then this Lease shall terminate as of the date of such damage or destruction. In the event of any damage or destruction (regardless of whether such damage is governed by Section 24.1 or this Section), if (a) in Landlords determination as set forth in the Damage Repair Estimate (as defined below), the Affected Areas cannot be repaired, reconstructed or restored within twelve (12) months after the date of the Damage Repair Estimate, (b) subject to Section 24.6, the Affected Areas are not actually repaired, reconstructed and restored within eighteen (18) months after the date of the Damage Repair Estimate, or (c) the damage and destruction occurs within the last twelve (12) months of the then-current Term, then Tenant shall have the right to terminate this Lease, effective as of the date of such damage or destruction, by delivering to Landlord its written notice of termination (a Termination Notice) (y) with respect to Subsections 24.2(a) and (c), no later than fifteen (15) days after Landlord delivers to Tenant Landlords Damage Repair Estimate and (z) with respect to Subsection 24.2(b), no later than fifteen (15) days after such eighteen (18) month period (as the same may be extended pursuant to Section 24.6) expires. If Tenant provides Landlord with a Termination Notice pursuant to Subsection 24.2(z), Landlord shall have an additional thirty (30) days after receipt of such
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Termination Notice to complete the repair, reconstruction and restoration. If Landlord does not complete such repair, reconstruction and restoration within such thirty (30) day period, then Tenant may terminate this Lease by giving Landlord written notice within two (2) business days after the expiration of such thirty (30) day period. If Landlord does complete such repair, reconstruction and restoration within such thirty (30) day period, then this Lease shall continue in full force and effect.
24.3. As soon as reasonably practicable, but in any event within sixty (60) days following the date of damage or destruction, Landlord shall notify Tenant of Landlords good faith estimate of the period of time in which the repairs, reconstruction and restoration will be completed (the Damage Repair Estimate), which estimate shall be based upon the opinion of a contractor reasonably selected by Landlord and experienced in comparable repair, reconstruction and restoration of similar buildings. Additionally, Landlord shall give written notice to Tenant within sixty (60) days following the date of damage or destruction of its election not to repair, reconstruct or restore the Building or the Project, as applicable.
24.4. Upon any termination of this Lease under any of the provisions of this Article, the parties shall be released thereby without further obligation to the other from the date possession of the Premises is surrendered to Landlord, except with regard to (a) items occurring prior to the damage or destruction and (b) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof.
24.5. In the event of repair, reconstruction and restoration as provided in this Article, all Rent to be paid by Tenant under this Lease shall be abated proportionately based on the extent to which Tenants use of the Premises is impaired during the period of such repair, reconstruction or restoration, unless Landlord provides Tenant with other space during the period of repair, reconstruction and restoration that, in Tenants reasonable opinion, is suitable for the temporary conduct of Tenants business; provided, however, that the amount of such abatement shall be reduced by the amount of Rent that is received by Tenant as part of the business interruption or loss of rental income with respect to the Premises from the proceeds of business interruption or loss of rental income insurance.
24.6. Notwithstanding anything to the contrary contained in this Article, should Landlord be delayed or prevented from completing the repair, reconstruction or restoration of the damage or destruction to the Premises after the occurrence of such damage or destruction by Force Majeure or delays caused by a Tenant Party, then the time for Landlord to commence or complete repairs, reconstruction and restoration shall be extended on a day-for-day basis; provided, however, that, at Landlords election, Landlord shall be relieved of its obligation to make such repairs, reconstruction and restoration.
24.7. If Landlord is obligated to or elects to repair, reconstruct or restore as herein provided, then Landlord shall be obligated to make such repairs, reconstruction or restoration only with regard to (a) those portions of the Premises that were originally provided at Landlords expense and (b) the Common Area portion of the Affected Areas. The repairs, reconstruction or restoration of improvements not originally provided by Landlord or at Landlords expense shall be the obligation of Tenant. In the event Tenant has elected to upgrade certain improvements from the Building Standard, Landlord shall, upon the need for replacement due to an insured
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loss, provide only the Building Standard, unless Tenant again elects to upgrade such improvements and pay any incremental costs related thereto, except to the extent that excess insurance proceeds, if received, are adequate to provide such upgrades, in addition to providing for basic repairs, reconstruction and restoration of the Premises, the Building and the Project.
24.8. Notwithstanding anything to the contrary contained in this Article, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises if the damage resulting from any casualty covered under this Article occurs during the last twenty-four (24) months of the Term or any extension thereof, or to the extent that insurance proceeds are not available therefor.
24.9. Landlords obligation, should it elect or be obligated to repair, reconstruct or restore, shall be limited to the Affected Areas, and shall be conditioned upon Landlord receiving any permits or authorizations required by Applicable Laws. Tenant shall, at its expense, replace or fully repair all of Tenants personal property and any Alterations installed by Tenant existing at the time of such damage or destruction. If Affected Areas are to be repaired, reconstructed or restored in accordance with the foregoing, Landlord shall make available to Tenant any portion of insurance proceeds it receives that are allocable to the Alterations constructed by Tenant pursuant to this Lease; provided Tenant is not then in default under this Lease, and subject to the requirements of any Lender of Landlord.
24.10. This Article sets forth the terms and conditions upon which this Lease may terminate in the event of any damage or destruction. Accordingly, the parties hereby waive the provisions of California Civil Code Sections 1932(2) and 1933(4) (and any successor statutes) permitting the parties to terminate this Lease as a result of any damage or destruction.
25. Eminent Domain.
25.1. In the event (a) the whole of all Affected Areas or (b) such part thereof as shall substantially interfere with Tenants use and occupancy of the Premises for the Permitted Use shall be taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such taking, Tenant or Landlord may terminate this Lease effective as of the date possession is required to be surrendered to such authority, except with regard to (y) items occurring prior to the taking and (z) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof.
25.2. In the event of a partial taking of (a) the Building or the Project or (b) drives, walkways or parking areas serving the Building or the Project for any public or quasi-public purpose by any lawful power or authority by exercise of right of appropriation, condemnation, or eminent domain, or sold to prevent such taking, then, without regard to whether any portion of the Premises occupied by Tenant was so taken, Landlord may elect to terminate this Lease (except with regard to (y) items occurring prior to the taking and (z) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof) as of such taking if such taking is, in Landlords sole opinion, of a material nature such as to make it uneconomical to continue use of the unappropriated portion for purposes of renting office or laboratory space.
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25.3. Tenant shall be entitled to any award that is specifically awarded as compensation for (a) the taking of Tenants personal property that was installed at Tenants expense and (b) the costs of Tenant moving to a new location. Except as set forth in the previous sentence, any award for such taking shall be the property of Landlord.
25.4. If, upon any taking of the nature described in this Article, this Lease continues in effect, then Landlord shall promptly proceed to restore the Affected Areas to substantially their same condition prior to such partial taking. To the extent such restoration is infeasible, as determined by Landlord in its sole and absolute discretion, the Rent shall be decreased proportionately to reflect the loss of any portion of the Premises no longer available to Tenant.
25.5. This Article sets forth the terms and conditions upon which this Lease may terminate in the event of any damage or destruction. Accordingly, the parties hereby waive the provisions of California Code of Civil Procedure Section 1265.130 (and any successor statutes) permitting the parties to terminate this Lease as a result of any damage or destruction.
26. Surrender.
26.1. At least thirty (30) days prior to Tenants surrender of possession of any part of the Premises, Tenant shall provide Landlord with a facility decommissioning and Hazardous Materials closure plan for the Premises (Exit Survey) prepared by an independent third party state-certified professional with appropriate expertise, which Exit Survey must be reasonably acceptable to Landlord. The Exit Survey shall comply with the American National Standards Institutes Laboratory Decommissioning guidelines (ANSI/AIHA Z9.11-2008) or any successor standards published by ANSI or any successor organization (or, if ANSI and its successors no longer exist, a similar entity publishing similar standards). In addition, at least ten (10) days prior to Tenants surrender of possession of any part of the Premises, Tenant shall (a) provide Landlord with written evidence of all appropriate governmental releases obtained by Tenant in accordance with Applicable Laws, including laws pertaining to the surrender of the Premises, (b) place Laboratory Equipment Decontamination Forms on all decommissioned equipment to assure safe occupancy by future users and (c) conduct a site inspection with Landlord. In addition, Tenant agrees to remain responsible after the surrender of the Premises for the remediation of any recognized environmental conditions set forth in the Exit Survey and comply with any recommendations set forth in the Exit Survey. Tenants obligations under this Section shall survive the expiration or earlier termination of the Lease.
26.2. No surrender of possession of any part of the Premises shall release Tenant from any of its obligations hereunder, unless such surrender is accepted in writing by Landlord.
26.3. The voluntary or other surrender of this Lease by Tenant shall not effect a merger with Landlords fee title or leasehold interest in the Premises, the Building, the Property or the Project, unless Landlord consents in writing, and shall, at Landlords option, operate as an assignment to Landlord of any or all subleases.
26.4. The voluntary or other surrender of any ground or other underlying lease that now exists or may hereafter be executed affecting the Building or the Project, or a mutual cancellation thereof or of Landlords interest therein by Landlord and its lessor shall not effect a merger with Landlords fee title or leasehold interest in the Premises, the Building or the Property and shall, at the option of the successor to Landlords interest in the Building or the Project, as applicable, operate as an assignment of this Lease.
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27. Holding Over.
27.1. If, with Landlords prior written consent, Tenant holds possession of all or any part of the Premises after the Term, Tenant shall become a tenant from month to month after the expiration or earlier termination of the Term, and in such case Tenant shall continue to pay (a) Base Rent in accordance with Article 7, as adjusted in accordance with Article 8, and (b) any amounts for which Tenant would otherwise be liable under this Lease if the Lease were still in effect, including payments for Tenants Adjusted Share of Operating Expenses. Any such month-to-month tenancy shall be subject to every other term, covenant and agreement contained herein.
27.2. Notwithstanding the foregoing, if Tenant remains in possession of the Premises after the expiration or earlier termination of the Term without Landlords prior written consent, (a) Tenant shall become a tenant at sufferance subject to the terms and conditions of this Lease, except that the monthly rent shall be equal to one hundred fifty percent (150%) of the Rent in effect during the last thirty (30) days of the Term, and (b) Tenant shall be liable to Landlord for any and all damages suffered by Landlord as a result of such holdover, including any lost rent or consequential, special and indirect damages (in each case, regardless of whether such damages are foreseeable).
27.3. Acceptance by Landlord of Rent after the expiration or earlier termination of the Term shall not result in an extension, renewal or reinstatement of this Lease.
27.4. The foregoing provisions of this Article are in addition to and do not affect Landlords right of reentry or any other rights of Landlord hereunder or as otherwise provided by Applicable Laws.
27.5. The provisions of this Article shall survive the expiration or earlier termination of this Lease.
28. Indemnification and Exculpation.
28.1. Tenant agrees to indemnify, save, defend (at Landlords option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against any and all Claims of any kind or nature, real or alleged, to the extent arising from injury to or death of any person or damage to any property occurring within or about the Premises, the Building, the Property or the Project, arising directly or indirectly out of (a) the presence at or use or occupancy of the Premises or Project by a Tenant Party, (b) an act or omission on the part of any Tenant Party, (c) a breach or default by Tenant in the performance of any of its obligations hereunder or (d) injury to or death of persons or damage to or loss of any property, real or alleged, arising from the serving of alcoholic beverages at the Premises or Project by a Tenant Party, including liability under any dram shop law, host liquor law or similar Applicable Law, except to the extent directly caused by Landlords negligence or willful misconduct. Tenants obligations under this Section shall not be affected, reduced or limited by any limitation on the amount or type of damages, compensation or benefits payable by or for Tenant under
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workers compensation acts, disability benefit acts, employee benefit acts or similar legislation. Tenants obligations under this Section shall survive the expiration or earlier termination of this Lease. Subject to Sections 23.6, 23.7, 28.2 and 31.12, Landlord agrees to indemnify, save, defend (at Tenants option and with counsel reasonably acceptable to Tenant) and hold the Tenant Parties harmless from and against any and all Claims arising from injury to or death of any person or damage to or loss of any physical property occurring within or about the Premises, the Building, the Property or the Project to the extent directly arising out of Landlords gross negligence or willful misconduct.
28.2. Notwithstanding anything in this Lease to the contrary, Landlord shall not be liable to Tenant for and Tenant assumes all risk of (a) damage or losses caused by fire, electrical malfunction, gas explosion or water damage of any type (including broken water lines, malfunctioning fire sprinkler systems, roof leaks or stoppages of lines), unless any such loss is due to Landlords willful disregard of written notice by Tenant of need for a repair that Landlord is responsible to make for an unreasonable period of time, and (b) damage to personal property or scientific research, including loss of records kept by Tenant within the Premises (in each case, regardless of whether such damages are foreseeable). Tenant further waives any claim for injury to Tenants business or loss of income relating to any such damage or destruction of personal property as described in this Section. Notwithstanding anything in the foregoing or this Lease to the contrary, except (x) as otherwise provided herein (including Section 27.2), (y) as may be provided by Applicable Laws or (z) in the event of Tenants breach of Article 21 or Section 26.1, in no event shall Landlord or Tenant be liable to the other for any consequential, special or indirect damages arising out of this Lease, including lost profits (provided that this Subsection 28.2(z) shall not limit Tenants liability for Base Rent or Additional Rent pursuant to this Lease).
28.3. Landlord shall not be liable for any damages arising from any act, omission or neglect of any other tenant in the Building or the Project, or of any other third party.
28.4. Tenant acknowledges that security devices and services, if any, while intended to deter crime, may not in given instances prevent theft or other criminal acts. Landlord shall not be liable for injuries or losses caused by criminal acts of third parties, and Tenant assumes the risk that any security device or service may malfunction or otherwise be circumvented by a criminal. If Tenant desires protection against such criminal acts, then Tenant shall, at Tenants sole cost and expense, obtain appropriate insurance coverage. Tenants security programs and equipment for the Premises shall be coordinated with Landlord and subject to Landlords reasonable approval.
28.5. The provisions of this Article shall survive the expiration or earlier termination of this Lease.
29. Assignment or Subletting.
29.1. Except as hereinafter expressly permitted, none of the following (each, a Transfer), either voluntarily or by operation of Applicable Laws, shall be directly or indirectly performed without Landlords prior written consent: (a) Tenant selling, hypothecating, assigning, pledging, encumbering or otherwise transferring this Lease or subletting the Premises or (b) a controlling interest in Tenant being sold, assigned or otherwise transferred (other than as a result of shares in Tenant being sold on a public stock exchange). For purposes of the
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preceding sentence, control means (y) owning (directly or indirectly) more than fifty percent (50%) of the stock or other equity interests of another person or (z) possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of such person. For purposes of clarity, pledges or sales of Tenants equity (in connection with financing and/or raising capital) that do not result in a Transfer under subsection (b) above shall not require Landlords consent. Notwithstanding the foregoing, Tenant shall have the right to Transfer, without Landlords prior written consent, Tenants interest in this Lease or the Premises or any part thereof to any person that (i) acquires all or substantially all of the assets of Tenant, (ii) is a successor to Tenant by merger, consolidation or reorganization, or (iii) as of the date of determination and at all times thereafter directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with Tenant (any person described in (i), (ii), or (iii), a Tenants Affiliate); provided that Tenant shall notify Landlord in writing at least fifteen (15) business days prior to the effectiveness of such Transfer to Tenants Affiliate (an Exempt Transfer) and otherwise comply with the requirements of this Lease regarding such Transfer; and provided, further, that the person that will be the tenant under this Lease after the Exempt Transfer has a net worth (as of both the day immediately prior to and the day immediately after the Exempt Transfer) that is equal to or greater than the net worth (as of both the Execution Date and the date of the Exempt Transfer) of the transferring Tenant. For purposes of the immediately preceding sentence, control requires both (aa) owning (directly or indirectly) more than fifty percent (50%) of the stock or other equity interests of another person and (bb) possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of such person. In no event shall Tenant perform a Transfer to or with an entity that is a tenant at the Project or that is in discussions or negotiations with Landlord or an affiliate of Landlord to lease premises at the Project or a property owned by Landlord or an affiliate of Landlord. Notwithstanding anything in this Lease to the contrary, if (yy) Tenant or any proposed transferee, assignee or sublessee of Tenant has been required by any prior landlord, Lender or Governmental Authority to take material remedial action in connection with Hazardous Materials contaminating a property if the contamination resulted from such partys action or omission or use of the property in question or (zz) Tenant or any proposed transferee, assignee or sublessee is subject to a material enforcement order issued by any Governmental Authority in connection with the use, disposal or storage of Hazardous Materials, then Landlord shall have the right to terminate this Lease in Landlords sole and absolute discretion (with respect to any such matter involving Tenant), and it shall not be unreasonable for Landlord to withhold its consent to any proposed transfer, assignment or subletting (with respect to any such matter involving a proposed transferee, assignee or sublessee).
29.2. In the event Tenant desires to effect a Transfer, then, at least fifteen (15) business but not more than ninety (90) days prior to the date when Tenant desires the Transfer to be effective (the Transfer Date), Tenant shall provide written notice to Landlord (the Transfer Notice) containing information (including references) concerning the character of the proposed transferee, assignee or sublessee; the Transfer Date; the most recent unconsolidated financial statements of Tenant and of the proposed transferee, assignee or sublessee satisfying the requirements of Section 40.2 (Required Financials); any ownership or commercial relationship between Tenant and the proposed transferee, assignee or sublessee; copies of Hazardous Materials Documents for the proposed transferee, assignee or sublesse; and the consideration and all other material terms and conditions of the proposed Transfer, all in such detail as Landlord shall reasonably require.
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29.3. Landlord, in determining whether consent should be given to a proposed Transfer, may give consideration to (a) the financial strength of Tenant and of such transferee, assignee or sublessee (notwithstanding Tenant remaining liable for Tenants performance), (b) any change in use that such transferee, assignee or sublessee proposes to make in the use of the Premises and (c) Landlords desire to exercise its rights under Section 29.7 to cancel this Lease. In no event shall Landlord be deemed to be unreasonable for declining to consent to a Transfer to a transferee, assignee or sublessee of poor reputation, lacking financial qualifications or seeking a change in the Permitted Use, or jeopardizing directly or indirectly the status of Landlord or any of Landlords affiliates as a Real Estate Investment Trust under the Internal Revenue Code of 1986 (as the same may be amended from time to time, the Revenue Code). Notwithstanding anything contained in this Lease to the contrary, (w) no Transfer shall be consummated on any basis such that the rental or other amounts to be paid by the occupant, assignee, manager or other transferee thereunder would be based, in whole or in part, on the income or profits derived by the business activities of such occupant, assignee, manager or other transferee; (x) Tenant shall not furnish or render any services to an occupant, assignee, manager or other transferee with respect to whom transfer consideration is required to be paid, or manage or operate the Premises or any capital additions so transferred, with respect to which transfer consideration is being paid; (y) Tenant shall not consummate a Transfer with any person in which Landlord owns an interest, directly or indirectly (by applying constructive ownership rules set forth in Section 856(d)(5) of the Revenue Code); and (z) Tenant shall not consummate a Transfer with any person or in any manner that could cause any portion of the amounts received by Landlord pursuant to this Lease or any sublease, license or other arrangement for the right to use, occupy or possess any portion of the Premises to fail to qualify as rents from real property within the meaning of Section 856(d) of the Revenue Code, or any similar or successor provision thereto or which could cause any other income of Landlord to fail to qualify as income described in Section 856(c)(2) of the Revenue Code.
29.4. The following are conditions precedent to a Transfer or to Landlord considering a request by Tenant to a Transfer:
(a) Tenant shall remain fully liable under this Lease. Tenant agrees that it shall not be (and shall not be deemed to be) a guarantor or surety of this Lease, however, and waives its right to claim that is it is a guarantor or surety or to raise in any legal proceeding any guarantor or surety defenses permitted by this Lease or by Applicable Laws;
(b) If Tenant or the proposed transferee, assignee or sublessee does not or cannot deliver the Required Financials, then Landlord may elect to have either Tenants ultimate parent company or the proposed transferees, assignees or sublessees ultimate parent company provide a guaranty of the applicable entitys obligations under this Lease, in a form acceptable to Landlord, which guaranty shall be executed and delivered to Landlord by the applicable guarantor prior to the Transfer Date;
(c) In the case of an Exempt Transfer, Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord that the Transfer qualifies as an Exempt Transfer;
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(d) Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord that the value of Landlords interest under this Lease shall not be diminished or reduced by the proposed Transfer. Such evidence shall include evidence respecting the relevant business experience and financial responsibility and status of the proposed transferee, assignee or sublessee;
(e) Tenant shall reimburse Landlord for Landlords actual costs and expenses, including reasonable attorneys fees, charges and disbursements incurred in connection with the review, processing and documentation of such request, which fees shall not exceed Two Thousand Five Hundred ($2,500) in any one instance;
(f) Except with respect to an Exempt Transfer, if Tenants transfer of rights or sharing of the Premises provides for the receipt by, on behalf of or on account of Tenant of any consideration of any kind whatsoever (including a premium rental for a sublease or lump sum payment for an assignment, but excluding Tenants reasonable costs in marketing and subleasing the Premises) in excess of the rental and other charges due to Landlord under this Lease, Tenant shall pay fifty percent (50%) of all of such excess to Landlord, after making deductions for any reasonable marketing expenses, tenant improvement funds expended by Tenant, alterations, cash concessions, brokerage commissions, attorneys fees and free rent actually paid by Tenant. If such consideration consists of cash paid to Tenant, payment to Landlord shall be made upon receipt by Tenant of such cash payment;
(g) The proposed transferee, assignee or sublessee shall agree that, in the event Landlord gives such proposed transferee, assignee or sublessee notice that Tenant is in default under this Lease, such proposed transferee, assignee or sublessee shall thereafter make all payments otherwise due Tenant directly to Landlord, which payments shall be received by Landlord without any liability being incurred by Landlord, except to credit such payment against those due by Tenant under this Lease, and any such proposed transferee, assignee or sublessee shall agree to attorn to Landlord or its successors and assigns should this Lease be terminated for any reason; provided, however, that in no event shall Landlord or its Lenders, successors or assigns be obligated to accept such attornment;
(h) Landlords consent to any such Transfer shall be effected on Landlords forms;
(i) Tenant shall not then be in Default hereunder in any respect;
(j) Such proposed transferee, assignee or sublessees use of the Premises shall be the same as the Permitted Use;
(k) Landlord shall not be bound by any provision of any agreement pertaining to the Transfer, except for Landlords written consent to the same;
(l) Tenant shall pay all transfer and other taxes (including interest and penalties) assessed or payable for any Transfer;
(m) Landlords consent (or waiver of its rights) for any Transfer shall not waive Landlords right to consent or refuse consent to any later Transfer;
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(n) Tenant shall deliver to Landlord one executed copy of any and all written instruments evidencing or relating to the Transfer; and
(o) Tenant shall deliver to Landlord a list of Hazardous Materials (as defined below), certified by the proposed transferee, assignee or sublessee to be true and correct, that the proposed transferee, assignee or sublessee intends to use or store in the Premises. Additionally, Tenant shall deliver to Landlord, on or before the date any proposed transferee, assignee or sublessee takes occupancy of the Premises, all of the items relating to Hazardous Materials of such proposed transferee, assignee or sublessee as described in Section 21.2.
29.5. Any Transfer that is not in compliance with the provisions of this Article or with respect to which Tenant does not fulfill its obligations pursuant to this Article shall be void and shall, at the option of Landlord, terminate this Lease.
29.6. Notwithstanding any Transfer, Tenant shall remain fully and primarily liable for the payment of all Rent and other sums due or to become due hereunder, and for the full performance of all other terms, conditions and covenants to be kept and performed by Tenant. The acceptance of Rent or any other sum due hereunder, or the acceptance of performance of any other term, covenant or condition thereof, from any person or entity other than Tenant shall not be deemed a waiver of any of the provisions of this Lease or a consent to any Transfer.
29.7. If Tenant delivers to Landlord a Transfer Notice indicating a desire to transfer this Lease to a proposed transferee, assignee or sublessee other than pursuant to an Exempt Transfer, then Landlord shall have the option, exercisable by giving notice to Tenant at any time within ten (10) days after Landlords receipt of such Transfer Notice, to terminate this Lease as of the date specified in the Transfer Notice as the Transfer Date, except for those provisions that, by their express terms, survive the expiration or earlier termination hereof. If Landlord exercises such option, then Tenant shall have the right to withdraw such Transfer Notice by delivering to Landlord written notice of such election within five (5) days after Landlords delivery of notice electing to exercise Landlords option to terminate this Lease. In the event Tenant withdraws the Transfer Notice as provided in this Section, this Lease shall continue in full force and effect. No failure of Landlord to exercise its option to terminate this Lease shall be deemed to be Landlords consent to a proposed Transfer.
29.8. If Tenant sublets the Premises or any portion thereof, Tenant hereby immediately and irrevocably assigns to Landlord, as security for Tenants obligations under this Lease, all rent from any such subletting, and appoints Landlord as assignee and attorney-in-fact for Tenant, and Landlord (or a receiver for Tenant appointed on Landlords application) may collect such rent and apply it toward Tenants obligations under this Lease; provided that, until the occurrence of a Default (as defined below) by Tenant, Tenant shall have the right to collect such rent.
29.9. In the event that Tenant enters into a sublease for the entire Premises in accordance with this Article that expires within two (2) days of the Term Expiration Date, the term expiration date of such sublease shall, notwithstanding anything in this Lease, the sublease or any consent to the sublease to the contrary, be deemed to be the date that is two (2) days prior to the Term Expiration Date.
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30. Subordination and Attornment.
30.1. This Lease shall be subject and subordinate to the lien of any mortgage, deed of trust, or lease in which Landlord is tenant now or hereafter in force against the Building or the Project and to all advances made or hereafter to be made upon the security thereof without the necessity of the execution and delivery of any further instruments on the part of Tenant to effectuate such subordination.
30.2. Notwithstanding the foregoing, Tenant shall execute and deliver upon demand such further commercially reasonable instrument or instruments evidencing such subordination and non-disturbance of this Lease to the lien of any such mortgage or mortgages or deeds of trust or lease in which Landlord is tenant as may be required by Landlord. If any such mortgagee, beneficiary or landlord under a lease wherein Landlord is tenant (each, a Mortgagee) so elects, however, this Lease shall be deemed prior in lien to any such lease, mortgage, or deed of trust upon or including the Premises regardless of date and Tenant shall execute a statement in writing to such effect at Landlords request. For the avoidance of doubt, Mortgagees shall also include historic tax credit investors and new market tax credit investors.
30.3. Upon written request of Landlord and opportunity for Tenant to review, Tenant agrees to execute any Lease amendments not materially altering the terms of this Lease, if required by a Mortgagee incident to the financing of the real property of which the Premises constitute a part.
30.4. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by Landlord covering the Premises, Tenant shall at the election of the purchaser at such foreclosure or sale attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as Landlord under this Lease.
31. Defaults and Remedies.
31.1. Late payment by Tenant to Landlord of Rent and other sums due shall cause Landlord to incur costs not contemplated by this Lease, the exact amount of which shall be extremely difficult and impracticable to ascertain. Such costs include processing and accounting charges and late charges that may be imposed on Landlord by the terms of any mortgage or trust deed covering the Premises. Therefore, if any installment of Rent due from Tenant is not received by Landlord within three (3) days after the date such payment is due, Tenant shall pay to Landlord (a) an additional sum of six percent (6%) of the overdue Rent as a late charge plus (b) interest at an annual rate (the Default Rate) equal to the lesser of (a) twelve percent (12%) and (b) the highest rate permitted by Applicable Laws. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord shall incur by reason of late payment by Tenant and shall be payable as Additional Rent to Landlord due with the next installment of Rent or within five (5) business days after Landlords demand, whichever is earlier. Landlords acceptance of any Additional Rent (including a late charge or any other amount hereunder) shall not be deemed an extension of the date that Rent is due or prevent Landlord from pursuing any other rights or remedies under this Lease, at law or in equity. Notwithstanding anything to the contrary in this Section, Tenant shall not be obligated to pay a late charge pursuant to this Section for the first (1st) late payment of Rent during the initial Term, unless Tenant fails to make such payment within five (5) days after Tenants receipt of notice from Landlord regarding such late payment.
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31.2. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlords right to recover the balance of such Rent or pursue any other remedy provided in this Lease or in equity or at law. If a dispute shall arise as to any amount or sum of money to be paid by Tenant to Landlord hereunder, Tenant shall have the right to make payment under protest, such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of Tenant to institute suit for recovery of the payment paid under protest.
31.3. If Tenant fails to pay any sum of money required to be paid by it hereunder or perform any other act on its part to be performed hereunder, in each case within the applicable cure period (if any) described in Section 31.4, then Landlord may (but shall not be obligated to), without waiving or releasing Tenant from any obligations of Tenant, make such payment or perform such act; provided that such failure by Tenant unreasonably interfered with the use of the Building or the Project by any other tenant or with the efficient operation of the Building or the Project, or resulted or could have resulted in a violation of Applicable Laws or the cancellation of an insurance policy maintained by Landlord. Notwithstanding the foregoing, in the event of an emergency, Landlord shall have the right to enter the Premises and act in accordance with its rights as provided elsewhere in this Lease. In addition to the late charge described in Section 31.1, Tenant shall pay to Landlord as Additional Rent all sums so paid or incurred by Landlord, together with interest at the Default Rate, computed from the date such sums were paid or incurred.
31.4. The occurrence of any one or more of the following events shall constitute a Default hereunder by Tenant:
(a) Tenant abandons or vacates the Premises;
(b) Tenant fails to make any payment of Rent, as and when due, or to satisfy its obligations under Article 19, where such failure shall continue for a period of three (3) days after written notice thereof from Landlord to Tenant;
(c) Tenant fails to observe or perform any obligation or covenant contained herein (other than described in Sections 31.4(a) and 31.4(b)) to be performed by Tenant, where such failure continues for a period of twenty (20) days after written notice thereof from Landlord to Tenant; provided that, if the nature of Tenants default is such that it reasonably requires more than twenty (20) days to cure, Tenant shall not be deemed to be in Default if Tenant commences such cure within such twenty (20) day period and thereafter diligently prosecutes the same to completion; and provided, further, that such cure is completed no later than sixty (60) days after Tenants receipt of written notice from Landlord;
(d) Tenant makes an assignment for the benefit of creditors;
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(e) A receiver, trustee or custodian is appointed to or does take title, possession or control of all or substantially all of Tenants assets;
(f) Tenant files a voluntary petition under the United States Bankruptcy Code or any successor statute (as the same may be amended from time to time, the Bankruptcy Code) or an order for relief is entered against Tenant pursuant to a voluntary or involuntary proceeding commenced under any chapter of the Bankruptcy Code;
(g) Any involuntary petition is filed against Tenant under any chapter of the Bankruptcy Code and is not dismissed within one hundred twenty (120) days;
(h) Tenant fails to deliver an estoppel certificate in accordance with Article 20; or
(i) Tenants interest in this Lease is attached, executed upon or otherwise judicially seized and such action is not released within one hundred twenty (120) days of the action.
Notices given under this Section shall specify the alleged default and shall demand that Tenant perform the provisions of this Lease or pay the Rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises. No such notice shall be deemed a forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice.
31.5. In the event of a Default by Tenant, and at any time thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or remedy that Landlord may have, Landlord has the right to do any or all of the following:
(a) Halt any Tenant Improvements and Alterations and order Tenants contractors, subcontractors, consultants, designers and material suppliers to stop work;
(b) Terminate Tenants right to possession of the Premises by written notice to Tenant or by any lawful means, in which case Tenant shall immediately surrender possession of the Premises to Landlord. In such event, Landlord shall have the immediate right to re-enter and remove all persons and property, and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby; and
(c) Terminate this Lease, in which event Tenant shall immediately surrender possession of the Premises to Landlord. In such event, Landlord shall have the immediate right to re-enter and remove all persons and property, and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby. In the event that Landlord shall elect to so terminate this Lease, then Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenants default, including:
(i) The sum of:
A. The worth at the time of award of any unpaid Rent that had accrued at the time of such termination; plus
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B. The worth at the time of award of the amount by which the unpaid Rent that would have accrued during the period commencing with termination of the Lease and ending at the time of award exceeds that portion of the loss of Landlords rental income from the Premises that Tenant proves to Landlords reasonable satisfaction could have been reasonably avoided; plus
C. The worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds that portion of the loss of Landlords rental income from the Premises that Tenant proves to Landlords reasonable satisfaction could have been reasonably avoided; plus
D. Any other amount necessary to compensate Landlord for all the detriment caused by Tenants failure to perform its obligations under this Lease or that in the ordinary course of things would be likely to result therefrom, including the cost of restoring the Premises to the condition required under the terms of this Lease, including any rent payments not otherwise chargeable to Tenant (e.g., during any free rent period or rent holiday); plus
E. At Landlords election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by Applicable Laws; or
(ii) At Landlords election, as minimum liquidated damages in addition to any (A) amounts paid or payable to Landlord pursuant to Section 31.5(c)(i)(A) prior to such election and (B) costs of restoring the Premises to the condition required under the terms of this Lease, an amount (the Election Amount) equal to either (Y) the positive difference (if any, and measured at the time of such termination) between (1) the then-present value of the total Rent and other benefits that would have accrued to Landlord under this Lease for the remainder of the Term if Tenant had fully complied with the Lease minus (2) the then-present cash rental value of the Premises as determined by Landlord for what would be the then-unexpired Term if the Lease remained in effect, computed using the discount rate of the Federal Reserve Bank of San Francisco at the time of the award plus one (1) percentage point (the Discount Rate) or (Z) twelve (12) months (or such lesser number of months as may then be remaining in the Term) of Base Rent and Additional Rent at the rate last payable by Tenant pursuant to this Lease, in either case as Landlord specifies in such election. Landlord and Tenant agree that the Election Amount represents a reasonable forecast of the minimum damages expected to occur in the event of a breach, taking into account the uncertainty, time and cost of determining elements relevant to actual damages, such as fair market rent, time and costs that may be required to re-lease the Premises, and other factors; and that the Election Amount is not a penalty.
As used in Sections 31.5(c)(i)(A) and (B), worth at the time of award shall be computed by allowing interest at the Default Rate. As used in Section 31.5(c)(i)(C), the worth at the time of the award shall be computed by taking the present value of such amount, using the Discount Rate.
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31.6. In addition to any other remedies available to Landlord at law or in equity and under this Lease, Landlord shall have the remedy described in California Civil Code Section 1951.4 and may continue this Lease in effect after Tenants Default or abandonment and recover Rent as it becomes due, provided Tenant has the right to sublet or assign, subject only to reasonable limitations. In addition, Landlord shall not be liable in any way whatsoever for its failure or refusal to relet the Premises. For purposes of this Section, the following acts by Landlord will not constitute the termination of Tenants right to possession of the Premises:
(a) Acts of maintenance or preservation or efforts to relet the Premises, including alterations, remodeling, redecorating, repairs, replacements or painting as Landlord shall consider advisable for the purpose of reletting the Premises or any part thereof; or
(b) The appointment of a receiver upon the initiative of Landlord to protect Landlords interest under this Lease or in the Premises.
Notwithstanding the foregoing, in the event of a Default by Tenant, Landlord may elect at any time to terminate this Lease and to recover damages to which Landlord is entitled.
31.7. If Landlord does not elect to terminate this Lease as provided in Section 31.5, then Landlord may, from time to time, recover all Rent as it becomes due under this Lease. At any time thereafter, Landlord may elect to terminate this Lease and to recover damages to which Landlord is entitled.
31.8. In the event Landlord elects to terminate this Lease and relet the Premises, Landlord may execute any new lease in its own name. Tenant hereunder shall have no right or authority whatsoever to collect any Rent from such tenant. The proceeds of any such reletting shall be applied as follows:
(a) First, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord, including storage charges or brokerage commissions owing from Tenant to Landlord as the result of such reletting;
(b) Second, to the payment of the costs and expenses of reletting the Premises, including (i) alterations and repairs that Landlord deems reasonably necessary and advisable and (ii) reasonable attorneys fees, charges and disbursements incurred by Landlord in connection with the retaking of the Premises and such reletting;
(c) Third, to the payment of Rent and other charges due and unpaid hereunder; and
(d) Fourth, to the payment of future Rent and other damages payable by Tenant under this Lease.
31.9. All of Landlords rights, options and remedies hereunder shall be construed and held to be nonexclusive and cumulative. Landlord shall have the right to pursue any one or all of such remedies, or any other remedy or relief that may be provided by Applicable Laws, whether or not stated in this Lease. No waiver of any default of Tenant hereunder shall be implied from any acceptance by Landlord of any Rent or other payments due hereunder or any omission by
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Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect defaults other than as specified in such waiver. Notwithstanding any provision of this Lease to the contrary, in no event shall Landlord be required to mitigate its damages with respect to any default by Tenant, except as required by Applicable Laws. Any such obligation imposed by Applicable Laws upon Landlord to relet the Premises after any termination of this Lease shall be subject to the reasonable requirements of Landlord to (a) lease to high quality tenants on such terms as Landlord may from time to time deem appropriate in its discretion and (b) develop the Project in a harmonious manner with a mix of uses, tenants, floor areas, terms of tenancies, etc., as determined by Landlord. Landlord shall not be obligated to relet the Premises to (y) any Tenants Affiliate or (z) any party (i) unacceptable to a Lender, (ii) that requires Landlord to make improvements to or re-demise the Premises, (iii) that desires to change the Permitted Use, (iv) that desires to lease the Premises for more or less than the remaining Term or (v) to whom Landlord or an affiliate of Landlord may desire to lease other available space in the Project or at another property owned by Landlord or an affiliate of Landlord.
31.10. Landlords termination of (a) this Lease or (b) Tenants right to possession of the Premises shall not relieve Tenant of any liability to Landlord that has previously accrued or that shall arise based upon events that occurred prior to the later to occur of (y) the date of Lease termination and (z) the date Tenant surrenders possession of the Premises.
31.11. To the extent permitted by Applicable Laws, Tenant waives any and all rights of redemption granted by or under any present or future Applicable Laws if Tenant is evicted or dispossessed for any cause, or if Landlord obtains possession of the Premises due to Tenants default hereunder or otherwise.
31.12. Landlord shall not be in default or liable for damages under this Lease unless Landlord fails to perform obligations required of Landlord within a reasonable time, but in no event shall such failure continue for more than thirty (30) days after written notice from Tenant specifying the nature of Landlords failure; provided, however, that if the nature of Landlords obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate or cancel this Lease or to withhold or abate rent or to set off any Claims against Rent as a result of any default or breach by Landlord of any of its covenants, obligations, representations, warranties or promises hereunder, except as may otherwise be expressly set forth in this Lease.
31.13. In the event of any default by Landlord, Tenant shall give notice by registered or certified mail to any (a) beneficiary of a deed of trust or (b) mortgagee under a mortgage covering the Premises, the Building or the Project and to any landlord of any lease of land upon or within which the Premises, the Building or the Project is located, and shall offer such beneficiary, mortgagee or landlord a reasonable opportunity to cure the default, including time to obtain possession of the Building or the Project by power of sale or a judicial action if such should prove necessary to effect a cure; provided that Landlord shall furnish to Tenant in writing, upon written request by Tenant, the names and addresses of all such persons who are to receive such notices.
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32. Bankruptcy. In the event a debtor, trustee or debtor in possession under the Bankruptcy Code, or another person with similar rights, duties and powers under any other Applicable Laws, proposes to cure any default under this Lease or to assume or assign this Lease and is obliged to provide adequate assurance to Landlord that (a) a default shall be cured, (b) Landlord shall be compensated for its damages arising from any breach of this Lease and (c) future performance of Tenants obligations under this Lease shall occur, then such adequate assurances shall include any or all of the following, as designated by Landlord in its sole and absolute discretion:
32.1. Those acts specified in the Bankruptcy Code or other Applicable Laws as included within the meaning of adequate assurance, even if this Lease does not concern a shopping center or other facility described in such Applicable Laws;
32.2. A prompt cash payment to compensate Landlord for any monetary defaults or actual damages arising directly from a breach of this Lease;
32.3. A cash deposit in an amount at least equal to the then-current amount of the Security Deposit; or
32.4. The assumption or assignment of all of Tenants interest and obligations under this Lease.
33. Brokers.
33.1. Tenant represents and warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease other than Jones Lang LaSalle (Broker), and that it knows of no other real estate broker or agent that is or might be entitled to a commission in connection with this Lease. Landlord shall compensate Broker in relation to this Lease pursuant to a separate agreement between Landlord and Broker.
33.2. Tenant represents and warrants that no broker or agent has made any representation or warranty relied upon by Tenant in Tenants decision to enter into this Lease, other than as contained in this Lease.
33.3. Tenant acknowledges and agrees that the employment of brokers by Landlord is for the purpose of solicitation of offers of leases from prospective tenants and that no authority is granted to any broker to furnish any representation (written or oral) or warranty from Landlord unless expressly contained within this Lease. Landlord is executing this Lease in reliance upon Tenants representations, warranties and agreements contained within Sections 33.1 and 33.2.
33.4. Tenant agrees to indemnify, save, defend (at Landlords option and with counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from any and all cost or liability for compensation claimed by any broker or agent, other than Broker, employed or engaged by Tenant or claiming to have been employed or engaged by Tenant. Landlord agrees to indemnify, save, defend (at Tenants option and with counsel reasonably acceptable to Tenant) and hold the Tenant harmless from any and all cost or liability for compensation claimed by any broker or agent, other than Broker, employed or engaged by Landlord or claiming to have been employed or engaged by Landlord.
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34. Definition of Landlord. With regard to obligations imposed upon Landlord pursuant to this Lease, the term Landlord, as used in this Lease, shall refer only to Landlord or Landlords then-current successor-in-interest. In the event of any transfer, assignment or conveyance of Landlords interest in this Lease or in Landlords fee title to or leasehold interest in the Property, as applicable, Landlord herein named (and in case of any subsequent transfers or conveyances, the subsequent Landlord) shall be automatically freed and relieved, from and after the date of such transfer, assignment or conveyance, from all liability for the performance of any covenants or obligations contained in this Lease thereafter to be performed by Landlord and, without further agreement, the transferee, assignee or conveyee of Landlords in this Lease or in Landlords fee title to or leasehold interest in the Property, as applicable, shall be deemed to have assumed and agreed to observe and perform any and all covenants and obligations of Landlord hereunder during the tenure of its interest in the Lease or the Property. Landlord or any subsequent Landlord may transfer its interest in the Premises or this Lease without Tenants consent.
35. Limitation of Landlords Liability.
35.1. If Landlord is in default under this Lease and, as a consequence, Tenant recovers a monetary judgment against Landlord, the judgment shall be satisfied only out of (a) the proceeds of sale received on execution of the judgment and levy against the right, title and interest of Landlord in the Building and the Project, (b) rent or other income from such real property receivable by Landlord or (c) the consideration received by Landlord from the sale, financing, refinancing or other disposition of all or any part of Landlords right, title or interest in the Building or the Project.
35.2. Neither Landlord nor any of its affiliates, nor any of their respective partners, shareholders, directors, officers, employees, members or agents shall be personally liable for Landlords obligations or any deficiency under this Lease, and service of process shall not be made against any shareholder, director, officer, employee or agent of Landlord or any of Landlords affiliates. No partner, shareholder, director, officer, employee, member or agent of Landlord or any of its affiliates shall be sued or named as a party in any suit or action, and service of process shall not be made against any partner or member of Landlord except as may be necessary to secure jurisdiction of the partnership, joint venture or limited liability company, as applicable. No partner, shareholder, director, officer, employee, member or agent of Landlord or any of its affiliates shall be required to answer or otherwise plead to any service of process, and no judgment shall be taken or writ of execution levied against any partner, shareholder, director, officer, employee, member or agent of Landlord or any of its affiliates.
35.3. Each of the covenants and agreements of this Article shall be applicable to any covenant or agreement either expressly contained in this Lease or imposed by Applicable Laws and shall survive the expiration or earlier termination of this Lease.
36. Joint and Several Obligations. If more than one person or entity executes this Lease as Tenant, then:
36.1. Each of them is jointly and severally liable for the keeping, observing and performing of all of the terms, covenants, conditions, provisions and agreements of this Lease to be kept, observed or performed by Tenant, and such terms, covenants, conditions, provisions and agreements shall be binding with the same force and effect upon each and all of the persons executing this Agreement as Tenant; and
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36.2. The term Tenant, as used in this Lease, shall mean and include each of them, jointly and severally. The act of, notice from, notice to, refund to, or signature of any one or more of them with respect to the tenancy under this Lease, including any renewal, extension, expiration, termination or modification of this Lease, shall be binding upon each and all of the persons executing this Lease as Tenant with the same force and effect as if each and all of them had so acted, so given or received such notice or refund, or so signed.
37. Representations. Tenant guarantees, warrants and represents that (a) Tenant is duly incorporated or otherwise established or formed and validly existing under the laws of its state of incorporation, establishment or formation, (b) Tenant has and is duly qualified to do business in the state in which the Property is located, (c) Tenant has full corporate, partnership, trust, association or other appropriate power and authority to enter into this Lease and to perform all Tenants obligations hereunder, (d) each person (and all of the persons if more than one signs) signing this Lease on behalf of Tenant is duly and validly authorized to do so and (e) neither (i) the execution, delivery or performance of this Lease nor (ii) the consummation of the transactions contemplated hereby will violate or conflict with any provision of documents or instruments under which Tenant is constituted or to which Tenant is a party. In addition, Tenant guarantees, warrants and represents that none of (x) it, (y) its affiliates or partners nor (z) to the best of its knowledge, its members, shareholders or other equity owners or any of their respective employees, officers, directors, representatives or agents is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (OFAC) of the Department of the Treasury (including those named on OFACs Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) or other similar governmental action.
38. Confidentiality. Tenant shall keep the terms and conditions of this Lease and any information provided to Tenant or its employees, agents or contractors pursuant to Article 9 confidential and shall not (a) disclose to any third party any terms or conditions of this Lease or any other Lease-related document (including subleases, assignments, work letters, construction contracts, letters of credit, subordination agreements, non-disturbance agreements, brokerage agreements or estoppels) or (b) provide to any third party an original or copy of this Lease (or any Lease-related document). Landlord shall not release to any third party any non-public financial information or non-public information about Tenants ownership structure that Tenant gives Landlord. Notwithstanding the foregoing, confidential information under this Section may be released by Landlord or Tenant under the following circumstances: (x) if required by Applicable Laws or in any judicial proceeding; provided that the releasing party has given the other party reasonable notice of such requirement, if feasible, (y) to a partys attorneys, accountants, brokers and other bona fide consultants or advisers (with respect to this Lease only); provided such third parties agree to be bound by this Section or (z) to bona fide prospective assignees or subtenants of this Lease; provided they agree in writing to be bound by this Section.
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39. Notices. Except as otherwise stated in this Lease, any notice, consent, demand, invoice, statement or other communication required or permitted to be given hereunder shall be in writing and shall be given by (a) personal delivery, (b) overnight delivery with a reputable international overnight delivery service, such as FedEx, or (c) facsimile or email transmission, so long as such transmission is followed within one (1) business day by delivery utilizing one of the methods described in Subsection 39(a) or (b). Any such notice, consent, demand, invoice, statement or other communication shall be deemed delivered (x) upon receipt, if given in accordance with Subsection 39(a); (y) one (1) business day after deposit with a reputable international overnight delivery service, if given if given in accordance with Subsection 39(b); or (z) upon transmission, if given in accordance with Subsection 39(c). Except as otherwise stated in this Lease, any notice, consent, demand, invoice, statement or other communication required or permitted to be given pursuant to this Lease shall be addressed to Landlord or Tenant at the addresses shown in Sections 2.9 and 2.10 or 2.11, respectively. Either party may, by notice to the other given pursuant to this Section, specify additional or different addresses for notice purposes.
40. Miscellaneous.
40.1. Landlord reserves the right to change the name of the Building or the Project in its sole discretion.
40.2. To induce Landlord to enter into this Lease, Tenant agrees that it shall furnish to Landlord, from time to time, within ten (10) business days after receipt of Landlords written request (but not more than once per calendar year), the most recent year-end unconsolidated financial statements reflecting Tenants current financial condition audited (except as provided below) by a nationally recognized accounting firm. Upon Landlords request, Tenant shall, within ninety (90) days after the end of Tenants financial year, furnish Landlord with a certified copy of Tenants year-end unconsolidated financial statements for the previous year audited (except as provided below) by a nationally recognized accounting firm. Tenant represents and warrants that all financial statements, records and information furnished by Tenant to Landlord in connection with this Lease are true, correct and complete in all respects. If audited financials are not otherwise prepared, unaudited financials complying with generally accepted accounting principles and certified by the chief financial officer of Tenant as true, correct and complete in all respects shall suffice for purposes of this Section. If Tenant fails to deliver to Landlord any financial statement within the time period required under this Section, then, after five (5) business days notice and an opportunity to cure, Tenant shall be required to pay to Landlord an administrative fee equal to One Thousand Dollars ($1,000) (provided, however, that Landlords acceptance of such fee shall not prevent Landlord from pursuing any other rights or remedies under this Lease, at law or in equity). The provisions of this Section shall not apply at any time while Tenant is a corporation whose shares are traded on any nationally recognized stock exchange.
40.3. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for a lease, and shall not be effective as a lease or otherwise until execution by and delivery to both Landlord and Tenant.
40.4. The terms of this Lease are intended by the parties as a final, complete and exclusive expression of their agreement with respect to the terms that are included herein, and may not be contradicted or supplemented by evidence of any other prior or contemporaneous agreement.
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40.5. Landlord may, but shall not be obligated to, record a short form or memorandum hereof without Tenants consent. Within ten (10) days after receipt of written request from Landlord, Tenant shall execute a termination of any short form or memorandum of lease recorded with respect hereto. Tenant shall be responsible for the cost of recording any short form or memorandum of this Lease, including any transfer or other taxes incurred in connection with such recordation. Neither party shall record this Lease.
40.6. Where applicable in this Lease, the singular includes the plural and the masculine or neuter includes the masculine, feminine and neuter. The words include, includes, included and including mean include, etc., without limitation. The word shall is mandatory and the word may is permissive. The section headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease. Landlord and Tenant have each participated in the drafting and negotiation of this Lease, and the language in all parts of this Lease shall be in all cases construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant.
40.7. Except as otherwise expressly set forth in this Lease, each party shall pay its own costs and expenses incurred in connection with this Lease and such partys performance under this Lease; provided that, if either party commences an action, proceeding, demand, claim, action, cause of action or suit against the other party arising out of or in connection with this Lease, then the substantially prevailing party shall be reimbursed by the other party for all reasonable costs and expenses, including reasonable attorneys fees and expenses, incurred by the substantially prevailing party in such action, proceeding, demand, claim, action, cause of action or suit, and in any appeal in connection therewith (regardless of whether the applicable action, proceeding, demand, claim, action, cause of action, suit or appeal is voluntarily withdrawn or dismissed).
40.8. Time is of the essence with respect to the performance of every provision of this Lease.
40.9. Each provision of this Lease performable by Tenant shall be deemed both a covenant and a condition.
40.10. Notwithstanding anything to the contrary contained in this Lease, Tenants obligations under this Lease are independent and shall not be conditioned upon performance by Landlord.
40.11. Whenever consent or approval of either party is required, that party shall not unreasonably withhold, condition or delay such consent or approval, except as may be expressly set forth to the contrary.
40.12. Any provision of this Lease that shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and all other provisions of this Lease shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal provision did not exist.
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40.13. Each of the covenants, conditions and agreements herein contained shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs; legatees; devisees; executors; administrators; and permitted successors and assigns. This Lease is for the sole benefit of the parties and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns, and nothing in this Lease shall give or be construed to give any other person or entity any legal or equitable rights. Nothing in this Section shall in any way alter the provisions of this Lease restricting assignment or subletting.
40.14. This Lease shall be governed by, construed and enforced in accordance with the laws of the state in which the Premises are located, without regard to such states conflict of law principles.
40.15. Tenant guarantees, warrants and represents that the individual or individuals signing this Lease have the power, authority and legal capacity to sign this Lease on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf such individual or individuals have signed.
40.16. This Lease may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.
40.17. No provision of this Lease may be modified, amended or supplemented except by an agreement in writing signed by Landlord and Tenant.
40.18. No waiver of any term, covenant or condition of this Lease shall be binding upon either party unless executed in writing by the waiving party. The waiver by Landlord or Tenant of any breach or default of any term, covenant or condition contained in this Lease shall not be deemed to be a waiver of any preceding or subsequent breach or default of such term, covenant or condition or any other term, covenant or condition of this Lease.
40.19. To the extent permitted by Applicable Laws, the parties waive trial by jury in any action, proceeding or counterclaim brought by the other party hereto related to matters arising out of or in any way connected with this Lease; the relationship between Landlord and Tenant; Tenants use or occupancy of the Premises; or any claim of injury or damage related to this Lease or the Premises.
41. Rooftop Installation Area.
41.1. Tenant may use those portions of the Building identified as a Rooftop Installation Area by Landlord from time to time (the Rooftop Installation Area) solely to operate, maintain, repair and replace rooftop antennae, mechanical equipment, communications antennas and other equipment installed by Tenant in the Rooftop Installation Area in accordance with this Article (Tenants Rooftop Equipment). Tenants Rooftop Equipment shall be only for Tenants use of the Premises for the Permitted Use.
41.2. Tenant shall install Tenants Rooftop Equipment at its sole cost and expense, at such times and in such manner as Landlord may reasonably designate, and in accordance with this Article and the applicable provisions of this Lease regarding Alterations. Tenants Rooftop Equipment and the installation thereof shall be subject to Landlords prior written approval,
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which approval shall not be unreasonably withheld. Among other reasons, Landlord may withhold approval if the installation or operation of Tenants Rooftop Equipment could reasonably be expected to damage the structural integrity of the Building or to transmit vibrations or noise or cause other adverse effects beyond the Premises to an extent not customary in first class laboratory buildings, unless Tenant implements measures that are acceptable to Landlord in its reasonable discretion to avoid any such damage or transmission.
41.3. Tenant shall comply with any roof or roof-related warranties. Tenant shall obtain a letter from Landlords roofing contractor within thirty (30) days after completion of any Tenant work on the rooftop stating that such work did not affect any such warranties. Tenant, at its sole cost and expense, shall inspect the Rooftop Installation Area at least annually, and correct any loose bolts, fittings or other appurtenances and repair any damage to the roof caused by the installation or operation of Tenants Rooftop Equipment. Tenant shall not permit the installation, maintenance or operation of Tenants Rooftop Equipment to violate any Applicable Laws or constitute a nuisance. Tenant shall pay Landlord within thirty (30) days after demand (a) all applicable taxes, charges, fees or impositions imposed on Landlord by Governmental Authorities as the result of Tenants use of the Rooftop Installation Areas in excess of those for which Landlord would otherwise be responsible for the use or installation of Tenants Rooftop Equipment and (b) the amount of any increase in Landlords insurance premiums as a result of the installation of Tenants Rooftop Equipment. Upon Tenants written request to Landlord, Landlord shall use commercially reasonable efforts to cause other tenants to remedy any interference in the operation of Tenants Rooftop Equipment caused by any such tenants equipment installed after the applicable piece of Tenants Rooftop Equipment; provided, however, that Landlord shall not be required to request that such tenants waive their rights under their respective leases.
41.4. If Tenants Equipment (a) causes physical damage to the structural integrity of the Building, (b) interferes with any telecommunications, mechanical or other systems located at or near or servicing the Building or the Project that were installed prior to the installation of Tenants Rooftop Equipment, (c) interferes with any other service provided to other tenants in the Building or the Project by rooftop or penthouse installations that were installed prior to the installation of Tenants Rooftop Equipment or (d) interferes with any other tenants business, in each case in excess of that permissible under Federal Communications Commission regulations, then Tenant shall cooperate with Landlord to determine the source of the damage or interference and promptly repair such damage and eliminate such interference, in each case at Tenants sole cost and expense, within ten (10) days after receipt of notice of such damage or interference (which notice may be oral; provided that Landlord also delivers to Tenant written notice of such damage or interference within twenty-four (24) hours after providing oral notice).
41.5. Landlord reserves the right to cause Tenant to relocate Tenants Rooftop Equipment to comparably functional space on the roof or in the penthouse of the Building by giving Tenant prior written notice thereof. Landlord agrees to pay the reasonable costs thereof. Tenant shall arrange for the relocation of Tenants Rooftop Equipment within sixty (60) days after receipt of Landlords notification of such relocation. In the event Tenant fails to arrange for relocation within such sixty (60)-day period, Landlord shall have the right to arrange for the relocation of Tenants Rooftop Equipment in a manner that does not unnecessarily interrupt or interfere with Tenants use of the Premises for the Permitted Use.
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42. Option to Extend Term. Tenant shall have the option (Option) to extend the Term by four (4) years as to the entire Premises (and no less than the entire Premises) upon the following terms and conditions. Any extension of the Term pursuant to the Option shall be on all the same terms and conditions as this Lease, except as follows:
42.1. Base Rent at the commencement of the Option term shall equal the greater of (a) one hundred three percent (103%) of the then-current Base Rent and (b) the then-current fair market value for comparable office and laboratory space in the Brisbane and South San Francisco submarkets of comparable age, quality, level of finish and proximity to amenities and public transit, and containing the systems and improvements present in the Premises as of the date that Tenant gives Landlord written notice of Tenants election to exercise the Option (FMV), and in each case shall be further increased on each annual anniversary of the Option term commencement date by three percent (3%). Tenant may, no more than fifteen (15) months prior to the date the Term is then scheduled to expire, request Landlords estimate of the FMV for the Option term. Landlord shall, within fifteen (15) days after receipt of such request, give Tenant a written proposal of such FMV. If Tenant gives written notice to exercise the Option, such notice shall specify whether Tenant accepts Landlords proposed estimate of FMV. If Tenant does not accept the FMV, then the parties shall endeavor to agree upon the FMV, taking into account all relevant factors, including (v) the size of the Premises, (w) the length of the Option term, (x) rent in comparable buildings in the relevant submarket, including concessions offered to new tenants, such as free rent, tenant improvement allowances and moving allowances, (y) Tenants creditworthiness and (z) the quality and location of the Building and the Project. In the event that the parties are unable to agree upon the FMV within thirty (30) days after Tenant notifies Landlord that Tenant is exercising the Option, then either party may request that the same be determined as follows: a senior officer of a nationally recognized leasing brokerage firm with local knowledge of the Brisbane and South San Francisco laboratory/research and development leasing submarkets (the Baseball Arbitrator) shall be selected and paid for jointly by Landlord and Tenant. If Landlord and Tenant are unable to agree upon the Baseball Arbitrator, then the same shall be designated by the local chapter of the Judicial Arbitration and Mediation Services or any successor organization thereto (the JAMS). The Baseball Arbitrator selected by the parties or designated by JAMS shall (y) have at least ten (10) years experience in the leasing of laboratory/research and development space in the Brisbane and South San Francisco submarkets and (z) not have been employed or retained by either Landlord or Tenant or any affiliate of either for a period of at least ten (10) years prior to appointment pursuant hereto. Each of Landlord and Tenant shall submit to the Baseball Arbitrator and to the other party its determination of the FMV. The Baseball Arbitrator shall grant to Landlord and Tenant a hearing and the right to submit evidence. The Baseball Arbitrator shall determine which of the two (2) FMV determinations more closely represents the actual FMV. The arbitrator may not select any other FMV for the Premises other than one submitted by Landlord or Tenant. The FMV selected by the Baseball Arbitrator shall be binding upon Landlord and Tenant and shall serve as the basis for determination of Base Rent payable for the Option term. If, as of the commencement date of the Option term, the amount of Base Rent payable during the Option term shall not have been determined, then, pending such determination, Tenant shall pay Base Rent equal to the Base Rent payable with respect to the last year of the then-current Term. After the final determination of Base Rent payable for the Option term, the parties shall promptly execute a written amendment to this Lease specifying the amount of Base Rent to be paid during the Option term. Any failure of the parties to execute such amendment shall not affect the validity of the FMV determined pursuant to this Section.
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42.2. The Option is not assignable separate and apart from this Lease.
42.3. The Option is conditional upon Tenant giving Landlord written notice of its election to exercise the Option at least fifteen (15) months prior to the end of the expiration of the then-current Term. Time shall be of the essence as to Tenants exercise of the Option. Tenant assumes full responsibility for maintaining a record of the deadlines to exercise the Option. Tenant acknowledges that it would be inequitable to require Landlord to accept any exercise of the Option after the date provided for in this Section.
42.4. Notwithstanding anything contained in this Article to the contrary, Tenant shall not have the right to exercise the Option:
(a) During the time commencing from the date Landlord delivers to Tenant a written notice that Tenant is in default under any provisions of this Lease and continuing until Tenant has cured the specified default to Landlords reasonable satisfaction; or
(b) At any time after any Default as described in Article 31 of the Lease (provided, however, that, for purposes of this Section 42.4(b), Landlord shall not be required to provide Tenant with notice of such Default) and continuing until Tenant cures any such Default, if such Default is susceptible to being cured; or
(c) In the event that Tenant has defaulted in the performance of its obligations under this Lease two (2) or more times during the twelve (12)-month period immediately prior to the date that Tenant intends to exercise the Option, whether or not Tenant has cured such defaults.
42.5. The period of time within which Tenant may exercise the Option shall not be extended or enlarged by reason of Tenants inability to exercise such Option because of the provisions of Section 42.4.
42.6. All of Tenants rights under the provisions of the Option shall terminate and be of no further force or effect even after Tenants due and timely exercise of the Option if, after such exercise, but prior to the commencement date of the new term, (a) Tenant fails to pay to Landlord a monetary obligation of Tenant for a period of twenty (20) days after written notice from Landlord to Tenant, (b) Tenant fails to commence to cure a default (other than a monetary default) within thirty (30) days after the date Landlord gives notice to Tenant of such default or (c) Tenant has defaulted under this Lease two (2) or more times and a service or late charge under Section 31.1 has become payable for any such default, whether or not Tenant has cured such defaults.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above written.
LANDLORD:
BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership | ||
By: | /s/ Kevin M. Simonsen | |
Name: | Kevin M. Simonsen | |
Title: | Sr. VP, Real Estate Legal |
TENANT:
UNITY BIOTECHNOLOGY, INC., a Delaware corporation | ||
By: | /s/ Nathaniel David | |
Name: | Nathaniel David | |
Title: | CEO |
EXHIBIT A-1
PHASE I PREMISES
A-1
EXHIBIT A-2
PHASE II PREMISES
A-1
EXHIBIT B
TENANT IMPROVEMENT PLANS
B-1
EXHIBIT B-1
TENANT WORK INSURANCE SCHEDULE
Tenant shall be responsible for requiring all of Tenant contractors doing construction or renovation work to purchase and maintain such insurance as shall protect it from the claims set forth below which may arise out of or result from any Tenant Work whether such Tenant Work is completed by Tenant or by any Tenant contractors or by any person directly or indirectly employed by Tenant or any Tenant contractors, or by any person for whose acts Tenant or any Tenant contractors may be liable:
1. Claims under workers compensation, disability benefit and other similar employee benefit acts which are applicable to the Tenant Work to be performed.
2. Claims for damages because of bodily injury, occupational sickness or disease, or death of employees under any applicable employers liability law.
3. Claims for damages because of bodily injury, or death of any person other than Tenants or any Tenant contractors employees.
4. Claims for damages insured by usual personal injury liability coverage which are sustained (a) by any person as a result of an offense directly or indirectly related to the employment of such person by Tenant or any Tenant contractors or (b) by any other person.
5. Claims for damages, other than to the Tenant Work itself, because of injury to or destruction of tangible property, including loss of use therefrom.
6. Claims for damages because of bodily injury or death of any person or property damage arising out of the ownership, maintenance or use of any motor vehicle.
Tenant contractors Commercial General Liability Insurance shall include premises/operations (including explosion, collapse and underground coverage if such Tenant Work involves any underground work), elevators, independent contractors, products and completed operations, and blanket contractual liability on all written contracts, all including broad form property damage coverage.
Tenant contractors Commercial General, Automobile, Employers and Umbrella Liability Insurance shall be written for not less than limits of liability as follows:
a. Commercial General Liability:
Bodily Injury and Property Damage |
Commercially reasonable amounts, but in any event no less than $1,000,000 per occurrence and $2,000,000 general aggregate, with $2,000,000 products and completed operations aggregate. |
B-1-1
b. Commercial Automobile Liability:
Bodily Injury and Property Damage |
$1,000,000 per accident | |
c. Employers Liability:
Each Accident Disease Policy Limit Disease Each Employee |
$500,000 $500,000 $500,000 | |
d. Umbrella Liability:
Bodily Injury and Property Damage |
Commercially reasonable amounts (excess of coverages a, b and c above), but in any event no less than $5,000,000 per occurrence / aggregate. |
All subcontractors for Tenant contractors shall carry the same coverages and limits as specified above, unless different limits are reasonably approved by Landlord. The foregoing policies shall contain a provision that coverages afforded under the policies shall not be canceled or not renewed until at least thirty (30) days prior written notice has been given to the Landlord. Certificates of insurance including required endorsements showing such coverages to be in force shall be filed with Landlord prior to the commencement of any Tenant Work and prior to each renewal. Coverage for completed operations must be maintained for the lesser of ten (10) years and the applicable statue of repose following completion of the Tenant Work, and certificates evidencing this coverage must be provided to Landlord. The minimum A.M. Bests rating of each insurer shall be A- VII. Landlord and its mortgagees shall be named as an additional insureds under Tenant contractors Commercial General Liability, Commercial Automobile Liability and Umbrella Liability Insurance policies as respects liability arising from work or operations performed, or ownership, maintenance or use of autos, by or on behalf of such contractors. Each contractor and its insurers shall provide waivers of subrogation with respect to any claims covered or that should have been covered by valid and collectible insurance, including any deductibles or self-insurance maintained thereunder.
If any contractors work involves the handling or removal of asbestos (as determined by Landlord in its sole and absolute discretion), such contractor shall also carry Pollution Legal Liability insurance. Such coverage shall include bodily injury, sickness, disease, death or mental anguish or shock sustained by any person; property damage, including physical injury to or destruction of tangible property (including the resulting loss of use thereof), clean-up costs and the loss of use of tangible property that has not been physically injured or destroyed; and defense costs, charges and expenses incurred in the investigation, adjustment or defense of claims for such damages. Coverage shall apply to both sudden and non-sudden pollution conditions including the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water. Claims-made coverage is permitted, provided the policy retroactive date is continuously maintained prior to the Phase I Premises Term Commencement Date, and coverage is continuously maintained during all periods in which Tenant occupies the Premises. Coverage shall be maintained with limits of not less than $1,000,000 per incident with a $2,000,000 policy aggregate.
B-1-2
EXHIBIT B-2
TENANT ITEMS
B-2-1
EXHIBIT B-2 TENANT ITEMS
Laboratory Equipment
1. | Biosafety Cabinets and Animal Cage Changing Stations |
2. | Ventilated Animal Housing Racks, including blowers, cages, hoses |
3. | Refrigerators, Delicases, Ice Machines, Undercounter Refrigerators and Freezers |
4. | Shelving Racks, Laboratory Tables, Lockers and Free Standing Storage Cabinets |
5. | Irradiator |
6. | Incubators |
7. | Seismic Anchoring for Tenant Furnished and Installed Equipment |
8. | Any other tenant specific laboratory equipment |
Furniture Fixtures and Equipment
9. | Lab Sink Accessories (soap, paper towel) |
10. | Toilet/Shower Accessories (coat hooks, paper towel, soap, mirror) |
11. | Lab Sink Accessories (soap, paper towel) |
12. | Hardware, Lock and key changes for existing doors not modified by T.I. |
13. | Non-Code Required Signage |
14. | Office Furniture and Equipment |
15. | AV Equipment/Systems |
16. | Break Room Tables, Chairs, Refrigerator, Microwaves, Coffee Equipment |
Tenant Specific Laboratory Utilities
17. | Tenant Specific Utilities Include: Nitrogen, Carbon Dioxide, Clean Dry Air, Vacuum, DI Water |
18. | Cylinders, Manifolds, Tank Restraints are provided by the Tenant |
19. | Clean Dry Air Compressor Equipment and Installation, tenant may use existing lab system and equipment |
20. | Laboratory Vacuum Equipment and Installation, tenant may use existing lab system and equipment |
21. | RO/DI Equipment and Installation |
22. | HEPA Filtration for lab/vivarium space if required |
23. | Humidification for lab/vivarium space if required |
24. | Differential Pressure measuring and monitoring devices |
IT Room and Telecom Cabling
25. | Cable Management and Pathway: tray, ladders, baskets, rings, wall field, rack frames, rack equipment |
26. | Cabling to MPO and field terminations |
27. | New Server Room Air Cooling Unit, tenant may re-use existing equipment |
28. | Pre-Action System relocation, reconfiguration, equipment, materials, installation and start-up, tenant may re-use existing equipment |
29. | UPS system relocation, reconfiguration, installation, and start-up, tenant may use existing equipment as-is |
B-2-2
30. | Modifications to Existing Phase I Premises cabling for phone/data service prior to, during and after Phase II Tenant Improvements |
31. | Jack Termination Installation and Testing |
Electrical and Security Systems
32. | Generator and any modifications to the mechanical yard |
33. | Additional Panels if required for expanded generator power capacity |
34. | Access Control system, cabling, equipment, networking, power, distribution and other associated infrastructure |
35. | Access Control wiring and devices for Tenant Suite Entries from Lobby, Tenant Dedicated S/R Entry |
36. | Access Control wiring and devices for Tenant suite internal doors (Vivarium Vestibules, Irradiator, IT) |
37. | Camera and Intrusion Alarm Systems within tenant premises |
38. | Security Barriers, Upgraded Doors/Frames or Lead Wall Lining for Radiation Source |
Administrative Deliverables
39. | Review, Comment and Approval of Design Deliverables within 3 business days of receipt |
40. | Business License City of Brisbane |
41. | Hazardous Material Management Plan |
42. | Radiologic Health Licenses |
43. | Bay Area Air Quality Management District Permit Generator |
44. | HHS BMBL and Guide to Care and Use of Lab Animals Written compliance |
45. | Any other Tenant Specific permits or regulatory approvals |
B-2-3
EXHIBIT C
ACKNOWLEDGEMENT OF PHASE II PREMISES TERM COMMENCEMENT DATE
AND TERM EXPIRATION DATE
THIS ACKNOWLEDGEMENT OF PHASE II PREMISES TERM COMMENCEMENT DATE AND TERM EXPIRATION DATE is entered into as of [_______], 20[__], with reference to that certain Lease (the Lease) dated as of [_______], 20[__], by UNITY BIOTECHNOLOGY, INC., a Delaware corporation (Tenant), in favor of BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership (Landlord). All capitalized terms used herein without definition shall have the meanings ascribed to them in the Lease.
Tenant hereby confirms the following:
1. Tenant accepted possession of the Phase II Premises for use in accordance with the Permitted Use on [_______], 20[__]. Tenant first occupied the Phase II Premises for the Permitted Use on [_______], 20[__].
2. The Phase II Premises are in good order, condition and repair.
3. The Tenant Improvements are Substantially Complete.
4. All conditions of the Lease to be performed by Landlord as a condition to the full effectiveness of the Lease have been satisfied, and Landlord has fulfilled all of its duties in the nature of inducements offered to Tenant to lease the Premises.
5. In accordance with the provisions of Article 4 of the Lease, the Phase II Premises Term Commencement Date is [_______], 20[__], and, unless the Lease is terminated prior to the Term Expiration Date pursuant to its terms, the Term Expiration Date shall be [_______], 20[__].
6. The Lease is in full force and effect, and the same represents the entire agreement between Landlord and Tenant concerning the Premises[, except [_______]].
7. Tenant has no existing defenses against the enforcement of the Lease by Landlord, and there exist no offsets or credits against Rent owed or to be owed by Tenant.
8. The obligation to pay Rent is presently in effect and all Rent obligations on the part of Tenant under the Lease commenced to accrue on [_______], 20[__], with Base Rent payable on the dates and amounts set forth in the chart below:
Dates |
Approximate Square Feet of Rentable Area |
Base Rent per Square Foot of Rentable Area |
Monthly Base Rent |
Annual Base Rent | ||||
[__]/[__]/[__]- [__]/[__]/[__] |
[ ] | $[_______] [monthly] | [ ] | [ ] |
C-1
9. The undersigned Tenant has not made any prior assignment, transfer, hypothecation or pledge of the Lease or of the rents thereunder or sublease of the Premises or any portion thereof.
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C-2
IN WITNESS WHEREOF, Tenant has executed this Acknowledgment of Phase II Premises Term Commencement Date and Term Expiration Date as of the date first written above.
TENANT:
UNITY BIOTECHNOLOGY, INC., a Delaware corporation |
By: | ||
Name: | ||
Title: |
C-3
EXHIBIT D
TENANT GENERATOR
1. Right to Install. Subject to the terms, conditions and provisions set forth in this Exhibit D, Tenant shall have the right to install a backup generator to exclusively serve the Premises (the Tenant Generator in the area shown on Schedule 1 attached hereto (the Generator License Area). Upon installation of the Tenant Generator, Landlord hereby grants to Tenant a license to use the Generator License Area during the Term for the sole purpose of maintaining the Tenant Generator in accordance with all of the terms, conditions and provisions of this Exhibit D. Tenant shall, at Tenants sole cost and expense, install, maintain and use the Tenant Generator in compliance with all Applicable Laws.
2. Installation. The Tenant Generator shall be installed in the Generator License Area as an Alteration under the Lease and, therefore, the plans and specifications with respect to, and the installation of, the Tenant Generator shall be subject to all of the terms, conditions and provisions of the Lease pertaining to Alterations.
3. Maintenance. Tenant shall maintain, repair and (if necessary) replace the Tenant Generator at its sole cost and expense, and shall be solely responsible for keeping the Tenant Generator and the Generator License Area in compliance with all Applicable Laws. Landlord expressly disclaims any warranties with regard to the Tenant Generator or the installation thereof, including any warranty of merchantability or fitness for a particular purpose. Notwithstanding anything to the contrary in the Lease, Landlord shall have no liability, and Tenant shall have no right or remedy, on account of any interruption, impairment or failure of the Tenant Generator.
4. Landlord Exculpation. Landlord shall not be liable to Tenant for, and Tenant assumes all risk of, damage to the Tenant Generator including, without limitation, damage or losses caused by fire, electrical malfunction, gas explosion or water damage of any type (including, without limitation, broken water lines, malfunctioning fire sprinkler systems, roof leaks or stoppages of lines). Tenant further waives any claim for injury to Tenants business or loss of income relating to any such damage or destruction of the Tenant Generator as described in this Section.
5. Insurance; Indemnification. Tenant shall cause all insurance policies required to be maintained by Tenant pursuant to the Lease to cover the installation, presence, use, operation, maintenance, repair, replacement and upgrading of the Tenant Generator. Without limiting the provisions of Section 28.1 of the Lease, Tenant hereby agrees to indemnify, defend, protect, compensate and hold harmless the Landlord Indemnitees from any Claims in connection with or arising from the use or operation of the Tenant Generator. This Section shall survive the expiration or earlier termination of the Lease.
D-1
SCHEDULE 1
GENERATOR LICENSE AREA
EXHIBIT E
FORM OF LETTER OF CREDIT
[On letterhead or L/C letterhead of Issuer]
LETTER OF CREDIT
Date: , 20
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(the Beneficiary) | |||
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Attention: |
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L/C. No.: |
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Loan No.: |
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Ladies and Gentlemen:
We establish in favor of Beneficiary our irrevocable and unconditional Letter of Credit numbered as identified above (the L/C) for an aggregate amount of $ , expiring at :00 p.m. on or, if such day is not a Banking Day, then the next succeeding Banking Day (such date, as extended from time to time, the Expiry Date). Banking Day means a weekday except a weekday when commercial banks in are authorized or required to close.
We authorize Beneficiary to draw on us (the Issuer) for the account of (the Account Party), under the terms and conditions of this L/C.
Funds under this L/C are available by presenting the following documentation (the Drawing Documentation): (a) the original L/C and (b) a sight draft substantially in the form of Attachment 1, with blanks filled in and bracketed items provided as appropriate. No other evidence of authority, certificate, or documentation is required.
Drawing Documentation must be presented at Issuers office at on or before the Expiry Date by personal presentation, courier or messenger service, or fax. Presentation by fax shall be effective upon electronic confirmation of transmission as evidenced by a printed report from the senders fax machine. After any fax presentation, but not as a condition to its effectiveness, Beneficiary shall with reasonable promptness deliver the original Drawing Documentation by any other means. Issuer will on request issue a receipt for Drawing Documentation.
We agree, irrevocably, and irrespective of any claim by any other person, to honor drafts drawn under and in conformity with this L/C, within the maximum amount of this L/C, presented to us on or before the Expiry Date, provided we also receive (on or before the Expiry Date) any other Drawing Documentation this L/C requires.
E-1
We shall pay this L/C only from our own funds by check or wire transfer, in compliance with the Drawing Documentation.
If Beneficiary presents proper Drawing Documentation to us on or before the Expiry Date, then we shall pay under this L/C at or before the following time (the Payment Deadline): (a) if presentment is made at or before noon of any Banking Day, then the close of such Banking Day; and (b) otherwise, the close of the next Banking Day. We waive any right to delay payment beyond the Payment Deadline. If we determine that Drawing Documentation is not proper, then we shall so advise Beneficiary in writing, specifying all grounds for our determination, within one Banking Day after the Payment Deadline.
Partial drawings are permitted. This L/C shall, except to the extent reduced thereby, survive any partial drawings.
We shall have no duty or right to inquire into the validity of or basis for any draw under this L/C or any Drawing Documentation. We waive any defense based on fraud or any claim of fraud.
The Expiry Date shall automatically be extended by one year (but never beyond (the Outside Date)) unless, on or before the date 90 days before any Expiry Date, we have given Beneficiary notice that the Expiry Date shall not be so extended (a Nonrenewal Notice). We shall promptly upon request confirm any extension of the Expiry Date under the preceding sentence by issuing an amendment to this L/C, but such an amendment is not required for the extension to be effective. We need not give any notice of the Outside Date.
Beneficiary may from time to time without charge transfer this L/C, in whole but not in part, to any transferee (the Transferee). Issuer shall look solely to Account Party for payment of any fee for any transfer of this L/C. Such payment is not a condition to any such transfer. Beneficiary or Transferee shall consummate such transfer by delivering to Issuer the original of this L/C and a Transfer Notice substantially in the form of Attachment 2, purportedly signed by Beneficiary, and designating Transferee. Issuer shall promptly reissue or amend this L/C in favor of Transferee as Beneficiary. Upon any transfer, all references to Beneficiary shall automatically refer to Transferee, who may then exercise all rights of Beneficiary. Issuer expressly consents to any transfers made from time to time in compliance with this paragraph.
Any notice to Beneficiary shall be in writing and delivered by hand with receipt acknowledged or by overnight delivery service such as FedEx (with proof of delivery) at the above address, or such other address as Beneficiary may specify by written notice to Issuer. A copy of any such notice shall also be delivered, as a condition to the effectiveness of such notice, to: (or such replacement as Beneficiary designates from time to time by written notice).
No amendment that adversely affects Beneficiary shall be effective without Beneficiarys written consent.
This L/C is subject to and incorporates by reference: (a) the International Standby Practices 98 (ISP 98); and (b) to the extent not inconsistent with ISP 98, Article 5 of the Uniform Commercial Code of the State of New York.
E-2
Very truly yours,
[Issuer Signature]
E-3
ATTACHMENT 1 TO EXHIBIT E
FORM OF SIGHT DRAFT
[BENEFICIARY LETTERHEAD]
TO:
[Name and Address of Issuer]
SIGHT DRAFT
AT SIGHT, pay to the Order of , the sum of United States Dollars ($ ). Drawn under [Issuer] Letter of Credit No. dated .
[Issuer is hereby directed to pay the proceeds of this Sight Draft solely to the following account: .]
[Name and signature block, with signature or purported signature of Beneficiary]
Date:
E-1-1
ATTACHMENT 2 TO EXHIBIT E
FORM OF TRANSFER NOTICE
[BENEFICIARY LETTERHEAD]
TO:
[Name and Address of Issuer] (the Issuer)
TRANSFER NOTICE
By signing below, the undersigned, Beneficiary (the Beneficiary) under Issuers Letter of Credit No. dated
(the L/C), transfers the L/C to the following transferee (the Transferee):
[Transferee Name and Address]
The original L/C is enclosed. Beneficiary directs Issuer to reissue or amend the L/C in favor of Transferee as Beneficiary. Beneficiary represents and warrants that Beneficiary has not transferred, assigned, or encumbered the L/C or any interest in the L/C, which transfer, assignment, or encumbrance remains in effect.
[Name and signature block, with signature or purported signature of Beneficiary]
Date: ]
E-2-1
EXHIBIT F
RULES AND REGULATIONS
NOTHING IN THESE RULES AND REGULATIONS (RULES AND REGULATIONS) SHALL SUPPLANT ANY PROVISION OF THE LEASE. IN THE EVENT OF A CONFLICT OR INCONSISTENCY BETWEEN THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.
1. No Tenant Party shall encumber or obstruct the common entrances, lobbies, elevators, sidewalks and stairways of the Building(s) or the Project or use them for any purposes other than ingress or egress to and from the Building(s) or the Project.
2. Except as specifically provided in the Lease, no sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part of the outside of the Premises or the Building(s) without Landlords prior written consent. Landlord shall have the right to remove, at Tenants sole cost and expense and without notice, any sign installed or displayed in violation of this rule.
3. If Landlord objects in writing to any curtains, blinds, shades, screens, hanging plants or other similar objects attached to or used in connection with any window or door of the Premises or placed on any windowsill, and (a) such window, door or windowsill is visible from the exterior of the Premises and (b) such curtain, blind, shade, screen, hanging plant or other object is not included in plans approved by Landlord, then Tenant shall promptly remove such curtains, blinds, shades, screens, hanging plants or other similar objects at its sole cost and expense.
4. No deliveries shall be made that impede or interfere with other tenants in or the operation of the Project. Movement of furniture, office equipment or any other large or bulky material(s) through the Common Area shall be restricted to such hours as Landlord may designate and shall be subject to reasonable restrictions that Landlord may impose.
5. Tenant shall not place a load upon any floor of the Premises that exceeds the load per square foot that (a) such floor was designed to carry or (b) is allowed by Applicable Laws. Fixtures and equipment that cause noises or vibrations that may be transmitted to the structure of the Building(s) to such a degree as to be objectionable to other tenants shall be placed and maintained by Tenant, at Tenants sole cost and expense, on vibration eliminators or other devices sufficient to eliminate such noises and vibrations to levels reasonably acceptable to Landlord and the affected tenants of the Project.
6. Tenant shall not use any method of HVAC other than that present at the Project and serving the Premises as of the Execution Date or otherwise approved in writing by Landlord.
7. Tenant shall not install any radio, television or other antennae; cell or other communications equipment; or other devices on the roof or exterior walls of the Premises except in accordance with the Lease. Tenant shall not interfere with radio, television or other digital or electronic communications at the Project or elsewhere.
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8. Canvassing, peddling, soliciting and distributing handbills or any other written material within, on or around the Project (other than within the Premises) are prohibited. Tenant shall cooperate with Landlord to prevent such activities by any Tenant Party.
9. Tenant shall store all of its trash, garbage and Hazardous Materials in receptacles within its Premises or in receptacles designated by Landlord outside of the Premises. Tenant shall not place in any such receptacle any material that cannot be disposed of in the ordinary and customary manner of trash, garbage and Hazardous Materials disposal. Any Hazardous Materials transported through Common Area shall be held in secondary containment devices. Tenant shall be responsible, at its sole cost and expense, for Tenants removal of its trash, garbage and Hazardous Materials. Tenant is encouraged to participate in the waste removal and recycling program in place at the Project.
10. The Premises shall not be used for lodging or for any improper, immoral or objectionable purpose. No cooking shall be done or permitted in the Premises; provided, however, that Tenant may use (a) equipment approved in accordance with the requirements of insurance policies that Landlord or Tenant is required to purchase and maintain pursuant to the Lease for brewing coffee, tea, hot chocolate and similar beverages, (b) microwave ovens for employees use and (c) equipment shown on plans approved by Landlord; provided, further, that any such equipment and microwave ovens are used in accordance with Applicable Laws.
11. Tenant shall not, without Landlords prior written consent, use the name of the Project, if any, in connection with or in promoting or advertising Tenants business except as Tenants address.
12. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any Governmental Authority.
13. Tenant assumes any and all responsibility for protecting the Premises from theft, robbery and pilferage, which responsibility includes keeping doors locked and other means of entry to the Premises closed.
14. Tenant shall not modify any locks to the Premises without Landlords prior written consent, which consent Landlord shall not unreasonably withhold, condition or delay. Tenant shall furnish Landlord with copies of keys, pass cards or similar devices for locks to the Premises.
15. Tenant shall cooperate and participate in all reasonable security programs affecting the Premises.
16. Tenant shall not permit any animals in the Project, other than for service animals or for use in laboratory experiments.
17. Bicycles shall not be taken into the Building(s) (including the elevators and stairways of the Building) except into areas designated by Landlord.
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18. The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags or other substances shall be deposited therein.
19. Discharge of industrial sewage shall only be permitted if Tenant, at its sole expense, first obtains all necessary permits and licenses therefor from all applicable Governmental Authorities.
20. Smoking is prohibited at the Project (except for designated smoking areas, if any).
21. The Projects hours of operation are currently 24 hours a day seven days a week.
22. Tenant shall comply with all orders, requirements and conditions now or hereafter imposed by Applicable Laws or Landlord (Waste Regulations) regarding the collection, sorting, separation and recycling of waste products, garbage, refuse and trash generated by Tenant (collectively, Waste Products), including (without limitation) the separation of Waste Products into receptacles reasonably approved by Landlord and the removal of such receptacles in accordance with any collection schedules prescribed by Waste Regulations.
23. Tenant, at Tenants sole cost and expense, shall cause the Premises to be exterminated on a monthly basis to Landlords reasonable satisfaction and shall cause all portions of the Premises used for the storage, preparation, service or consumption of food or beverages to be cleaned daily in a manner reasonably satisfactory to Landlord, and to be treated against infestation by insects, rodents and other vermin and pests whenever there is evidence of any infestation. Tenant shall not permit any person to enter the Premises or the Project for the purpose of providing such extermination services, unless such persons have been approved by Landlord. If requested by Landlord, Tenant shall, at Tenants sole cost and expense, store any refuse generated in the Premises by the consumption of food or beverages in a cold box or similar facility.
24. If Tenant desires to use any portion of the Common Area for a Tenant-related event, Tenant must notify Landlord in writing at least thirty (30) days prior to such event on the form attached as Attachment 1 to this Exhibit, which use shall be subject to Landlords prior written consent, not to be unreasonably withheld, conditioned or delayed. Notwithstanding anything in this Lease or the completed and executed Attachment to the contrary, Tenant shall be solely responsible for setting up and taking down any equipment or other materials required for the event, and shall promptly pick up any litter and report any property damage to Landlord related to the event. Any use of the Common Area pursuant to this Section shall be subject to the provisions of Article 28 of the Lease.
Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all of the tenants of the Project, including Tenant. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms covenants, agreements and conditions of the Lease. Landlord reserves the right to make such other and reasonable additional rules and regulations as, in its judgment, may from time to time be needed for safety
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and security, the care and cleanliness of the Project, or the preservation of good order therein; provided, however, that Tenant shall not be obligated to adhere to such additional rules or regulations until Landlord has provided Tenant with written notice thereof. Tenant agrees to abide by these Rules and Regulations and any such additional rules and regulations issued or adopted by Landlord. Tenant shall be responsible for the observance of these Rules and Regulations by all Tenant Parties.
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ATTACHMENT 1 TO EXHIBIT F
REQUEST FOR USE OF COMMON AREA
REQUEST FOR USE OF COMMON AREA
Date of Request: |
Landlord/Owner: |
Tenant/Requestor: |
Property Location: |
Event Description: |
Proposed Plan for Security & Cleaning: |
Date of Event: |
Hours of Event: (to include set-up and take down): |
Location at Property (see attached map): |
Number of Attendees: |
Open to the Public? [ ] YES [ ] NO
Food and/or Beverages? [ ] YES [ ] NO
If YES:
| Will food be prepared on site? [ ] YES [ ] NO |
| Please describe: |
| Will alcohol be served? [ ] YES [ ] NO |
| Please describe: |
| Will attendees be charged for alcohol? [ ] YES [ ] NO |
| Is alcohol license or permit required? [ ] YES [ ] NO |
| Does caterer have alcohol license or permit: [ ] YES [ ] NO [ ] N/A |
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Other Amenities (tent, booths, band, food trucks, bounce house, etc.): |
Other Event Details or Special Circumstances: |
The undersigned certifies that the foregoing is true, accurate and complete and he/she is duly authorized to sign and submit this request on behalf of the Tenant/Requestor named above.
UNITY BIOTECHNOLOGY, INC. |
By: |
Name: |
Title: |
Date: |
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EXHIBIT G
BILL OF SALE
This instrument (this Bill of Sale) dated as of , 2016, is executed by and between BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership (Seller), and UNITY BIOTECHNOLOGY, INC., a Delaware corporation (Purchaser).
1. Sale of Existing Furniture. As part of the consideration for Tenants agreement to enter into that certain Lease of even date herewith between Seller, as Landlord, and Purchaser, as Tenant, for certain space in the building located at 3280 Bayshore Boulevard, Brisbane, California (the Lease), Seller hereby transfers, sets over and conveys to Purchaser all right, title and interest of Seller in and to the Existing Furniture (as such term is defined in the Lease), specifically excluding the Non-Included Items (as such term is defined in the Lease).
2. As Is Sale. Purchaser accepts the Existing Furniture in its condition as is and with all faults, patent or latent, as of the date hereof, and Seller hereby disclaims any warranties, related to the Existing Furniture, including, without limitation, warranties of merchantability and fitness for a particular purpose. Purchaser hereby acknowledges that Seller has not made, and does not make any representations or warranties, of any kind, express or implied, regarding the Existing Furniture, and Purchaser waives and releases any and all claims of any kind arising from the sale or condition of the Existing Furniture.
3. Successors and Assigns. This Bill of Sale is binding upon, and shall inure to the benefit of Seller and Purchaser and their respective heirs, legal representatives, successors and assigns.
4. Counterparts. This Bill of Sale may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. Signature pages may be detached from the counterparts and attached to a single copy of this Bill of Sale to form one (1) document. A facsimile, electronic or portable document format (PDF) signature on this Bill of Sale shall be equivalent to, and have the same force and effect as, an original signature.
5. Governing Law. This Bill of Sale shall be governed by, interpreted under, and construed and enforceable in accordance with, the laws of the State of California.
6. Attorneys Fees. Should either party employ attorneys to enforce any of the provisions hereof, the substantially prevailing party shall be entitled to receive from the other party all reasonable costs, charges, and expenses, including reasonable attorneys fees, expended or incurred by the substantially prevailing party in connection therewith.
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IN WITNESS WHEREOF, the undersigned have caused this Bill of Sale to be executed as of the date written above.
SELLER:
BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership |
By: | ||
Name: | ||
Title: |
PURCHASER:
UNITY BIOTECHNOLOGY, INC., a Delaware corporation |
By: | ||
Name: | ||
Title: |
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EXHIBIT H
TENANTS PROPERTY
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EXHIBIT I
FORM OF ESTOPPEL CERTIFICATE
To: | BMR-Bayshore Boulevard LP |
17190 Bernardo Center Drive |
San Diego, California 92128 |
Attention: Vice President, Real Estate Legal |
BioMed Realty, L.P. |
17190 Bernardo Center Drive |
San Diego, California 92128 |
Re: | Suite [ ] (the Premises) at 3280 Bayshore Boulevard, Brisbane, California (the Property) |
The undersigned tenant (Tenant) hereby certifies to you as follows:
1. Tenant is a tenant at the Property under a lease (the Lease) for the Premises dated as of
[ ], 20[ ]. The Lease has not been cancelled, modified, assigned, extended or
amended [except as follows: [ ]], and there are no other agreements, written or oral, affecting or relating to Tenants lease of the Premises
or any other space at the Property. The lease term expires on [ ], 20[ ].
2. Tenant took possession of the Premises, currently consisting of [ ] square feet, on [ ], 20[ ], and commenced to pay rent on [ ], 20[ ]. Tenant has full possession of the Premises, has not assigned the Lease or sublet any part of the Premises, and does not hold the Premises under an assignment or sublease[, except as follows: [ ]].
3. All base rent, rent escalations and additional rent under the Lease have been paid through [ ], 20[ ]. There is no prepaid rent[, except $[ ]][, and the amount of security deposit is $[ ] [in cash][OR][in the form of a letter of credit]]. Tenant currently has no right to any future rent abatement under the Lease.
4. Base rent is currently payable in the amount of $[ ] per month.
5. Tenant is currently paying estimated payments of additional rent of $[ ] per month on account of real estate taxes, insurance, management fees and Common Area maintenance expenses.
6. All work to be performed for Tenant under the Lease has been performed as required under the Lease and has been accepted by Tenant[, except [ ]], and all allowances to be paid to Tenant, including allowances for tenant improvements, moving expenses or other items, have been paid.
7. The Lease is in full force and effect, free from default and free from any event that could become a default under the Lease, and Tenant has no claims against the landlord or offsets or defenses against rent, and there are no disputes with the landlord. Tenant has received no notice of prior sale, transfer, assignment, hypothecation or pledge of the Lease or of the rents payable thereunder[, except [ ]].
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8. [Tenant has the following expansion rights or options for leasing additional space at the Property: [ ].][OR][Tenant has no rights or options to purchase the Property.]
9. To Tenants knowledge, no hazardous wastes have been generated, treated, stored or disposed of by or on behalf of Tenant in, on or around the Premises or the Project in violation of any environmental laws.
10. The undersigned has executed this Estoppel Certificate with the knowledge and understanding that [INSERT NAME OF LANDLORD, PURCHASER OR LENDER, AS APPROPRIATE] or its assignee is [acquiring the Property/making a loan secured by the Property] in reliance on this certificate and that the undersigned shall be bound by this certificate. The statements contained herein may be relied upon by [INSERT NAME OF PURCHASER OR LENDER, AS APPROPRIATE], [LANDLORD], BioMed Realty, L.P., BioMed Realty Trust, Inc., and any [other] mortgagee of the Property and their respective successors and assigns.
Any capitalized terms not defined herein shall have the respective meanings given in the Lease.
Dated this [ ] day of [ ], 20[ ].
UNITY BIOTECHNOLOGY, INC., a Delaware corporation |
By: | ||
Name: | ||
Title: |
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Exhibit 10.1B
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (this Amendment) is entered into as of this 23rd day of May, 2017 (the First Amendment Execution Date), by and between BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership (Landlord), and UNITY BIOTECHNOLOGY, INC., a Delaware corporation (Tenant).
RECITALS
A. WHEREAS, Landlord and Tenant are parties to that certain Lease dated as of May 13, 2016 (as the same may have been amended, supplemented or modified from time to time, the Existing Lease), whereby Tenant leases certain premises (the Existing Premises) from Landlord at 3280 Bayshore Boulevard in Brisbane, California (the Building);
B. WHEREAS, in connection with the completion of the Tenant Improvements for the Existing Premises, Landlord and Tenant desire to memorialize the remeasurement and reconfiguration of the Existing Premises;
C. WHEREAS, Landlord and Tenant desire to expand the Existing Premises to include that certain space containing approximately eleven thousand five hundred fourteen (11,514) square feet of Rentable Area located on the first (1st) and second (2nd) floors of the Building (as more particularly described on Exhibit A attached hereto, the Additional Premises);
D. WHEREAS, Landlord and Tenant desire to modify and amend the Existing Lease only in the respects and on the conditions hereinafter stated.
AGREEMENT
NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:
1. Definitions. For purposes of this Amendment, capitalized terms shall have the meanings ascribed to them in the Existing Lease unless otherwise defined herein. The Existing Lease, as amended by this Amendment, is referred to collectively herein as the Lease. From and after the date hereof, the term Lease, as used in the Existing Lease, shall mean the Existing Lease, as amended by this Amendment.
2. Existing Lease Terms. As a result of the remeasurement and reconfiguration of the Existing Premises in connection with the construction of the Tenant Improvements, the terms, conditions and provisions of the Existing Lease are hereby modified as follows (effective as of the First Amendment Execution Date):
2.1 Premises Space Plan. Exhibit A-1 and Exhibit A-2 of the Existing Lease are hereby deleted and replaced with the Exhibit A-1 and Exhibit A-2 attached to this Amendment.
2.2 Rentable Area and Pro Rata Share. The chart in Section 2.2 of the Existing Lease is hereby deleted in its entirety and replaced with the following:
Definition or Provision |
Means the Following (As of the First Amendment Execution Date) | |
Approximate Rentable Area of Phase I Premises | 10,753 square feet | |
Approximate Rentable Area of Phase II Premises | 16,432 square feet | |
Approximate Rentable Area of Building | 55,898 square feet | |
Approximate Rentable Area of Project | 183,344 square feet | |
Tenants Pro Rata Share of Building (Phase I Premises) | 19.24% | |
Tenants Pro Rata Share of Building (Phase II Premises) | 29.40% | |
Tenants Pro Rata Share of Project (Phase I Premises) | 5.86% | |
Tenants Pro Rata Share of Project (Phase II Premises) | 8.96% |
2.3 Phase I Premises (Base Rent). The chart in Section 2.3.1 of the Existing Lease is hereby deleted in its entirety and replaced with the following:
Dates |
Square Feet of Rentable Area |
Base Rent per Square Foot of Rentable Area |
Monthly Base Rent |
Annual Base Rent | ||||
Months 1 - 12 |
10,753 | $4.45 monthly | $47,850.85 | $574,210.20 |
3. Additional Premises. Effective as of January 1, 2018 (the Additional Premises Commencement Date), Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Additional Premises. From and after the Additional Premises Commencement Date, the term Premises as used in the Lease shall mean the Existing Premises plus the Additional Premises.
3.1 Additional Premises Term. The Term with respect to the Additional Premises (the Additional Premises Term) shall commence on the Additional Premises Commencement Date and shall thereafter be coterminous with the Term for the Existing Premises, such that the Term with respect to the entire Premises (including both the Existing Premises and the Additional Premises) shall expire on the Term Expiration Date.
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3.2 Condition of Additional Premises. Tenant acknowledges that (a) it is fully familiar with the condition of the Additional Premises and, notwithstanding anything to the contrary in the Lease, agrees to take the same in its condition as is as of the Additional Premises Commencement Date, (b) neither Landlord nor any agent of Landlord has made (and neither Landlord nor any agent of Landlord hereby makes) any representation or warranty of any kind whatsoever, express or implied, regarding the Additional Premises, including (without limitation) any representation or warranty with respect to the condition of the Additional Premises or with respect to the suitability of the Additional Premises for the conduct of Tenants business and (c) Landlord shall have no obligation to alter, repair or otherwise prepare the Additional Premises for Tenants occupancy or to pay for any improvements to the Additional Premises. The Additional Premises have not undergone inspection by a Certified Access Specialist (as defined in California Civil Code Section 55.52). Notwithstanding anything to the contrary in this Section, Landlord shall deliver the Additional Premises to Tenant with the heating, ventilating and air conditioning systems serving the Additional Premises in good working order, condition and repair (such obligation, Landlords Delivery Obligation). Tenants taking possession of the Additional Premises shall, except as otherwise agreed to in writing by Landlord and Tenant, conclusively establish that the Additional Premises, the Building and the Project were at such time in good, sanitary and satisfactory condition and repair and that Landlords Delivery Obligation was satisfied; provided that, if Landlord fails to satisfy Landlords Delivery Obligation (a Delivery Shortfall), then Tenant may, as its sole and exclusive remedy, deliver notice of such failure to Landlord detailing the nature of such failure (a Shortfall Notice); provided, further, that any Shortfall Notice must be received by Landlord no later than the date (the Shortfall Notice Deadline) that is thirty (30) days after the First Amendment Execution Date. In the event that Landlord receives a Shortfall Notice on or before the Shortfall Notice Deadline, Landlord shall, at Landlords expense, promptly remedy the Delivery Shortfall. Landlord shall not have any obligations or liabilities in connection with a failure to satisfy Landlords Delivery Obligation except to the extent such failure is identified by Tenant in a Shortfall Notice delivered to Landlord on or before the Shortfall Notice Deadline.
3.3 Additional Premises Base Rent. Initial monthly and annual installments of Base Rent for the Additional Premises shall be as set forth in the following chart, subject to adjustment under the Lease:
Dates |
Square Feet of Rentable Area |
Base Rent per Square Foot of Rentable Area |
Monthly Base Rent |
Annual Base Rent | ||||
1/1/2018 12/31/2018 |
11,514 | $3.10 monthly | $35,693.40 | $428,320.80 |
3.4 Additional Premises Base Rent Adjustments. Base Rent for the Additional Premises shall be subject to an annual upward adjustment of three percent (3%) of the then-current Base Rent. The first such adjustment shall become effective commencing on the first (1st) annual anniversary of the Additional Premises Commencement Date, and subsequent adjustments shall become effective on every successive annual anniversary for so long as the Lease continues in effect.
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3.5 Additional Premises Base Rent Abatement. Tenants obligations with respect to Base Rent as to the Additional Premises shall be subject to abatement in the amount of One Hundred Seven Thousand Eighty and 20/100 Dollars ($107,080.20) (the Additional Premises Base Rent Abatement), which Additional Premises Base Rent Abatement shall be amortized and applied in equal installments over months one (1) through three (3) of the Additional Premises Term; provided, however, that Tenant shall not be entitled to any portion of the Additional Premises Base Rent Abatement accruing during a period of time in which Tenant is in Default under the Lease. Tenant acknowledges and agrees that the Additional Premises Base Rent Abatement has been granted to Tenant as additional consideration for entering into this Amendment and for agreeing to pay the Rent and perform all of the obligations of Tenant under the Lease. The Additional Premises Base Rent Abatement shall not work to abate or reduce Tenants obligations under the Lease with respect to Additional Rent including (without limitation) Tenants obligations with respect to Operating Expenses and the Property Management Fee. For avoidance of doubt, for the first three (3) months of the Additional Premises Term, the Property Management Fee with respect to the Additional Premises shall be calculated as if Tenant were paying Thirty-Five Thousand Six Hundred Ninety-Three and 40/100 Dollars ($35,693.40) per month for Base Rent with respect to the Additional Premises.
3.6 Additional Premises Early Access. Subject to all of the terms, conditions and provisions of this Section 3.6, Landlord shall, from and after the First Amendment Execution Date, permit Tenant to enter upon the Additional Premises prior to the Additional Premises Commencement Date; provided, however, that, prior to any such entry, Tenant shall furnish to Landlord evidence satisfactory to Landlord in advance that insurance coverages required of Tenant under the provisions of Article 23 of the Existing Lease are in effect with respect to the Additional Premises, and such entry shall be subject to all the terms and conditions of the Lease other than the payment of Base Rent (with respect to the Additional Premises) and Tenants Adjusted Share of Operating Expenses (with respect to the Additional Premises). Tenant acknowledges that, as of the First Amendment Execution Date, Landlord is in the process of constructing certain tenant improvements and alterations in and around the Additional Premises and that Tenants right to access and occupy the Additional Premises prior to the Additional Premises Commencement Date shall be subject and subordinate to Landlords right to complete such construction. Prior to the Additional Premises Commencement Date, Landlord shall be permitted to enter the Additional Premises at all times in connection with such construction, and Tenant shall reasonably cooperate with Landlord throughout the construction process to enable Landlord to complete the construction in a timely and efficient manner. Tenant acknowledges that such construction may cause noise, paint, fumes, dust and debris in and around the Additional Premises and that one of the demising walls on the Additional Premises is currently open to other space within the Building (the Open Wall) to facilitate such construction. Landlord shall, within thirty (30) days after the First Amendment Execution Date, install a temporary barrier within the Open Wall to reduce the amount of noise, paint, fumes, dust and debris entering the Additional Premises.
3.7 Additional Premises Utilities. Tenant shall pay all utility charges with respect to the Additional Premises, together with any fees, surcharges and taxes thereon for the period beginning on the date that Tenant first accesses the Additional Premises for any reason after the First Amendment Execution Date.
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4. Tenants Pro Rata Share. Effective as of the Additional Premises Commencement Date, the chart in Section 2.2 of the Existing Lease (as amended by Section 2.2 above) is hereby deleted and replaced with following:
Definition or Provision |
Means the Following (As of the Additional Premises Commencement Date) | |
Approximate Rentable Area of Phase I Premises |
10,753 square feet | |
Approximate Rentable Area of Phase II Premises |
16,432 square feet | |
Approximate Rentable Area of Additional Premises |
11,514 square feet | |
Approximate Rentable Area of Building |
55,898 square feet | |
Approximate Rentable Area of Project |
183,344 square feet | |
Tenants Pro Rata Share of Building (Phase I Premises) |
19.24% | |
Tenants Pro Rata Share of Building (Phase II Premises) |
29.40% | |
Tenants Pro Rata Share of Building (Additional Premises) |
20.60% | |
Tenants Pro Rata Share of Project (Phase I Premises) |
5.86% | |
Tenants Pro Rata Share of Project (Phase II Premises) |
8.96% | |
Tenants Pro Rata Share of Project (Additional Premises) |
6.28% |
5. Security Deposit. On or before the First Amendment Execution Date, Tenant shall deposit with Landlord an amount equal to One Hundred Thousand Dollars ($100,000) to be held by Landlord as an additional Security Deposit under the Lease in accordance with all of the terms, conditions and provisions of Article 11 of the Existing Lease (such amount, the Additional Security Deposit). From and after the First Amendment Execution Date, the required Security Deposit under the Lease shall be an amount equal to Five Hundred Fifty Thousand Dollars ($550,000). As set forth in Section 11.6 of the Existing Lease (and subject to all of the terms, conditions and provisions of Article 11 of the Existing Lease), the Security Deposit (including, without limitation, the Additional Security Deposit) may be in the form of cash, a letter of credit or any other security instrument acceptable to Landlord in its sole discretion.
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6. Right of First Refusal. Subject to any other parties pre-existing rights with respect to Available ROFR Premises (as defined below), Tenant shall have a right of first refusal (ROFR) as to any rentable premises in the Building for which Landlord is seeking a tenant (Available ROFR Premises); provided, however, that in no event shall Landlord be required to lease any Available ROFR Premises to Tenant for any period past the date on which the Lease expires or is terminated pursuant to its terms. To the extent that Landlord renews or extends a then-existing lease with any then-existing tenant or subtenant of any space, or enters into a new lease with such then-existing tenant or subtenant for the same premises, the affected space shall not be deemed to be Available ROFR Premises. In the event Landlord receives from a third party a bona fide offer to lease Available ROFR Premises, Landlord shall provide written notice thereof to Tenant (the Notice of Offer), specifying the terms and conditions of a proposed lease to Tenant of the Available ROFR Premises.
6.1 Within ten (10) days following its receipt of a Notice of Offer, Tenant shall advise Landlord in writing whether Tenant elects to lease all (not just a portion) of the Available ROFR Premises on the terms and conditions set forth in the Notice of Offer. If Tenant fails to notify Landlord of Tenants election within such ten (10) day period, then Tenant shall be deemed to have elected not to lease the Available ROFR Premises.
6.2 If Tenant timely notifies Landlord that Tenant elects to lease the Available ROFR Premises on the terms and conditions set forth in the Notice of Offer, then Landlord shall lease the Available ROFR Premises to Tenant upon the terms and conditions set forth in the Notice of Offer.
6.3 If Tenant notifies Landlord that Tenant elects not to lease the Available ROFR Premises on the terms and conditions set forth in the Notice of Offer, or if Tenant fails to notify Landlord of Tenants election within the ten (10)-day period described above, then Landlord shall have the right to consummate the lease of the Available ROFR Premises on any terms that are acceptable to Landlord (provided, however, in the event the total amount of base rent over the term of the lease that Landlord desires to consummate for the Available ROFR Premises would be less than ninety-five percent (95%) of the total amount of base rent contemplated in the Notice of Offer, Landlord shall not consummate such lease without first complying with the procedures set forth in this Article). If Landlord does not lease the Available ROFR Premises within one hundred eighty (180) days after Tenants election (or deemed election) not to lease the Available ROFR Premises, then the ROFR shall be fully reinstated, and Landlord shall not thereafter lease the Available ROFR Premises without first complying with the procedures set forth in this Article.
6.4 Notwithstanding anything in this Article to the contrary, Tenant shall not exercise the ROFR during such period of time that Tenant is in default under any provision of the Lease. Any attempted exercise of the ROFR during a period of time in which Tenant is so in default shall be void and of no effect. In addition, Tenant shall not be entitled to exercise the ROFR if Landlord has given Tenant two (2) or more notices of default under this Lease, whether or not the defaults are cured, during the twelve (12) month period prior to the date on which Tenant seeks to exercise the ROFR.
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6.5 Notwithstanding anything in this Lease to the contrary, Tenant shall not assign or transfer the ROFR, either separately or in conjunction with an assignment or transfer of Tenants interest in the Lease, without Landlords prior written consent, which consent Landlord may withhold in its sole and absolute discretion.
6.6 If Tenant exercises the ROFR, Landlord does not guarantee that the Available ROFR Premises will be available on the anticipated commencement date due to a holdover by the then-existing occupants of the Available ROFR Premises or for any other reason beyond Landlords reasonable control.
6.7 Notwithstanding anything in this Lease to the contrary, the ROFR shall expire on the date that is thirty-six (36) months following the First Amendment Execution Date.
7. Broker. Tenant represents and warrants that it has not dealt with any broker or agent in the negotiation for or the obtaining of this Amendment and agrees to reimburse, indemnify, save, defend (at Landlords option and with counsel reasonably acceptable to Landlord, at Tenants sole cost and expense) and hold harmless the Landlord Indemnitees for, from and against any and all cost or liability for compensation claimed by any such broker or agent employed or engaged by it or claiming to have been employed or engaged by it.
8. No Default. Tenant represents, warrants and covenants that, to the best of Tenants knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Existing Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder. Landlord represents, warrants and covenants that, to the best of Landlords knowledge, Landlord and Tenant are not in default of any of their respective obligations under the Existing Lease and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Landlord or Tenant thereunder.
9. Notices. Tenant confirms that, notwithstanding anything in the Lease to the contrary, notices delivered to Tenant pursuant to the Lease should be sent to:
Unity Biotechnology
3280 Bayshore Boulevard, Suite 100
Brisbane, CA 94005
Attention: Keith Leonard, CEO
10. Effect of Amendment. Except as modified by this Amendment, the Existing Lease and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. In the event of any conflict between the terms contained in this Amendment and the Existing Lease, the terms herein contained shall supersede and control the obligations and liabilities of the parties.
11. Successors and Assigns. Each of the covenants, conditions and agreements contained in this Amendment shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns and sublessees. Nothing in this section shall in any way alter the provisions of the Lease restricting assignment or subletting.
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12. Miscellaneous. This Amendment becomes effective only upon execution and delivery hereof by Landlord and Tenant. The captions of the paragraphs and subparagraphs in this Amendment are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof. All exhibits hereto are incorporated herein by reference. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for a lease, and shall not be effective as a lease, lease amendment or otherwise until execution by and delivery to both Landlord and Tenant.
13. Authority. Tenant guarantees, warrants and represents that the individual or individuals signing this Amendment have the power, authority and legal capacity to sign this Amendment on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf such individual or individuals have signed.
14. Counterparts; Facsimile and PDF Signatures. This Amendment may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document. A facsimile or portable document format (PDF) signature on this Amendment shall be equivalent to, and have the same force and effect as, an original signature.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date and year first above written.
LANDLORD: |
BMR-BAYSHORE BOULEVARD LP, |
a Delaware limited partnership |
By: | /s/ Marie Lewis | |
Name: | Marie Lewis | |
Title: | Vice President, Legal |
TENANT: |
UNITY BIOTECHNOLOGY, INC., |
a Delaware corporation |
By: | /s/ Keith R. Leonard | |
Name: | Keith R. Leonard | |
Title: | CEO |
EXHIBIT A
ADDITIONAL PREMISES
EXHIBIT A-1
PHASE I PREMISES
EXHIBIT A-2
PHASE II PREMISES
Exhibit 10.2A
SPACE LICENSE AGREEMENT
Commencement Date: October 20, 2016 | Expiration Date: April 17, 2017 |
OWNER | ||||
Owner Name: | BMR-Bayshore Boulevard LP | |||
Notice Address: |
17190 Bernardo Center Drive San Diego, California 92128 Attn: Legal Department |
Facsimile: ***** | Email: ***** | |
USER | ||
User Name: Unity Biotechnology, Inc. | ||
Notice Address: 3280 Bayshore Boulevard, Brisbane, California 94005 | ||
Facsimile: N/A | Email: ***** | |
DESCRIPTION OF SPACE AND USE | ||
Building/Space: approximately 750 rentable square feet located on the second (2nd) floor and approximately 150 rentable square feet located on the first (1st) floor, in each case in the building (the Building) at 3280 Bayshore Boulevard in Brisbane, California, as shown on Exhibit A attached hereto (the License Area). | Use:
With respect to the portion of the License Area located on the first (1st) floor of the Building:
General storage use in accordance with Applicable Laws (as defined below) and any other requirements of any federal, state, regional, local or municipal governmental authority, agency or subdivision (each, a Governmental Authority).
With respect to the portion of the License Area located on the second (2nd) floor of the Building:
Office use in accordance with Applicable Laws (as defined below) and any other requirements of any Governmental Authority. |
RENT AND DEPOSIT | ||||
Base Fees: $3,000
Due Date: First (1st) calendar day of each month during the Term. |
Fees should be payable to:
BMR-Bayshore Boulevard LP Attention Entity 159 P.O. Box 511415 Los Angeles, CA 90051-7970 |
Security Deposit: $0 |
THIS SPACE LICENSE AGREEMENT (this Agreement) is entered into as of this 20th day of October, 2016 (the Execution Date), by and between BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership (Owner), and UNITY BIOTECHNOLOGY, INC., a Delaware corporation (User). In consideration of the mutual promises and agreements set forth above and hereinafter in this Agreement, the undersigned parties agree as follows:
1. License Area. Owner hereby grants to User a non-transferable right and revocable exclusive (but subject to Section 13) license for the temporary use of the License Area located in or adjacent to the Building for the term of this Agreement, as more precisely described and designated on Exhibit A attached hereto and made a part hereof. The License Area, Building and the real property on which the Building is situated are sometimes referred to collectively in this Agreement as the Property. User acknowledges and agrees that the License Area may be relocated by Owner at any time for any reason or for no reason. Nothing in this Agreement shall be construed to create any relationship between the parties other than that of licensor and licensee.
2. Term. The Term of this Agreement shall commence on the Commencement Date and shall expire on the Expiration Date described above, unless sooner terminated as provided in this Agreement. If User remains in the License Area after the termination or expiration of this Agreement, then, in addition to all other remedies Owner may have at law, in equity or under this Agreement, User shall be deemed to be a licensee at sufferance only and Base Fees shall be increased to One Thousand Dollars ($1,000) per day. If User fails to surrender and vacate the License Area upon the termination or expiration of this Agreement, then User shall reimburse, indemnify, save, defend (at Owners option and with counsel reasonably acceptable to Owner) and hold Owner and its affiliates and their respective shareholders, members, partners, directors, officers, employees, lenders, ground lessors, successors and assigns, and Owners contractors and agents (collectively with Owner, each an Owner Indemnitee) harmless for, from and against any and all Claims (as defined below) arising, directly or indirectly, from such failure to surrender or vacate. The obligations of User under this Section shall survive the expiration or earlier termination of this Agreement.
3. Use. User shall occupy and use the License Area during the Term as and for the sole purposes set forth above and for no other purpose without Owners prior written consent (which consent Owner may withhold in Owners sole and absolute discretion). Subject to Section 13, Users right to occupy and use the License Area during the Term shall be exclusive.
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4. License Fees. Base Fees and all other amounts specified in this Agreement (all such other amounts, Additional Fees) are collectively referred to as Fees. All Fees shall be paid without notice, demand, deduction or set-off, by check or money order, made payable to Owner at Owners address set forth above on the first (1st) day of each month during the Term. Users obligation to pay Fees with respect to any period or obligations arising, existing or pertaining to the period prior to the date of the expiration or earlier termination of the Term or this Agreement shall survive any such expiration or earlier termination; provided, however, that nothing in this sentence shall in any way affect Users obligations with respect to any other period.
5. [Intentionally omitted].
6. Late Charges. Late payment by User to Owner of Fees and other sums due shall cause Owner to incur costs not contemplated by this Agreement, the exact amount of which shall be extremely difficult and impracticable to ascertain. Such costs include, but are not limited to, processing and accounting charges and late charges that may be imposed on Owner by the terms of any mortgage or trust deed covering the License Area. Therefore, if any installment of Fees due from User is not received by Owner within five (5) days after the date such payment is due, User shall pay to Owner an additional sum of six percent (6%) of the overdue Fees as a late charge. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Owner shall incur by reason of late payment by User. In addition to the late charge, Fees not paid when due shall bear interest from the fifth (5th) day after the date due until paid at the lesser of (a) twelve percent (12%) per annum or (b) the maximum rate permitted by all federal, state and local laws, ordinances, rules, regulations and code requirements (Applicable Laws).
7. Users Maintenance; No Improvements. User shall at all times maintain the License Area, and any equipment or property used or installed by User in the License Area, in good, clean and safe condition, free of all debris and trash. User shall not make any improvements, alterations or changes of any kind to the License Area without Owners prior written approval (which approval may be withheld by Owner in Owners sole and absolute discretion). In addition to all of Owners remedies under this Agreement, if (a) User does not maintain the License Area as required under this Section or (b) repairs or replacement of any portion of the License Area or the Property is made necessary by any act, omission or negligence of User or its agents, employees, contractors, subcontractors or invitees (collectively with User, each a User Party), then Owner may make such repairs or provide such maintenance without liability to User for any loss or damage to User or its merchandise, fixtures or other property, or to Users business by reason of such repairs or maintenance. Further, upon completion of any such repairs or maintenance, User shall pay upon demand, as Additional Fees, Owners costs for making such repairs or providing such maintenance, together with Owners administrative costs related thereto, which amount shall equal one hundred twenty percent (120%) of the total cost of such repair.
8. Damage and Repairs. Any damage, destruction, graffiti or debris around, to, or on the License Area, Building or Property caused by a User Party shall be Users responsibility. If User fails to repair, clean or replace any such damage or debris within two (2) days of the expiration or termination of this Agreement, then Owner may make such repairs, clean-up or replacement. Upon completion of any such repairs, clean-up or replacement, User shall pay
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upon demand, as Additional Fees, Owners costs for making such repairs or providing such clean-up or replacement, together with Owners administrative costs related thereto, which amount shall equal one hundred twenty percent (120%) of the total cost of such repairs, clean-up or replacement. Any damage to the License Area caused directly by Owner shall be Owners responsibility to repair and maintain. The provisions of this Section shall survive the expiration or earlier termination of this Agreement.
9. Termination of Agreement. At any time, either party can terminate this Agreement for any reason, or no reason, by providing at least thirty (30) days prior written notice to the other party declaring such termination. Upon the expiration or termination of this Agreement, User shall (a) return the License Area to Owner in broom clean condition and restore the License Area to at least as good a condition as it was in on the date User took possession and (b) remove its equipment and any other property from the License Area and the Building, including any property purchased or free that may have been in the property on the date of possession, unless otherwise directed by Owner. User acknowledges and agrees that it shall reimburse Owner upon demand for Owners costs to repair any damage caused by such removal by User. Any equipment or property not removed within two (2) days of the date of termination or expiration of this Agreement shall be deemed abandoned by User, and Owner shall have the right, but not the obligation, to remove and dispose of such abandoned equipment or property at Users sole cost and risk.
10. Compliance with Laws; Liens. User shall at all times in its use of the License Area and as related to this Agreement observe and comply with Applicable Laws. Notwithstanding any other provision herein to the contrary, User shall be responsible for all liabilities, costs and expenses arising out of or in connection with the compliance of the License Area with the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., and any state and local accessibility laws, codes, ordinances and rules (collectively, and together with regulations promulgated pursuant thereto, the ADA), and User shall reimburse, indemnify, save, defend (at Owners option and with counsel reasonably acceptable to Owner) and hold harmless the Owner Indemnitees for, from and against any and all Claims (as defined below) arising out of any such failure of the License Area to comply with the ADA. The License Area has not undergone inspection by a Certified Access Specialist (as defined in California Civil Code Section 55.52). User shall obtain all permits and licenses for the operation of its business at the Building or its use or occupancy of the License Area and shall comply with all current and future rules and regulations of Owner for tenants or licensees of the Building. User shall at all times maintain sufficient supervision and control of its employees and invitees. User shall not (a) obstruct the free flow of pedestrian or vehicular traffic in any area of the Property, (b) harm the License Area, commit any waste, create a nuisance or make any use of the License Area that is offensive or (c) act or fail to act in any manner that could result in injury or harm to any person in or about the Property. User shall, and shall instruct all other User Parties to, act in accordance with Owners rules and regulations (the Rules and Regulations), which are attached as Exhibit B hereto. User shall keep the License Area free and clear of any mechanics liens and other liens. Nothing in this Agreement shall be construed as consent on the part of Owner to subject the Building or the Property to any lien or liability under the lien laws of the State in which the Building is located. The provisions of this Section shall survive the expiration or earlier termination of this Agreement.
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11. Insurance. User shall, at its sole cost and expense, maintain insurance in accordance with all of the terms, covenants, conditions and provisions of Exhibit C hereto.
12. Hazardous Materials. User shall not cause or permit any Hazardous Materials (as defined below) to be brought upon, kept or used in or about the License Area, the Building or the Property. As used herein, the term Hazardous Material means any hazardous or toxic substance, material or waste that is or becomes regulated by any Governmental Authority.
13. Project Control. Owner may, at any and all times, enter the License Area to (a) inspect the same and to determine whether User is in compliance with its obligations hereunder, (b) supply any service Owner is required to provide hereunder, (c) alter, improve or repair any portion of the Building, including the License Area, for which access to the License Area is reasonably necessary, (d) post notices of nonresponsibility, (e) access the telephone equipment, electrical substation and fire risers and (f) show the License Area to prospective and current tenants, purchasers and lenders. In connection with any such alteration, improvement or repair as described in Subsection 13(c), Landlord may erect in the License Area or elsewhere in the Project scaffolding and other structures reasonably required for the alteration, improvement or repair work to be performed. In no event shall Users Fees abate as a result of Owners activities pursuant to this Section. Owner shall at all times retain a key with which to unlock all of the doors in the License Area. If an emergency necessitates immediate access to the License Area, Owner may use whatever force is necessary to enter the License Area, and any such entry to the License Area shall not constitute a forcible or unlawful entry to the License Area, a detainer of the License Area, or an eviction of User from the License Area or any portion thereof.
14. Utilities, Services. Owner shall not be required to supply User with any services or utilities. User shall provide its own supplies for cleaning and janitorial services. Owner shall not be liable to User for any loss, injury or damage to persons or property caused by or resulting from any variation, failure, or interruption of any services or utilities to be provided by Owner under this Agreement due to any cause whatsoever, or resulting from Owners failure to make any repairs or perform maintenance, if any, required to be performed by it under this Agreement.
15. Access and Parking. User and its agents, employees and invitees may have access to the License Area twenty-four (24) hours a day. Owner shall have no obligation to provide parking facilities to User in connection with this Agreement or Users use of the License Area User agrees that it shall not park in any reserved spot on the Property or in front of any roll access/loading doors to the other buildings. User must also keep a fire lane available around the Building. Any costs or liability associated with enforcing this parking access shall be Users or violators sole responsibility.
16. Default. Any (a) failure by User to perform any term or condition of this Agreement or (b) default under that certain Lease dated as of May 13, 2016, by and between Owner and User, after the expiration of any applicable notice and cure periods, shall constitute a default under this Agreement and, in such event, Owner may exercise any remedy available to it under this Agreement, at law or in equity. Without limiting the foregoing, in the event any such default is not cured within forty-eight (48) hours of Owners notice to User thereof, Owner may, at its option, terminate this Agreement and revoke the license granted hereby. User shall reimburse Owner for any and all costs and expenses (including attorneys fees and costs) that Owner incurs in connection with enforcing Users obligations under this Agreement.
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17. Limitation of Recovery; Waiver. There shall be no personal liability of Owner with respect to any of the terms of this Agreement. In the event of any breach or default by Owner under this Agreement, User shall look solely to the equity of Owner in the Building for satisfaction of Users remedies. User releases and waives all right of recovery that it might otherwise have against Owner, or any tenants or other licensees of the Building, and their respective agents and employees, by reason of any loss or damage resulting from any recovery, claim, action or cause of action against Owner, damage or injury or other occurrence no matter how caused, to the extent the same is either covered by Users insurance (assuming no deductible) or would have been covered had User complied with the requirements of this Agreement. Each of the covenants and agreements of this Section shall be applicable to any covenant or agreement either expressly contained in this Agreement or imposed by Applicable Laws and shall survive the expiration or earlier termination of this Agreement.
18. Assignment. User shall not, voluntarily or by operation of law, directly or indirectly (whether by merger or otherwise), assign, pledge, hypothecate or otherwise transfer this Agreement or any of Users rights, interests or obligations under this Agreement, in whole or in part, without the prior written consent of Owner in its sole and absolute discretion, and any such purported assignment, pledge, hypothecation or transfer without the prior written consent of Owner shall be null and void.
19. Brokers. User represents and warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Agreement and that it knows of no real estate broker or agent that is or might be entitled to a commission in connection with this Agreement. Owner is executing this Agreement in reliance upon Users representations, warranties and agreements contained within this Section. User shall reimburse, indemnify, save, defend (at Owners option and with counsel reasonably acceptable to Owner) and hold the Owner Indemnitees harmless for, from and against any and all Claims arising, directly or indirectly, from any claim by any broker or agent employed or engaged by User or claiming to have been employed or engaged by User.
20. Notices. Except as otherwise stated in this Agreement, any notice, consent, demand, invoice, statement or other communication required or permitted to be given under this Agreement shall be in writing and shall be given by (a) personal delivery, (b) overnight delivery with a reputable international overnight delivery service, such as FedEx, or (c) facsimile or email transmission, so long as such transmission is followed within one (1) business day by delivery utilizing one of the methods described in (a) or (b). Any such notice, consent, demand, invoice, statement or other communication shall be deemed delivered (x) upon receipt, if given in accordance with subsection (a); (y) one (1) business day after deposit with a reputable international overnight delivery service, if given in accordance with subsection (b); or (z) upon transmission, if given in accordance with subsection (c). Any notice, consent, demand, invoice, statement or other communication required or permitted to be given under this Agreement shall be addressed to the parties at the addresses set forth above. Either party may, by notice to the other given pursuant to this Section, specify additional or different addresses for notice purposes.
21. Acceptance of License Area. By taking possession of the License Area, User shall be deemed to have inspected the License Area and accepted the License Area as is in its present condition. User acknowledges and agrees that neither Owner, nor any employee, agent nor representative of Owner, has made any representation or warranty, express or implied, of any kind as to the condition of the License Area or its suitability for Users proposed use. User further acknowledges and agrees that Owner has no obligation to improve, maintain or repair the License Area unless said obligation is expressly set forth in this Agreement.
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22. Indemnification. User agrees to reimburse, indemnify, save, defend (at Owners option and with counsel reasonably acceptable to Owner) and hold harmless the Owner Indemnitees for, from and against any and all demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages, suits or judgments, and all reasonable expenses (including reasonable attorneys fees, charges and disbursements, regardless of whether the applicable demand, claim, action, cause of action or suit is voluntarily withdrawn or dismissed) incurred in investigating or resisting the same (collectively, Claims) of any kind or nature arising from (a) any labor dispute involving User or its contractors or agents, (b) the use or enjoyment of the License Area or the Property by User or any other User Party, (c) injury to or death of any person or persons, or damage to or destruction of any property occurring in, on or about the License Area or (d) a breach of this Agreement by User or any act or omission of a User Party, except to the extent directly caused by Owners negligence or willful misconduct. Users obligations under this Section shall not be affected, reduced or limited by any limitation on the amount or type of damages, compensation or benefits payable by or for User under workers compensation acts, disability benefit acts, employee benefit acts or similar legislation. Users obligations under this Section shall survive the expiration or earlier termination of this Agreement.
23. Assumption of Risk. To the maximum extent permitted by Applicable Laws, Users activities on and use of the License Area and the Property shall be at Users sole risk. Notwithstanding anything in this Agreement to the contrary, Owner shall not be liable to User for, and User assumes all risk of, damage to personal property or scientific research, including loss of records kept by User within the License Area and damage or losses caused by fire, electrical malfunction, gas explosion or water damage of any type (including broken water lines, malfunctioning fire sprinkler systems, roof leaks or stoppages of lines), unless any such loss is due to Owners willful disregard of written notice by User of need for a repair that Owner is responsible to make for an unreasonable period of time. User further waives any claim for injury to Users business or loss of income relating to any such damage or destruction as described in this Section.
24. Signage. User is responsible for all of Users signage. All signage must be pre-approved in writing by Owner and hand-written signs are not permitted.
25. Trash Removal. User must supply its own dumpster for disposal of any debris, garbage or material created or used in the use of the License Area. User must notify Owner of its use of a dumpster and locate the dumpster in such area as may be designated by Owner from time to time. User is solely responsible for all costs associated with obtaining, maintaining and disposing of the dumpster. User acknowledges that other dumpsters may exist on the site but that User is not to use any other means of disposal on site except its own dumpster or means of disposal off-site. Any costs of enforcing Users obligations under this Section shall be Users sole responsibility. Further, upon completion of any such disposal, User shall pay upon demand, as Additional Fees, Owners costs for making such additional disposal, together with Owners administrative costs related thereto, which amount shall equal one hundred twenty percent (120%) of the total cost of such disposal.
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26. Signatures Required. Submission of this instrument for examination or signature by User does not constitute a reservation of or option for a license, and shall not be effective as a license or otherwise until execution by and delivery to both Owner and User.
27. Subordination and Attornment. This Agreement shall be subject and subordinate to the lien of any mortgage, deed of trust, or lease in which Owner is tenant now or hereafter in force against the Building or the Property and to all advances made or hereafter to be made upon the security thereof without the necessity of the execution and delivery of any further instruments on the part of User to effectuate such subordination. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by Owner covering the License Area, User shall at the election of the purchaser at such foreclosure or sale attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as Owner under this Agreement.
28. Force Majeure. Any covenants on Owners part to furnish any service pursuant to any of the terms, covenants, conditions, provisions or agreements of this Agreement, or to perform any act or thing for the benefit of User, shall not be deemed breached if Owner is unable to furnish or perform the same by virtue of accident; breakage; repair; casualty; physical natural disaster (but excluding weather conditions except for Sever Weather Conditions (as defined below)); strike, lockout or other labor disturbance or labor dispute; act of terrorism; riot or civil disturbance; war or insurrection; shortage of materials, which shortage is not unique to Owner; governmental regulation, moratorium or other governmental action, inaction or delay; Severe Weather Conditions (as hereinafter defined); or any other causes beyond Owners reasonable control (collectively, Force Majeure). Severe Weather Conditions means weather conditions that are materially worse than those that reasonably would be anticipated for the Property at the applicable time based on historic meteorological records.
29. Construction. Where applicable in this Agreement, the singular includes the plural and the masculine or neuter includes the masculine, feminine and neuter. The words include, includes, included and including mean include, etc., without limitation. The word shall is mandatory and the word may is permissive. The section headings of this Agreement are not a part of this Agreement and shall have no effect upon the construction or interpretation of any part of this Agreement. Owner and User have each participated in the drafting and negotiation of this Agreement, and the language in all parts of this Agreement shall be in all cases construed as a whole according to its fair meaning and not strictly for or against either Owner or User.
30. Attorneys Fees. Except as otherwise expressly set forth in this Agreement, each party shall pay its own costs and expenses incurred in connection with this Agreement and such partys performance under this Agreement, provided, that if either party commences an action, proceeding, demand, claim, action, cause of action or suit against the other party arising out of or in connection with this Agreement, then the substantially prevailing party shall be reimbursed by the other party for all reasonable costs and expenses, including reasonable attorneys fees and expenses, incurred by the substantially prevailing party in such action, proceeding, demand, claim, action, cause of action or suit, and in any appeal in connection therewith (regardless of whether the applicable action, proceeding, demand, claim, action, cause of action, suit or appeal is voluntarily withdrawn or dismissed).
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31. Time of the Essence. Time is of the essence with respect to the performance of every provision of this Agreement.
32. Integration. The terms of this Agreement are intended by the parties as a final, complete and exclusive expression of their agreement with respect to the terms that are included in this Agreement, and may not be contradicted or supplemented by evidence of any other prior or contemporaneous agreement.
33. Independent Obligations. Notwithstanding anything to the contrary contained in this Agreement, Users obligations under this Agreement are independent and shall not be conditioned upon performance by Owner.
34. Reasonable Consent. Whenever consent or approval of either party is required pursuant to this Agreement, that party shall not unreasonably withhold, condition or delay such consent or approval, except as may be expressly set forth to the contrary in this Agreement.
35. Severability. Any provision of this Agreement that shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and all other provisions of this Agreement shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal provision did not exist.
36. Successors and Assigns. Each of the covenants, conditions and agreements contained in this Agreement shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns. Nothing in this section shall in any way alter the provisions of this Agreement restricting assignment.
37. No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns, and nothing in this Agreement shall give or be construed to give any other person or entity any legal or equitable rights.
38. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of California, without regard to Californias conflict of law principles.
39. Authority. User guarantees, warrants and represents that the individual or individuals signing this Agreement have the power, authority and legal capacity to sign this Agreement on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf such individual or individuals have signed.
40. Further Assurances. User shall take all such actions and execute all such documents as are reasonable and necessary to implement or evidence the transactions contemplated by this Agreement.
41. Counterparts. This Agreement may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.
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42. Amendment. No provision of this Agreement may be modified, amended or supplemented except by an agreement in writing signed by Owner and User.
43. No Waiver. No waiver of any term, covenant or condition of this Agreement shall be binding unless executed in writing by the party entitled to the benefit of such term, covenant or condition. The waiver of any breach or default of any term, covenant or condition contained in this Agreement shall not be deemed to be a waiver of any preceding or subsequent breach or default of such term, covenant or condition or any other term, covenant or condition of this Agreement. Except as expressly provided in this Agreement, the rights and remedies under this Agreement are in addition to and not exclusive of any other rights, remedies, powers and privileges under this Agreement or available at law, in equity or otherwise. No failure to exercise or delay in exercising any right, remedy, power or privilege shall operate as a waiver thereof, and no single or partial exercise of any right, remedy, power or privilege shall preclude the exercise of any other right, remedy, power or privilege.
44. Waiver of Jury Trial. To the extent permitted by applicable laws, the parties waive trial by jury in any action, proceeding or counterclaim brought by the other party hereto related to matters arising out of or in any way connected with this Agreement, Users use or occupancy of the License Area or any claim of injury or damage related to this Agreement or the License Area.
45. Facsimile and PDF Signatures. A facsimile or portable document format (PDF) signature on this Agreement shall be equivalent to, and have the same force and effect as, an original signature.
46. Covenant and Condition. Each provision of this Agreement performable by User shall be deemed both a covenant and a condition.
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IN WITNESS WHEREOF, Owner and User have hereunto set their hands as of the Execution Date, and acknowledge that they possess the requisite authority to enter into this transaction and to execute this Agreement.
OWNER: | ||
BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership | ||
By: | /s/ Kevin M. Simonsen | |
Name: | Kevin M. Simonsen | |
Title: | Sr. Vice President, Sr. Counsel |
USER: | ||
UNITY BIOTECHNOLOGY, INC., a Delaware corporation | ||
By: | /s/ Nathaniel David | |
Name: | Nathaniel David | |
Title: | CEO |
EXHIBIT A
LICENSE AREA
[See attached]
A-1
A-2
EXHIBIT B
RULES AND REGULATIONS
NOTHING IN THESE RULES AND REGULATIONS (RULES AND REGULATIONS) SHALL SUPPLANT ANY PROVISION OF THE AGREEMENT. IN THE EVENT OF A CONFLICT OR INCONSISTENCY BETWEEN THESE RULES AND REGULATIONS AND THE AGREEMENT, THE AGREEMENT SHALL PREVAIL.
1. Except as specifically provided in the Agreement to which these Rules and Regulations are attached, no sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part of the outside of the License Area or the Building without Owners prior written consent. Owner shall have the right to remove, at Users sole cost and expense and without notice, any sign installed or displayed in violation of this rule.
2. If Owner objects in writing to any curtains, blinds, shades, screens or hanging plants or other similar objects attached to or used in connection with any window or door of the License Area or placed on any windowsill, which window, door or windowsill is (a) visible from the exterior of the License Area and (b) not included in plans approved by Owner, then User shall promptly remove said curtains, blinds, shades, screens or hanging plants or other similar objects at its sole cost and expense.
3. User shall not obstruct any sidewalks or entrances to the Building, or any halls, passages, exits, entrances or stairways within the License Area, in any case that are required to be kept clear for health and safety reasons.
4. No deliveries shall be made that impede or interfere with any tenants in or the operation of the Building.
5. User shall not place a load upon any floor of the License Area that exceeds the load per square foot that (a) such floor was designed to carry or (b) that is allowed by Applicable Laws. Fixtures and equipment that cause noises or vibrations that may be transmitted to the structure of the Building to such a degree as to be objectionable to any tenant shall be placed and maintained by User, at Users sole cost and expense, on vibration eliminators or other devices sufficient to eliminate such noises and vibrations to levels reasonably acceptable to Owner and any tenants of the Building.
6. User shall not use any method of heating or air conditioning other than that shown in plans approved by Owner.
7. User shall not install any radio, television or other antenna, cell or other communications equipment, or any other devices on the roof or exterior walls of the License Area except to the extent shown on plans approved by Owner. User shall not interfere with radio, television or other communications from or in the License Area or elsewhere.
8. Canvassing, peddling, soliciting and distributing handbills or any other written material within, on or around the Building (other than within the License Area) are prohibited, and User shall cooperate to prevent such activities.
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9. User shall store all of its trash, garbage and Hazardous Materials within its License Area or in designated receptacles outside of the License Area. User shall not place in any such receptacle any material that cannot be disposed of in the ordinary and customary manner of trash, garbage and Hazardous Materials disposal.
10. The License Area shall not be used for any improper, immoral or objectionable purpose. No cooking shall be done or permitted on the License Area; provided, however, that User may use (a) equipment approved in accordance with the requirements of insurance policies that Owner or User is required to purchase and maintain pursuant to the Agreement for brewing coffee, tea, hot chocolate and similar beverages, (b) microwave ovens for employees use and (c) equipment shown on plans approved by Owner; provided, further, that any such equipment and microwave ovens are used in accordance with Applicable Laws.
11. User shall not, without Owners prior written consent, use the name of the Building, if any, in connection with or in promoting or advertising Users business except as Users address.
12. User shall comply with all safety, fire protection and evacuation procedures and regulations established by Owner or any Governmental Authority.
13. User assumes any and all responsibility for protecting the License Area from theft, robbery and pilferage, which responsibility includes keeping doors locked and other means of entry to the License Area closed.
14. Owner may waive any one or more of these Rules and Regulations for the benefit of User or any tenant or other user, but no such waiver by Owner shall be construed as a waiver of such Rules and Regulations in favor of User or any tenant or other user, nor prevent Owner from thereafter enforcing any such Rules and Regulations against any or all of the tenants or other users of the Building, including User.
15. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms covenants, agreements and conditions of the Agreement.
16. Owner reserves the right to make such other and reasonable rules and regulations as, in its judgment, may from time to time be needed for safety and security, the care and cleanliness of the Building, or the preservation of good order therein; provided, however, that Owner shall provide written notice to User of such rules and regulations prior to them taking effect. User agrees to abide by these Rules and Regulations and any additional rules and regulations issued or adopted by Owner.
User shall be responsible for the observance of these Rules and Regulations by Users employees, agents, clients, customers, invitees and guests.
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EXHIBIT C
INSURANCE
All capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.
1. User shall, at its own cost and expense, procure and maintain in effect, beginning on the Commencement Date or the date of occupancy, whichever occurs first, and continuing throughout the Term (and occupancy by User, if any, after termination of the Agreement) with insurers financially acceptable and lawfully authorized to do business in the state where the Property is located Commercial General Liability insurance on a broad-based occurrence coverage form, with limits of not less than Two Million Dollars ($2,000,000) per occurrence and in the aggregate for bodily injury (including death) and for property damage with respect to the License Area (including $100,000 fire legal liability (each loss)); automobile liability insurance with a minimum limit of One Million Dollars ($1,000,000) combined single limit bodily injury and property damage each accident (with coverage including all vehicles owned, leased, hired or borrowed). Claims-made coverage is permitted, provided the policy retroactive date is continuously maintained prior to the commencement date of the Agreement, and coverage is continuously maintained during all periods in which User occupies the License Area.
2. User shall, at its own cost and expense, procure and maintain in effect, beginning on the Commencement Date or the date of occupancy, whichever occurs first, and continuing throughout the Term (and occupancy by User, if any, after termination of the Agreement) with insurers financially acceptable and lawfully authorized to do business in the state where the Property is located Workers Compensation insurance in compliance with all statutory laws of the State of California. Employers Liability must be at least in the amount of One Million Dollars ($1,000,000) for bodily injury by accident for each employee, One Million Dollars ($1,000,000) for bodily injury by disease for each employee, and One Million Dollars ($1,000,000) bodily injury by disease for policy limit. Users Workers Compensation policies shall be endorsed to waive subrogation against Owner, the other Additional Insureds and their respective consultants and agents.
3. The insurance required to be purchased and maintained by User hereunder shall name Owner, BioMed Realty, L.P., and BRE Edison Parent, L.P., BioMed Realty LLC and their respective officers, directors, employees, agents, general partners, members, subsidiaries, affiliates, lenders and ground lessors (Owner Parties) as additional insureds as respects liability arising from work or operations performed by or on behalf of User and Users use or occupancy of the License Area. Said insurance shall be with companies having a current rating of not less than A- and financial category rating of at least Class VII in A.M. Bests Insurance Guide current edition. User shall obtain for Owner from the insurance broker/agent or cause the insurance broker/agent to furnish certificates of insurance evidencing all coverages required herein to Owner. Owner reserves the right to require complete, certified copies of all required insurance policies including any endorsements. No such policy shall be cancelable or subject to reduction of coverage or other modification or cancellation except after twenty (20) days prior written notice to Owner from the insurer (except in the event of non-payment of premium, in which case ten (10) days written notice shall be given). Should carrier be unwilling or unable to
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provide such notice, User shall provide notice to Owner in accordance with this Section. All such policies shall be written as primary policies, not contributing with and not in excess of the coverage that Owner may carry. Users required policies shall contain severability of interests clauses stating that, except with respect to limits of insurance, coverage shall apply separately to each insured or additional insured. Users policies shall contain dedicated or per location limits endorsements so that the amounts of insurance required herein shall not be prejudiced by losses at other locations. User shall, at least five (5) days prior to the expiration of such policies, furnish Owner with renewal certificates of insurance or binders. User agrees that if User does not take out and maintain such insurance, Owner may (but shall not be required to) procure said insurance on Users behalf and at its cost to be paid by User within thirty (30) days of receipt of an invoice from Owner.
4. User shall, at Users sole cost and expense, carry such insurance as User desires for Users protection with respect to personal property of User or business interruption.
5. In each instance where insurance is to name Owner Parties as additional insureds, User shall, upon Owners written request, also designate and furnish certificates evidencing such Owner Parties as additional insureds to (a) any lender of Owner holding a security interest in the Building or the Property, (b) the landlord under any lease whereunder Owner is a tenant of the Property if the interest of Owner is or shall become that of a tenant under a ground lease rather than that of a fee owner and (c) any management company retained by Owner to manage the Property.
6. User and each of Users respective insurers hereby waive any and all rights of recovery or subrogation against Owner or against any Owner Parties as respects any loss, damage, claims, suits or demands, howsoever caused, that are covered, or should have been covered, by valid and collectible insurance, including any deductibles or self-insurance maintained thereunder. If necessary, User agrees to endorse the required insurance policies to permit waivers of subrogation as required hereunder and reimburse, indemnify, save, defend (at Owners option and with counsel reasonably acceptable to Owner) and hold the Owner Indemnitees harmless for, from and against any and all Claims incurred as a result of a failure to obtain such waivers of subrogation from insurers. User, upon obtaining the policies of insurance required or permitted hereunder, shall give notice to the insurance carrier or carriers that the foregoing waiver of subrogation is contained in this Agreement. If the release of Owner, as set forth in the first sentence of this Section, shall contravene Applicable Laws, then the liability of User shall be deemed not released but shall be secondary to Users insurer.
Owner may require insurance policy limits required hereunder to be raised to conform with requirements of Owners lender or to bring coverage limits to levels then being required of new tenants within the Property.
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Exhibit 10.2B
FIRST AMENDMENT TO SPACE LICENSE AGREEMENT
THIS FIRST AMENDMENT TO SPACE LICENSE AGREEMENT (this Amendment) is entered into as of this 5th day of December, 2016 (the First Amendment Execution Date), by and between BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership (Owner), and UNITY BIOTECHNOLOGY, INC., a Delaware corporation (User).
RECITALS
A. WHEREAS, Owner and User are parties to that certain Space License Agreement dated as of October 20, 2016 (as the same may have been amended, amended and restated, supplemented or modified from time to time, the Existing Agreement), whereby Owner granted to User a license to use certain space (the Existing License Area) in the building at 3280 Bayshore Boulevard in Brisbane, California (the Building);
B. WHEREAS, Owner and User desire to modify the Existing License Area to include that certain space containing approximately two hundred seventy-five (275) rentable square feet located on the second (2nd) floor of the Building (as more particularly described on Exhibit A attached hereto, the First Amendment License Area); and
C. WHEREAS, Owner and User desire to modify and amend the Existing Agreement only in the respects and on the conditions hereinafter stated.
AGREEMENT
NOW, THEREFORE, Owner and User, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:
1. Definitions. For purposes of this Amendment, capitalized terms shall have the meanings ascribed to them in the Existing Agreement unless otherwise defined herein. The Existing Agreement, as amended by this Amendment, is referred to collectively herein as the Agreement. From and after the date hereof, the term Agreement, as used in the Existing Agreement, shall mean the Existing Agreement, as amended by this Amendment.
2. First Amendment License Area. Effective as of the First Amendment Execution Date, the License Area is hereby expanded to include the First Amendment License Area. From and after the First Amendment Execution Date, the term License Area as used in the Agreement shall mean the Existing License Area plus the First Amendment License Area.
2.1 Term. The Term with respect to the First Amendment License Area shall commence on the First Amendment Execution Date and shall thereafter be coterminous with the Term for the Existing License Area, such that the Term with respect to the entire License Area (including both the Existing License Area and the First Amendment License Area) shall expire on the Expiration Date.
2.2 Use. Notwithstanding anything to the contrary in the Existing Agreement, the permitted Use with respect to the First Amendment License Area shall be general storage, break room, shower and changing room use, all in accordance with Applicable Laws and any other requirements of any Governmental Authority.
2.3 Condition. User acknowledges that (a) it is fully familiar with the condition of the First Amendment License Area and, notwithstanding anything to the contrary in the Agreement, agrees to accept the same in its condition as is as of the First Amendment Execution Date, (b) neither Owner nor any agent of Owner has made (and neither Owner nor any agent of Owner hereby makes) any representation or warranty of any kind whatsoever, express or implied, regarding the First Amendment License Area, including (without limitation) any representation or warranty with respect to the condition of the First Amendment License Area or with respect to the suitability of the First Amendment License Area for the conduct of Users business and (c) Owner shall have no obligation to alter, repair or otherwise prepare the First Amendment License Area for Users occupancy or to pay for any improvements to the First Amendment License Area. The First Amendment License Area has not undergone inspection by a Certified Access Specialist (as defined in California Civil Code Section 55.52).
3. Base Fees. Notwithstanding anything to the contrary in the Existing Agreement, commencing on the First Amendment Execution Date and continuing throughout the remainder of the Term, Base Fees shall equal Five Thousand Dollars ($5,000) per month (prorated for partial months).
4. Broker. User represents and warrants that it has not dealt with any broker or agent in the negotiation for or the obtaining of this Amendment and agrees to reimburse, indemnify, save, defend (at Owners option and with counsel reasonably acceptable to Owner, at Users sole cost and expense) and hold harmless the Owner Indemnitees for, from and against any and all cost or liability for compensation claimed by any such broker or agent employed or engaged by it or claiming to have been employed or engaged by it.
5. No Default. User represents, warrants and covenants that, to the best of Users knowledge, Owner and User are not in default of any of their respective obligations under the Existing Agreement and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Owner or User thereunder.
6. Effect of Amendment. Except as modified by this Amendment, the Existing Agreement and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. In the event of any conflict between the terms contained in this Amendment and the Existing Agreement, the terms herein contained shall supersede and control the obligations and liabilities of the parties.
7. Successors and Assigns. Each of the covenants, conditions and agreements contained in this Amendment shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns. Nothing in this section shall in any way alter the provisions of the Agreement restricting assignment.
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8. Miscellaneous. This Amendment becomes effective only upon execution and delivery hereof by Owner and User. The captions of the paragraphs and subparagraphs in this Amendment are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof. All exhibits hereto are incorporated herein by reference.
9. Authority. User guarantees, warrants and represents that the individual or individuals signing this Amendment have the power, authority and legal capacity to sign this Amendment on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf such individual or individuals have signed.
10. Counterparts; Facsimile and PDF Signatures. This Amendment may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document. A facsimile or portable document format (PDF) signature on this Amendment shall be equivalent to, and have the same force and effect as, an original signature.
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IN WITNESS WHEREOF, Owner and User have executed this Amendment as of the date and year first above written.
OWNER: | ||
BMR-BAYSHORE BOULEVARD LP, | ||
a Delaware limited partnership | ||
By: | /s/ Kevin M. Simonsen | |
Name: | Kevin M. Simonsen | |
Title: | Sr. Vice President, Sr. Counsel |
USER: | ||
UNITY BIOTECHNOLOGY, INC., | ||
a Delaware corporation | ||
By: | /s/ Nathaniel David | |
Name: | Nathaniel David | |
Title: | CEO |
EXHIBIT A
FIRST AMENDMENT LICENSE AREA
Exhibit 10.2C
SECOND AMENDMENT TO SPACE LICENSE AGREEMENT
THIS SECOND AMENDMENT TO SPACE LICENSE AGREEMENT (this Amendment) is entered into as of this 30th day of January, 2017 (the Second Amendment Execution Date), by and between BMR-BAYSHORE BOULEVARD LP, a Delaware limited partnership (Owner), and UNITY BIOTECHNOLOGY, INC., a Delaware corporation (User).
RECITALS
A. WHEREAS, Owner and User are parties to that certain Space License Agreement dated as of October 20, 2016, as amended by that certain First Amendment to Space License Agreement dated as of December 5, 2016 (collectively, and as the same may have been further amended, amended and restated, supplemented or modified from time to time, the Existing Agreement), whereby Owner granted to User a license to use certain space (the Existing License Area) in the building at 3280 Bayshore Boulevard in Brisbane, California (the Building);
B. WHEREAS, Owner and User desire to modify the Existing License Area to include that certain space containing approximately one thousand five hundred (1,500) rentable square feet located on the second (2nd) floor of the Building (as more particularly described on Exhibit A attached hereto, the Second Amendment License Area); and
C. WHEREAS, Owner and User desire to modify and amend the Existing Agreement only in the respects and on the conditions hereinafter stated.
AGREEMENT
NOW, THEREFORE, Owner and User, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:
1. Definitions. For purposes of this Amendment, capitalized terms shall have the meanings ascribed to them in the Existing Agreement unless otherwise defined herein. The Existing Agreement, as amended by this Amendment, is referred to collectively herein as the Agreement. From and after the date hereof, the term Agreement, as used in the Existing Agreement, shall mean the Existing Agreement, as amended by this Amendment.
2. Second Amendment License Area. Effective as of the Second Amendment Execution Date, the License Area is hereby expanded to include the Second Amendment License Area. From and after the Second Amendment Execution Date, the term License Area as used in the Agreement shall mean the Existing License Area plus the Second Amendment License Area.
2.1 Term. The Term with respect to the Second Amendment License Area shall commence on the Second Amendment Execution Date and shall thereafter be coterminous with the Term for the Existing License Area, such that the Term with respect to the entire License Area (including both the Existing License Area and the Second Amendment License Area) shall expire on the Expiration Date.
2.2 Use. Notwithstanding anything to the contrary in the Existing Agreement, the permitted Use with respect to the Second Amendment License Area shall be general office use in accordance with Applicable Laws and any other requirements of any Governmental Authority.
2.3 Condition. User acknowledges that (a) it is fully familiar with the condition of the Second Amendment License Area and, notwithstanding anything to the contrary in the Agreement, agrees to accept the same in its condition as is as of the Second Amendment Execution Date, (b) neither Owner nor any agent of Owner has made (and neither Owner nor any agent of Owner hereby makes) any representation or warranty of any kind whatsoever, express or implied, regarding the Second Amendment License Area, including (without limitation) any representation or warranty with respect to the condition of the Second Amendment License Area or with respect to the suitability of the Second Amendment License Area for the conduct of Users business and (c) Owner shall have no obligation to alter, repair or otherwise prepare the Second Amendment License Area for Users occupancy or to pay for any improvements to the Second Amendment License Area. The Second Amendment License Area has not undergone inspection by a Certified Access Specialist (as defined in California Civil Code Section 55.52).
3. Base Fees. Notwithstanding anything to the contrary in the Existing Agreement, commencing on the Second Amendment Execution Date and continuing throughout the remainder of the Term, Base Fees shall equal Ten Thousand Dollars ($10,000) per month (prorated for partial months).
4. Broker. User represents and warrants that it has not dealt with any broker or agent in the negotiation for or the obtaining of this Amendment and agrees to reimburse, indemnify, save, defend (at Owners option and with counsel reasonably acceptable to Owner, at Users sole cost and expense) and hold harmless the Owner Indemnitees for, from and against any and all cost or liability for compensation claimed by any such broker or agent employed or engaged by it or claiming to have been employed or engaged by it.
5. No Default. User represents, warrants and covenants that, to the best of Users knowledge, Owner and User are not in default of any of their respective obligations under the Existing Agreement and no event has occurred that, with the passage of time or the giving of notice (or both) would constitute a default by either Owner or User thereunder.
6. Effect of Amendment. Except as modified by this Amendment, the Existing Agreement and all the covenants, agreements, terms, provisions and conditions thereof shall remain in full force and effect and are hereby ratified and affirmed. In the event of any conflict between the terms contained in this Amendment and the Existing Agreement, the terms herein contained shall supersede and control the obligations and liabilities of the parties.
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7. Successors and Assigns. Each of the covenants, conditions and agreements contained in this Amendment shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns. Nothing in this section shall in any way alter the provisions of the Agreement restricting assignment.
8. Miscellaneous. This Amendment becomes effective only upon execution and delivery hereof by Owner and User. The captions of the paragraphs and subparagraphs in this Amendment are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof. All exhibits hereto are incorporated herein by reference.
9. Authority. User guarantees, warrants and represents that the individual or individuals signing this Amendment have the power, authority and legal capacity to sign this Amendment on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf such individual or individuals have signed.
10. Counterparts; Facsimile and PDF Signatures. This Amendment may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document. A facsimile or portable document format (PDF) signature on this Amendment shall be equivalent to, and have the same force and effect as, an original signature.
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IN WITNESS WHEREOF, Owner and User have executed this Amendment as of the date and year first above written.
OWNER: | ||
BMR-BAYSHORE BOULEVARD LP, | ||
a Delaware limited partnership | ||
By: | /s/ Scott Altick | |
Name: | Scott Altick | |
Title: | V.P. |
USER: | ||
UNITY BIOTECHNOLOGY, INC., | ||
a Delaware corporation | ||
By: | /s/ Nathaniel David | |
Name: | Nathaniel David | |
Title: | President |
EXHIBIT A
SECOND AMENDMENT LICENSE AREA
Exhibit 10.3A
UNITY BIOTECHNOLOGY, INC.
2013 EQUITY INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Plan are:
| to attract and retain the best available personnel for positions of substantial responsibility, |
| to provide additional incentive to Employees, Directors and Consultants, and |
| to promote the success of the Companys business. |
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock and Restricted Stock Units.
2. Definitions. As used herein, the following definitions will apply:
(a) Administrator means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan.
(b) Applicable Laws means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
(c) Award means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, or Restricted Stock Units.
(d) Award Agreement means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.
(e) Board means the Board of Directors of the Company.
(f) Change in Control means the occurrence of any of the following events:
(i) Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (Person), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be considered a Change in Control; or
(ii) Change in Effective Control of the Company. If the Company has a class of securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(iii) Change in Ownership of a Substantial Portion of the Companys Assets. A change in the ownership of a substantial portion of the Companys assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) all or substantially all of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this Section 2(f), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the jurisdiction of the Companys incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction.
(g) Code means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.
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(h) Committee means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board, or by the compensation committee of the Board, in accordance with Section 4 hereof.
(i) Common Stock means the common stock of the Company.
(j) Company means Unity Biotechnology, Inc., a Delaware corporation, or any successor thereto.
(k) Consultant means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity.
(l) Director means a member of the Board.
(m) Disability means total and permanent disability as defined in Code Section 22(e)(3), provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.
(n) Employee means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a directors fee by the Company will be sufficient to constitute employment by the Company.
(o) Exchange Act means the Securities Exchange Act of 1934, as amended.
(p) Exchange Program means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is reduced or increased. The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.
(q) Fair Market Value means, as of any date, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
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(iii) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.
(r) Incentive Stock Option means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Code Section 422 and the regulations promulgated thereunder.
(s) Nonstatutory Stock Option means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
(t) Option means a stock option granted pursuant to the Plan.
(u) Parent means a parent corporation, whether now or hereafter existing, as defined in Code Section 424(e).
(v) Participant means the holder of an outstanding Award.
(w) Period of Restriction means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.
(x) Plan means this 2013 Equity Incentive Plan.
(y) Restricted Stock means Shares issued pursuant to an Award of Restricted Stock under Section 8 of the Plan, or issued pursuant to the early exercise of an Option.
(z) Restricted Stock Unit means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(aa) Service Provider means an Employee, Director or Consultant.
(bb) Share means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan.
(cc) Stock Appreciation Right means an Award, granted alone or in connection with an Option, that pursuant to Section 7 is designated as a Stock Appreciation Right.
(dd) Subsidiary means a subsidiary corporation, whether now or hereafter existing, as defined in Code Section 424(f).
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3. Stock Subject to the Plan.
(a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be subject to Awards and sold under the Plan is 5,672,576 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.
(b) Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock or Restricted Stock Units, is forfeited to or repurchased by the Company due to the failure to vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). With respect to Stock Appreciation Rights, only Shares actually issued pursuant to a Stock Appreciation Right will cease to be available under the Plan; all remaining Shares under Stock Appreciation Rights will remain available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock or Restricted Stock Units are repurchased by the Company or are forfeited to the Company due to the failure to vest, such Shares will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 13, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Code Section 422 and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Section 3(b).
(c) Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.
(ii) Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which Committee will be constituted to satisfy Applicable Laws.
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(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards may be granted hereunder;
(iii) to determine the number of Shares to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;
(vi) to institute and determine the terms and conditions of an Exchange Program;
(vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;
(ix) to modify or amend each Award (subject to Section 18(c) of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(d));
(x) to allow Participants to satisfy withholding tax obligations in a manner prescribed in Section 14;
(xi) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
(xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that otherwise would be due to such Participant under an Award; and
(xiii) to make all other determinations deemed necessary or advisable for administering the Plan.
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(c) Effect of Administrators Decision. The Administrators decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, and Restricted Stock Units may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6. Stock Options.
(a) Grant of Options. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Options in such amounts as the Administrator, in its sole discretion, will determine.
(b) Option Agreement. Each Award of an Option will be evidenced by an Award Agreement that will specify the exercise price, the term of the Option, the number of Shares subject to the Option, the exercise restrictions, if any, applicable to the Option, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
(c) Limitations. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. Notwithstanding such designation, however, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(c), Incentive Stock Options will be taken into account in the order in which they were granted, the Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted, and calculation will be performed in accordance with Code Section 422 and Treasury Regulations promulgated thereunder.
(d) Term of Option. The term of each Option will be stated in the Award Agreement; provided, however, that the term will be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.
(e) Option Exercise Price and Consideration.
(i) Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option will be determined by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, in the case of an Incentive Stock Option granted to an Employee who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this Section 6(e)(i), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a).
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(ii) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.
(iii) Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration received by the Company under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6) by net exercise, (7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws, or (8) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator will consider if acceptance of such consideration may be reasonably expected to benefit the Company.
(f) Exercise of Option.
(i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.
An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable tax withholding). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan.
Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
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(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participants termination as the result of the Participants death or Disability, the Participant may exercise his or her Option within thirty (30) days of termination, or such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iii) Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participants Disability, the Participant may exercise his or her Option within six (6) months of termination, or such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent the Option is vested on the date of termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iv) Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised within six (6) months following the Participants death, or within such longer period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement) to the extent that the Option is vested on the date of death, by the Participants designated beneficiary, provided such beneficiary has been designated prior to the Participants death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participants estate or by the person(s) to whom the Option is transferred pursuant to the Participants will or in accordance with the laws of descent and distribution. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
7. Stock Appreciation Rights.
(a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.
(b) Number of Shares. The Administrator will have complete discretion to determine the number of Shares subject to any Award of Stock Appreciation Rights.
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(c) Exercise Price and Other Terms. The per Share exercise price for the Shares that will determine the amount of the payment to be received upon exercise of a Stock Appreciation Right as set forth in Section 7(f) will be determined by the Administrator and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan.
(d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
(e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(d) relating to the maximum term and Section 6(f) relating to exercise also will apply to Stock Appreciation Rights.
(f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:
(i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times
(ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.
At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.
8. Restricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares have lapsed.
(c) Transferability. Except as provided in this Section 8 or as the Administrator determines, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.
(d) Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
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(e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.
(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
(h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.
9. Restricted Stock Units.
(a) Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units.
(b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment or service), or any other basis determined by the Administrator in its discretion.
(c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.
(d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may settle earned Restricted Stock Units in cash, Shares, or a combination of both.
(e) Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.
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10. Compliance With Code Section 409A. Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A.
11. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.
12. Limited Transferability of Awards.
(a) Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, or otherwise transferred in any manner other than by will or by the laws of descent and distribution, and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) as permitted by Rule 701 of the Securities Act of 1933, as amended (the Securities Act).
(b) Further, until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or after the Administrator determines that it is, will, or may no longer be relying upon the exemption from registration under the Exchange Act as set forth in Rule 12h-1(f) promulgated under the Exchange Act, an Option, or prior to exercise, the Shares subject to the Option, may not be pledged, hypothecated or otherwise transferred or disposed of, in any manner, including by entering into any short position, any put equivalent position or any call equivalent position (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than to (i) persons who are family members (as defined in Rule 701(c)(3) of the Securities Act) through gifts or domestic relations orders, or (ii) to an executor or guardian of the Participant upon the death or disability of the Participant. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may determine to permit transfers to the Company or in connection with a Change in Control or other acquisition transactions involving the Company to the extent permitted by Rule 12h-1(f).
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13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of shares of stock that may be delivered under the Plan and/or the number, class, and price of shares of stock covered by each outstanding Award; provided, however, that the Administrator will make such adjustments to an Award required by Section 25102(o) of the California Corporations Code to the extent the Company is relying upon the exemption afforded thereby with respect to the Award.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
(c) Merger or Change in Control. In the event of a merger of the Company with or into another corporation or other entity or a Change in Control, each outstanding Award will be treated as the Administrator determines (subject to the provisions of the following paragraph) without a Participants consent, including, without limitation, that (i) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a Participant, that the Participants Awards will terminate upon or immediately prior to the consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such merger or Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control; (iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participants rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participants rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under this subsection 13(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly.
In the event that the successor corporation does not assume or substitute for the Award (or portion thereof), the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, all
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performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a merger or Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
For the purposes of this subsection 13(c), an Award will be considered assumed if, following the merger or Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or Change in Control.
Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participants consent; provided, however, a modification to such performance goals only to reflect the successor corporations post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
Notwithstanding anything in this Section 13(c) to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change in control definition contained in the Award Agreement does not comply with the definition of change of control for purposes of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section will be delayed until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A.
14. Tax Withholding.
(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participants FICA obligation) required to be withheld with respect to such Award (or exercise thereof).
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(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the statutory amount required to be withheld, provided the delivery of such Shares will not result in any adverse accounting consequences, as the Administrator determines in its sole discretion, or (iv) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.
15. No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participants relationship as a Service Provider with the Company, nor will they interfere in any way with the Participants right or the Companys right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.
16. Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.
17. Term of Plan. Subject to Section 21 of the Plan, the Plan will become effective upon its adoption by the Board. Unless sooner terminated under Section 18, it will continue in effect for a term of ten (10) years from the later of (a) the effective date of the Plan, or (b) the earlier of the most recent Board or stockholder approval of an increase in the number of Shares reserved for issuance under the Plan.
18. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrators ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
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19. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
20. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Companys counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.
21. Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
22. Information to Participants. Beginning on the earlier of (i) the date that the aggregate number of Participants under this Plan is five hundred (500) or more and the Company is relying on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act and (ii) the date that the Company is required to deliver information to Participants pursuant to Rule 701 under the Securities Act, and until such time as the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, is no longer relying on the exemption provided by Rule 12h-1(f)(1) under the Exchange Act or is no longer required to deliver information to Participants pursuant to Rule 701 under the Securities Act, the Company shall provide to each Participant the information described in paragraphs (e)(3), (4), and (5) of Rule 701 under the Securities Act not less frequently than every six (6) months with the financial statements being not more than 180 days old and with such information provided either by physical or electronic delivery to the Participants or by written notice to the Participants of the availability of the information on an Internet site that may be password-protected and of any password needed to access the information. The Company may request that Participants agree to keep the information to be provided pursuant to this section confidential. If a Participant does not agree to keep the information to be provided pursuant to this section confidential, then the Company will not be required to provide the information unless otherwise required pursuant to Rule 12h-1(f)(1) under the Exchange Act or Rule 701 of the Securities Act.
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Exhibit 10.3B
UNITY BIOTECHNOLOGY, INC.
2013 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the 2013 Equity Incentive Plan (the Plan) shall have the same defined meanings in this Stock Option Agreement (the Option Agreement).
I. | NOTICE OF STOCK OPTION GRANT |
Name:
Address:
The undersigned Participant has been granted an Option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:
Date of Grant: | ||||
Vesting Commencement Date: | ||||
Exercise Price per Share: | ||||
Total Number of Shares Granted: | ||||
Total Exercise Price: | ||||
Type of Option: | Incentive Stock Option | |||
Nonstatutory Stock Option | ||||
Term/Expiration Date: |
Vesting Schedule:
This Option shall be exercisable, in whole or in part, according to the following vesting schedule:
[One fourth (1/4th) of the Shares subject to the Option shall vest on the one (1) year anniversary of the Vesting Commencement Date, and an additional one forty-eighth (1/48th) of the Shares subject to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date (and if there is no corresponding day, on the last day of the month), such that all Shares subject to the Option shall be vested on the four (4) year anniversary of the Vesting Commencement Date, subject to Participant continuing to be a Service Provider through each such date.]
Termination Period:
This Option shall be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to Participants death or Disability, in which case this Option shall be exercisable for twelve (12) months after Participant ceases to be a Service Provider. Notwithstanding the foregoing sentence, in no event may this Option be exercised after the Term/Expiration Date as provided above and this Option may be subject to earlier termination as provided in Section 13 of the Plan.
II. | AGREEMENT |
1. Grant of Option. The Administrator of the Company hereby grants to the Participant named in the Notice of Stock Option Grant in Part I of this Agreement (Participant), an option (the Option) to purchase the number of Shares set forth in the Notice of Stock Option Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the Exercise Price), and subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 18 of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.
If designated in the Notice of Stock Option Grant as an Incentive Stock Option (ISO), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated as a Nonstatutory Stock Option (NSO). Further, if for any reason this Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a NSO granted under the Plan. In no event shall the Administrator, the Company or any Parent or Subsidiary or any of their respective employees or directors have any liability to Participant (or any other person) due to the failure of the Option to qualify for any reason as an ISO.
2. Exercise of Option.
(a) Right to Exercise. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option shall be exercisable by delivery of an exercise notice in the form attached as Exhibit A (the Exercise Notice) or in a manner and pursuant to such procedures as the Administrator may determine, which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised (the Exercised Shares), and such other representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares, together with any applicable tax withholding. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by the aggregate Exercise Price, together with any applicable tax withholding.
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No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise comply with Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Participant on the date on which the Option is exercised with respect to such Shares.
3. Participants Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended (the Securities Act), at the time this Option is exercised, Participant shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B.
4. Lock-Up Period. Participant hereby agrees that Participant shall not 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, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Common Stock (or other securities) of the Company held by Participant (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to exceed one hundred and eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto).
Participant agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which 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, Participant 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 Companys securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section 4 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 Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred and eighty (180) day (or other) period. Participant agrees that any transferee of the Option or shares acquired pursuant to the Option shall be bound by this Section 4.
5. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Participant:
(a) cash;
(b) check;
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(c) consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or
(d) surrender of other Shares which (i) shall be valued at its Fair Market Value on the date of exercise, and (ii) must be owned free and clear of any liens, claims, encumbrances or security interests, if accepting such Shares, in the sole discretion of the Administrator, shall not result in any adverse accounting consequences to the Company.
6. Restrictions on Exercise. This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Law.
7. Non-Transferability of Option.
(a) This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Participant.
(b) Further, until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, or after the Administrator determines that it is, will, or may no longer be relying upon the exemption from registration of Options under the Exchange Act as set forth in Rule 12h-1(f) promulgated under the Exchange Act (the Reliance End Date), Participant shall not transfer this Option or, prior to exercise, the Shares subject to this Option, in any manner other than (i) to persons who are family members (as defined in Rule 701(c)(3) of the Securities Act) through gifts or domestic relations orders, or (ii) to an executor or guardian of Participant upon the death or disability of Participant. Until the Reliance End Date, the Options and, prior to exercise, the Shares subject to this Option, may not be pledged, hypothecated or otherwise transferred or disposed of, including by entering into any short position, any put equivalent position or any call equivalent position (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than as permitted in clauses (i) and (ii) of this paragraph.
8. Term of Option. This Option may be exercised only within the term set out in the Notice of Stock Option Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement.
9. Tax Obligations.
(a) Tax Withholding. Participant agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or retaining Participant) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise. Participant acknowledges and agrees that the Company may refuse to honor the exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the time of exercise.
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(b) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of Grant, or (ii) the date one (1) year after the date of exercise, Participant shall immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant.
(c) Code Section 409A. Under Code Section 409A, an Option that vests after December 31, 2004 (or that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per Share exercise price that is determined by the Internal Revenue Service (the IRS) to be less than the Fair Market Value of a Share on the date of grant (a discount option) may be considered deferred compensation. An Option that is a discount option may result in (i) income recognition by Participant prior to the exercise of the Option, (ii) an additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges. The discount option may also result in additional state income, penalty and interest tax to the Participant. Participant acknowledges that the Company cannot and has not guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of a Share on the date of grant in a later examination. Participant agrees that if the IRS determines that the Option was granted with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Participant shall be solely responsible for Participants costs related to such a determination.
10. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participants interest except by means of a writing signed by the Company and Participant. This Option Agreement is governed by the internal substantive laws but not the choice of law rules of California.
11. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH PARTICIPANTS RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANTS RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
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Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Participant has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Participant further agrees to notify the Company upon any change in the residence address indicated below.
PARTICIPANT
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UNITY BIOTECHNOLOGY, INC. | |||
Signature | By | |||
Nathaniel E. David | ||||
Print Name | Print Name | |||
President and CEO | ||||
Title
| ||||
Residence Address |
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EXHIBIT A
2013 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
Unity Biotechnology, Inc.
1700 Owens Street, Suite 535
San Francisco, CA 94158
Attention: President
1. Exercise of Option. Effective as of today, ________________, ____, the undersigned (Participant) hereby elects to exercise Participants option (the Option) to purchase ________________ shares of the Common Stock (the Shares) of Unity Biotechnology, Inc. (the Company) under and pursuant to the 2013 Equity Incentive Plan (the Plan) and the Stock Option Agreement dated (the Option Agreement).
2. Delivery of Payment. Participant herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in connection with the exercise of the Option.
3. Representations of Participant. Participant acknowledges that Participant has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Common Stock subject to an Award, notwithstanding the exercise of the Option. The Shares shall be issued to Participant as soon as practicable after the Option is exercised in accordance with the Option Agreement. No adjustment shall be made for a dividend or other right for which the record date is prior to the date of issuance except as provided in Section 13 of the Plan.
5. Companys Right of First Refusal. Before any Shares held by Participant or any transferee (either being sometimes referred to herein as the Holder) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 5 (the Right of First Refusal).
(a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the Notice) stating: (i) the Holders bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (Proposed Transferee); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares (the Offered Price), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below.
(c) Purchase Price. The purchase price (Purchase Price) for the Shares purchased by the Company or its assignee(s) under this Section 5 shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice.
(e) Holders Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 5, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within one hundred and twenty (120) days after the date of the Notice, that any such sale or other transfer is effected in accordance with any applicable securities laws and that the Proposed Transferee agrees in writing that the provisions of this Section 5 shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.
(f) Exception for Certain Family Transfers. Anything to the contrary contained in this Section 5 notwithstanding, the transfer of any or all of the Shares during the Participants lifetime or on the Participants death by will or intestacy to the Participants immediate family or a trust for the benefit of the Participants immediate family shall be exempt from the provisions of this Section 5. Immediate Family as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section 5, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 5.
(g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control in which the successor corporation has equity securities that are publicly traded.
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6. Tax Consultation. Participant understands that Participant may suffer adverse tax consequences as a result of Participants purchase or disposition of the Shares. Participant represents that Participant has consulted with any tax consultants Participant deems advisable in connection with the purchase or disposition of the Shares and that Participant is not relying on the Company for any tax advice.
7. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Participant understands and agrees that the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by the Company or by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE ACT) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE COMPANYS SECURITIES SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.
(b) Stop-Transfer Notices. Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate stop transfer instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.
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8. Successors and Assigns. The Company may assign any of its rights under this Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Exercise Notice shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns.
9. Interpretation. Any dispute regarding the interpretation of this Exercise Notice shall be submitted by Participant or by the Company forthwith to the Administrator, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Administrator shall be final and binding on all parties.
10. Governing Law; Severability. This Exercise Notice is governed by the internal substantive laws, but not the choice of law rules, of California. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Exercise Notice shall continue in full force and effect.
11. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan, the Option Agreement and the Investment Representation Statement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to the Participants interest except by means of a writing signed by the Company and Participant.
Submitted by: | Accepted by: | |||
PARTICIPANT | UNITY BIOTECHNOLOGY, INC. | |||
|
| |||
Signature | By | |||
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Nathaniel E. David | |||
Print Name | Print Name | |||
Address: | President and CEO | |||
Title | ||||
Address: | ||||
1700 Owens Street, Suite 535 San Francisco, CA 94158 | ||||
Date Received |
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
PARTICIPANT |
: | |||||
COMPANY |
: | UNITY BIOTECHNOLOGY, INC. | ||||
SECURITY |
: | COMMON STOCK | ||||
AMOUNT |
: | |||||
DATE |
: |
In connection with the purchase of the above-listed Securities, the undersigned Participant represents to the Company the following:
(a) Participant is aware of the Companys business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Participant is acquiring these Securities for investment for Participants own account only and not with a view to, or for resale in connection with, any distribution thereof within the meaning of the Securities Act of 1933, as amended (the Securities Act).
(b) Participant acknowledges and understands that the Securities constitute restricted securities under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Participants investment intent as expressed herein. In this connection, Participant understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Participants representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one (1) year or any other fixed period in the future. Participant further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Participant further acknowledges and understands that the Company is under no obligation to register the Securities. Participant understands that the certificate evidencing the Securities shall be imprinted with any legend required under applicable state securities laws.
(c) Participant is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of restricted securities acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to Participant, the exercise shall be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of the applicable conditions specified by Rule 144, including in the case of affiliates (1) the availability of certain public information about the Company, (2) the amount of Securities being sold during any three (3) month period not exceeding specified limitations, (3) the resale being made in an unsolicited brokers transaction, transactions directly with a market maker or riskless principal transactions (as those terms are defined under the Securities Exchange Act of 1934) and (4) the timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which may require (i) the availability of current public information about the Company; (ii) the resale to occur more than a specified period after the purchase and full payment (within the meaning of Rule 144) for the Securities; and (iii) in the case of the sale of Securities by an affiliate, the satisfaction of the conditions set forth in sections (2), (3) and (4) of the paragraph immediately above.
(d) Participant further understands that in the event all of the applicable requirements of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption shall be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 shall have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Participant understands that no assurances can be given that any such other registration exemption shall be available in such event.
PARTICIPANT
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Signature
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Print Name
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Date |
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Exhibit 10.4A
UNITY BIOTECHNOLOGY, INC.
2018 INCENTIVE AWARD PLAN
ARTICLE I.
PURPOSE
The Plans purpose is to enhance the Companys ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities.
ARTICLE II.
DEFINITIONS
As used in the Plan, the following words and phrases will have the meanings specified below, unless the context clearly indicates otherwise:
2.1 Administrator means the Board or a Committee to the extent that the Boards powers or authority under the Plan have been delegated to such Committee. With reference to the Boards or a Committees powers or authority under the Plan that have been delegated to one or more officers pursuant to Section 4.2, the term Administrator shall refer to such officer(s) unless and until such delegation has been revoked.
2.2 Applicable Law means any applicable law, including without limitation: (a) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (c) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.
2.3 Award means an Option, Stock Appreciation Right, Restricted Stock award, Restricted Stock Unit award, Performance Bonus Award, Performance Stock Units award, Dividend Equivalents award or Other Stock or Cash Based Award granted to a Participant under the Plan.
2.4 Award Agreement means an agreement evidencing an Award, which may be written or electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan.
2.5 Board means the Board of Directors of the Company.
2.6 Change in Control shall mean and includes each of the following:
(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any person or related group of persons (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) directly or indirectly acquires beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Companys securities outstanding immediately after such acquisition; provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition by the Company or any of its Subsidiaries; (ii) any acquisition by an employee benefit plan maintained by the Company or any of its Subsidiaries, (iii) any acquisition which complies with Sections 2.6(c)(i), 2.6(c)(ii) and 2.6(c)(iii); or (iv) in respect of an Award held by a particular Participant, any acquisition by the Participant or any group of persons including the Participant (or any entity controlled by the Participant or any group of persons including the Participant); or
(b) The Incumbent Directors cease for any reason to constitute a majority of the Board;
(c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination, (y) a sale or other disposition of all or substantially all of the Companys assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:
(i) which results in the Companys voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Companys assets or otherwise succeeds to the business of the Company (the Company or such person, the Successor Entity)) directly or indirectly, at least a majority of the combined voting power of the Successor Entitys outstanding voting securities immediately after the transaction, and
(ii) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 2.9(c)(ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; and
(iii) after which at least a majority of the members of the board of directors (or the analogous governing body) of the Successor Entity were Board members at the time of the Boards approval of the execution of the initial agreement providing for such transaction; or
(d) The completion of a liquidation or dissolution of the Company.
Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award (or any portion of an Award) that provides for the deferral of compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a change in control event, as defined in Treasury Regulation Section 1.409A-3(i)(5).
The Administrator shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a change in control event as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.
2.7 Code means the U.S. Internal Revenue Code of 1986, as amended, and all regulations, guidance, compliance programs and other interpretative authority issued thereunder.
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2.8 Committee means one or more committees or subcommittees of the Board, which may include one or more Company directors or executive officers, to the extent permitted by Applicable Law. To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a non-employee director within the meaning of Rule 16b-3; however, a Committee members failure to qualify as a non-employee director within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.
2.9 Common Stock means the common stock of the Company.
2.10 Company means Unity Biotechnology, Inc., a Delaware corporation, or any successor.
2.11 Consultant means any person, including any adviser, engaged by the Company or its parent or Subsidiary to render services to such entity if the consultant or adviser: (i) renders bona fide services to the Company; (ii) renders services not in connection with the offer or sale of securities in a capital-raising transaction and does not directly or indirectly promote or maintain a market for the Companys securities; and (iii) is a natural person.
2.12 Designated Beneficiary means the beneficiary or beneficiaries the Participant designates, in a manner the Company determines, to receive amounts due or exercise the Participants rights if the Participant dies. Without a Participants effective designation, Designated Beneficiary will mean the Participants estate.
2.13 Director means a Board member.
2.14 Disability means a permanent and total disability under Section 22(e)(3) of the Code.
2.15 Dividend Equivalents means a right granted to a Participant to receive the equivalent value (in cash or Shares) of dividends paid on a specified number of Shares. Such Dividend Equivalent shall be converted to cash or additional Shares, or a combination of cash and Shares, by such formula and at such time and subject to such limitations as may be determined by the Administrator.
2.16 Effective Date has the meaning set forth in Section 11.3.
2.17 Employee means any employee of the Company or any of its Subsidiaries.
2.18 Equity Restructuring means a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split (including a reverse stock split), spin-off or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other Company securities) or the share price of Common Stock (or other Company securities) and causes a change in the per share value of the Common Stock underlying outstanding Awards.
2.19 Exchange Act means the U.S. Securities Exchange Act of 1934, as amended, and all regulations, guidance and other interpretative authority issued thereunder.
2.20 Fair Market Value means, as of any date, the value of a Share determined as follows: (i) if the Common Stock is listed on any established stock exchange, the value of a Share will be the closing sales price for a Share as quoted on such exchange for such date, or if no sale occurred on such date, the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (ii) if the Common Stock is not listed on an established stock exchange but is quoted on a national market or other quotation system, the value of a
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Share will be the closing sales price for a Share on such date, or if no sales occurred on such date, then on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (iii) if the Common Stock is not listed on any established stock exchange or quoted on a national market or other quotation system, the value established by the Administrator in its sole discretion. Notwithstanding the foregoing, with respect to any Award granted after the effectiveness of the Companys registration statement relating to its initial public offering and prior to the Public Trading Date, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Companys final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.
2.21 Greater Than 10% Stockholder means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any parent corporation or subsidiary corporation of the Company, as determined in accordance with in Section 424(e) and (f) of the Code, respectively.
2.22 Incentive Stock Option means an Option that meets the requirements to qualify as an incentive stock option as defined in Section 422 of the Code.
2.23 Incumbent Directors shall mean for any period of 12 consecutive months, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.6(a) or 2.6(c)) whose election or nomination for election to the Board was approved by a vote of at least a majority (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director without objection to such nomination) of the Directors then still in office who either were Directors at the beginning of the 12-month period or whose election or nomination for election was previously so approved. No individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be an Incumbent Director.
2.24 Nonqualified Stock Option means an Option that is not an Incentive Stock Option.
2.25 Option means a right granted under Article VI to purchase a specified number of Shares at a specified price per Share during a specified time period. An Option may be either an Incentive Stock Option or a Nonqualified Stock Option.
2.26 Other Stock or Cash Based Awards means cash awards, awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property.
2.27 Overall Share Limit means the sum of (i) [ ] Shares; (ii) any Shares that are subject to Prior Plan Awards that become available for issuance under the Plan pursuant to Article V; and (iii) an annual increase on the first day of each year beginning in 2019 and ending in 2028, equal to the lesser of (A) 5% of the Shares outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of Shares as determined by the Board.
2.28 Participant means a Service Provider who has been granted an Award.
2.29 Performance Bonus Award has the meaning set forth in Section 8.3.
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2.30 Performance Stock Unit means a right granted to a Participant pursuant to Section 8.1 and subject to Section 8.2, to receive Shares, the payment of which is contingent upon achieving certain performance goals or other performance-based targets established by the Administrator.
2.31 Permitted Transferee shall mean, with respect to a Participant, any family member of the Participant, as defined in the General Instructions to Form S-8 Registration Statement under the Securities Act (or any successor form thereto), or any other transferee specifically approved by the Administrator after taking into account Applicable Law.
2.32 Plan means this 2018 Incentive Award Plan.
2.33 Prior Plan means the Companys 2013 Equity Incentive Plan.
2.34 Prior Plan Award means an award outstanding under the Prior Plan as of the Effective Date.
2.35 Public Trading Date shall mean the first date upon which Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.
2.36 Restricted Stock means Shares awarded to a Participant under Article VII, subject to certain vesting conditions and other restrictions.
2.37 Restricted Stock Unit means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date, subject to certain vesting conditions and other restrictions.
2.38 Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act.
2.39 Section 409A means Section 409A of the Code.
2.40 Securities Act means the Securities Act of 1933, as amended, and all regulations, guidance and other interpretative authority issued thereunder.
2.41 Service Provider means an Employee, Consultant or Director.
2.42 Shares means shares of Common Stock.
2.43 Stock Appreciation Right or SAR means a right granted under Article VI to receive a payment equal to the excess of the Fair Market Value of a specified number of Shares on the date the right is exercised over the exercise price set forth in the applicable Award Agreement.
2.44 Subsidiary means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
2.45 Substitute Awards means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company or other entity acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.
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2.46 Termination of Service means:
(a) As to a Consultant, the time when the engagement of a Participant as a Consultant to the Company or a Subsidiary is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Subsidiary.
(b) As to a Non-Employee Director, the time when a Participant who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Participant simultaneously commences or remains in employment or service with the Company or any Subsidiary.
(c) As to an Employee, the time when the employee-employer relationship between a Participant and the Company or any Subsidiary is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Participant simultaneously commences or remains in employment or service with the Company or any Subsidiary.
The Company, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, whether a Termination of Service has occurred, whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service. For purposes of the Plan, a Participants employee-employer relationship or consultancy relationship shall be deemed to be terminated in the event that the Subsidiary employing or contracting with such Participant ceases to remain a Subsidiary following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off), even though the Participant may subsequently continue to perform services for that entity.
ARTICLE III.
ELIGIBILITY
Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein. No Service Provider shall have any right to be granted an Award pursuant to the Plan and neither the Company nor the Administrator is obligated to treat Service Providers, Participants or any other persons uniformly.
ARTICLE IV.
ADMINISTRATION AND DELEGATION
4.1 Administration.
(a) The Plan is administered by the Administrator. The Administrator has authority to determine which Service Providers receive Awards, grant Awards and set Award terms and conditions, subject to the conditions and limitations in the Plan. The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable. The
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Administrator may correct defects and ambiguities, supply omissions, reconcile inconsistencies in the Plan or any Award and make all other determinations that it deems necessary or appropriate to administer the Plan and any Awards. The Administrator (and each member thereof) is entitled to, in good faith, rely or act upon any report or other information furnished to it, him or her by any officer or other employee of the Company or any Subsidiary, the Companys independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan. The Administrators determinations under the Plan are in its sole discretion and will be final, binding and conclusive on all persons having or claiming any interest in the Plan or any Award.
(b) Without limiting the foregoing, the Administrator has the exclusive power, authority and sole discretion to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant; (iii) determine the number of Awards to be granted and the number of Shares to which an Award will relate; (iv) subject to the limitations in the Plan, determine the terms and conditions of any Award and related Award Agreement, including, but not limited to, the exercise price, grant price, purchase price, any performance criteria, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations, waivers or amendments thereof; (v) determine whether, to what extent, and under what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, or other property, or an Award may be canceled, forfeited, or surrendered; and (vi) make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan.
4.2 Delegation of Authority. To the extent permitted by Applicable Law, the Board or any Committee may delegate any or all of its powers under the Plan to one or more Committees or officers of the Company or any of its Subsidiaries; provided, however, that in no event shall an officer of the Company or any of its Subsidiaries be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, or (b) officers of the Company or any of its Subsidiaries or Directors to whom authority to grant or amend Awards has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation or that are otherwise included in the applicable organizational documents, and the Board or Committee, as applicable, may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 4.2 shall serve in such capacity at the pleasure of the Board or the Committee, as applicable, and the Board or the Committee may abolish any committee at any time and re-vest in itself any previously delegated authority. Further, regardless of any delegation, the Board or a Committee may, in its discretion, exercise any and all rights and duties as the Administrator under the Plan delegated thereby, except with respect to Awards that are required to be determined in the sole discretion of the Committee under the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.
ARTICLE V.
STOCK AVAILABLE FOR AWARDS
5.1 Number of Shares. Subject to adjustment under Article IX and the terms of this Article V, Awards may be made under the Plan covering up to the Overall Share Limit. As of the Effective Date, the Company will cease granting awards under the Prior Plan; however, Prior Plan Awards will remain subject to the terms of the Prior Plan. Shares issued or delivered under the Plan may consist of authorized but unissued Shares, Shares purchased on the open market or treasury Shares.
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5.2 Share Recycling.
(a) If all or any part of an Award or Prior Plan Award expires, lapses or is terminated, converted into an award in respect of shares of another entity in connection with a spin-off or other similar event, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award or Prior Plan Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award or Prior Plan Award, the unused Shares covered by the Award or Prior Plan Award will, as applicable, become or again be available for Awards under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards or Prior Plan Awards shall not count against the Overall Share Limit.
(b) In addition, the following Shares shall be available for future grants of Awards: (i) Shares tendered by a Participant or withheld by the Company in payment of the exercise price of an Option or any stock option granted under the Prior Plan; (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award or any award granted under the Prior Plan; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof; and (iv) Shares purchased on the open market by the Company with the cash proceeds received from the exercise of Options. Notwithstanding the provisions of this Section 5.2(b), no Shares may again be optioned, granted or awarded pursuant to an Incentive Stock Option if such action would cause such Option to fail to qualify as an incentive stock option under Section 422 of the Code.
5.3 Incentive Stock Option Limitations. Notwithstanding anything to the contrary herein, no more than [ ] Shares (as adjusted to reflect any Equity Restructuring) may be issued pursuant to the exercise of Incentive Stock Options.
5.4 Substitute Awards. In connection with an entitys merger or consolidation with the Company or any Subsidiary or the Companys or any Subsidiarys acquisition of an entitys property or stock, the Administrator may grant Awards in substitution for any options or other stock or stock-based awards granted before such merger or consolidation by such entity or its affiliate. Substitute Awards may be granted on such terms and conditions as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan. Substitute Awards will not count against the Overall Share Limit (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive Stock Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards may again become available for Awards under the Plan as provided under Section 5.2 above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or any of its Subsidiaries prior to such acquisition or combination.
5.5 Non-Employee Director Award Limit. Notwithstanding any provision to the contrary in the Plan or in any policy of the Company regarding non-employee director compensation, the sum of the grant date fair value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of all equity-based
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Awards and the maximum amount that may become payable pursuant to all cash-based Awards that may be granted to a Service Provider as compensation for services as a Non-Employee Director during any calendar year shall not exceed $1,000,000 for such Service Providers first year of service as a Non-Employee Director and $500,000 for each year thereafter.
ARTICLE VI.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
6.1 General. The Administrator may grant Options or Stock Appreciation Rights to one or more Service Providers, subject to such terms and conditions not inconsistent with the Plan as the Administrator shall determine. The Administrator will determine the number of Shares covered by each Option and Stock Appreciation Right, the exercise price of each Option and Stock Appreciation Right and the conditions and limitations applicable to the exercise of each Option and Stock Appreciation Right. A Stock Appreciation Right will entitle the Participant (or other person entitled to exercise the Stock Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Stock Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value of one Share on the date of exercise over the exercise price per Share of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value on the date of exercise or a combination of the two as the Administrator may determine or provide in the Award Agreement.
6.2 Exercise Price. The Administrator will establish each Options and Stock Appreciation Rights exercise price and specify the exercise price in the Award Agreement. Subject to Section 6.6, the exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option or Stock Appreciation Right. Notwithstanding the foregoing, in the case of an Option or Stock Appreciation Right that is a Substitute Award, the exercise price per share of the Shares subject to such Option or Stock Appreciation Right, as applicable, may be less than the Fair Market Value per share on the date of grant; provided that the exercise price of any Substitute Award shall be determined in accordance with the applicable requirements of Section 424 and 409A of the Code.
6.3 Duration of Options. Subject to Section 6.6, each Option or Stock Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that the term of an Option or Stock Appreciation Right will not exceed ten years; provided, further, that, unless otherwise determined by the Administrator, (a) no portion of an Option or Stock Appreciation Right which is unexercisable at a Participants Termination of Service shall thereafter become exercisable and (b) the portion of an Option or Stock Appreciation Right that is unexercisable at a Participants Termination of Service shall automatically expire on the date of such Termination of Service. Notwithstanding the foregoing, if the Participant, prior to the end of the term of an Option or Stock Appreciation Right, commits an act of cause (as determined by the Administrator), or violates any non-competition, non-solicitation or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any of its Subsidiaries, the right to exercise the Option or Stock Appreciation Right, as applicable, may be terminated by the Company and the Company may suspend the Participants right to exercise the Option or Stock Appreciation Right when it reasonably believes that the Participant may have participated in any such act or violation.
6.4 Exercise. Options and Stock Appreciation Rights may be exercised by delivering to the Company (or such other person or entity designated by the Administrator) a notice of exercise, in a form and manner the Company approves (which may be written, electronic or telephonic and may contain representations and warranties deemed advisable by the Administrator), signed or authenticated by the
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person authorized to exercise the Option or Stock Appreciation Right, together with, as applicable, payment in full of (a) the exercise price for the number of Shares for which the Option is exercised in a manner specified in Section 6.5 and (b) all applicable taxes in a manner specified in Section 10.5. The Administrator may, in its discretion, limit exercise with respect to fractional Shares and require that any partial exercise of an Option or Stock Appreciation Right be with respect to a minimum number of Shares.
6.5 Payment Upon Exercise. The Administrator shall determine the methods by which payment of the exercise price of an Option shall be made, including, without limitation:
(a) cash, check or wire transfer of immediately available funds; provided that the Company may limit the use of one of the foregoing methods if one or more of the methods below is permitted;
(b) if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (A) delivery (including electronically or telephonically to the extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to deliver promptly to the Company funds sufficient to pay the exercise price, or (B) the Participants delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company an amount sufficient to pay the exercise price by cash, wire transfer of immediately available funds or check; provided that such amount is paid to the Company at such time as may be required by the Company;
(c) to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value on the date of delivery;
(d) to the extent permitted by the Administrator, surrendering Shares then issuable upon the Options exercise valued at their Fair Market Value on the exercise date;
(e) to the extent permitted by the Administrator, delivery of a promissory note or any other lawful consideration; or
(f) to the extent permitted by the Administrator, any combination of the above payment forms.
6.6 Additional Terms of Incentive Stock Options. The Administrator may grant Incentive Stock Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code. If an Incentive Stock Option is granted to a Greater Than 10% Stockholder, the exercise price will not be less than 110% of the Fair Market Value on the Options grant date, and the term of the Option will not exceed five years. All Incentive Stock Options (and Award Agreements related thereto) will be subject to and construed consistently with Section 422 of the Code. By accepting an Incentive Stock Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired under the Option made within (a) two years from the grant date of the Option or (b) one year after the transfer of such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer. Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Stock Option fails or
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ceases to qualify as an incentive stock option under Section 422 of the Code. Any Incentive Stock Option or portion thereof that fails to qualify as an incentive stock option under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Nonqualified Stock Option.
ARTICLE VII.
RESTRICTED STOCK; RESTRICTED STOCK UNITS
7.1 General. The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to forfeiture or the Companys right to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award. In addition, the Administrator may grant Restricted Stock Units, which may be subject to vesting and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement, to Service Providers. The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock and Restricted Stock Units; provided, however, that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by Applicable Law. In all cases, legal consideration shall be required for each issuance of Restricted Stock and Restricted Stock Units to the extent required by Applicable Law. The Award Agreement for each Restricted Stock and Restricted Stock Unit Award shall set forth the terms and conditions not inconsistent with the Plan as the Administrator shall determine.
7.2 Restricted Stock.
(a) Stockholder Rights. Unless otherwise determined by the Administrator, each Participant holding shares of Restricted Stock will be entitled to all the rights of a stockholder with respect to such Shares, subject to the restrictions in the Plan and/or the applicable Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to the Shares to the extent such dividends and other distributions have a record date that is on or after the date on which such Participant becomes the record holder of such Shares; provided, however, that with respect to a share of Restricted Stock subject to restrictions or vesting conditions as described in Section 8.3, except in connection with a spin-off or other similar event as otherwise permitted under Section 9.2, dividends which are paid to Company stockholders prior to the removal of restrictions and satisfaction of vesting conditions shall only be paid to the Participant to the extent that the restrictions are subsequently removed and the vesting conditions are subsequently satisfied and the share of Restricted Stock vests.
(b) Stock Certificates. The Company may require that the Participant deposit in escrow with the Company (or its designee) any stock certificates issued in respect of shares of Restricted Stock, together with a stock power endorsed in blank.
(c) Section 83(b) Election. If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which such Participant would otherwise be taxable under Section 83(a) of the Code, such Participant shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service along with proof of the timely filing thereof.
7.3 Restricted Stock Units. The Administrator may provide that settlement of Restricted Stock Units will occur upon or as soon as reasonably practicable after the Restricted Stock Units vest or will instead be deferred, on a mandatory basis or at the Participants election, subject to compliance with Applicable Law.
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ARTICLE VIII.
OTHER TYPES OF AWARDS
8.1 General. The Administrator may grant Performance Stock Units awards, Performance Bonus Awards, Dividend Equivalents or Other Stock or Cash Based Awards, to one or more Service Providers, in such amounts and subject to such terms and conditions not inconsistent with the Plan as the Administrator shall determine.
8.2 Performance Stock Unit Awards. Each Performance Stock Units award shall be denominated in a number of Shares or in unit equivalents of Shares and/or units of value (including a dollar value of Shares) and may be linked to any one or more of performance or other specific criteria, including service to the Company or Subsidiaries, determined to be appropriate by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator. In making such determinations, the Administrator may consider (among such other factors as it deems relevant in light of the specific type of award) the contributions, responsibilities and other compensation of the particular Participant.
8.3 Performance Bonus Awards. Each right to receive a bonus granted under this Section 8.3 shall be denominated in the form of cash (but may be payable in cash, stock or a combination thereof) (a Performance Bonus Award) and shall be payable upon the attainment of performance goals that are established by the Administrator and relate to one or more of performance or other specific criteria, including service to the Company or Subsidiaries, in each case on a specified date or dates or over any period or periods determined by the Administrator.
8.4 Dividend Equivalents. If the Administrator provides, an Award (other than an Option or Stock Appreciation Right) may provide a Participant with the right to receive Dividend Equivalents. Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Award with respect to which the Dividend Equivalents are granted and subject to other terms and conditions as set forth in the Award Agreement. Notwithstanding anything to the contrary herein, Dividend Equivalents with respect to an Award subject to vesting shall either (i) to the extent permitted by Applicable Law, not be paid or credited or (ii) be accumulated and subject to vesting to the same extent as the related Award. All such Dividend Equivalents shall be paid at such time as the Administrator shall specify in the applicable Award Agreement.
8.5 Other Stock or Cash Based Awards. Other Stock or Cash Based Awards may be granted to Participants, including Awards entitling Participants to receive cash or Shares to be delivered in the future and annual or other periodic or long-term cash bonus awards (whether based on specified performance criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Stock or Cash Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock or Cash Based Awards may be paid in Shares, cash or other property, as the Administrator determines. Subject to the provisions of the Plan, the Administrator will determine the terms and conditions of each Other Stock or Cash Based Award, including any purchase price, performance goal(s), transfer restrictions, and vesting conditions, which will be set forth in the applicable Award Agreement. Except in connection with a spin-off or other similar event as otherwise permitted under Article IX, dividends that are paid prior to vesting of any Other Stock or Cash Based Award shall only be paid to the applicable Participant to the extent that the vesting conditions are subsequently satisfied and the Other Stock or Cash Based Award vests.
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ARTICLE IX.
ADJUSTMENTS FOR CHANGES IN COMMON STOCK
AND CERTAIN OTHER EVENTS
9.1 Equity Restructuring. In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Article IX the Administrator will equitably adjust the terms of the Plan and each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include (i) adjusting the number and type of securities subject to each outstanding Award and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article V hereof on the maximum number and kind of shares that may be issued); (ii) adjusting the terms and conditions of (including the grant or exercise price), and the performance goals or other criteria included in, outstanding Awards; and (iii) granting new Awards or making cash payments to Participants. The adjustments provided under this Section 9.1 will be nondiscretionary and final and binding on all interested parties, including the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.
9.2 Corporate Transactions. In the event of any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), reorganization, merger, consolidation, split-up, spin off, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Law or accounting principles, the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Law or accounting principles may be made within a reasonable period of time after such change) and either automatically or upon the Participants request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such transaction or event or (z) give effect to such changes in Applicable Law or accounting principles:
(a) To provide for the cancellation of any such Award in exchange for either an amount of cash and/or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participants rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participants rights, in any case, is equal to or less than zero, then the Award may be terminated without payment;
(b) To provide that such Award shall vest and, to the extent applicable, be exercisable as to all Shares (or other property) covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;
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(c) To provide that such Award be assumed by the successor or survivor corporation or entity, or a parent or subsidiary thereof, or shall be substituted for by awards covering the stock of the successor or survivor corporation or entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price, in all cases, as determined by the Administrator;
(d) To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Article V hereof on the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards;
(e) To replace such Award with other rights or property selected by the Administrator; and/or
(f) To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable event.
9.3 Change in Control.
(a) Notwithstanding any other provision of the Plan, in the event of a Change in Control, unless the Administrator elects to (i) terminate an Award in exchange for cash, rights or property, or (ii) cause an Award to become fully exercisable and no longer subject to any forfeiture restrictions prior to the consummation of a Change in Control, pursuant to Section 9.2, (A) such Award (other than any portion subject to performance-based vesting) shall continue in effect or be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation and (B) the portion of such Award subject to performance-based vesting shall be subject to the terms and conditions of the applicable Award Agreement and, in the absence of applicable terms and conditions, the Administrators discretion.
(b) In the event that the successor corporation in a Change in Control refuses to assume or substitute for an Award (other than any portion subject to performance-based vesting), the Administrator shall cause such Award to become fully vested and, if applicable, exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on such Award to lapse and, to the extent unexercised upon the consummation of such transaction, to terminate in exchange for cash, rights or other property. The Administrator shall notify the Participant of any Award that becomes exercisable pursuant to the preceding sentence that such Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change in Control, and such Award shall terminate upon the consummation of the Change in Control in accordance with the preceding sentence.
(c) For the purposes of this Section 9.3, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each Share subject to an Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per-share consideration received by holders of Common Stock in the Change in Control.
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9.4 Administrative Stand Still. In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other extraordinary transaction or change affecting the Shares or the share price of Common Stock (including any Equity Restructuring or any securities offering or other similar transaction) or for reasons of administrative convenience or to facilitate compliance with any Applicable Law, the Company may refuse to permit the exercise or settlement of one or more Awards for such period of time as the Company may determine to be reasonably appropriate under the circumstances.
9.5 General. Except as expressly provided in the Plan or the Administrators action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class or dissolution, liquidation, merger, or consolidation of the Company or other corporation. Except as expressly provided with respect to an Equity Restructuring under Section 9.1 above or the Administrators action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Awards grant or exercise price. The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Companys right or power to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Companys capital structure or its business, (ii) any merger, consolidation, spinoff, dissolution or liquidation of the Company or sale of Company assets or (iii) any sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares.
ARTICLE X.
PROVISIONS APPLICABLE TO AWARDS
10.1 Transferability.
(a) No Award may be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except by will or the laws of descent and distribution, or, subject to the Administrators consent, pursuant to a domestic relations order, unless and until such Award has been exercised and/or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed. During the life of a Participant, Awards will be exercisable only by the Participant, unless it has been disposed of pursuant to a domestic relations order. After the death of a Participant, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Award Agreement, be exercised by the Participants personal representative or by any person empowered to do so under the deceased Participants will or under the then-Applicable Law of descent and distribution. References to a Participant, to the extent relevant in the context, will include references to a transferee approved by the Administrator.
(b) Notwithstanding Section 10.1(a), the Administrator, in its sole discretion, may determine to permit a Participant or a Permitted Transferee of such Participant to transfer an Award other than an Incentive Stock Option (unless such Incentive Stock Option is intended to become a Nonqualified Stock Option) to any one or more Permitted Transferees of such Participant, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than (A) to another Permitted Transferee of the applicable Participant or (B) by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a domestic relations order; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Participant (other than the ability to further transfer the Award to any Person other than another Permitted Transferee of the applicable Participant); (iii) the Participant (or transferring Permitted Transferee) and
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the receiving Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer; and (iv) any transfer of an Award to a Permitted Transferee shall be without consideration, except as required by Applicable Law. In addition, and further notwithstanding Section 10.1(a), the Administrator, in its sole discretion, may determine to permit a Participant to transfer Incentive Stock Options to a trust that constitutes a Permitted Transferee if, under Section 671 of the Code and other Applicable Law, the Participant is considered the sole beneficial owner of the Incentive Stock Option while it is held in the trust.
(c) Notwithstanding Section 10.1(a), a Participant may, in the manner determined by the Administrator, designate a Designated Beneficiary. A Designated Beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant and any additional restrictions deemed necessary or appropriate by the Administrator. If the Participant is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a community property state, a designation of a person other than the Participants spouse or domestic partner, as applicable, as the Participants Designated Beneficiary with respect to more than 50% of the Participants interest in the Award shall not be effective without the prior written or electronic consent of the Participants spouse or domestic partner. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time; provided that the change or revocation is delivered in writing to the Administrator prior to the Participants death.
10.2 Documentation. Each Award will be evidenced in an Award Agreement in such form as the Administrator determines in its discretion. Each Award may contain such terms and conditions as are determined by the Administrator in its sole discretion, to the extent not inconsistent with those set forth in the Plan.
10.3 Discretion. Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.
10.4 Changes in Participants Status. The Administrator will determine how the disability, death, retirement, authorized leave of absence or any other change or purported change in a Participants Service Provider status affects an Award and the extent to which, and the period during which, the Participant, the Participants legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable. Except to the extent otherwise required by law or expressly authorized by the Company or by the Companys written policy on leaves of absence, no Service credit shall be given for vesting purposes for any period the Participant is on a leave of absence.
10.5 Withholding. Each Participant must pay the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by law to be withheld in connection with such Participants Awards by the date of the event creating the tax liability. The Company may deduct an amount sufficient to satisfy such tax obligations from any payment of any kind otherwise due to a Participant. The amount deducted shall be determined by the Company and may be up to, but no greater than, the aggregate amount of such obligations based on the maximum statutory withholding rates in the applicable Participants jurisdiction for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income. Subject to any Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (i) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company; provided that the Company may limit the use of one of the foregoing methods if one or more of the exercise methods below
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is permitted, (ii) to the extent permitted by the Administrator, in whole or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of delivery, (iii) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Administrator otherwise determines, (A) delivery (including electronically or telephonically to the extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise of the Option and that the broker has been directed to deliver promptly to the Company funds sufficient to satisfy the tax obligations, or (B) the Participants delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company an amount sufficient to satisfy the tax withholding by cash, wire transfer of immediately available funds or check; provided that such amount is paid to the Company at such time as may be required by the Company, (iv) to the extent permitted by the Administrator, delivery of a promissory note or any other lawful consideration or (v) to the extent permitted by the Administrator, any combination of the foregoing payment forms. If any tax withholding obligation will be satisfied under clause (ii) of the immediately preceding sentence by the Companys retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participants behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participants acceptance of an Award under the Plan will constitute the Participants authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence.
10.6 Amendment of Award; Repricing. The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting an Incentive Stock Option to a Nonqualified Stock Option. The Participants consent to such action will be required unless (i) the action, taking into account any related action, does not materially and adversely affect the Participants rights under the Award, or (ii) the change is permitted under Article IX or pursuant to Section 11.6. In addition, the Administrator shall, without the approval of the stockholders of the Company, have the authority to (a) amend any outstanding Option or Stock Appreciation Right to reduce its exercise price per Share, or (b) cancel any Option or Stock Appreciation Right in exchange for cash or another Award.
10.7 Conditions on Delivery of Stock. The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Companys satisfaction, (ii) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy Applicable Law. The Companys inability to obtain authority from any regulatory body having jurisdiction, which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability for failing to issue or sell such Shares as to which such requisite authority has not been obtained.
10.8 Acceleration. The Administrator may at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.
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ARTICLE XI.
MISCELLANEOUS
11.1 No Right to Employment or Other Status. No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continue employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement or other written agreement between the Participant and the Company or any Subsidiary.
11.2 No Rights as Stockholder; Certificates. Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a stockholder with respect to any Shares to be distributed under an Award until becoming the record holder of such Shares. Notwithstanding any other provision of the Plan, unless the Administrator otherwise determines or Applicable Law requires, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). The Company may place legends on any share certificate or book entry to reference restrictions applicable to the Shares (including, without limitation, restrictions applicable to Restricted Stock).
11.3 Effective Date. The Plan will become effective on the day prior to the Public Trading Date (the Effective Date). No Incentive Stock Option may be granted pursuant to the Plan after the tenth anniversary of the earlier of (i) the date the Plan was approved by the Board and (ii) the date the Plan was approved by the Companys stockholders.
11.4 Amendment of Plan. The Board may amend, suspend or terminate the Plan at any time and from time to time; provided that (a) no amendment requiring stockholder approval to comply with Applicable Law shall be effective unless approved by the Board, and (b) no amendment, other than an increase to the Overall Share Limit or pursuant to Section Article IX or Section 11.6, may materially and adversely affect any Award outstanding at the time of such amendment without the affected Participants consent. No Awards may be granted under the Plan during any suspension period or after Plan termination. Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination. The Board will obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Law.
11.5 Provisions for Foreign Participants. The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States, establish subplans or procedures under the Plan or take any other necessary or appropriate action to address Applicable Law, including (a) differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters, (b) listing and other requirements of any foreign securities exchange, and (c) any necessary local governmental or regulatory exemptions or approvals.
11.6 Section 409A.
(a) General. The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply. Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participants consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (A) exempt this Plan or any Award from Section 409A, or (B) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority
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that may be issued after an Awards grant date. The Company makes no representations or warranties as to an Awards tax treatment under Section 409A or otherwise. The Company will have no obligation under this Section 11.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant nonqualified deferred compensation subject to taxes, penalties or interest under Section 409A.
(b) Separation from Service. If an Award constitutes nonqualified deferred compensation under Section 409A, any payment or settlement of such Award upon a Participants Termination of Service will, to the extent necessary to avoid taxes under Section 409A, be made only upon the Participants separation from service (within the meaning of Section 409A), whether such separation from service occurs upon or after the Participants Termination of Service. For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a termination, termination of employment or like terms means a separation from service.
(c) Payments to Specified Employees. Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of nonqualified deferred compensation required to be made under an Award to a specified employee (as defined under Section 409A and as the Administrator determines) due to his or her separation from service will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such separation from service (or, if earlier, until the specified employees death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest). Any payments of nonqualified deferred compensation under such Award payable more than six months following the Participants separation from service will be paid at the time or times the payments are otherwise scheduled to be made.
11.7 Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer or other employee of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his or her capacity as an Administrator, director, officer or other employee of the Company or any Subsidiary. The Company will indemnify and hold harmless each director, officer or other employee of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plans administration or interpretation, against any cost or expense (including attorneys fees) or liability (including any sum paid in settlement of a claim with the Administrators approval) arising from any act or omission concerning this Plan unless arising from such persons own fraud or bad faith; provided that he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.
11.8 Data Privacy. As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participants participation in the Plan. The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the Participants name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details, to implement, manage and administer the Plan and Awards (the Data). The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participants participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company
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with Plan implementation, administration and management. These recipients may be located in the Participants country, or elsewhere, and the Participants country may have different data privacy laws and protections than the recipients country. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participants participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participants participation in the Plan. A Participant may, at any time, view the Data that the Company holds regarding such Participant, request additional information about the storage and processing of the Data regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 11.8 in writing, without cost, by contacting the local human resources representative. The Company may cancel Participants ability to participate in the Plan and, in the Administrators sole discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 11.8. For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative.
11.9 Severability. If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.
11.10 Governing Documents. If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary), the Plan will govern, unless such Award Agreement or other written agreement was approved by the Administrator and expressly provides that a specific provision of the Plan will not apply.
11.11 Governing Law. The Plan and all Awards will be governed by and interpreted in accordance with the laws of the State of Delaware, disregarding the choice-of-law principles of the State of Delaware and any other state requiring the application of a jurisdictions laws other than the State of Delaware.
11.12 Clawback Provisions. All Awards (including the gross amount of any proceeds, gains or other economic benefit the Participant actually or constructively receives upon receipt or exercise of any Award or the receipt or resale of any Shares underlying the Award) will be subject to recoupment by the Company to the extent required to comply with Applicable Law or any policy of the Company providing for the reimbursement of incentive compensation, whether or not such policy was in place at the time of grant of an Award.
11.13 Titles and Headings. The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plans text, rather than such titles or headings, will control.
11.14 Conformity to Applicable Law. Participant acknowledges that the Plan is intended to conform to the extent necessary with Applicable Law. Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered only in a manner intended to conform with Applicable Law. To the extent Applicable Law permit, the Plan and all Award Agreements will be deemed amended as necessary to conform to Applicable Law.
11.15 Relationship to Other Benefits. No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary, except as expressly provided in writing in such other plan or an agreement thereunder.
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11.16 Unfunded Status of Awards. The Plan is intended to be an unfunded plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary.
11.17 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
11.18 Prohibition on Executive Officer Loans. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director or an executive officer of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
11.19 Broker-Assisted Sales. In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final sentence of Section 10.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (c) the applicable Participant will be responsible for all brokers fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such sale are insufficient to satisfy the Participants applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participants obligation.
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I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Unity Biotechnology, Inc. on [ ], 2018.
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I hereby certify that the foregoing Plan was approved by the stockholders of Unity Biotechnology, Inc. on [ ], 2018.
Executed on this day of [ ], 2018.
Corporate Secretary |
Exhibit 10.4B
UNITY BIOTECHNOLOGY, INC.
2018 INCENTIVE AWARD PLAN
STOCK OPTION GRANT NOTICE
Unity Biotechnology, Inc., a Delaware corporation, (the Company), pursuant to its 2018 Incentive Award Plan, as may be amended from time to time (the Plan), hereby grants to the holder listed below (Participant), an option to purchase the number of shares of the Companys Common Stock (the Shares), set forth below (the Option). This Option is subject to all of the terms and conditions set forth herein, as well as in the Plan and the Stock Option Agreement attached hereto as Exhibit A (the Stock Option Agreement), each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement.
Participant: | [____________] | |||
Grant Date: | [____________] | |||
Vesting Commencement Date: | [____________] | |||
Exercise Price per Share: | $[___] | |||
Total Exercise Price: | [____________] | |||
Total Number of Shares Subject to the Option: |
[_______] shares | |||
Expiration Date: | [____________] | |||
Vesting Schedule: | [____________] |
Type of Option: ☐ Incentive Stock Option ☐ Nonqualified Stock Option
By his or her signature and the Companys signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement, and this Grant Notice. Participant has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Stock Option Agreement.
UNITY BIOTECHNOLOGY, INC.: | PARTICIPANT: | |||||||
By: | By: | |||||||
Print Name: | Print Name: | |||||||
Title: | ||||||||
Address: | Address: | |||||||
EXHIBIT A
TO STOCK OPTION GRANT NOTICE
STOCK OPTION AGREEMENT
Pursuant to the Stock Option Grant Notice (the Grant Notice) to which this Stock Option Agreement (this Agreement) is attached, Unity Biotechnology, Inc., a Delaware corporation (the Company), has granted to the Participant an Option under the Companys 2018 Incentive Award Plan, as may be amended from time to time (the Plan), to purchase the number of Shares indicated in the Grant Notice.
ARTICLE 1.
GENERAL
1.1 Defined Terms. Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.
1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.
ARTICLE 2.
GRANT OF OPTION
2.1 Grant of Option. In consideration of the Participants past and/or continued employment with or service to the Company or any Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the Grant Date), the Company irrevocably grants to the Participant the Option to purchase any part or all of an aggregate of the number of Shares set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement, subject to adjustments as provided in Article IX of the Plan. Unless designated as a Nonqualified Stock Option in the Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law.
2.2 Exercise Price. The exercise price of the Shares subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the price per share of the Shares subject to the Option shall not be less than 100% of the Fair Market Value of a Share on the Grant Date. Notwithstanding the foregoing, if this Option is designated as an Incentive Stock Option and the Participant is a Greater Than 10% Stockholder as of the Date of Grant, the exercise price per share of the Shares subject to the Option shall not be less than 110% of the Fair Market Value of a Share on the Grant Date.
2.3 Consideration to the Company. In consideration of the grant of the Option by the Company, the Participant agrees to render faithful and efficient services to the Company or any Subsidiary. Nothing in the Plan or this Agreement shall confer upon the Participant any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of the Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and the Participant.
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ARTICLE 3.
PERIOD OF EXERCISABILITY
3.1 Commencement of Exercisability.
(a) Subject to Sections 3.2, 3.3, 5.11 and 5.17 hereof, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the Grant Notice.
(b) No portion of the Option which has not become vested and exercisable at the date of the Participants Termination of Service shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and the Participant.
(c) Notwithstanding Section 3.1(a) hereof and the Grant Notice, but subject to Section 3.1(b) hereof, in the event of a Change in Control the Option shall be treated pursuant to Sections 9.2 and 9.3 of the Plan.
3.2 Duration of Exercisability. The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 hereof.
3.3 Expiration of Option. The Option may not be exercised to any extent by anyone after the first to occur of the following events:
(a) The Expiration Date set forth in the Grant Notice, which shall in no event be more than ten (10) years from the Grant Date;
(b) If this Option is designated as an Incentive Stock Option and the Participant, at the time the Option was granted, was a Greater Than 10% Stockholder, the expiration of five (5) years from the Grant Date;
(c) The expiration of three (3) months from the date of the Participants Termination of Service, unless such termination occurs by reason of the Participants death or disability; or
(d) The expiration of one (1) year from the date of the Participants Termination of Service by reason of the Participants death or disability.
3.4 Special Tax Consequences. The Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Stock Options, including the Option (if applicable), are exercisable for the first time by the Participant in any calendar year exceeds $100,000, the Option and such other options shall be Nonqualified Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of the Code. The Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other incentive stock options into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder. The Participant also acknowledges that an Incentive Stock Option exercised more than three (3) months after the Participants Termination of Employment, other than by reason of death or disability, will be taxed as a Nonqualified Stock Option.
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3.5 Tax Indemnity.
(a) The Participant agrees to indemnify and keep indemnified the Company, any Subsidiary and the Participants employing company, if different, from and against any liability for or obligation to pay any Tax Liability (a Tax Liability being any liability for income tax, withholding tax and any other employment related taxes or social security contributions in any jurisdiction) that is attributable to (1) the grant or exercise of, or any benefit derived by the Participant from, the Option, (2) the acquisition by the Participant of the Shares on exercise of the Option or (3) the disposal of any Shares.
(b) The Option cannot be exercised until the Participant has made such arrangements as the Company may require for the satisfaction of any Tax Liability that may arise in connection with the exercise of the Option and/or the acquisition of the Shares by the Participant. The Company shall not be required to issue, allot or transfer Shares until the Participant has satisfied this obligation.
(c) The Participant hereby acknowledges that the Company (i) makes no representations or undertakings regarding the treatment of any Tax Liabilities in connection with any aspect of the Option and (ii) does not commit to and is under no obligation to structure the terms of the grant or any aspect of any Award, including the Option, to reduce or eliminate the Participants liability for Tax Liabilities or achieve any particular tax result. Furthermore, if the Participant becomes subject to tax in more than one jurisdiction between the date of grant of an Award, including the Option, and the date of any relevant taxable event, the Participant acknowledges that the Company may be required to withhold or account for Tax Liabilities in more than one jurisdiction.
ARTICLE 4.
EXERCISE OF OPTION
4.1 Person Eligible to Exercise. Except as provided in Section 5.3 hereof, during the lifetime of the Participant, only the Participant may exercise the Option or any portion thereof, unless it has been disposed of pursuant to a DRO. After the death of the Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by the deceased the Participants personal representative or by any person empowered to do so under the deceased the Participants will or under the then applicable laws of descent and distribution.
4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof. However, the Option shall not be exercisable with respect to fractional Shares.
4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other person or entity designated by the Company; for the avoidance of doubt, delivery shall include electronic delivery), during regular business hours, of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 hereof:
(a) An exercise notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator. The notice shall be signed by the Participant or other person then entitled to exercise the Option or such portion of the Option;
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(b) The receipt by the Company of full payment for the Shares with respect to which the Option or portion thereof is exercised, including payment of any applicable withholding tax, which shall be made by deduction from other compensation payable to the Participant or in such other form of consideration permitted under Section 4.4 hereof that is acceptable to the Company;
(c) Any other written representations or documents as may be required in the Administrators sole discretion to evidence compliance with the Securities Act, the Exchange Act or any other applicable law, rule or regulation; and
(d) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 hereof by any person or persons other than the Participant, appropriate proof of the right of such person or persons to exercise the Option.
Notwithstanding any of the foregoing, the Company shall have the right to specify all conditions of the manner of exercise, which conditions may vary by country and which may be subject to change from time to time.
4.4 Method of Payment. Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of the Participant:
(a) Cash or check;
(b) With the consent of the Administrator, surrender of Shares (including, without limitation, Shares otherwise issuable upon exercise of the Option) held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; or
(c) Other legal consideration acceptable to the Administrator (including, without limitation, through the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that payment of such proceeds is then made to the Company at such time as may be required by the Company, but in any event not later than the settlement of such sale).
4.5 Conditions to Issuance of Shares. The Shares deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued Shares or issued Shares which have then been reacquired by the Company. Such Shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any Shares purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the conditions in Section 10.7 of the Plan and following conditions:
(a) The admission of such Shares to listing on all stock exchanges on which such Shares are then listed;
(b) The completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable;
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(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable;
(d) The receipt by the Company of full payment for such Shares, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof; and
(e) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience.
4.6 Rights as Stockholder. The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company, including, without limitation, voting rights and rights to dividends, in respect of any Shares purchasable upon the exercise of any part of the Option unless and until such Shares shall have been issued by the Company and held of record by such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Article IX of the Plan.
ARTICLE 5.
OTHER PROVISIONS
5.1 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon the Participant, the Company and all other interested persons. No member of the Committee or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option.
5.2 Whole Shares. The Option may only be exercised for whole Shares.
5.3 Option Not Transferable.
(a) Subject to Section 4.1 hereof, the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until the Option has been exercised and the Shares underlying the Option have been issued, and all restrictions applicable to such Shares have lapsed. Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of the Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until the Option has been exercised, and any attempted disposition thereof prior to exercise shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.
(b) During the lifetime of the Participant, only the Participant may exercise the Option (or any portion thereof), unless it has been disposed of pursuant to a DRO; after the death of the Participant, any exercisable portion of the Option may, prior to the time when such portion becomes unexercisable under the Plan or this Agreement, be exercised by the Participants personal representative or by any person empowered to do so under the deceased the Participants will or under the then-applicable laws of descent and distribution.
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(c) Notwithstanding any other provision in this Agreement, the Participant may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to the Option upon the Participants death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and this Agreement, except to the extent the Plan and this Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the Participant is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a community property state, a designation of a person other than the Participants spouse or domestic partner, as applicable, as his or her beneficiary with respect to more than 50% of the Participants interest in the Option shall not be effective without the prior written consent of the Participants spouse or domestic partner. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participants will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by the Participant at any time provided the change or revocation is filed with the Administrator prior to the Participants death.
5.4 Tax Consultation. The Participant understands that the Participant may suffer adverse tax consequences as a result of the grant, vesting and/or exercise of the Option, and/or with the purchase or disposition of the Shares subject to the Option. The Participant represents that the Participant has consulted with any tax consultants the Participant deems advisable in connection with the purchase or disposition of such Shares and that the Participant is not relying on the Company for any tax advice.
5.5 Binding Agreement. Subject to the limitation on the transferability of the Option contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
5.6 Adjustments Upon Specified Events. The Administrator may accelerate the vesting of the Option in such circumstances as it, in its sole discretion, may determine. In addition, upon the occurrence of certain events relating to the Shares contemplated by Article IX of the Plan (including, without limitation, an extraordinary cash dividend on such Shares), the Administrator shall make such adjustments the Administrator deems appropriate in the number of Shares subject to the Option, the exercise price of the Option and the kind of securities that may be issued upon exercise of the Option. The Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and Article IX of the Plan.
5.7 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Companys principal office, and any notice to be given to the Participant shall be addressed to the Participant at the Participants last address reflected on the Companys records. By a notice given pursuant to this Section 5.7, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to the Participant shall, if the Participant is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 hereof by written notice under this Section 5.7. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.
5.8 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
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5.9 Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.
5.10 Conformity to Securities Laws. The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all Applicable Law and regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such Applicable Law. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such Applicable Law.
5.11 Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Option in any material way without the prior written consent of the Participant.
5.12 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth in Section 5.3 hereof, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.
5.13 Notification of Disposition. If this Option is designated as an Incentive Stock Option, the Participant shall give prompt notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or transfer is made (a) within two (2) years from the Grant Date with respect to such Shares or (b) within one (1) year after the transfer of such Shares to the Participant. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Participant in such disposition or other transfer.
5.14 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
5.15 Not a Contract of Service Relationship. Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries or interfere with or restrict in any way with the right of the Company or any of its Subsidiaries, which rights are hereby expressly reserved, to discharge or to terminate for any reason whatsoever, with or without cause, the services of the Participants at any time.
5.16 Entire Agreement. The Plan, the Grant Notice and this Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof.
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5.17 Section 409A. This Option is not intended to constitute nonqualified deferred compensation within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, Section 409A). However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that the Option (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify the Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate either for the Option to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.
5.18 Limitation on the Participants Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. The Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Option, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to options, as and when exercised pursuant to the terms hereof.
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Exhibit 10.4C
UNITY BIOTECHNOLOGY, INC.
2018 INCENTIVE AWARD PLAN
RESTRICTED STOCK UNIT AWARD GRANT NOTICE
Unity Biotechnology, Inc., a Delaware corporation, (the Company), pursuant to its 2018 Incentive Award Plan, as amended from time to time (the Plan), hereby grants to the holder listed below (the Participant), an award of restricted stock units (Restricted Stock Units or RSUs). Each vested Restricted Stock Unit represents the right to receive, in accordance with the Restricted Stock Unit Award Agreement attached hereto as Exhibit A (the Agreement), one share of Common Stock (Share). This award of Restricted Stock Units is subject to all of the terms and conditions set forth herein and in the Agreement and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Restricted Stock Unit Award Grant Notice (the Grant Notice) and the Agreement.
Participant: | [__________________________] | |
Grant Date: | [__________________________] | |
Total Number of RSUs: | [_____________] | |
Vesting Commencement Date: | [_____________] | |
Vesting Schedule: | [_____________] | |
Termination: | If the Participant experiences a Termination of Service, all RSUs that have not become vested on or prior to the date of such Termination of Service will thereupon be automatically forfeited by the Participant without payment of any consideration therefor. |
By his or her signature and the Companys signature below, the Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice. The Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement. In addition, by signing below, the Participant also agrees that the Company, in its sole discretion, may satisfy any withholding obligations in accordance with Section 2.6(b) of the Agreement by (i) withholding shares of Common Stock otherwise issuable to the Participant upon vesting of the RSUs, (ii) instructing a broker on the Participants behalf to sell shares of Common Stock otherwise issuable to the Participant upon vesting of the RSUs and submit the proceeds of such sale to the Company, or (iii) using any other method permitted by Section 2.6(b) of the Agreement or the Plan.
UNITY BIOTECHNOLOGY, INC.: | PARTICIPANT: | |||||||
By: | By: | |||||||
Print Name: | Print Name: | |||||||
Title: | ||||||||
Address: | Address: |
EXHIBIT A
TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE
RESTRICTED STOCK UNIT AWARD AGREEMENT
Pursuant to the Restricted Stock Unit Award Grant Notice (the Grant Notice) to which this Restricted Stock Unit Award Agreement (this Agreement) is attached, Unity Biotechnology, Inc., a Delaware corporation (the Company), has granted to the Participant the number of restricted stock units (Restricted Stock Units or RSUs) set forth in the Grant Notice under the Companys 2018 Incentive Award Plan, as amended from time to time (the Plan). Each Restricted Stock Unit represents the right to receive one share of Common Stock (a Share) upon vesting. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and Grant Notice.
ARTICLE I.
GENERAL
1.1 Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions of the Plan, which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.
ARTICLE II.
GRANT OF RESTRICTED STOCK UNITS
2.1 Grant of RSUs. Pursuant to the Grant Notice and upon the terms and conditions set forth in the Plan and this Agreement, effective as of the Grant Date set forth in the Grant Notice, the Company hereby grants to the Participant an award of RSUs under the Plan in consideration of the Participants past and/or continued employment with or service to the Company or any Subsidiaries and for other good and valuable consideration.
2.2 Unsecured Obligation to RSUs. Unless and until the RSUs have vested in the manner set forth in Article 2 hereof, the Participant will have no right to receive Common Stock under any such RSUs. Prior to actual payment of any vested RSUs, such RSUs will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.
2.3 Vesting Schedule. Subject to Section 2.5 hereof, the RSUs shall vest and become nonforfeitable with respect to the applicable portion thereof according to the vesting schedule set forth in the Grant Notice (rounding down to the nearest whole Share).
2.4 Consideration to the Company. In consideration of the grant of the award of RSUs pursuant hereto, the Participant agrees to render faithful and efficient services to the Company or any Subsidiary.
2.5 Forfeiture, Termination and Cancellation upon Termination of Service. Notwithstanding any contrary provision of this Agreement or the Plan, upon the Participants Termination of Service for any or no reason, all Restricted Stock Units which have not vested prior to or in connection with such Termination of Service shall thereupon automatically be forfeited, terminated and cancelled as of the applicable termination date without payment of any consideration by the Company, and the Participant, or the Participants beneficiary or personal representative, as the case may be, shall have no further rights hereunder. No portion of the RSUs which has not become vested as of the date on which the Participant incurs a Termination of Service shall thereafter become vested.
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2.6 Issuance of Common Stock upon Vesting.
(a) As soon as administratively practicable following the vesting of any Restricted Stock Units pursuant to Section 2.3 hereof, but in no event later than thirty (30) days after such vesting date (for the avoidance of doubt, this deadline is intended to comply with the short term deferral exemption from Section 409A of the Code), the Company shall deliver to the Participant (or any transferee permitted under Section 3.2 hereof) a number of Shares equal to the number of RSUs subject to this Award that vest on the applicable vesting date. Notwithstanding the foregoing, in the event Shares cannot be issued pursuant to Section 10.7 of the Plan, the Shares shall be issued pursuant to the preceding sentence as soon as administratively practicable after the Administrator determines that Shares can again be issued in accordance with such Section.
(b) As set forth in Section 10.5 of the Plan, the Company shall have the authority and the right to deduct or withhold, or to require the Participant to remit to the Company, an amount sufficient to satisfy all applicable federal, state and local taxes required by law to be withheld with respect to any taxable event arising in connection with the Restricted Stock Units. The Company shall not be obligated to deliver any Shares to the Participant or the Participants legal representative unless and until the Participant or the Participants legal representative shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of the Participant resulting from the grant or vesting of the Restricted Stock Units or the issuance of Shares.
2.7 Conditions to Delivery of Shares. The Shares deliverable hereunder may be either previously authorized but unissued Shares, treasury Shares or issued Shares which have then been reacquired by the Company. Such Shares shall be fully paid and nonassessable. The Company shall not be required to issue Shares deliverable hereunder prior to fulfillment of the conditions set forth in Section 10.4 of the Plan.
2.8 Rights as Stockholder. The holder of the RSUs shall not be, nor have any of the rights or privileges of, a stockholder of the Company, including, without limitation, voting rights and rights to dividends, in respect of the RSUs and any Shares underlying the RSUs and deliverable hereunder unless and until such Shares shall have been issued by the Company and held of record by such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Article IX of the Plan.
ARTICLE III.
OTHER PROVISIONS
3.1 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon the Participant, the Company and all other interested persons. No member of the Administrator or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the RSUs.
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3.2 RSUs Not Transferable. The RSUs shall be subject to the restrictions on transferability set forth in Section 10.1 of the Plan.
3.3 Tax Consultation. The Participant understands that the Participant may suffer adverse tax consequences in connection with the RSUs granted pursuant to this Agreement (and the Shares issuable with respect thereto). The Participant represents that the Participant has consulted with any tax consultants the Participant deems advisable in connection with the RSUs and the issuance of Shares with respect thereto and that the Participant is not relying on the Company for any tax advice.
3.4 Binding Agreement. Subject to the limitation on the transferability of the RSUs contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
3.5 Adjustments Upon Specified Events. The Administrator may accelerate the vesting of the RSUs in such circumstances as it, in its sole discretion, may determine. The Participant acknowledges that the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and Article IX of the Plan.
3.6 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Companys principal office, and any notice to be given to the Participant shall be addressed to the Participant at the Participants last address reflected on the Companys records. By a notice given pursuant to this Section 3.6, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.
3.7 Participants Representations. If the Shares issuable hereunder have not been registered under the Securities Act or any applicable state laws on an effective registration statement at the time of such issuance, the Participant shall, if required by the Company, concurrently with such issuance, make such written representations as are deemed necessary or appropriate by the Company and/or its counsel.
3.8 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
3.9 Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.
3.10 Conformity to Securities Laws. The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any other Applicable Law. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are granted, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such Applicable Law.
3.11 Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the RSUs in any material way without the prior written consent of the Participant.
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3.12 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth in Section 3.2 hereof, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.
3.13 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the Exchange Act, then the Plan, the RSUs and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
3.14 Not a Contract of Service Relationship. Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries or interfere with or restrict in any way with the right of the Company or any of its Subsidiaries, which rights are hereby expressly reserved, to discharge or to terminate for any reason whatsoever, with or without cause, the services of the Participants at any time.
3.15 Entire Agreement. The Plan, the Grant Notice and this Agreement (including all Exhibits thereto, if any) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof.
3.16 Section 409A. This Award is not intended to constitute nonqualified deferred compensation within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, Section 409A). However, notwithstanding any other provision of the Plan, the Grant Notice or this Agreement, if at any time the Administrator determines that this Award (or any portion thereof) may be subject to Section 409A, the Administrator shall have the right in its sole discretion (without any obligation to do so or to indemnify Participant or any other person for failure to do so) to adopt such amendments to the Plan, the Grant Notice or this Agreement, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate for this Award either to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.
3.17 Limitation on Participants Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. The Participant shall have only the rights of a general unsecured creditor of the Company and its Subsidiaries with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to RSUs, as and when payable hereunder.
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Exhibit 10.4D
UNITY BIOTECHNOLOGY, INC.
2018 INCENTIVE AWARD PLAN
RESTRICTED STOCK AWARD GRANT NOTICE
Unity Biotechnology, Inc., a Delaware corporation, (the Company), pursuant to its 2018 Incentive Award Plan, as amended from time to time (the Plan), hereby grants to the holder listed below (the Participant) the number of shares of the Companys Common Stock set forth below (the Shares) subject to all of the terms and conditions as set forth herein and in the Restricted Stock Award Agreement attached hereto as Exhibit A (the Agreement) (including without limitation the Restrictions on the Shares set forth in the Agreement) and the Plan, each of which is incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Restricted Stock Award Grant Notice (the Grant Notice) and the Agreement.
Participant: | [ ] | |
Grant Date: | [ ] | |
Total Number of Shares of Restricted Stock: | [ ] Shares | |
Vesting Commencement Date: | [ ] | |
Vesting Schedule: | [ ] | |
Termination: | If the Participant experiences a Termination of Service, any Shares that have not become vested on or prior to the date of such Termination of Service will thereupon be automatically forfeited by the Participant, and the Participants rights in such Shares shall thereupon lapse and expire. |
By his or her signature and the Companys signature below, the Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice. The Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement. In addition, by signing below, the Participant also agrees that the Company, in its sole discretion, may satisfy any withholding obligations in accordance with Section 2.2(c) of the Agreement by (i) withholding shares of Common Stock otherwise issuable to the Participant upon vesting of the Shares, (ii) instructing a broker on the Participants behalf to sell Shares upon vesting and submit the proceeds of such sale to the Company, or (iii) using any other method permitted by Section 2.2(c) of the Agreement or the Plan.
UNITY BIOTECHNOLOGY, INC.: | PARTICIPANT: | |||||||
By: | By: | |||||||
Print Name: | Print Name: | |||||||
Title: | ||||||||
Address: | Address: | |||||||
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EXHIBIT A
TO RESTRICTED STOCK AWARD GRANT NOTICE
RESTRICTED STOCK AWARD AGREEMENT
Pursuant to the Restricted Stock Award Grant Notice (the Grant Notice) to which this Restricted Stock Award Agreement (this Agreement) is attached, Unity Biotechnology, Inc., a Delaware corporation, (the Company) has granted to the Participant the number of shares of Restricted Stock (the Shares) under the Companys 2018 Incentive Award Plan, as amended from time to time (the Plan), as set forth in the Grant Notice. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and Grant Notice.
ARTICLE I.
GENERAL
1.1 Incorporation of Terms of Plan. The Award (as defined below) is subject to the terms and conditions of the Plan, which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.
ARTICLE II.
AWARD OF RESTRICTED STOCK
2.1 Award of Restricted Stock.
(a) Award. Pursuant to the Grant Notice and upon the terms and conditions set forth in the Plan and this Agreement, effective as of the Grant Date set forth in the Grant Notice, the Company has granted to the Participant an award of Restricted Stock (the Award) under the Plan in consideration of the Participants past and/or continued employment with or service to the Company or any Subsidiary, and for other good and valuable consideration. The number of Shares subject to the Award is set forth in the Grant Notice. The Participant is an Employee, Director or Consultant of the Company or one of its Subsidiaries.
(b) Escrow. The Participant, by acceptance of the Award, shall be deemed to appoint, and does so appoint, the Secretary of the Company or such other escrow holder as the Administrator may appoint to hold the Shares in escrow as the Participants attorney(s)-in-fact to effect any transfer of unvested forfeited Shares (or Shares otherwise reacquired by the Company hereunder) to the Company as may be required pursuant to the Plan or this Agreement and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer.
(c) Removal of Notations. As soon as administratively practicable after the vesting of any Shares subject to the Award pursuant to Section 2.2(b) hereof, the Company shall remove the notations on any Shares subject to the Award which have vested (or such lesser number of Shares as may be permitted pursuant to Section 10.5 of the Plan). The Participant (or the beneficiary or personal representative of the Participant in the event of the Participants death or incapacity, as the case may be) shall deliver to the Company any representations or other documents or assurances required by the Company.
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2.2 Restrictions.
(a) Forfeiture. Notwithstanding any contrary provision of this Agreement, upon the Participants Termination of Service for any or no reason, any Shares subject to Restrictions shall thereupon be forfeited immediately and without any further action by the Company, and the Participants rights in such Shares shall thereupon lapse and expire.
(b) Vesting and Lapse of Restrictions. As of the Grant Date, one hundred percent (100%) of the Shares shall be subject to a risk of forfeiture and the transfer restrictions set forth in Section 3.3 hereof (collectively, such risk of forfeiture and such transfer restrictions, the Restrictions). The Award shall vest and Restrictions shall lapse in accordance with the vesting schedule set forth in the Grant Notice (rounding down to the nearest whole Share).
(c) Tax Withholding. As set forth in Section 10.5 of the Plan, the Company shall have the authority and the right to deduct or withhold, or to require the Participant to remit to the Company, an amount sufficient to satisfy all applicable federal, state and local taxes required by law to be withheld with respect to any taxable event arising in connection with the Award. The Company shall not be obligated to transfer Shares held in escrow to the Participant or the Participants legal representative until the Participant or the Participants legal representative shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of the Participant resulting from the grant or vesting of the Award or the issuance of Shares.
(d) Stop Transfer Instructions. To ensure compliance with the Restrictions, the provisions of the charter documents of the Company, and/or Applicable Law and for other proper purposes, the Company may issue appropriate stop transfer and other instructions to its transfer agent with respect to the Restricted Stock. The Company shall notify the transfer agent as and when the Restrictions lapse.
2.3 Consideration to the Company. In consideration of the grant of the Award pursuant hereto, the Participant agrees to render faithful and efficient services to the Company or any Subsidiary.
ARTICLE III.
OTHER PROVISIONS
3.1 Section 83(b) Election. If the Participant makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, the Participant hereby agrees to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.
3.2 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon the Participant, the Company and all other interested persons. No member of the Administrator or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Award.
3.3 Restricted Stock Not Transferable. Until the Restrictions hereunder lapse or expire pursuant to this Agreement and the Shares vest, the Restricted Stock (including any Shares or other securities or property received by the Participant with respect to Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall be subject to the restrictions on transferability set forth in Section 10.1 of the Plan.
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3.4 Rights as Stockholder. Except as otherwise provided herein, upon the Grant Date, the Participant shall have all the rights of a stockholder of the Company with respect to the Shares, subject to the Restrictions, including, without limitation, voting rights and rights to receive any cash or stock dividends, in respect of the Shares subject to the Award and deliverable hereunder.
3.5 Tax Consultation. The Participant understands that the Participant may suffer adverse tax consequences in connection with the Restricted Stock granted pursuant to this Agreement (and the Shares issuable with respect thereto). The Participant represents that the Participant has consulted with any tax consultants the Participant deems advisable in connection with the Restricted Stock and that the Participant is not relying on the Company for any tax advice.
3.6 Adjustments Upon Specified Events. The Administrator may accelerate the vesting of the Restricted Stock in such circumstances as it, in its sole discretion, may determine. The Participant acknowledges that the Restricted Stock is subject to adjustment, modification and termination in certain events as provided in this Agreement and Article IX of the Plan.
3.7 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Companys principal office, and any notice to be given to the Participant shall be addressed to the Participant at the Participants last address reflected on the Companys records. By a notice given pursuant to this Section 3.7, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.
3.8 Participants Representations. If the Shares issuable hereunder have not been registered under the Securities Act or any applicable state laws on an effective registration statement at the time of such issuance, the Participant shall, if required by the Company, concurrently with such issuance, make such written representations as are deemed necessary or appropriate by the Company and/or its counsel.
3.9 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
3.10 Governing Law. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.
3.11 Conformity to Securities Laws. The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act, and any and all Applicable Law. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Award is granted, only in such a manner as to conform to such Applicable Law. To the extent permitted by Applicable Law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such Applicable Law.
3.12 Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Award in any material way without the prior written consent of the Participant.
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3.13 Successors and Assigns. The Company or any Subsidiary may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company and its Subsidiaries. Subject to the restrictions on transfer set forth in Section 3.3 hereof, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.
3.14 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the Exchange Act, then the Plan, the Award and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
3.15 Not a Contract of Service Relationship. Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an Employee or other service provider of the Company or any of its Subsidiaries or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of the Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and the Participant.
3.16 Entire Agreement. The Plan, the Grant Notice and this Agreement (including all Exhibits thereto, if any) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and its Subsidiaries and the Participant with respect to the subject matter hereof.
3.17 Limitation on the Participants Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. The Participant shall have only the rights of a general unsecured creditor of the Company and its Subsidiaries with respect to amounts credited and benefits payable, if any, with respect to the Shares issuable hereunder.
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Exhibit 10.5
UNITY BIOTECHNOLOGY, INC.
2018 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I.
PURPOSE, SCOPE AND ADMINISTRATION OF THE PLAN
1.1 Purpose and Scope. The purpose of the Unity Biotechnology, Inc. 2018 Employee Stock Purchase Plan, as it may be amended from time to time, (the Plan) is to assist employees of Unity Biotechnology, Inc., a Delaware corporation, (the Company) and its Designated Subsidiaries in acquiring a stock ownership interest in the Company pursuant to a plan which is intended to qualify as an employee stock purchase plan under Section 423 of the Code and to help such employees provide for their future security and to encourage them to remain in the employment of the Company and its Subsidiaries.
ARTICLE II.
DEFINITIONS
Whenever the following terms are used in the Plan, they shall have the meaning specified below unless the context clearly indicates to the contrary. The singular pronoun shall include the plural where the context so indicates.
2.1 Administrator shall mean the Committee, or such individuals to which authority to administer the Plan has been delegated under Section 7.1 hereof.
2.2 Agent means the brokerage firm, bank or other financial institution, entity or person(s), if any, engaged, retained, appointed or authorized to act as the agent of the Company or an Employee with regard to the Plan.
2.3 Board shall mean the Board of Directors of the Company.
2.4 Code shall mean the Internal Revenue Code of 1986, as amended.
2.5 Committee shall mean the Compensation Committee of the Board.
2.6 Common Stock shall mean the common stock of the Company.
2.7 Company shall have such meaning as set forth in Section 1.1 hereof.
2.8 Compensation of an Employee shall mean the regular earnings or base salary, bonuses and commissions paid to the Employee from the Company on each Payday as compensation for services to the Company or any Designated Subsidiary, before deduction for any salary deferral contributions made by the Employee to any tax-qualified or nonqualified deferred compensation plan, including overtime, shift differentials, vacation pay, salaried production schedule premiums, holiday pay, jury duty pay, funeral leave pay, paid time off, military pay, prior week adjustments and weekly bonus, but excluding education or tuition reimbursements, imputed income arising under any group insurance or benefit program, travel
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expenses, business and moving reimbursements, including tax gross ups and taxable mileage allowance, income received in connection with any stock options, restricted stock, restricted stock units or other compensatory equity awards and all contributions made by the Company or any Designated Subsidiary for the Employees benefit under any employee benefit plan now or hereafter established. Such Compensation shall be calculated before deduction of any income or employment tax withholdings, but shall be withheld from the Employees net income.
2.9 Designated Subsidiary shall mean each Subsidiary that has been designated by the Board or Committee from time to time in its sole discretion as eligible to participate in the Plan, including any Subsidiary in existence on the Effective Date and any Subsidiary formed or acquired following the Effective Date, in accordance with Section 7.2 hereof.
2.10 Effective Date shall mean the date immediately prior to the date Companys registration statement relating to its initial public offering becomes effective, provided that the Board has adopted the Plan prior to or on such date, subject to approval of the Plan by the Companys stockholders.
2.11 Eligible Employee shall mean an Employee who (a) is customarily scheduled to work at least twenty (20) hours per week, (b) whose customary employment is more than five (5) months in a calendar year and (c) after the granting of the Option would not be deemed for purposes of Section 423(b)(3) of the Code to possess five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any Subsidiary. For purposes of clause (c), the rules of Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in determining the stock ownership of an individual, and stock which an Employee may purchase under outstanding options shall be treated as stock owned by the Employee. Notwithstanding the foregoing, the Administrator may exclude from participation in the Plan as an Eligible Employee (x) any Employee that is a highly compensated employee of the Company or any Designated Subsidiary (within the meaning of Section 414(q) of the Code), or that is such a highly compensated employee (A) with compensation above a specified level, (B) who is an officer and/or (C) is subject to the disclosure requirements of Section 16(a) of the Exchange Act and/or (y) any Employee who is a citizen or resident of a foreign jurisdiction (without regard to whether they are also a citizen of the United States or a resident alien (within the meaning of Section 7701(b)(1)(A) of the Code)) if either (i) the grant of the Option is prohibited under the laws of the jurisdiction governing such Employee, or (ii) compliance with the laws of the foreign jurisdiction would cause the Plan or the Option to violate the requirements of Section 423 of the Code; provided that any exclusion in clauses (x), and/or (y) shall be applied in an identical manner under each Offering Period to all Employees of the Company and all Designated Subsidiaries, in accordance with Treasury Regulation Section 1.423-2(e).
2.12 Employee shall mean any person who renders services to the Company or a Designated Subsidiary in the status of an employee within the meaning of Section 3401(c) of the Code. Employee shall not include any director of the Company or a Designated Subsidiary who does not render services to the Company or a Designated Subsidiary in the status of an employee within the meaning of Section 3401(c) of the Code. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on military
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leave, sick leave or other leave of absence approved by the Company or Designated Subsidiary and meeting the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds three (3) months, or such other period specified in Treasury Regulation Section 1.421-1(h)(2), and the individuals right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three (3)-month period, or such other period specified in Treasury Regulation Section 1.421-1(h)(2).
2.13 Enrollment Date shall mean the first date of each Offering Period.
2.14 Exercise Date shall mean the last Trading Day of each Offering Period, except as provided in Section 5.2 hereof.
2.15 Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
2.16 Fair Market Value shall mean, as of any date, the value of Common Stock determined as follows:
(a) If the Common Stock is (i) listed on any established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market system or (iii) listed, quoted or traded on any automated quotation system, its Fair Market Value shall be the closing sales price for a share of Common Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a share of Common Stock on the date in question, the closing sales price for a share of Stock on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(b) If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a share of Common Stock on such date, the high bid and low asked prices for a share of Common Stock on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(c) If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith.
2.17 Grant Date shall mean the first Trading Day of an Offering Period.
2.18 New Exercise Date shall have such meaning as set forth in Section 5.2(b) hereof.
2.19 Offering Period shall mean such period of time commencing on such date(s) as determined by the Board or Committee, in its sole discretion, and with respect to which Options shall be granted to Participants. The duration and timing of Offering Periods may be established or changed by the Board or Committee at any time, in its sole discretion. Notwithstanding the foregoing, in no event may an Offering Period exceed twenty-seven (27) months.
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2.20 Option shall mean the right to purchase shares of Common Stock pursuant to the Plan during each Offering Period.
2.21 Option Price shall mean the purchase price of a share of Common Stock hereunder as provided in Section 4.2 hereof.
2.22 Parent means any entity that is a parent corporation of the Company within the meaning of Section 424 of the Code and the Treasury Regulations thereunder.
2.23 Participant shall mean any Eligible Employee who elects to participate in the Plan.
2.24 Payday shall mean the regular and recurring established day for payment of Compensation to an Employee of the Company or any Designated Subsidiary.
2.25 Plan shall have such meaning as set forth in Section 1.1 hereof.
2.26 Plan Account shall mean a bookkeeping account established and maintained by the Company in the name of each Participant.
2.27 Section 423 Option shall have such meaning as set forth in Section 3.1(b) hereof.
2.28 Subsidiary shall mean any entity that is a subsidiary corporation of the Company within the meaning of Section 424 of the Code and the Treasury Regulations thereunder. In addition, with respect to any sub-plans adopted under Section 7.1(d) hereof which are designed to be outside the scope of Section 423 of the Code, Subsidiary shall include any corporate or noncorporate entity in which the Company has a direct or indirect equity interest or significant business relationship.
2.29 Trading Day shall mean a day on which the principal securities exchange on which the Common Stock is listed is open for trading or, if the Common Stock is not listed on a securities exchange, shall mean a business day, as determined by the Administrator in good faith.
2.30 Withdrawal Election shall have such meaning as set forth in Section 6.1(a) hereof.
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ARTICLE III.
PARTICIPATION
3.1 Eligibility.
(a) Any Eligible Employee who shall be employed by the Company or a Designated Subsidiary on a given Enrollment Date for an Offering Period shall be eligible to participate in the Plan during such Offering Period, subject to the requirements of Articles IV and V hereof, and the limitations imposed by Section 423(b) of the Code and the Treasury Regulations thereunder.
(b) No Eligible Employee shall be granted an Option under the Plan which permits the Participants rights to purchase shares of Common Stock under the Plan, and to purchase stock under all other employee stock purchase plans of the Company, any Parent or any Subsidiary subject to the Section 423 of the Code (any such Option or other option, a Section 423 Option), to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined at the time the Section 423 Option is granted) for each calendar year in which any Section 423 Option granted to the Participant is outstanding at any time. For purposes of the limitation imposed by this subsection,
(i) the right to purchase stock under a Section 423 Option accrues when the Section 423 Option (or any portion thereof) first becomes exercisable during the calendar year,
(ii) the right to purchase stock under a Section 423 Option accrues at the rate provided in the Section 423 Option, but in no case may such rate exceed $25,000 of fair market value of such stock (determined at the time such option is granted) for any one calendar year, and
(iii) a right to purchase stock which has accrued under a Section 423 Option may not be carried over to any other Section 423 Option; provided that Participants may carry forward amounts so accrued that represent a fractional share of stock and were withheld but not applied towards the purchase of Common Stock under an earlier Offering Period, and may apply such amounts towards the purchase of additional shares of Common Stock under a subsequent Offering Period.
The limitation under this Section 3.1(b) shall be applied in accordance with Section 423(b)(8) of the Code and the Treasury Regulations thereunder.
3.2 Election to Participate; Payroll Deductions
(a) Except as provided in Section 3.3 hereof, an Eligible Employee may become a Participant in the Plan only by means of payroll deduction. Each individual who is an Eligible Employee as of an Offering Periods Enrollment Date may elect to participate in such Offering Period and the Plan by delivering to the Company a payroll deduction authorization no later such period of time prior to the applicable Enrollment Date as determined by the Administrator, in its sole discretion.
(b) Subject to Section 3.1(b) hereof, payroll deductions (i) shall be equal to at least one percent (1%) of the Participants Compensation as of each Payday of the Offering Period following the Enrollment Date, but not more than the lesser of fifteen percent (15%) of the Participants Compensation as of each Payday of the Offering Period following the Enrollment Date or $50,000 per Offering Period; and (ii) may be expressed either as (A) a whole number percentage, or (B) a fixed dollar amount. Amounts deducted from a Participants Compensation with respect to an Offering Period pursuant to this Section 3.2 shall be deducted each Payday through payroll deduction and credited to the Participants Plan Account.
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(c) Following at least one (1) payroll deduction, a Participant may decrease (to as low as zero) the amount deducted from such Participants Compensation only once during an Offering Period upon ten (10) calendar days prior written notice to the Company. A Participant may not increase the amount deducted from such Participants Compensation during an Offering Period.
(d) Notwithstanding the foregoing, upon the termination of an Offering Period, each Participant in such Offering Period shall automatically participate in the immediately following Offering Period at the same payroll deduction percentage or fixed amount as in effect at the termination of the prior Offering Period, unless such Participant delivers to the Company a different election with respect to the successive Offering Period in accordance with Section 3.2(a) hereof, or unless such Participant becomes ineligible for participation in the Plan.
3.3 Leave of Absence. During leaves of absence approved by the Company meeting the requirements of Treasury Regulation Section 1.421-1(h)(2) under the Code, a Participant may continue participation in the Plan by making cash payments to the Company on his or her normal payday equal to his or her authorized payroll deduction.
ARTICLE IV.
PURCHASE OF SHARES
4.1 Grant of Option. Each Participant shall be granted an Option with respect to an Offering Period on the applicable Grant Date. Subject to the limitations of Section 3.1(b) hereof, the number of shares of Common Stock subject to a Participants Option shall be determined by dividing (a) such Participants payroll deductions accumulated prior to an Exercise Date and retained in the Participants Plan Account on such Exercise Date by (b) the applicable Option Price; provided that in no event shall a Participant be permitted to purchase during each Offering Period more than 15,000 shares of Common Stock (subject to any adjustment pursuant to Section 5.2 hereof). The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that a Participant may purchase during such future Offering Periods. Each Option shall expire on the Exercise Date for the applicable Offering Period immediately after the automatic exercise of the Option in accordance with Section 4.3 hereof, unless such Option terminates earlier in accordance with Article 6 hereof.
4.2 Option Price. The Option Price per share of Common Stock to be paid by a Participant upon exercise of the Participants Option on the applicable Exercise Date for an Offering Period shall be equal to eighty five percent (85%) of the lesser of the Fair Market Value of a share of Common Stock on (a) the applicable Grant Date and (b) the applicable Exercise Date; provided that in no event shall the Option Price per share of Common Stock be less than the par value per share of the Common Stock.
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4.3 Purchase of Shares.
(a) On the applicable Exercise Date for an Offering Period, each Participant shall automatically and without any action on such Participants part be deemed to have exercised his or her Option to purchase at the applicable per share Option Price the largest number of whole shares of Common Stock which can be purchased with the amount in the Participants Plan Account. Any balance less than the per share Option Price that is remaining in the Participants Plan Account (after exercise of such Participants Option) as of the Exercise Date shall be carried forward to the next Offering Period, unless the Participant has elected to withdraw from the Plan pursuant to Section 6.1 hereof or, pursuant to Section 6.2 hereof, such Participant has ceased to be an Eligible Employee. Any balance not carried forward to the next Offering Period in accordance with the prior sentence promptly shall be refunded to the applicable Participant. For the avoidance of doubt, in no event shall an amount greater than or equal to the per share Option Price as of an Exercise Date be carried forward to the next Offering Period.
(b) As soon as practicable following the applicable Exercise Date, the number of shares of Common Stock purchased by such Participant pursuant to Section 4.3(a) hereof shall be delivered (either in share certificate or book entry form), in the Companys sole discretion, to either (i) the Participant or (ii) an account established in the Participants name at a stock brokerage or other financial services firm designated by the Company. If the Company is required to obtain from any commission or agency authority to issue any such shares of Common Stock, the Company shall seek to obtain such authority. Inability of the Company to obtain from any such commission or agency authority which counsel for the Company deems necessary for the lawful issuance of any such shares shall relieve the Company from liability to any Participant except to refund to the Participant such Participants Plan Account balance, without interest thereon.
4.4 Transferability of Rights. An Option granted under the Plan shall not be transferable, other than by will or the applicable laws of descent and distribution, and is exercisable during the Participants lifetime only by the Participant. No option or interest or right to the Option shall be available to pay off any debts, contracts or engagements of the Participant or his or her successors in interest or shall be subject to disposition by pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempt at disposition of the option shall have no effect.
ARTICLE V.
PROVISIONS RELATING TO COMMON STOCK
5.1 Common Stock Reserved. Subject to adjustment as provided in Section 5.2 hereof, the maximum number of shares of Common Stock that shall be made available for sale under the Plan shall be the sum of (a) [ ] shares and (b) an annual increase on the first day of each year beginning in 2019 and ending in 2028 equal to the lesser of (i) one percent (1%) of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares as may be determined by the Board; provided, however, no more than [ ] shares may be issued under the Plan. Shares made available for sale under the Plan may be authorized but unissued shares, treasury shares of Common Stock, or reacquired shares reserved for issuance under the Plan.
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5.2 Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under Option, as well as the price per share and the number of shares of Common Stock covered by each Option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been effected without receipt of consideration. Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the New Exercise Date), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date shall be before the date of the Companys proposed dissolution or liquidation. The Administrator shall notify each Participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the Participants Option has been changed to the New Exercise Date and that the Participants Option shall be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 6.1 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each outstanding Option shall be assumed or an equivalent Option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option, any Offering Periods then in progress shall be shortened by setting a New Exercise Date and any Offering Periods then in progress shall end on the New Exercise Date. The New Exercise Date shall be before the date of the Companys proposed sale or merger. The Administrator shall notify each Participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the Participants Option has been changed to the New Exercise Date and that the Participants Option shall be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 6.1 hereof.
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5.3 Insufficient Shares. If the Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which Options are to be exercised may exceed the number of shares of Common Stock remaining available for sale under the Plan on such Exercise Date, the Administrator shall make a pro rata allocation of the shares of Common Stock available for issuance on such Exercise Date in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all Participants exercising Options to purchase Common Stock on such Exercise Date, and unless additional shares are authorized for issuance under the Plan, no further Offering Periods shall take place and the Plan shall terminate pursuant to Section 7.5 hereof. If an Offering Period is so terminated, then the balance of the amount credited to the Participants Plan Account which has not been applied to the purchase of shares of Common Stock shall be paid to such Participant in one lump sum in cash within thirty (30) days after such Exercise Date, without any interest thereon.
5.4 Rights as Stockholders. With respect to shares of Common Stock subject to an Option, a Participant shall not be deemed to be a stockholder of the Company and shall not have any of the rights or privileges of a stockholder. A Participant shall have the rights and privileges of a stockholder of the Company when, but not until, shares of Common Stock have been deposited in the designated brokerage account following exercise of his or her Option.
ARTICLE VI.
TERMINATION OF PARTICIPATION
6.1 Cessation of Contributions; Voluntary Withdrawal.
(a) A Participant may cease payroll deductions during an Offering Period and elect to withdraw from the Plan by delivering written notice of such election to the Company in such form and at such time prior to the Exercise Date for such Offering Period as may be established by the Administrator (a Withdrawal Election). A Participant electing to withdraw from the Plan may elect to either (i) withdraw all of the funds then credited to the Participants Plan Account as of the date on which the Withdrawal Election is received by the Company, in which case amounts credited to such Plan Account shall be returned to the Participant in one (1) lump-sum payment in cash within thirty (30) days after such election is received by the Company, without any interest thereon, and the Participant shall cease to participate in the Plan and the Participants Option for such Offering Period shall terminate; or (ii) exercise the Option for the maximum number of whole shares of Common Stock on the applicable Exercise Date with any remaining Plan Account balance returned to the Participant in one (1) lump-sum payment in cash within thirty (30) days after such Exercise Date, without any interest thereon, and after such exercise cease to participate in the Plan. Upon receipt of a Withdrawal Election, the Participants payroll deduction authorization and his or her Option to purchase under the Plan shall terminate.
(b) A participants withdrawal from the Plan shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the Participant withdraws.
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(c) A Participant who ceases contributions to the Plan during any Offering Period shall not be permitted to resume contributions to the Plan during that Offering Period.
6.2 Termination of Eligibility. Upon a Participants ceasing to be an Eligible Employee, for any reason, such Participants Option for the applicable Offering Period shall automatically terminate, he or she shall be deemed to have elected to withdraw from the Plan, and such Participants Plan Account shall be paid to such Participant or, in the case of his or her death, to the person or persons entitled thereto pursuant to applicable law, within thirty (30) days after such cessation of being an Eligible Employee, without any interest thereon.
ARTICLE VII.
GENERAL PROVISIONS
7.1 Administration.
(a) The Plan shall be administered by the Committee, which shall be composed of members of the Board. The Committee may delegate administrative tasks under the Plan to the services of an Agent and/or Employees to assist in the administration of the Plan, including establishing and maintaining an individual securities account under the Plan for each Participant.
(b) It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with the provisions of the Plan. The Administrator shall have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To establish and terminate Offering Periods;
(ii) To determine when and how Options shall be granted and the provisions and terms of each Offering Period (which need not be identical);
(iii) To select Designated Subsidiaries in accordance with Section 7.2 hereof; and
(iv) To construe and interpret the Plan, the terms of any Offering Period and the terms of the Options and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. The Administrator, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, any Offering Period or any Option, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effect, subject to Section 423 of the Code and the Treasury Regulations thereunder.
(c) The Administrator may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding handling of participation elections, payroll deductions, payment of interest, conversion of local currency, payroll tax, withholding procedures and handling of stock certificates which vary with local requirements. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan.
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(d) The Administrator may adopt sub-plans applicable to particular Designated Subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code. The rules of such sub-plans may take precedence over other provisions of this Plan, with the exception of Section 5.1 hereof, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan shall govern the operation of such sub-plan.
(e) All expenses and liabilities incurred by the Administrator in connection with the administration of the Plan shall be borne by the Company. The Administrator may, with the approval of the Committee, employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Administrator, the Company and its officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon all Participants, the Company and all other interested persons. No member of the Board or Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the options, and all members of the Board or Administrator shall be fully protected by the Company in respect to any such action, determination, or interpretation.
7.2 Designation of Subsidiary Corporations. The Board or Committee shall designate from among the Subsidiaries, as determined from time to time, the Subsidiary or Subsidiaries that shall constitute Designated Subsidiaries. The Board or Committee may designate a Subsidiary, or terminate the designation of a Subsidiary, without the approval of the stockholders of the Company.
7.3 Reports. Individual accounts shall be maintained for each Participant in the Plan. Statements of Plan Accounts shall be given to Participants at least annually, which statements shall set forth the amounts of payroll deductions, the Option Price, the number of shares purchased and the remaining cash balance, if any.
7.4 No Right to Employment. Nothing in the Plan shall be construed to give any person (including any Participant) the right to remain in the employ of the Company, a Parent or a Subsidiary or to affect the right of the Company, any Parent or any Subsidiary to terminate the employment of any person (including any Participant) at any time, with or without cause, which right is expressly reserved.
7.5 Amendment and Termination of the Plan.
(a) The Board may, in its sole discretion, amend, suspend or terminate the Plan at any time and from time to time; provided, however, that without approval of the Companys stockholders given within twelve (12) months before or after action by the Board, the Plan may not be amended to increase the maximum number of shares of Common Stock subject to the Plan or change the designation or class of Eligible Employees; and provided, further that without approval of the Companys stockholders, the Plan may not be amended in any manner that would cause the Plan to no longer be an employee stock purchase plan within the meaning of Section 423(b) of the Code.
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(b) In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, to the extent permitted under Section 423 of the Code, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:
(i) altering the Option Price for any Offering Period including an Offering Period underway at the time of the change in Option Price;
(ii) shortening any Offering Period so that the Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Administrator action; and
(iii) allocating shares of Common Stock.
Such modifications or amendments shall not require stockholder approval or the consent of any Participant.
(c) Upon termination of the Plan, the balance in each Participants Plan Account shall be refunded as soon as practicable after such termination, without any interest thereon.
7.6 Use of Funds; No Interest Paid. All funds received by the Company by reason of purchase of Common Stock under the Plan shall be included in the general funds of the Company free of any trust or other restriction and may be used for any corporate purpose. No interest shall be paid to any Participant or credited under the Plan.
7.7 Term; Approval by Stockholders. No Option may be granted during any period of suspension of the Plan or after termination of the Plan. The Plan shall be submitted for the approval of the Companys stockholders within twelve (12) months after the date of the Boards initial adoption of the Plan. Options may be granted prior to such stockholder approval; provided, however, that such Options shall not be exercisable prior to the time when the Plan is approved by the stockholders; provided, further that if such approval has not been obtained by the end of said twelve (12)-month period, all Options previously granted under the Plan shall thereupon terminate and be canceled and become null and void without being exercised.
7.8 Effect Upon Other Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company, any Parent or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company, any Parent or any Subsidiary (a) to establish any other forms of incentives or compensation for Employees of the Company or any Parent or any Subsidiary, or (b) to grant or assume Options otherwise than under the Plan in connection with any proper corporate purpose, including, but not by way of limitation, the grant or assumption of options in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, firm or association.
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7.9 Conformity to Securities Laws. Notwithstanding any other provision of the Plan, the Plan and the participation in the Plan by any individual who is then subject to Section 16 of the Exchange Act shall be subject to any additional limitations set forth in any applicable exemption rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
7.10 Notice of Disposition of Shares. Each Participant shall give the Company prompt notice of any disposition or other transfer of any shares of Common Stock, acquired pursuant to the exercise of an Option, if such disposition or transfer is made (a) within two (2) years after the applicable Grant Date or (b) within one (1) year after the transfer of such shares of Common Stock to such Participant upon exercise of such Option. The Company may direct that any certificates evidencing shares acquired pursuant to the Plan refer to such requirement.
7.11 Tax Withholding. The Company or any Parent or any Subsidiary shall be entitled to require payment in cash or deduction from other compensation payable to each Participant of any sums required by federal, state or local tax law to be withheld with respect to any purchase of shares of Common Stock under the Plan or any sale of such shares.
7.12 Governing Law. The Plan and all rights and obligations thereunder shall be construed and enforced in accordance with the laws of the State of Delaware.
7.13 Notices. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
7.14 Conditions To Issuance of Shares.
(a) Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing shares of Common Stock pursuant to the exercise of an Option by a Participant, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such shares of Common Stock is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any securities exchange or automated quotation system on which the shares of Common Stock are listed or traded, and the shares of Common Stock are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Board or the Committee may require that a Participant make such reasonable covenants, agreements, and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements.
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(b) All certificates for shares of Common Stock delivered pursuant to the Plan and all shares of Common Stock issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state, or foreign securities or other laws, rules and regulations and the rules of any securities exchange or automated quotation system on which the shares of Common Stock are listed, quoted, or traded. The Committee may place legends on any certificate or book entry evidencing shares of Common Stock to reference restrictions applicable to the shares of Common Stock.
(c) The Committee shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Option, including a window-period limitation, as may be imposed in the sole discretion of the Committee.
(d) Notwithstanding any other provision of the Plan, unless otherwise determined by the Committee or required by any applicable law, rule or regulation, the Company may, in lieu of delivering to any Participant certificates evidencing shares of Common Stock issued in connection with any Option, record the issuance of shares of Common Stock in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).
7.15 Equal Rights and Privileges. Except with respect to sub-plans designed to be outside the scope of Section 423 of the Code, all Eligible Employees of the Company (or of any Designated Subsidiary) shall have equal rights and privileges under this Plan to the extent required under Section 423 of the Code or the regulations promulgated thereunder so that this Plan qualifies as an employee stock purchase plan within the meaning of Section 423 of the Code or the Treasury Regulations thereunder. Any provision of this Plan that is inconsistent with Section 423 of the Code or the Treasury Regulations thereunder shall, without further act or amendment by the Company or the Board, be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code or the Treasury Regulations thereunder.
* * * * * *
I hereby certify that the foregoing Unity Biotechnology, Inc. 2018 Employee Stock Purchase Plan was duly approved by the Board of Directors of Unity Biotechnology, Inc. on , 2018.
I hereby certify that the foregoing Unity Biotechnology, Inc. 2018 Employee Stock Purchase Plan was duly approved by the stockholders of Unity Biotechnology, Inc. on , 2018.
Executed on this day of , 2018.
|
[Name, Title] |
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Exhibit 10.6
UNITY BIOTECHNOLOGY, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM
This Unity Biotechnology, Inc. (the Company) Non-Employee Director Compensation Program (this Program) has been adopted under the Companys 2018 Incentive Award Plan (the Plan) and shall be effective upon the closing of the Companys initial public offering of its common stock (the IPO). Capitalized terms not otherwise defined herein shall have the meaning ascribed in the Plan.
Cash Compensation
Effective upon the IPO, annual retainers will be paid in the following amounts to Non-Employee Directors:
Non-Employee Director: |
$ | 40,000 | ||
Chair of Audit Committee: |
$ | 15,000 | ||
Chair of Compensation Committee: |
$ | 12,500 | ||
Chair of Nominating and Corporate Governance Committee: |
$ | 8,000 | ||
Audit Committee Member (other than Chair): |
$ | 7,500 | ||
Compensation Committee Member (other than Chair): |
$ | 6,250 | ||
Nominating and Corporate Governance Committee Member (other than Chair): |
$ | 4,000 |
All annual retainers will be paid in cash quarterly in arrears promptly following the end of the applicable calendar quarter, but in no event more than thirty (30) days after the end of such quarter. In the event a Non-Employee Director does not serve as a Non-Employee Director, or in the applicable positions described above, for an entire calendar quarter, the retainer paid to such Non-Employee Director shall be prorated for the portion of such calendar quarter actually served as a Non-Employee Director, or in such position, as applicable.
Equity Compensation
Initial Stock Option Grant: |
Each Non-Employee Director who is initially elected or appointed to serve on the Board after the IPO shall be granted an Option under the Plan or any other applicable Company equity incentive plan then-maintained by the Company to purchase that number of shares of Common Stock such that the Option has a Grant Date Value (as defined below) equal to $450,000 (the Initial Option). For the purposes of this Program, Grant Date Value shall mean the fair value of an option determined using the Black-Scholes pricing model with the volume weighted average trading price of a share of Common Stock on the stock exchange on which the Common Stock is then listed or traded for the thirty (30) consecutive trading days ending on the trading day prior to the date of grant and the volatility, risk-free rate and life expectancy assumptions in the Companys most recent public filings disclosing those assumptions. |
The Initial Option will be automatically granted on the date on which such Non-Employee Director commences service on the Board, and will vest as to 1/36th of the shares subject thereto on each monthly anniversary of the applicable date of grant such that the shares subject to the Initial Option are fully vested on the third anniversary of the grant, subject to the Non-Employee Director continuing in service on the Board through each vesting date. | ||
Annual Stock Option Grant: | Each Non-Employee Director who is serving on the Board as of the date of each annual shareholder meeting of the Company (each, an Annual Meeting) shall be granted an Option under the Plan or any other applicable Company equity incentive plan then-maintained by the Company to purchase that number of shares of Common Stock such that the Option has a Grant Date Value equal to $225,000 (the Annual Option), provided that the number of shares subject to the Annual Option will be prorated for any partial year of service as a Non-Employee Director.
The Annual Option will be automatically granted on the date of the applicable Annual Meeting, and will vest in full on the earlier of (i) the first anniversary of the date of grant and (ii) immediately prior to the Annual Meeting following the date of grant, subject to the Non-Employee Director continuing in service on the Board through such vesting date. |
The per share exercise price of each Option granted to a Non-Employee Director shall equal the Fair Market Value of a share of common stock on the date the Option is granted.
The term of each Option granted to a Non-Employee Director shall be ten (10) years from the date the Option is granted.
No portion of an Initial Option or Annual Option which is unvested or unexercisable at the time of a Non-Employee Directors termination of service on the Board shall become vested and exercisable thereafter.
Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their service with the Company and any parent or subsidiary of the Company and remain on the Board will not receive an Initial Option, but to the extent that they are otherwise eligible, will be eligible to receive, after termination from service with the Company and any parent or subsidiary of the Company, Annual Options as described above.
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Change in Control
Upon a Change in Control of the Company, all outstanding equity awards granted under the Plan and any other equity incentive plan maintained by the Company that are held by a Non-Employee Director shall become fully vested and/or exercisable, irrespective of any other provisions of the Non-Employee Directors Award Agreement.
Reimbursements
The Company shall reimburse each Non-Employee Director for all reasonable, documented, out-of-pocket travel and other business expenses incurred by such Non-Employee Director in the performance of his or her duties to the Company in accordance with the Companys applicable expense reimbursement policies and procedures as in effect from time to time.
Miscellaneous
The other provisions of the Plan shall apply to the Options granted automatically pursuant to this Program, except to the extent such other provisions are inconsistent with this Program. All applicable terms of the Plan apply to this Program as if fully set forth herein, and all grants of Options hereby are subject in all respect to the terms of such Plan. The grant of any Option under this Program shall be made solely by and subject to the terms set forth in a written agreement in a form to be approved by the Board and duly executed by an executive officer of the Company.
Effectiveness
This Program shall become effective upon the consummation of the IPO.
* * * * *
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I hereby certify that the foregoing Program was duly adopted by the Board of Directors of Unity Biotechnology, Inc. on [ ], 2018.
* * * * *
I hereby certify that the foregoing Program was approved by the stockholders of Unity Biotechnology, Inc. on [ ], 2018.
Executed on this day of [ ], 2018.
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Corporate Secretary |
Exhibit 10.7
UNITY BIOTECHNOLOGY, INC.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this Agreement) is effective as of [DATE] by and between Unity Biotechnology, Inc., a Delaware corporation (the Company), and [INDEMNITEE] (Indemnitee).
A. The Company recognizes the difficulty in obtaining liability insurance for its directors, officers, employees, controlling persons, fiduciaries and other agents and affiliates, the significant cost of such insurance and the general limitations in the coverage of such insurance.
B. The Company further recognizes the substantial increase in corporate litigation in general, subjecting directors, officers, employees, controlling persons, fiduciaries and other agents and affiliates to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited.
C. The current protection available to directors, officers, employees, controlling persons, fiduciaries and other agents and affiliates of the Company may not be adequate under the present circumstances, and directors, officers, employees, controlling persons, fiduciaries and other agents and affiliates of the Company (or persons who may be alleged or deemed to be the same), including the Indemnitee, may not be willing to serve or continue to serve or be associated with the Company in such capacities without additional protection.
D. The Company (a) desires to attract and retain the involvement of highly qualified persons, such as Indemnitee, to serve and be associated with the Company, and (b) accordingly, wishes to provide for the indemnification and advancement of expenses to the Indemnitee to the maximum extent permitted by law.
E. In view of the considerations set forth above, the Company desires that Indemnitee shall be indemnified and advanced expenses by the Company as set forth herein.
AGREEMENT:
In consideration of the mutual promises and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Certain Definitions.
(a) Change in Control shall be deemed to have occurred if, on or after the date of this Agreement, (i) any person (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company acting in such capacity or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the beneficial owner (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
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representing more than fifty percent (50%) of the total voting power represented by the Companys then outstanding Voting Securities, (ii) during any period of two (2) consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Companys stockholders was approved by a vote of at least two- thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least eighty percent (80%) of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of related transactions) all or substantially all of the Companys assets.
(b) Claim shall mean with respect to a Covered Event: any threatened, asserted, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation (formal or informal) that Indemnitee [(or in the case of a Fund Indemnitor (as defined in Section 18 below) seeking to be indemnified, a Fund Indemnitor)]1 in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other, including any appeal therefrom.
(c) References to the Company shall include, in addition to Unity Biotechnology, Inc., any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which Unity Biotechnology, Inc. (or any of its wholly owned subsidiaries) is a party, which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.
(d) Covered Event shall mean any event or occurrence by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or any subsidiary of the Company, direct or indirect, whether before or after the date of this Agreement, or is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity, whether before or after the date of this Agreement.
1 | Note to Form: To be included when applicable. |
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(e) Expense Advance shall mean a payment to Indemnitee for Expenses pursuant to Section 3 hereof, in advance of the settlement of or final judgment in any action, suit, proceeding or alternative dispute resolution mechanism, hearing, inquiry or investigation, which constitutes a Claim.
(f) Expenses shall mean any and all direct and indirect costs, losses, claims, damages, fees, expenses and liabilities, joint or several (including reasonable attorneys fees and all other costs, expenses and obligations reasonably incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, to be a witness in or to participate in, any action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation), judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) actually and reasonably incurred, of any Claim and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement.
(g) Independent Legal Counsel shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 2(d) hereof, who shall not have otherwise performed services for (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements) or (ii) any other party to the Claim giving rise to a claim for indemnification hereunder, within the last three (3) years. Notwithstanding the foregoing, the term Independent Legal Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement.
(h) References to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to serving at the request of the Company shall include any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner not opposed to the best interests of the Company as referred to in this Agreement.
(i) Reviewing Party shall mean, subject to the provisions of Section 2(d), any person or body appointed by the Board of Directors in accordance with applicable law to review the Companys obligations hereunder and under applicable law, which may include a member or members of the Companys Board of Directors, Independent Legal Counsel or any other person or body not a party to the particular Claim for which Indemnitee is seeking indemnification, exoneration or hold harmless rights. In the absence of the appointment of another Reviewing Party, but subject to the provisions of Section 2(d), the full Board of Directors shall be deemed to be the Reviewing Party within the meaning of this Agreement.
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(j) Section refers to a section of this Agreement unless otherwise indicated.
(k) Voting Securities shall mean any securities of the Company that vote generally in the election of directors.
2. Indemnification.
(a) Indemnification of Expenses. Subject to the provisions of Section 2(b) below, the Company shall indemnify, exonerate or hold harmless Indemnitee for Expenses to the fullest extent permitted by law if Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any Claim (whether by reason of or arising in part out of a Covered Event), including all interest, assessments and other charges incurred in connection with or in respect of such Expenses.
(b) Review of Indemnification Obligations.
(i) Notwithstanding the foregoing, in the event any Reviewing Party shall have determined (in a written opinion, in any case in which Independent Legal Counsel is the Reviewing Party) that Indemnitee is not entitled to be indemnified, exonerated or held harmless hereunder under applicable law, (A) the Company shall have no further obligation under Section 2(a) to make any payments to Indemnitee not made prior to such determination by such Reviewing Party and (B) the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all Expenses theretofore paid in indemnifying, exonerating or holding harmless Indemnitee (within thirty (30) days after such determination); provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee is entitled to be indemnified, exonerated or held harmless hereunder under applicable law, any determination made by any Reviewing Party that Indemnitee is not entitled to be indemnified hereunder under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any Expenses theretofore paid in indemnifying, exonerating or holding harmless Indemnitee until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed). Indemnitees obligation to reimburse the Company for any Expenses shall be unsecured and no interest shall be charged thereon.
(ii) Subject to Section 2(b)(iii) below, if the Reviewing Party shall not have made a determination within forty-five (45) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (A) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification or (B) a prohibition of such indemnification under applicable law; provided, however, that such 45-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.
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(iii) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Claim.
(c) Indemnitee Rights on Unfavorable Determination; Binding Effect. If any Reviewing Party determines that Indemnitee substantively is not entitled to be indemnified, exonerated or held harmless hereunder in whole or in part under applicable law, Indemnitee shall have the right to commence litigation seeking an initial determination by the court or challenging any such determination by such Reviewing Party or any aspect thereof, including the legal or factual bases therefor, and, subject to the provisions of Section 15 hereof, the Company hereby consents to service of process and to appear in any such proceeding. Absent such litigation, any determination by any Reviewing Party shall be conclusive and binding on the Company and Indemnitee.
(d) Selection of Reviewing Party; Change in Control. If there has not been a Change in Control, any Reviewing Party shall be selected by the Board of Directors, which may be the full Board of Directors in the absence of the selection of another Reviewing Party, and if there has been such a Change in Control (other than a Change in Control which has been approved by a majority of the Companys Board of Directors who were directors immediately prior to such Change in Control), any Reviewing Party with respect to all matters thereafter arising concerning Indemnitees indemnification, exoneration or hold harmless rights for Expenses under this Agreement or any other agreement or under the Companys Certificate of Incorporation or bylaws as now or hereafter in effect, or under any other applicable law, if desired by Indemnitee, shall be Independent Legal Counsel selected by the Indemnitee and approved by Company (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be entitled to be indemnified, exonerated or held harmless hereunder under applicable law and the Company agrees to abide by such opinion. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify, exonerate and hold harmless such counsel against any and all expenses (including attorneys fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. Notwithstanding any other provision of this Agreement, the Company shall not be required to pay Expenses of more than one Independent Legal Counsel in connection with all matters concerning a single Indemnitee, and such Independent Legal Counsel shall be the Independent Legal Counsel for any or all other Indemnitees unless (i) the Company otherwise determines or (ii) any Indemnitee shall provide a written statement setting forth in detail a reasonable objection to such Independent Legal Counsel representing other Indemnitees.
(e) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement other than Section 10 hereof, to the fullest extent permitted by applicable law and to the extent that Indemnitee was a party to (or participant in) and has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any Claim, Indemnitee shall be indemnified, exonerated and held harmless against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. If Indemnitee is not wholly successful in such Claim but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Claim, the Company shall indemnify
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Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Claim by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
(f) Contribution. If the indemnification, exoneration or hold harmless rights provided for in this Agreement is for any reason held by a court of competent jurisdiction to be unavailable to an Indemnitee, then in lieu of indemnifying, exonerating or holding harmless Indemnitee thereunder, the Company shall contribute to the amount paid or required to be paid by Indemnitee as a result of such Expenses (i) in such proportion as is deemed fair and reasonable in light of all of the circumstances in order to reflect the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Claim or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with the action or inaction which resulted in such Expenses, as well as any other relevant equitable considerations. In connection with the registration of the Companys securities, the relative benefits received by the Company and Indemnitee shall be deemed to be in the same respective proportions that the net proceeds from the offering (before deducting expenses) received by the Company and Indemnitee, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the securities so offered. The relative fault of the Company and Indemnitee shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or Indemnitee and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 2(f) were determined by pro rata or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. In connection with the registration of the Companys securities, in no event shall Indemnitee be required to contribute any amount under this Section 2(f) in excess of the net proceeds received by Indemnitee from its sale of securities under such registration statement. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(a) of the Securities Act of 1933, as amended) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.
3. Expense Advances.
(a) Obligation to Make Expense Advances. The Company shall make Expense Advances to Indemnitee upon receipt of a written undertaking, in the form attached hereto as Exhibit A, by or on behalf of the Indemnitee to repay such amounts if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified, exonerated or held harmless therefor by the Company.
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(b) Form of Undertaking. Any written undertaking by the Indemnitee to repay any Expense Advances hereunder shall be unsecured and no interest shall be charged thereon.
4. Procedures for Indemnification and Expense Advances.
(a) Timing of Payments. All payments of Expenses (including without limitation Expense Advances) by the Company to the Indemnitee pursuant to this Agreement shall be made to the fullest extent permitted by law as soon as practicable after written demand by Indemnitee therefor is presented to the Company, but in no event later than forty-five (45) days after such written demand by Indemnitee is presented to the Company, except in the case of Expense Advances, which shall be made no later than twenty (20) days after such written demand by Indemnitee is presented to the Company. If the Company disputes a portion of the amounts for which indemnification is requested, the undisputed portion shall be paid and only the disputed portion withheld pending resolution of any such dispute.
(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to Indemnitees right to be indemnified, exonerated or held harmless or Indemnitees right to receive Expense Advances under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification, exoneration or hold harmless rights will or could be sought under this Agreement. Notice to the Company shall be directed to the President and the Secretary of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee) and shall include a description of the nature of the Claim and the facts underlying the Claim, in each case to the extent known to Indemnitee. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Claim. In addition, Indemnitee shall give the Company such information and cooperation as the Company may reasonably require and as shall be within Indemnitees power. The failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement, except to the extent (solely with respect to the indemnity hereunder) that such failure or delay materially prejudices the Company.
(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification, exoneration or hold harmless right is not permitted by this Agreement or applicable law. In addition, neither the failure of any Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by any Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that
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Indemnitee should be indemnified, exonerated or held harmless under this Agreement or applicable law, shall be a defense to Indemnitees claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. In connection with any determination by any Reviewing Party or otherwise as to whether the Indemnitee is entitled to be indemnified, exonerated or held harmless hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled.
(d) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 4(b) hereof, the Company has liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all reasonably necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies.
(e) Selection of Counsel. In the event the Company shall be obligated hereunder to provide indemnification, exoneration or hold harmless rights for or make any Expense Advances with respect to the Expenses of any Claim, the Company, if appropriate, shall be entitled to assume the defense of such Claim with counsel approved by Indemnitee (which approval shall not be unreasonably withheld) upon the delivery to Indemnitee of written notice of the Companys election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees or expenses of separate counsel subsequently employed by or on behalf of Indemnitee with respect to the same Claim; provided, however, that (i) Indemnitee shall have the right to employ Indemnitees separate counsel in any such Claim at Indemnitees expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitees separate counsel shall be Expenses for which Indemnitee may receive indemnification, exoneration or hold harmless rights or Expense Advances hereunder. The Company shall have the right to conduct such defense as it sees fit in its sole discretion, including the right to settle any claim, action or proceeding against Indemnitee without the consent of Indemnitee, provided that the terms of such settlement include either: (i) a full release of Indemnitee by the claimant from all liabilities or potential liabilities under such claim or (ii), in the event such full release is not obtained, the terms of such settlement do not limit any indemnification, exoneration or hold harmless rights Indemnitee may now, or hereafter, be entitled to under this Agreement, the Companys Certificate of Incorporation, bylaws, any agreement, any vote of stockholders or disinterested directors, the General Corporation Law of the State of Delaware (the DGCL) or otherwise.
5. Additional Indemnification Rights; Nonexclusivity.
(a) Scope. The Company hereby agrees to indemnify, exonerate and hold harmless the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification, exoneration or hold harmless right is not specifically authorized by the other provisions of this Agreement, the Companys Certificate of Incorporation, the Companys
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bylaws or by statute, a vote of stockholders or a resolution of directors, or otherwise. The rights of indemnification and to receive Expense Advances as provided by this Agreement shall be interpreted independently of, and without reference to, any other such rights to which Indemnitee may at any time be entitled. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation to indemnify, exonerate or hold harmless a member of its board of directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify, exonerate or hold harmless a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties rights and obligations hereunder except as set forth in Section 10(a) hereof.
(b) Nonexclusivity. The indemnification, exoneration or hold harmless rights and the payment of Expense Advances provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Companys Certificate of Incorporation, its bylaws, any other agreement, any vote of stockholders or disinterested directors, the DGCL, or otherwise. The indemnification, exoneration or hold harmless rights and the payment of Expense Advances provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified, exonerated or held harmless capacity even though subsequent thereto Indemnitee may have ceased to serve in such capacity.
6. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, provision of the Companys Certificate of Incorporation, bylaws or otherwise) of the amounts otherwise payable hereunder, except as provided in Section 18 below.
7. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification, exoneration or hold harmless rights by the Company for some or a portion of Expenses incurred in connection with any Claim, but not, however, for the total amount thereof, the Company shall nevertheless indemnify, exonerate or hold harmless Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
8. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in certain instances, federal law or applicable public policy may prohibit the Company from indemnifying, exonerating or holding harmless its directors, officers, employees, agents or fiduciaries under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company may be required in the future to undertake with the Securities and Exchange Commission to submit the question of indemnification, exoneration or hold harmless rights to a court in certain circumstances for a determination of the Companys right under public policy to indemnify, exonerate or hold harmless Indemnitee.
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9. Liability Insurance. To the extent the Company maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Companys directors who are not employees of the Company, if Indemnitee is a director who is not employed by the Company; or of the Companys officers, if Indemnitee is a director of the Company and is also employed by the Company, or is not a director of the Company but is an officer; or in the Companys sole discretion, if Indemnitee is not an officer or director but is an employee, agent or fiduciary.
10. Exceptions. Notwithstanding any other provision of this Agreement, the Company shall not be obligated pursuant to the terms of this Agreement:
(a) Excluded Action or Omissions. To indemnify, exonerate or hold harmless Indemnitee for Expenses resulting from acts, omissions or transactions for which Indemnitee is prohibited from receiving indemnification, exoneration or hold harmless rights under this Agreement or applicable law; provided, however, that notwithstanding any limitation set forth in this Section 10(a) regarding the Companys obligation to provide indemnification, exoneration or hold harmless rights to Indemnitee, Indemnitee shall be entitled under Section 3 to receive Expense Advances hereunder with respect to any such Claim unless and until a court having jurisdiction over the Claim shall have made a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee has engaged in acts, omissions or transactions for which Indemnitee is prohibited from receiving indemnification under this Agreement or applicable law.
(b) Claims Initiated by Indemnitee. To indemnify, exonerate or hold harmless or make Expense Advances to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, counterclaim or cross claim, except (i) with respect to actions or proceedings brought to establish or enforce an indemnification, exoneration or hold harmless right under this Agreement or any other agreement or insurance policy or under the Companys Certificate of Incorporation or bylaws now or hereafter in effect relating to Claims for Covered Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim or (iii) as otherwise required under Section 145 of the DGCL, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, exoneration, hold harmless right, Expense Advances or insurance recovery, as the case may be.
(c) Lack of Good Faith. To indemnify, exonerate or hold harmless Indemnitee for any Expenses incurred by Indemnitee with respect to any action instituted (i) by Indemnitee to enforce or interpret this Agreement, if a court having jurisdiction over such action determines as provided in Section 13 hereof that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous or (ii) by or in the name of the Company to enforce or interpret this Agreement, if a court having jurisdiction over such action determines as provided in Section 13 hereof that each of the material defenses asserted by Indemnitee in such action was made in bad faith or was frivolous.
(d) Claims Under Section 16(b) or Sarbanes-Oxley Act. To indemnify, exonerate or hold harmless Indemnitee for expenses and the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute or (ii) any reimbursement of the Company by Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale of securities of the Company, as required
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in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); provided, however, that notwithstanding any limitation set forth in this Section 10(d) regarding the Companys obligation to provide indemnification or exoneration or hold harmless, Indemnitee shall be entitled under Section 3 hereof to receive Expense Advances hereunder with respect to any such Claim unless and until a court having jurisdiction over the Claim shall have made a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee has violated said statute.
11. Counterparts. This Agreement may be executed in counterparts and by facsimile or electronic transmission, each of which shall constitute an original and all of which, together, shall constitute one instrument.
12. Binding Effect; Successors and Assigns. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary (as applicable) of the Company or of any other enterprise at the Companys request. [The Company and Indemnitee agree that the Fund Indemnitors (as defined in Section 18 below) are express third party beneficiaries of this Agreement.]2
13. Expenses Incurred in Action Relating to Enforcement or Interpretation. In the event that any action is instituted by Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be indemnified for all Expenses incurred by Indemnitee with respect to such action (including without limitation attorneys fees), regardless of whether Indemnitee is ultimately successful in such action, unless as a part of such action a court having jurisdiction over such action makes a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous; provided, however, that until such final judicial determination is made, Indemnitee shall be entitled under Section 3 to receive payment of Expense Advances hereunder with respect to such action. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be indemnified, exonerated or held harmless for all Expenses incurred by Indemnitee in defense of such action (including without limitation costs and expenses incurred with respect to Indemnitees
2 | Note to Form: To be included when applicable. |
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counterclaims and cross-claims made in such action), unless as a part of such action a court having jurisdiction over such action makes a final judicial determination (as to which all rights of appeal therefrom have been exhausted or lapsed) that each of the material defenses asserted by Indemnitee in such action was made in bad faith or was frivolous; provided, however, that until such final judicial determination is made, Indemnitee shall be entitled under Section 3 to receive payment of Expense Advances hereunder with respect to such action.
14. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and signed for by the party addressed, on the date of such delivery or (ii) if mailed by domestic certified or registered mail with postage prepaid, on the third business day after the date postmarked. Addresses for notice to either party are as shown on the signature page of this Agreement or as subsequently modified by written notice.
15. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive and only proper forum for adjudicating such a claim.
16. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including without limitation each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
17. Choice of Law. This Agreement, and all rights, remedies, liabilities, powers and duties of the parties to this Agreement, shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws.
18. Primacy of Indemnification; Subrogation.
(a) [The Company hereby acknowledges that Indemnitee has or may in the future have certain indemnification, exoneration, hold harmless or Expense advancement rights and/or insurance provided by [Fund] and certain of its affiliates (collectively, the Fund Indemnitors). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance Expenses or to provide indemnification, exoneration or hold harmless rights for the same Expenses incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of Expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, to the extent legally permitted and as required by the Certificate of Incorporation or bylaws of the Company (or any agreement between the Company and Indemnitee), without
12.
regard to any rights Indemnitee may have against the Fund Indemnitors, (iii) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof and (iv) if any Fund Indemnitor is a party to or a participant in a legal proceeding, which participation or involvement arises solely and exclusively as a result of Indemnitees service to the Company as a director of the Company, then such Fund Indemnitor shall be entitled to all of the indemnification rights and remedies under this Agreement to the same extent as Indemnitee. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any Claim for which Indemnitee has sought indemnification, exoneration or hold harmless rights from the Company shall affect the foregoing and the Fund Indemnitors shall have a right to receive from the Company, contribution and/or be subrogated, to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company.]3
(b) [Except as provided in Section 18(a) above, ][I]n the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee from any insurance policy purchased by the Company, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights. In no event, however, shall the Company or any other person have any right of recovery, through subrogation or otherwise, against (i) Indemnitee, [or] (ii) [any Fund Indemnitor or (iii)]4 any insurance policy purchased or maintained by Indemnitee [or any Fund Indemnitor].
19. Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.
20. Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto, including any existing director or officer indemnification agreement; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the bylaws, any directors and officers insurance maintained by the Company and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
21. No Construction as Employment Agreement. Nothing contained in this Agreement shall be construed as giving Indemnitee any right to employment by the Company or any of its subsidiaries or affiliated entities.
3 | Note to Form: To be included when applicable. |
4 | Note to Form: To be included when applicable. |
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22. Additional Acts. If for the validation of any of the provisions in this Agreement any act, resolution, approval or other procedure is required, the Company undertakes to cause such act, resolution, approval or other procedure to be affected or adopted in a manner that will enable the Company to fulfill its obligations under this Agreement.
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date first above written.
UNITY BIOTECHNOLOGY, INC. | ||
By: |
| |
AUTHORIZED OFFICER | ||
Address: | ||
3280 Bayshore Boulevard | ||
Suite 100 | ||
Brisbane, California 94005 |
AGREED TO AND ACCEPTED BY: | ||
INDEMNITEE: | ||
By: |
| |
INDEMNITEE | ||
Date: | ||
Address: |
15.
EXHIBIT A
Form of Undertaking
AFFIRMATION AND UNDERTAKING FOR ADVANCE OF EXPENSES
PURSUANT TO SECTION 145(e) OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
Pursuant to Section 145(e) of the General Corporation Law of the State of Delaware (the DGCL), Section 9.3 of the Amended and Restated Bylaws (the Bylaws) of Unity Biotechnology, Inc. (the Company), and Section 3(a) of my Indemnification Agreement with the Company (the Indemnification Agreement), I understand that I must provide a written undertaking in order for the Company to make Expense Advances to me in connection with [NAME OF PROCEEDING], as well as in any related action, suit or proceeding that is threatened, pending or may be filed in the future in which I am a party, a witness or other participant.
The capitalized terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement.
I hereby affirm my good-faith belief that I have met the standard of conduct for indemnification imposed by Section 145(d) of the DGCL. I affirm that in connection with the matters for which I seek Expense Advances, I have acted in good faith and in a manner I reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe that such conduct was unlawful.
I hereby undertake to repay the Expense Advances if it is ultimately determined that I am not entitled to be indemnified, exonerated or held harmless therefor by the Company under Section 145 of the DGCL, Article IX of the Bylaws or the Indemnification Agreement.
This undertaking is a general, unsecured obligation, and no interest shall be charged hereon.
I have executed this Affirmation and Undertaking on this day of , 20 .
Exhibit 10.9
UNITY BIOTECHNOLOGY, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement), entered into as of January 29, 2018 (the Effective Date), is made by and between Unity Biotechnology, Inc., a Delaware corporation (the Company) and Nathaniel David (Executive and, together with the Company, the Parties). This Agreement supersedes in its entirety that certain offer letter by and between Executive and the Company dated as of April 20, 2009 (Offer Letter).
WHEREAS, the Company desires to assure itself of the continued services of Executive by engaging Executive to perform services as an employee of the Company under the terms hereof;
WHEREAS, Executive desires to provide continued services to the Company on the terms herein provided; and
WHEREAS, the Parties desire to execute this Agreement to supersede the Offer Letter in its entirety and reflect certain changes to Executives employment with the Company effective as of the Effective Date.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1. Employment.
(a) General. The Company shall employ Executive upon the terms and conditions provided herein effective as of the Effective Date.
(b) Position and Duties. Effective on the Effective Date, Executive: (i) shall continue to serve as the Companys President, with responsibilities, duties, and authority usual and customary for such position, subject to direction by the Chief Executive Officer of the Company (the CEO); (ii) shall continue to report directly to the CEO; and (iii) agrees promptly and faithfully to comply with all present and future policies, requirements, rules and regulations, and reasonable directions and requests, of the Company in connection with the Companys business. At the Companys request, Executive shall serve the Company and/or its subsidiaries and affiliates in such other capacities in addition to the foregoing as the Company shall designate, provided that such additional capacities are consistent with Executives position as the Companys President. In the event that Executive serves in any one or more of such additional capacities, Executives compensation shall not automatically be increased on account of such additional service.
(c) Performance of Executives Duties. During Executives employment with the Company, and except for periods of illness, vacation, disability, or reasonable leaves of absence or as discussed in Section 1(e) below, Executive shall devote Executives full time and attention to the business and affairs of the Company pursuant to the general direction of the CEO. The rights of Executive under this Agreement shall not be affected by any change in the title, duties, or capacity of Executive during Executives employment with the Company.
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(d) Principal Office. Executive will work principally at the Companys facility located in Brisbane, California.
(e) Exclusivity. Except with the prior written approval of the CEO (which the CEO may grant or withhold in his or her sole and absolute discretion), Executive shall devote substantially all of Executives working time, attention, and energies to the business of the Company, except during any paid vacation or other excused absence periods. Nothing in this section prevents Executive from engaging in additional activities in connection with personal investments and community affairs. Executive may also serve as a member of the board of directors or board of advisors of another organization provided (i) such organization is not a competitor of the Company; (ii) Executive receives prior written approval from the Companys CEO; and (iii) such activities do not individually or in the aggregate interfere with the performance of Executives duties under this Agreement, violate the Companys standards of conduct then in effect, or raise a conflict under the Companys conflict of interest policies.
2. Term. The period of Executives employment under this Agreement shall commence on the Effective Date and shall continue until Executives employment with the Company is terminated pursuant to Section 5 below. The phrase Term of Employment as used in this Agreement shall refer to the entire period of employment of Executive by the Company.
3. Compensation and Related Matters.
(a) Annual Base Salary. During the Term of Employment, Executive shall receive a base salary at the rate of $437,750.00 per annum (as may be increased from time to time, the Annual Base Salary), subject to withholdings and deductions, which shall be paid to Executive in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary shall be reviewed by the CEO, and, as applicable, the Board of Directors of the Company (the Board) and/or the Compensation Committee of the Board, not less than annually.
(b) Annual Bonus. Executive shall be eligible to receive a discretionary annual bonus based on Executives achievement of performance objectives as mutually agreed between Executive and the CEO, such bonus to be targeted at forty percent (40%) of Executives Annual Base Salary (the Annual Bonus). Any Annual Bonus approved by the Board, the Compensation Committee of the Board and/or the CEO shall be paid at the same time annual bonuses are paid to other executives of the Company generally, subject to Executives continuous employment through the date of approval.
(c) Benefits. Executive shall be entitled to participate in such employee and executive benefit plans and programs as the Company may from time to time offer to provide to its executives, subject to the terms and conditions of such plans. Notwithstanding the foregoing, nothing herein is intended, or shall be construed, to require the Company to institute or continue any, or any particular, plan or benefit.
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(d) Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executives duties to the Company in accordance with the Companys applicable expense reimbursement policies and procedures as are in effect from time to time.
(e) Vacation. Executive will be entitled to paid vacation in accordance with the Companys vacation policy.
4. Equity Awards.
(a) Outstanding Equity Awards. As of the Effective Date, Executive holds options to purchase 408,331 shares of Company common stock, a portion of which may remain subject to vesting, and 2,893,498 shares of Company common stock, a portion of which may remain subject to vesting and a right of repurchase at the original purchase price in favor of the Company. Each stock option and/or award of restricted shares, as applicable, is subject to the Companys 2013 Equity Incentive Plan and an option agreement entered into with the Company.
(b) Future Equity Awards. Executive shall be eligible for such additional stock options and equity awards as may be determined by the Company, in its sole discretion.
(c) Acceleration Upon a Change in Control. Notwithstanding anything herein to the contrary, in the event of a Change in Control (as defined below), the vesting of Executives then outstanding unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting (after giving effect to any vesting in connection with the Change in Control) (the Outstanding Awards), shall accelerate as of immediately prior to such a Change in Control (and, if applicable, all restrictions and rights of repurchase on such awards shall lapse) in respect of 50% of the then-unvested shares of Company common stock subject thereto (such unvested portion, the Unvested Portion). The Unvested Portion of any Outstanding Award subject to performance-based vesting shall convert into a time-based equity award, and the Unvested Portion of each Outstanding Award shall vest in substantially equal installments on each of the first twelve monthly anniversaries of the closing date of the Change in Control, subject to Executives continued service to the Company or its successor through the applicable vesting date. Notwithstanding the foregoing and for the avoidance of doubt, the Unvested Portion of each Outstanding Award shall be subject to accelerated vesting in accordance with Section 6(b)(iii) below.
5. Termination.
(a) At-Will Employment. The Company and Executive acknowledge that Executives employment is and shall continue to be at-will, as defined under applicable law. This means that it is not for any specified period of time and can be terminated by Executive or by the Company at any time, with or without advance notice, and for any or no particular reason or cause. It also means that Executives job duties, title, and responsibility and reporting level, work schedule, compensation, and benefits, as well as the Companys personnel policies and procedures, may be changed with prospective effect, with or without notice, at any time in the sole discretion of the Company (subject to any ramification such changes may have under
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Section 6 of this Agreement). This at-will nature of Executives employment shall remain unchanged during Executives tenure as an employee and may not be changed, except in an express writing signed by Executive and a duly-authorized officer of the Company. If Executives employment terminates for any lawful reason, Executive shall not be entitled to any payments, benefits, damages, award, or compensation other than as provided in this Agreement.
(b) Notice of Termination. During the Term of Employment, any termination of Executives employment by the Company or by Executive (other than by reason of death) shall be communicated by written notice (a Notice of Termination) from one Party hereto to the other Party hereto (i) indicating the specific termination provision in this Agreement relied upon, if any, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated, and (iii) specifying the Date of Termination (as defined below). The failure by the Company to set forth in the Notice of Termination all of the facts and circumstances which contribute to a showing of Cause (as defined below) shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing their rights hereunder.
(c) Termination Date. For purposes of this Agreement, Date of Termination shall mean the date of the termination of Executives employment with the Company specified in a Notice of Termination.
(d) Deemed Resignation. Upon termination of Executives employment for any reason, Executive shall be deemed to have resigned from all offices and board memberships, if any, then held with the Company or any of its affiliates, and, at the Companys request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations.
6. Consequences of Termination.
(a) Payments of Accrued Obligations upon all Terminations of Employment. Upon a termination of Executives employment for any reason, Executive (or Executives estate or legal representative, as applicable) shall be entitled to receive, within thirty (30) days after Executives Date of Termination (or such earlier date as may be required by applicable law): (i) any portion of Executives Annual Base Salary earned through Executives Date of Termination not theretofore paid, (ii) any expenses owed to Executive under Section 3(d) above, (iii) any accrued but unused paid time-off owed to Executive, (iv) any Annual Bonus approved by the Board, Compensation Committee of the Board and/or the CEO on or prior to the Date of Termination but unpaid as of the Date of Termination, and (v) any amount arising from Executives participation in, or benefits under, any employee benefit plans, programs, or arrangements under Section 3(c) above, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs, or arrangements. Except as otherwise set forth in Section 6(b) below, the payments and benefits described in this Section 6(a) shall be the only payments and benefits payable in the event of Executives termination of employment for any reason.
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(b) Severance Payments upon Termination Without Cause or For Good Reason In Connection with a Change in Control. If, during the Term of Employment and within the period beginning three months prior to and ending 18 months following a Change in Control, Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason, in addition to the payments and benefits described in Section 6(a) above, the Company shall, subject to Executives delivery to the Company of a waiver and release of claims agreement in a form approved by the Company that becomes effective and irrevocable in accordance with Section 11(d) hereof (a Release):
(i) The Company shall pay to Executive an amount equal to 0.75 times the sum of (i) Executives Annual Base Salary and (ii) Executives target Annual Bonus. Such amount will be subject to applicable withholdings and payable in a single lump sum cash payment on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) hereof.
(ii) During the period commencing on the Date of Termination and ending on the nine month anniversary thereof or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage under a subsequent employers group health plan (in any case, the COBRA Period), subject to Executives valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the Code) and the regulations thereunder, the Company shall, in its sole discretion, either (A) continue to provide to Executive and Executives dependents, at the Companys sole expense, or (B) reimburse Executive and Executives dependents for coverage under its group health plan (if any) at the same levels in effect on the Date of Termination; provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover Executive or Executives dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments over the COBRA Period (or remaining portion thereof).
(iii) Cause any unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting, held by Executive as of the Date of Termination, to become fully vested and, if applicable, exercisable, and cause all restrictions and rights of repurchase on such awards to lapse with respect to all of the shares of the Companys Common Stock subject thereto.
(c) No Other Severance. The provisions of this Section 6 shall supersede in their entirety any severance payment provisions in any severance plan, policy, program, or other arrangement maintained by the Company except as otherwise approved by the Board.
(d) No Requirement to Mitigate; Survival. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to the contrary in this Agreement, the termination of Executives employment shall not impair the rights or obligations of any Party.
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(e) Definition of Cause. For purposes hereof, Cause shall mean any one of the following: (i) Executives material violation of any applicable material law or regulation respecting the business of the Company; (ii) Executives conviction of, or plea of nolo contendere to, a felony or other crime involving moral turpitude; (iii) any act of dishonesty, fraud, or misrepresentation in relation to Executives duties to the Company which act is materially and demonstrably injurious to the Company; (iv) Executives willful and repeated failure to perform in any material respect Executives duties hereunder after fifteen (15) days notice and an opportunity to cure such failure and a reasonable opportunity to present to the Board Executives position regarding any dispute relating to the existence of such failure (other than on account of disability); (v) Executives failure to attempt in good faith to implement a clear and reasonable directive from the CEO or to comply with any of the Companys policies and procedures which failure is either material or occurs after written notice from the CEO; (vi) any act of gross misconduct which is materially and demonstrably injurious to the Company; or (vii) Executives breach of fiduciary duty owed to the Company.
(f) Definition of Change in Control. For purposes of this Agreement, Change in Control shall mean (i) the acquisition by any person or group of affiliated or associated persons of more than fifty percent (50%) of the outstanding capital stock of the Company or voting securities representing more than fifty percent (50%) of the total voting power of outstanding securities of the Company; (ii) the consummation of a sale of all or substantially all of the assets of the Company to a third party; (iii) the consummation of any merger involving the Company in which, immediately after giving effect to such merger, less than a majority of the total voting power of outstanding stock of the surviving or resulting entity is then beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders of the Company, as applicable, immediately prior to such merger. For the avoidance of doubt and notwithstanding anything herein to the contrary, in no event shall a transaction constitute a Change in Control if: (w) its sole purpose is to change the state of the Companys incorporation; (x) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction; (y) it is effected primarily for the purpose of financing the Company with cash (as determined by the Board without regard to whether such transaction is effectuated by a merger, equity financing, or otherwise); or (z) it constitutes, or includes sales of shares in connection with, the initial public offering of the Companys capital stock. Notwithstanding the foregoing, a Change in Control must also constitute a change in control event, as defined in Treasury Regulation §1.409A-3(i)(5).
(g) Definition of Good Reason. For purposes hereof, Good Reason shall mean any one of the following: (i) the material reduction of Executives base salary or target annual performance bonus, (ii) the assignment to Executive of any duties materially and negatively inconsistent in any respect of Executives position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (including without limitation a requirement to report to any person or entity other than the CEO);
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or (iii) the Companys material breach of this Agreement, provided, that, in each case, Executive will not be deemed to have Good Reason unless (1) Executive first provides the Company with written notice of the condition giving rise to Good Reason within thirty (30) days of its initial occurrence, (2) the Company or the successor company fails to cure such condition within thirty (30) days after receiving such written notice (the Cure Period), and (3) Executives resignation based on such Good Reason is effective within thirty (30) days after the expiration of the Cure Period.
7. Assignment and Successors. The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executives rights or obligations may be assigned or transferred by Executive, other than Executives rights to payments hereunder, which may be transferred only by will, operation of law, or as otherwise provided herein.
8. Miscellaneous Provisions.
(a) Confidentiality Agreement. Executive hereby affirms Executives obligations under that certain At-Will Employment, Confidential Information, Invention and Assignment, and Arbitration Agreement by and between Executive and the Company dated as of August 24, 2016 (the Confidentiality Agreement). The Confidentiality Agreement shall survive the termination of this Agreement and Executives employment with the Company for the applicable period(s) set forth therein. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(b) Non-Solicitation of Employees. For a period of one (1)-year following Executives Date of Termination, Executive shall not, either directly or indirectly (i) solicit for employment by any individual, corporation, firm, or other business, any employees, consultants, independent contractors, or other service providers of the Company or any of its affiliates, or (ii) solicit any employee or consultant of the Company or any of its affiliates to leave the employment or consulting of or cease providing services to the Company or any of its affiliates; provided, however, that the foregoing clauses (i) and (ii) shall not apply to a general advertisement or solicitation (or any hiring pursuant to such advertisement or solicitation) that is not specifically targeted to such employees or consultants.
(c) Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of California, without giving effect to any principles of conflicts of law, whether of the State of California or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.
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(d) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(e) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be deemed effective for all purposes.
(f) Entire Agreement. The terms of this Agreement, together with the Confidentiality Agreement, are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, regarding Executives service to the Company, including without limitation, the Offer Letter. The Parties further intend that this Agreement, together with the Confidentiality Agreement, shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement or the Confidentiality Agreement. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(g) Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
(h) Dispute Resolution. Executive and the Company affirm the Parties obligations under Section 12 of the Confidentiality Agreement and hereby agree that any dispute, claim or controversy arising under this Agreement shall be subject to Section 12 of the Confidentiality Agreement as a dispute, claim or controversy arising from, relating to or resulting from Executives employment.
(i) Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.
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(j) Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local, or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.
(k) Whistleblower Protections and Trade Secrets. Notwithstanding anything to the contrary contained herein, nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833, notwithstanding anything to the contrary in this Agreement: (i) Executive shall not be in breach of this Agreement, and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (ii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executives attorney, and may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.
9. Prior Employment. Executive represents and warrants that Executives acceptance of employment with the Company has not breached, and the performance of Executives duties hereunder will not breach, any duty owed by Executive to any prior employer or other person. Executive further represents and warrants to the Company that (a) the performance of Executives obligations hereunder will not violate any agreement between Executive and any other person, firm, organization, or other entity; (b) Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by Executive entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement; and (c) Executives performance of Executives duties under this Agreement will not require Executive to, and Executive shall not, rely on in the performance of Executives duties or disclose to the Company or any other person or entity or induce the Company in any way to use or rely on any trade secret or other confidential or proprietary information or material belonging to any previous employer of Executive.
10. Golden Parachute Excise Tax.
(a) Best Pay. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise (Payment) would (i) constitute a parachute payment within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then such Payment will be equal to
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the Reduced Amount (as defined below). The Reduced Amount will be either (A) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (B) the entire Payment, whichever amount after taking into account all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in Executive s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (1) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (2) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (3) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(b) Accounting Firm. The accounting firm engaged by the Company for general tax purposes as of the day prior to the Change in Control will perform the calculations set forth in Section 10(a) above. If the firm so engaged by the Company is serving as the accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company within thirty (30) days before the consummation of a Change in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder will be final, binding and conclusive upon the Company and Executive.
11. Section 409A.
(a) General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date,
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(Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies the Company that Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement would cause Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company and Executive shall take commercially reasonable efforts to reform such provision to try to comply with or be exempt from Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A, provided that any such modifications shall not increase the cost or liability to the Company. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) Separation from Service. Notwithstanding any provision to the contrary in this Agreement: (i) no amount that constitutes deferred compensation under Section 409A shall be payable pursuant to Section 6(b) above unless the termination of Executives employment constitutes a separation from service within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations (Separation from Service); (ii) for purposes of Section 409A, Executives right to receive installment payments shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes deferred compensation under Section 409A, such reimbursement or benefit shall be provided no later than December 31st of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.
(c) Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executives Separation from Service to be a specified employee for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executives benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of Executives Separation from Service with the Company or (ii) the date of Executives death. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executives estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.
(d) Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of Executives termination of employment are subject to Executives execution and delivery of a Release, (i) the Company shall deliver the Release to Executive within ten (10) business days following Executives Date of Termination, and the Companys failure to deliver a Release prior to the expiration of such ten (10) business day period shall constitute a waiver of any requirement to execute a Release, (ii) if
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Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes Executives acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release, and (iii) in any case where Executives Date of Termination and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 11(d), Release Expiration Date shall mean the date that is twenty-one (21) days following the date upon which the Company timely delivers the Release to Executive, or, in the event that Executives termination of employment is in connection with an exit incentive or other employment termination program (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of Executives termination of employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or, in the case of any payments subject to Section 11(d)(iii), on the first payroll period to occur in the subsequent taxable year, if later.
12. Employee Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executives own judgment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date and year first above written.
UNITY BIOTECHNOLOGY, INC. | ||
By: | /s/ Keith R. Leonard | |
Name: Keith R. Leonard | ||
Title: CEO | ||
EXECUTIVE | ||
By: | /s/ Nathaniel E. David | |
Name: Nathaniel David | ||
Address: | ||
***** | ||
***** |
Exhibit 10.10
UNITY BIOTECHNOLOGY, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement), entered into as of January 29, 2018 (the Effective Date), is made by and between Unity Biotechnology, Inc., a Delaware corporation (the Company) and Bob Goeltz (Executive and, together with the Company, the Parties). This Agreement supersedes in its entirety that certain offer letter by and between Executive and the Company dated as of August 8, 2017 (Offer Letter).
WHEREAS, the Company desires to assure itself of the continued services of Executive by engaging Executive to perform services as an employee of the Company under the terms hereof;
WHEREAS, Executive desires to provide continued services to the Company on the terms herein provided; and
WHEREAS, the Parties desire to execute this Agreement to supersede the Offer Letter in its entirety and reflect certain changes to Executives employment with the Company effective as of the Effective Date.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1. Employment.
(a) General. The Company shall employ Executive upon the terms and conditions provided herein effective as of the Effective Date.
(b) Position and Duties. Effective on the Effective Date, Executive: (i) shall continue to serve as the Companys Chief Financial Officer, with responsibilities, duties, and authority usual and customary for such position, subject to direction by the Chief Executive Officer of the Company (the CEO); (ii) shall continue to report directly to the CEO; and (iii) agrees promptly and faithfully to comply with all present and future policies, requirements, rules and regulations, and reasonable directions and requests, of the Company in connection with the Companys business. At the Companys request, Executive shall serve the Company and/or its subsidiaries and affiliates in such other capacities in addition to the foregoing as the Company shall designate, provided that such additional capacities are consistent with Executives position as the Companys Chief Financial Officer. In the event that Executive serves in any one or more of such additional capacities, Executives compensation shall not automatically be increased on account of such additional service.
(c) Performance of Executives Duties. During Executives employment with the Company, and except for periods of illness, vacation, disability, or reasonable leaves of absence or as discussed in Section 1(e) below, Executive shall devote Executives full time and attention to the business and affairs of the Company pursuant to the general direction of the CEO. The rights of Executive under this Agreement shall not be affected by any change in the title, duties, or capacity of Executive during Executives employment with the Company.
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(d) Principal Office. Executive will work principally at the Companys facility located in Brisbane, California.
(e) Exclusivity. Except with the prior written approval of the CEO (which the CEO may grant or withhold in his or her sole and absolute discretion), Executive shall devote substantially all of Executives working time, attention, and energies to the business of the Company, except during any paid vacation or other excused absence periods. Nothing in this section prevents Executive from engaging in additional activities in connection with personal investments and community affairs. Executive may also serve as a member of the board of directors or board of advisors of another organization provided (i) such organization is not a competitor of the Company; (ii) Executive receives prior written approval from the Companys CEO; and (iii) such activities do not individually or in the aggregate interfere with the performance of Executives duties under this Agreement, violate the Companys standards of conduct then in effect, or raise a conflict under the Companys conflict of interest policies.
2. Term. The period of Executives employment under this Agreement shall commence on the Effective Date and shall continue until Executives employment with the Company is terminated pursuant to Section 5 below. The phrase Term of Employment as used in this Agreement shall refer to the entire period of employment of Executive by the Company.
3. Compensation and Related Matters.
(a) Annual Base Salary. During the Term of Employment, Executive shall receive a base salary at the rate of $350,000 per annum (as may be increased from time to time, the Annual Base Salary), subject to withholdings and deductions, which shall be paid to Executive in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary shall be reviewed by the CEO, and, as applicable, the Board of Directors of the Company (the Board) and/or the Compensation Committee of the Board, not less than annually.
(b) Annual Bonus. Executive shall be eligible to receive a discretionary annual bonus based on Executives achievement of performance objectives as mutually agreed between Executive and the CEO, such bonus to be targeted at thirty-five percent (35%) of Executives Annual Base Salary (the Annual Bonus). Any Annual Bonus approved by the Board, the Compensation Committee of the Board and/or the CEO shall be paid at the same time annual bonuses are paid to other executives of the Company generally, subject to Executives continuous employment through the date of approval.
(c) Benefits. Executive shall be entitled to participate in such employee and executive benefit plans and programs as the Company may from time to time offer to provide to its executives, subject to the terms and conditions of such plans. Notwithstanding the foregoing, nothing herein is intended, or shall be construed, to require the Company to institute or continue any, or any particular, plan or benefit.
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(d) Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executives duties to the Company in accordance with the Companys applicable expense reimbursement policies and procedures as are in effect from time to time.
(e) Vacation. Executive will be entitled to paid vacation in accordance with the Companys vacation policy.
4. Equity Awards.
(a) Outstanding Equity Awards. As of the Effective Date, Executive holds options to purchase 710,581 shares of Company common stock, a portion of which may remain subject to vesting, and 279,419 shares of Company common stock, a portion of which may remain subject to vesting and a right of repurchase at the original purchase price in favor of the Company. Each stock option and/or award of restricted shares, as applicable, is subject to the Companys 2013 Equity Incentive Plan and an option agreement entered into with the Company.
(b) Future Equity Awards. Executive shall be eligible for such additional stock options and equity awards as may be determined by the Company, in its sole discretion.
(c) Acceleration Upon a Change in Control. Notwithstanding anything herein to the contrary, in the event of a Change in Control (as defined below), the vesting of Executives then outstanding unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting (after giving effect to any vesting in connection with the Change in Control) (the Outstanding Awards), shall accelerate as of immediately prior to such a Change in Control (and, if applicable, all restrictions and rights of repurchase on such awards shall lapse) in respect of 50% of the then-unvested shares of Company common stock subject thereto (such unvested portion, the Unvested Portion). The Unvested Portion of any Outstanding Award subject to performance-based vesting shall convert into a time-based equity award, and the Unvested Portion of each Outstanding Award shall vest in substantially equal installments on each of the first twelve monthly anniversaries of the closing date of the Change in Control, subject to Executives continued service to the Company or its successor through the applicable vesting date. Notwithstanding the foregoing and for the avoidance of doubt, the Unvested Portion of each Outstanding Award shall be subject to accelerated vesting in accordance with Section 6(b)(iii) below.
5. Termination.
(a) At-Will Employment. The Company and Executive acknowledge that Executives employment is and shall continue to be at-will, as defined under applicable law. This means that it is not for any specified period of time and can be terminated by Executive or by the Company at any time, with or without advance notice, and for any or no particular reason or cause. It also means that Executives job duties, title, and responsibility and reporting level, work schedule, compensation, and benefits, as well as the Companys personnel policies and procedures, may be changed with prospective effect, with or without notice, at any time in the sole discretion of the Company (subject to any ramification such changes may have under
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Section 6 of this Agreement). This at-will nature of Executives employment shall remain unchanged during Executives tenure as an employee and may not be changed, except in an express writing signed by Executive and a duly-authorized officer of the Company. If Executives employment terminates for any lawful reason, Executive shall not be entitled to any payments, benefits, damages, award, or compensation other than as provided in this Agreement.
(b) Notice of Termination. During the Term of Employment, any termination of Executives employment by the Company or by Executive (other than by reason of death) shall be communicated by written notice (a Notice of Termination) from one Party hereto to the other Party hereto (i) indicating the specific termination provision in this Agreement relied upon, if any, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated, and (iii) specifying the Date of Termination (as defined below). The failure by the Company to set forth in the Notice of Termination all of the facts and circumstances which contribute to a showing of Cause (as defined below) shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing their rights hereunder.
(c) Termination Date. For purposes of this Agreement, Date of Termination shall mean the date of the termination of Executives employment with the Company specified in a Notice of Termination.
(d) Deemed Resignation. Upon termination of Executives employment for any reason, Executive shall be deemed to have resigned from all offices and board memberships, if any, then held with the Company or any of its affiliates, and, at the Companys request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations.
6. Consequences of Termination.
(a) Payments of Accrued Obligations upon all Terminations of Employment. Upon a termination of Executives employment for any reason, Executive (or Executives estate or legal representative, as applicable) shall be entitled to receive, within thirty (30) days after Executives Date of Termination (or such earlier date as may be required by applicable law): (i) any portion of Executives Annual Base Salary earned through Executives Date of Termination not theretofore paid, (ii) any expenses owed to Executive under Section 3(d) above, (iii) any accrued but unused paid time-off owed to Executive, (iv) any Annual Bonus approved by the Board, Compensation Committee of the Board and/or the CEO on or prior to the Date of Termination but unpaid as of the Date of Termination, and (v) any amount arising from Executives participation in, or benefits under, any employee benefit plans, programs, or arrangements under Section 3(c) above, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs, or arrangements. Except as otherwise set forth in Section 6(b) below, the payments and benefits described in this Section 6(a) shall be the only payments and benefits payable in the event of Executives termination of employment for any reason.
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(b) Severance Payments upon Termination Without Cause or For Good Reason In Connection with a Change in Control. If, during the Term of Employment and within the period beginning three months prior to and ending 18 months following a Change in Control, Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason, in addition to the payments and benefits described in Section 6(a) above, the Company shall, subject to Executives delivery to the Company of a waiver and release of claims agreement in a form approved by the Company that becomes effective and irrevocable in accordance with Section 11(d) hereof (a Release):
(i) The Company shall pay to Executive an amount equal to 0.75 times the sum of (i) Executives Annual Base Salary and (ii) Executives target Annual Bonus. Such amount will be subject to applicable withholdings and payable in a single lump sum cash payment on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) hereof.
(ii) During the period commencing on the Date of Termination and ending on the nine month anniversary thereof or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage under a subsequent employers group health plan (in any case, the COBRA Period), subject to Executives valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the Code) and the regulations thereunder, the Company shall, in its sole discretion, either (A) continue to provide to Executive and Executives dependents, at the Companys sole expense, or (B) reimburse Executive and Executives dependents for coverage under its group health plan (if any) at the same levels in effect on the Date of Termination; provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover Executive or Executives dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments over the COBRA Period (or remaining portion thereof).
(iii) Cause any unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting, held by Executive as of the Date of Termination, to become fully vested and, if applicable, exercisable, and cause all restrictions and rights of repurchase on such awards to lapse with respect to all of the shares of the Companys Common Stock subject thereto.
(c) No Other Severance. The provisions of this Section 6 shall supersede in their entirety any severance payment provisions in any severance plan, policy, program, or other arrangement maintained by the Company except as otherwise approved by the Board.
(d) No Requirement to Mitigate; Survival. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to the contrary in this Agreement, the termination of Executives employment shall not impair the rights or obligations of any Party.
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(e) Definition of Cause. For purposes hereof, Cause shall mean any one of the following: (i) Executives material violation of any applicable material law or regulation respecting the business of the Company; (ii) Executives conviction of, or plea of nolo contendere to, a felony or other crime involving moral turpitude; (iii) any act of dishonesty, fraud, or misrepresentation in relation to Executives duties to the Company which act is materially and demonstrably injurious to the Company; (iv) Executives willful and repeated failure to perform in any material respect Executives duties hereunder after fifteen (15) days notice and an opportunity to cure such failure and a reasonable opportunity to present to the Board Executives position regarding any dispute relating to the existence of such failure (other than on account of disability); (v) Executives failure to attempt in good faith to implement a clear and reasonable directive from the CEO or to comply with any of the Companys policies and procedures which failure is either material or occurs after written notice from the CEO; (vi) any act of gross misconduct which is materially and demonstrably injurious to the Company; or (vii) Executives breach of fiduciary duty owed to the Company.
(f) Definition of Change in Control. For purposes of this Agreement, Change in Control shall mean (i) the acquisition by any person or group of affiliated or associated persons of more than fifty percent (50%) of the outstanding capital stock of the Company or voting securities representing more than fifty percent (50%) of the total voting power of outstanding securities of the Company; (ii) the consummation of a sale of all or substantially all of the assets of the Company to a third party; (iii) the consummation of any merger involving the Company in which, immediately after giving effect to such merger, less than a majority of the total voting power of outstanding stock of the surviving or resulting entity is then beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders of the Company, as applicable, immediately prior to such merger. For the avoidance of doubt and notwithstanding anything herein to the contrary, in no event shall a transaction constitute a Change in Control if: (w) its sole purpose is to change the state of the Companys incorporation; (x) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction; (y) it is effected primarily for the purpose of financing the Company with cash (as determined by the Board without regard to whether such transaction is effectuated by a merger, equity financing, or otherwise); or (z) it constitutes, or includes sales of shares in connection with, the initial public offering of the Companys capital stock. Notwithstanding the foregoing, a Change in Control must also constitute a change in control event, as defined in Treasury Regulation §1.409A-3(i)(5).
(g) Definition of Good Reason. For purposes hereof, Good Reason shall mean any one of the following: (i) the material reduction of Executives base salary or target annual performance bonus, (ii) the assignment to Executive of any duties materially and negatively inconsistent in any respect of Executives position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (including without limitation a requirement to report to any person or entity other than the CEO);
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or (iii) the Companys material breach of this Agreement, provided, that, in each case, Executive will not be deemed to have Good Reason unless (1) Executive first provides the Company with written notice of the condition giving rise to Good Reason within thirty (30) days of its initial occurrence, (2) the Company or the successor company fails to cure such condition within thirty (30) days after receiving such written notice (the Cure Period), and (3) Executives resignation based on such Good Reason is effective within thirty (30) days after the expiration of the Cure Period.
7. Assignment and Successors. The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executives rights or obligations may be assigned or transferred by Executive, other than Executives rights to payments hereunder, which may be transferred only by will, operation of law, or as otherwise provided herein.
8. Miscellaneous Provisions.
(a) Confidentiality Agreement. Executive hereby affirms Executives obligations under that certain At-Will Employment, Confidential Information, Invention and Assignment, and Arbitration Agreement by and between Executive and the Company dated as of September 5, 2017 (the Confidentiality Agreement). The Confidentiality Agreement shall survive the termination of this Agreement and Executives employment with the Company for the applicable period(s) set forth therein. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(b) Non-Solicitation of Employees. For a period of one (1)-year following Executives Date of Termination, Executive shall not, either directly or indirectly (i) solicit for employment by any individual, corporation, firm, or other business, any employees, consultants, independent contractors, or other service providers of the Company or any of its affiliates, or (ii) solicit any employee or consultant of the Company or any of its affiliates to leave the employment or consulting of or cease providing services to the Company or any of its affiliates; provided, however, that the foregoing clauses (i) and (ii) shall not apply to a general advertisement or solicitation (or any hiring pursuant to such advertisement or solicitation) that is not specifically targeted to such employees or consultants.
(c) Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of California, without giving effect to any principles of conflicts of law, whether of the State of California or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.
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(d) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(e) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be deemed effective for all purposes.
(f) Entire Agreement. The terms of this Agreement, together with the Confidentiality Agreement, are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, regarding Executives service to the Company, including without limitation, the Offer Letter. The Parties further intend that this Agreement, together with the Confidentiality Agreement, shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement or the Confidentiality Agreement. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(g) Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
(h) Dispute Resolution. Executive and the Company affirm the Parties obligations under Section 12 of the Confidentiality Agreement and hereby agree that any dispute, claim or controversy arising under this Agreement shall be subject to Section 12 of the Confidentiality Agreement as a dispute, claim or controversy arising from, relating to or resulting from Executives employment.
(i) Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.
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(j) Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local, or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.
(k) Whistleblower Protections and Trade Secrets. Notwithstanding anything to the contrary contained herein, nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833, notwithstanding anything to the contrary in this Agreement: (i) Executive shall not be in breach of this Agreement, and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (ii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executives attorney, and may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.
9. Prior Employment. Executive represents and warrants that Executives acceptance of employment with the Company has not breached, and the performance of Executives duties hereunder will not breach, any duty owed by Executive to any prior employer or other person. Executive further represents and warrants to the Company that (a) the performance of Executives obligations hereunder will not violate any agreement between Executive and any other person, firm, organization, or other entity; (b) Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by Executive entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement; and (c) Executives performance of Executives duties under this Agreement will not require Executive to, and Executive shall not, rely on in the performance of Executives duties or disclose to the Company or any other person or entity or induce the Company in any way to use or rely on any trade secret or other confidential or proprietary information or material belonging to any previous employer of Executive.
10. Golden Parachute Excise Tax.
(a) Best Pay. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise (Payment) would (i) constitute a parachute payment within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then such Payment will be equal to
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the Reduced Amount (as defined below). The Reduced Amount will be either (A) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (B) the entire Payment, whichever amount after taking into account all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in Executive s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (1) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (2) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (3) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(b) Accounting Firm. The accounting firm engaged by the Company for general tax purposes as of the day prior to the Change in Control will perform the calculations set forth in Section 10(a) above. If the firm so engaged by the Company is serving as the accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company within thirty (30) days before the consummation of a Change in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder will be final, binding and conclusive upon the Company and Executive.
11. Section 409A.
(a) General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date,
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(Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies the Company that Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement would cause Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company and Executive shall take commercially reasonable efforts to reform such provision to try to comply with or be exempt from Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A, provided that any such modifications shall not increase the cost or liability to the Company. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) Separation from Service. Notwithstanding any provision to the contrary in this Agreement: (i) no amount that constitutes deferred compensation under Section 409A shall be payable pursuant to Section 6(b) above unless the termination of Executives employment constitutes a separation from service within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations (Separation from Service); (ii) for purposes of Section 409A, Executives right to receive installment payments shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes deferred compensation under Section 409A, such reimbursement or benefit shall be provided no later than December 31st of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.
(c) Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executives Separation from Service to be a specified employee for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executives benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of Executives Separation from Service with the Company or (ii) the date of Executives death. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executives estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.
(d) Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of Executives termination of employment are subject to Executives execution and delivery of a Release, (i) the Company shall deliver the Release to Executive within ten (10) business days following Executives Date of Termination, and the Companys failure to deliver a Release prior to the expiration of such ten (10) business day period shall constitute a waiver of any requirement to execute a Release, (ii) if
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Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes Executives acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release, and (iii) in any case where Executives Date of Termination and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 11(d), Release Expiration Date shall mean the date that is twenty-one (21) days following the date upon which the Company timely delivers the Release to Executive, or, in the event that Executives termination of employment is in connection with an exit incentive or other employment termination program (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of Executives termination of employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or, in the case of any payments subject to Section 11(d)(iii), on the first payroll period to occur in the subsequent taxable year, if later.
12. Employee Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executives own judgment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date and year first above written.
UNITY BIOTECHNOLOGY, INC. | ||
By: | /s/ Keith R. Leonard | |
Name: Keith R. Leonard | ||
Title: CEO | ||
EXECUTIVE | ||
By: | /s/ Robert C. Goeltz II | |
Name: Robert C. Goeltz II | ||
Address: | ||
***** | ||
***** |
Exhibit 10.11
UNITY BIOTECHNOLOGY, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement), entered into as of January 29, 2018 (the Effective Date), is made by and between Unity Biotechnology, Inc., a Delaware corporation (the Company) and Jamie Dananberg (Executive and, together with the Company, the Parties). This Agreement supersedes in its entirety that certain offer letter by and between Executive and the Company dated as of December 22, 2015 (Offer Letter).
WHEREAS, the Company desires to assure itself of the continued services of Executive by engaging Executive to perform services as an employee of the Company under the terms hereof;
WHEREAS, Executive desires to provide continued services to the Company on the terms herein provided; and
WHEREAS, the Parties desire to execute this Agreement to supersede the Offer Letter in its entirety and reflect certain changes to Executives employment with the Company effective as of the Effective Date.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1. Employment.
(a) General. The Company shall employ Executive upon the terms and conditions provided herein effective as of the Effective Date.
(b) Position and Duties. Effective on the Effective Date, Executive: (i) shall continue to serve as the Companys Chief Medical Officer, with responsibilities, duties, and authority usual and customary for such position, subject to direction by the Chief Executive Officer of the Company (the CEO); (ii) shall continue to report directly to the CEO; and (iii) agrees promptly and faithfully to comply with all present and future policies, requirements, rules and regulations, and reasonable directions and requests, of the Company in connection with the Companys business. At the Companys request, Executive shall serve the Company and/or its subsidiaries and affiliates in such other capacities in addition to the foregoing as the Company shall designate, provided that such additional capacities are consistent with Executives position as the Companys Chief Medical Officer. In the event that Executive serves in any one or more of such additional capacities, Executives compensation shall not automatically be increased on account of such additional service.
(c) Performance of Executives Duties. During Executives employment with the Company, and except for periods of illness, vacation, disability, or reasonable leaves of absence or as discussed in Section 1(e) below, Executive shall devote Executives full time and attention to the business and affairs of the Company pursuant to the general direction of the CEO. The rights of Executive under this Agreement shall not be affected by any change in the title, duties, or capacity of Executive during Executives employment with the Company.
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(d) Principal Office. Executive will work principally at the Companys facility located in Brisbane, California.
(e) Exclusivity. Except with the prior written approval of the CEO (which the CEO may grant or withhold in his or her sole and absolute discretion), Executive shall devote substantially all of Executives working time, attention, and energies to the business of the Company, except during any paid vacation or other excused absence periods. Nothing in this section prevents Executive from engaging in additional activities in connection with personal investments and community affairs. Executive may also serve as a member of the board of directors or board of advisors of another organization provided (i) such organization is not a competitor of the Company; (ii) Executive receives prior written approval from the Companys CEO; and (iii) such activities do not individually or in the aggregate interfere with the performance of Executives duties under this Agreement, violate the Companys standards of conduct then in effect, or raise a conflict under the Companys conflict of interest policies.
2. Term. The period of Executives employment under this Agreement shall commence on the Effective Date and shall continue until Executives employment with the Company is terminated pursuant to Section 5 below. The phrase Term of Employment as used in this Agreement shall refer to the entire period of employment of Executive by the Company.
3. Compensation and Related Matters.
(a) Annual Base Salary. During the Term of Employment, Executive shall receive a base salary at the rate of $412,000.00 per annum (as may be increased from time to time, the Annual Base Salary), subject to withholdings and deductions, which shall be paid to Executive in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary shall be reviewed by the CEO, and, as applicable, the Board of Directors of the Company (the Board) and/or the Compensation Committee of the Board, not less than annually.
(b) Annual Bonus. Executive shall be eligible to receive a discretionary annual bonus based on Executives achievement of performance objectives as mutually agreed between Executive and the CEO, such bonus to be targeted at thirty-five percent (35%) of Executives Annual Base Salary (the Annual Bonus). Any Annual Bonus approved by the Board, the Compensation Committee of the Board and/or the CEO shall be paid at the same time annual bonuses are paid to other executives of the Company generally, subject to Executives continuous employment through the date of approval.
(c) Benefits. Executive shall be entitled to participate in such employee and executive benefit plans and programs as the Company may from time to time offer to provide to its executives, subject to the terms and conditions of such plans. Notwithstanding the foregoing, nothing herein is intended, or shall be construed, to require the Company to institute or continue any, or any particular, plan or benefit.
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(d) Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executives duties to the Company in accordance with the Companys applicable expense reimbursement policies and procedures as are in effect from time to time.
(e) Vacation. Executive will be entitled to paid vacation in accordance with the Companys vacation policy.
4. Equity Awards.
(a) Outstanding Equity Awards. As of the Effective Date, Executive holds 984,400 shares of Company common stock, a portion of which may remain subject to vesting and a right of repurchase at the original purchase price in favor of the Company. These shares are subject to the Companys 2013 Equity Incentive Plan and one or more option agreements and restricted stock purchase agreements entered into with the Company.
(b) Future Equity Awards. Executive shall be eligible for such additional stock options and equity awards as may be determined by the Company, in its sole discretion.
(c) Acceleration Upon a Change in Control. Notwithstanding anything herein to the contrary, in the event of a Change in Control (as defined below), the vesting of Executives then outstanding unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting (after giving effect to any vesting in connection with the Change in Control) (the Outstanding Awards), shall accelerate as of immediately prior to such a Change in Control (and, if applicable, all restrictions and rights of repurchase on such awards shall lapse) in respect of 50% of the then-unvested shares of Company common stock subject thereto (such unvested portion, the Unvested Portion). The Unvested Portion of any Outstanding Award subject to performance-based vesting shall convert into a time-based equity award, and the Unvested Portion of each Outstanding Award shall vest in substantially equal installments on each of the first twelve monthly anniversaries of the closing date of the Change in Control, subject to Executives continued service to the Company or its successor through the applicable vesting date. Notwithstanding the foregoing and for the avoidance of doubt, the Unvested Portion of each Outstanding Award shall be subject to accelerated vesting in accordance with Section 6(b)(iii) below.
5. Termination.
(a) At-Will Employment. The Company and Executive acknowledge that Executives employment is and shall continue to be at-will, as defined under applicable law. This means that it is not for any specified period of time and can be terminated by Executive or by the Company at any time, with or without advance notice, and for any or no particular reason or cause. It also means that Executives job duties, title, and responsibility and reporting level, work schedule, compensation, and benefits, as well as the Companys personnel policies and procedures, may be changed with prospective effect, with or without notice, at any time in the sole discretion of the Company (subject to any ramification such changes may have under Section 6 of this Agreement). This at-will nature of Executives employment shall remain
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unchanged during Executives tenure as an employee and may not be changed, except in an express writing signed by Executive and a duly-authorized officer of the Company. If Executives employment terminates for any lawful reason, Executive shall not be entitled to any payments, benefits, damages, award, or compensation other than as provided in this Agreement.
(b) Notice of Termination. During the Term of Employment, any termination of Executives employment by the Company or by Executive (other than by reason of death) shall be communicated by written notice (a Notice of Termination) from one Party hereto to the other Party hereto (i) indicating the specific termination provision in this Agreement relied upon, if any, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated, and (iii) specifying the Date of Termination (as defined below). The failure by the Company to set forth in the Notice of Termination all of the facts and circumstances which contribute to a showing of Cause (as defined below) shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing their rights hereunder.
(c) Termination Date. For purposes of this Agreement, Date of Termination shall mean the date of the termination of Executives employment with the Company specified in a Notice of Termination.
(d) Deemed Resignation. Upon termination of Executives employment for any reason, Executive shall be deemed to have resigned from all offices and board memberships, if any, then held with the Company or any of its affiliates, and, at the Companys request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations.
6. Consequences of Termination.
(a) Payments of Accrued Obligations upon all Terminations of Employment. Upon a termination of Executives employment for any reason, Executive (or Executives estate or legal representative, as applicable) shall be entitled to receive, within thirty (30) days after Executives Date of Termination (or such earlier date as may be required by applicable law): (i) any portion of Executives Annual Base Salary earned through Executives Date of Termination not theretofore paid, (ii) any expenses owed to Executive under Section 3(d) above, (iii) any accrued but unused paid time-off owed to Executive, (iv) any Annual Bonus approved by the Board, Compensation Committee of the Board and/or the CEO on or prior to the Date of Termination but unpaid as of the Date of Termination, and (v) any amount arising from Executives participation in, or benefits under, any employee benefit plans, programs, or arrangements under Section 3(c) above, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs, or arrangements. Except as otherwise set forth in Section 6(b) below, the payments and benefits described in this Section 6(a) shall be the only payments and benefits payable in the event of Executives termination of employment for any reason.
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(b) Severance Payments upon Termination Without Cause or For Good Reason In Connection with a Change in Control. If, during the Term of Employment and within the period beginning three months prior to and ending 18 months following a Change in Control, Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason, in addition to the payments and benefits described in Section 6(a) above, the Company shall, subject to Executives delivery to the Company of a waiver and release of claims agreement in a form approved by the Company that becomes effective and irrevocable in accordance with Section 11(d) hereof (a Release):
(i) The Company shall pay to Executive an amount equal to 0.75 times the sum of (i) Executives Annual Base Salary and (ii) Executives target Annual Bonus. Such amount will be subject to applicable withholdings and payable in a single lump sum cash payment on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) hereof.
(ii) During the period commencing on the Date of Termination and ending on the nine month anniversary thereof or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage under a subsequent employers group health plan (in any case, the COBRA Period), subject to Executives valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the Code) and the regulations thereunder, the Company shall, in its sole discretion, either (A) continue to provide to Executive and Executives dependents, at the Companys sole expense, or (B) reimburse Executive and Executives dependents for coverage under its group health plan (if any) at the same levels in effect on the Date of Termination; provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover Executive or Executives dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments over the COBRA Period (or remaining portion thereof).
(iii) Cause any unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting, held by Executive as of the Date of Termination, to become fully vested and, if applicable, exercisable, and cause all restrictions and rights of repurchase on such awards to lapse with respect to all of the shares of the Companys Common Stock subject thereto.
(c) No Other Severance. The provisions of this Section 6 shall supersede in their entirety any severance payment provisions in any severance plan, policy, program, or other arrangement maintained by the Company except as otherwise approved by the Board.
(d) No Requirement to Mitigate; Survival. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to the contrary in this Agreement, the termination of Executives employment shall not impair the rights or obligations of any Party.
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(e) Definition of Cause. For purposes hereof, Cause shall mean any one of the following: (i) Executives material violation of any applicable material law or regulation respecting the business of the Company; (ii) Executives conviction of, or plea of nolo contendere to, a felony or other crime involving moral turpitude; (iii) any act of dishonesty, fraud, or misrepresentation in relation to Executives duties to the Company which act is materially and demonstrably injurious to the Company; (iv) Executives willful and repeated failure to perform in any material respect Executives duties hereunder after fifteen (15) days notice and an opportunity to cure such failure and a reasonable opportunity to present to the Board Executives position regarding any dispute relating to the existence of such failure (other than on account of disability); (v) Executives failure to attempt in good faith to implement a clear and reasonable directive from the CEO or to comply with any of the Companys policies and procedures which failure is either material or occurs after written notice from the CEO; (vi) any act of gross misconduct which is materially and demonstrably injurious to the Company; or (vii) Executives breach of fiduciary duty owed to the Company.
(f) Definition of Change in Control. For purposes of this Agreement, Change in Control shall mean (i) the acquisition by any person or group of affiliated or associated persons of more than fifty percent (50%) of the outstanding capital stock of the Company or voting securities representing more than fifty percent (50%) of the total voting power of outstanding securities of the Company; (ii) the consummation of a sale of all or substantially all of the assets of the Company to a third party; (iii) the consummation of any merger involving the Company in which, immediately after giving effect to such merger, less than a majority of the total voting power of outstanding stock of the surviving or resulting entity is then beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders of the Company, as applicable, immediately prior to such merger. For the avoidance of doubt and notwithstanding anything herein to the contrary, in no event shall a transaction constitute a Change in Control if: (w) its sole purpose is to change the state of the Companys incorporation; (x) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction; (y) it is effected primarily for the purpose of financing the Company with cash (as determined by the Board without regard to whether such transaction is effectuated by a merger, equity financing, or otherwise); or (z) it constitutes, or includes sales of shares in connection with, the initial public offering of the Companys capital stock. Notwithstanding the foregoing, a Change in Control must also constitute a change in control event, as defined in Treasury Regulation §1.409A-3(i)(5).
(g) Definition of Good Reason. For purposes hereof, Good Reason shall mean any one of the following: (i) the material reduction of Executives base salary or target annual performance bonus, (ii) the assignment to Executive of any duties materially and negatively inconsistent in any respect of Executives position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (including without limitation a requirement to report to any person or entity other than the CEO); or (iii) the Companys material breach of this Agreement, provided, that, in each case, Executive will not be deemed to have Good Reason unless (1) Executive first provides the Company with written notice of the condition giving rise to Good Reason within thirty (30) days of its initial occurrence, (2) the Company or the successor company fails to cure such condition within thirty (30) days after receiving such written notice (the Cure Period), and (3) Executives resignation based on such Good Reason is effective within thirty (30) days after the expiration of the Cure Period.
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7. Assignment and Successors. The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executives rights or obligations may be assigned or transferred by Executive, other than Executives rights to payments hereunder, which may be transferred only by will, operation of law, or as otherwise provided herein.
8. Miscellaneous Provisions.
(a) Confidentiality Agreement. Executive hereby affirms Executives obligations under that certain At-Will Employment, Confidential Information, Invention and Assignment, and Arbitration Agreement by and between Executive and the Company dated as of December 22, 2015 (the Confidentiality Agreement). The Confidentiality Agreement shall survive the termination of this Agreement and Executives employment with the Company for the applicable period(s) set forth therein. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(b) Non-Solicitation of Employees. For a period of one (1)-year following Executives Date of Termination, Executive shall not, either directly or indirectly (i) solicit for employment by any individual, corporation, firm, or other business, any employees, consultants, independent contractors, or other service providers of the Company or any of its affiliates, or (ii) solicit any employee or consultant of the Company or any of its affiliates to leave the employment or consulting of or cease providing services to the Company or any of its affiliates; provided, however, that the foregoing clauses (i) and (ii) shall not apply to a general advertisement or solicitation (or any hiring pursuant to such advertisement or solicitation) that is not specifically targeted to such employees or consultants.
(c) Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of California, without giving effect to any principles of conflicts of law, whether of the State of California or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.
(d) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
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(e) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be deemed effective for all purposes.
(f) Entire Agreement. The terms of this Agreement, together with the Confidentiality Agreement, are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, regarding Executives service to the Company, including without limitation, the Offer Letter. The Parties further intend that this Agreement, together with the Confidentiality Agreement, shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement or the Confidentiality Agreement. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(g) Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
(h) Dispute Resolution. Executive and the Company affirm the Parties obligations under Section 12 of the Confidentiality Agreement and hereby agree that any dispute, claim or controversy arising under this Agreement shall be subject to Section 12 of the Confidentiality Agreement as a dispute, claim or controversy arising from, relating to or resulting from Executives employment.
(i) Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.
(j) Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local, or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.
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(k) Whistleblower Protections and Trade Secrets. Notwithstanding anything to the contrary contained herein, nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833, notwithstanding anything to the contrary in this Agreement: (i) Executive shall not be in breach of this Agreement, and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (ii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executives attorney, and may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.
9. Prior Employment. Executive represents and warrants that Executives acceptance of employment with the Company has not breached, and the performance of Executives duties hereunder will not breach, any duty owed by Executive to any prior employer or other person. Executive further represents and warrants to the Company that (a) the performance of Executives obligations hereunder will not violate any agreement between Executive and any other person, firm, organization, or other entity; (b) Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by Executive entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement; and (c) Executives performance of Executives duties under this Agreement will not require Executive to, and Executive shall not, rely on in the performance of Executives duties or disclose to the Company or any other person or entity or induce the Company in any way to use or rely on any trade secret or other confidential or proprietary information or material belonging to any previous employer of Executive.
10. Golden Parachute Excise Tax.
(a) Best Pay. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise (Payment) would (i) constitute a parachute payment within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then such Payment will be equal to the Reduced Amount (as defined below). The Reduced Amount will be either (A) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (B) the entire Payment, whichever amount after taking into account
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all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in Executive s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (1) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (2) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (3) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(b) Accounting Firm. The accounting firm engaged by the Company for general tax purposes as of the day prior to the Change in Control will perform the calculations set forth in Section 10(a) above. If the firm so engaged by the Company is serving as the accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company within thirty (30) days before the consummation of a Change in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder will be final, binding and conclusive upon the Company and Executive.
11. Section 409A.
(a) General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date, (Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies the Company that Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any
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provision of this Agreement would cause Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company and Executive shall take commercially reasonable efforts to reform such provision to try to comply with or be exempt from Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A, provided that any such modifications shall not increase the cost or liability to the Company. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) Separation from Service. Notwithstanding any provision to the contrary in this Agreement: (i) no amount that constitutes deferred compensation under Section 409A shall be payable pursuant to Section 6(b) above unless the termination of Executives employment constitutes a separation from service within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations (Separation from Service); (ii) for purposes of Section 409A, Executives right to receive installment payments shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes deferred compensation under Section 409A, such reimbursement or benefit shall be provided no later than December 31st of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.
(c) Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executives Separation from Service to be a specified employee for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executives benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of Executives Separation from Service with the Company or (ii) the date of Executives death. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executives estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.
(d) Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of Executives termination of employment are subject to Executives execution and delivery of a Release, (i) the Company shall deliver the Release to Executive within ten (10) business days following Executives Date of Termination, and the Companys failure to deliver a Release prior to the expiration of such ten (10) business day period shall constitute a waiver of any requirement to execute a Release, (ii) if Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes Executives acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release, and (iii) in any case
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where Executives Date of Termination and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 11(d), Release Expiration Date shall mean the date that is twenty-one (21) days following the date upon which the Company timely delivers the Release to Executive, or, in the event that Executives termination of employment is in connection with an exit incentive or other employment termination program (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of Executives termination of employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or, in the case of any payments subject to Section 11(d)(iii), on the first payroll period to occur in the subsequent taxable year, if later.
12. Employee Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executives own judgment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date and year first above written.
UNITY BIOTECHNOLOGY, INC. |
By: | /s/ Keith R. Leonard |
Name: Keith R. Leonard | ||
Title: CEO | ||
EXECUTIVE |
By: | /s/ Jamie Dananberg |
Name: Jamie Dananberg | ||
Address: | ||
***** | ||
***** |
Exhibit 10.12
UNITY BIOTECHNOLOGY, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement), entered into as of January 29, 2018 (the Effective Date), is made by and between Unity Biotechnology, Inc., a Delaware corporation (the Company) and Dan Marquess (Executive and, together with the Company, the Parties). This Agreement supersedes in its entirety that certain offer letter by and between Executive and the Company dated as of October 28, 2015(Offer Letter).
WHEREAS, the Company desires to assure itself of the continued services of Executive by engaging Executive to perform services as an employee of the Company under the terms hereof;
WHEREAS, Executive desires to provide continued services to the Company on the terms herein provided; and
WHEREAS, the Parties desire to execute this Agreement to supersede the Offer Letter in its entirety and reflect certain changes to Executives employment with the Company effective as of the Effective Date.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1. Employment.
(a) General. The Company shall employ Executive upon the terms and conditions provided herein effective as of the Effective Date.
(b) Position and Duties. Effective on the Effective Date, Executive: (i) shall continue to serve as the Companys Chief Science Officer, with responsibilities, duties, and authority usual and customary for such position, subject to direction by the Chief Executive Officer of the Company (the CEO); (ii) shall continue to report directly to the CEO; and (iii) agrees promptly and faithfully to comply with all present and future policies, requirements, rules and regulations, and reasonable directions and requests, of the Company in connection with the Companys business. At the Companys request, Executive shall serve the Company and/or its subsidiaries and affiliates in such other capacities in addition to the foregoing as the Company shall designate, provided that such additional capacities are consistent with Executives position as the Companys Chief Science Officer. In the event that Executive serves in any one or more of such additional capacities, Executives compensation shall not automatically be increased on account of such additional service.
(c) Performance of Executives Duties. During Executives employment with the Company, and except for periods of illness, vacation, disability, or reasonable leaves of absence or as discussed in Section 1(e) below, Executive shall devote Executives full time and attention to the business and affairs of the Company pursuant to the general direction of the CEO. The rights of Executive under this Agreement shall not be affected by any change in the title, duties, or capacity of Executive during Executives employment with the Company.
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(d) Principal Office. Executive will work principally at the Companys facility located in Brisbane, California.
(e) Exclusivity. Except with the prior written approval of the CEO (which the CEO may grant or withhold in his or her sole and absolute discretion), Executive shall devote substantially all of Executives working time, attention, and energies to the business of the Company, except during any paid vacation or other excused absence periods. Nothing in this section prevents Executive from engaging in additional activities in connection with personal investments and community affairs. Executive may also serve as a member of the board of directors or board of advisors of another organization provided (i) such organization is not a competitor of the Company; (ii) Executive receives prior written approval from the Companys CEO; and (iii) such activities do not individually or in the aggregate interfere with the performance of Executives duties under this Agreement, violate the Companys standards of conduct then in effect, or raise a conflict under the Companys conflict of interest policies.
2. Term. The period of Executives employment under this Agreement shall commence on the Effective Date and shall continue until Executives employment with the Company is terminated pursuant to Section 5 below. The phrase Term of Employment as used in this Agreement shall refer to the entire period of employment of Executive by the Company.
3. Compensation and Related Matters.
(a) Annual Base Salary. During the Term of Employment, Executive shall receive a base salary at the rate of $375,000.00 per annum (as may be increased from time to time, the Annual Base Salary), subject to withholdings and deductions, which shall be paid to Executive in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary shall be reviewed by the CEO, and, as applicable, the Board of Directors of the Company (the Board) and/or the Compensation Committee of the Board, not less than annually.
(b) Annual Bonus. Executive shall be eligible to receive a discretionary annual bonus based on Executives achievement of performance objectives as mutually agreed between Executive and the CEO, such bonus to be targeted at thirty-five percent (35%) of Executives Annual Base Salary (the Annual Bonus). Any Annual Bonus approved by the Board, the Compensation Committee of the Board and/or the CEO shall be paid at the same time annual bonuses are paid to other executives of the Company generally, subject to Executives continuous employment through the date of approval.
(c) Benefits. Executive shall be entitled to participate in such employee and executive benefit plans and programs as the Company may from time to time offer to provide to its executives, subject to the terms and conditions of such plans. Notwithstanding the foregoing, nothing herein is intended, or shall be construed, to require the Company to institute or continue any, or any particular, plan or benefit.
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(d) Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executives duties to the Company in accordance with the Companys applicable expense reimbursement policies and procedures as are in effect from time to time.
(e) Vacation. Executive will be entitled to paid vacation in accordance with the Companys vacation policy.
4. Equity Awards.
(a) Outstanding Equity Awards. As of the Effective Date, Executive holds 984,400 shares of Company common stock, a portion of which remains subject to vesting and a right of repurchase at the original purchase price in favor of the Company. These shares are subject to the Companys 2013 Equity Incentive Plan and an option agreement entered into with the Company.
(b) Future Equity Awards. Executive shall be eligible for such additional stock options and equity awards as may be determined by the Company, in its sole discretion.
(c) Acceleration Upon a Change in Control. Notwithstanding anything herein to the contrary, in the event of a Change in Control (as defined below), the vesting of Executives then outstanding unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting (after giving effect to any vesting in connection with the Change in Control) (the Outstanding Awards), shall accelerate as of immediately prior to such a Change in Control (and, if applicable, all restrictions and rights of repurchase on such awards shall lapse) in respect of 50% of the then-unvested shares of Company common stock subject thereto (such unvested portion, the Unvested Portion). The Unvested Portion of any Outstanding Award subject to performance-based vesting shall convert into a time-based equity award, and the Unvested Portion of each Outstanding Award shall vest in substantially equal installments on each of the first twelve monthly anniversaries of the closing date of the Change in Control, subject to Executives continued service to the Company or its successor through the applicable vesting date. Notwithstanding the foregoing and for the avoidance of doubt, the Unvested Portion of each Outstanding Award shall be subject to accelerated vesting in accordance with Section 6(b)(iii) below.
5. Termination.
(a) At-Will Employment. The Company and Executive acknowledge that Executives employment is and shall continue to be at-will, as defined under applicable law. This means that it is not for any specified period of time and can be terminated by Executive or by the Company at any time, with or without advance notice, and for any or no particular reason or cause. It also means that Executives job duties, title, and responsibility and reporting level, work schedule, compensation, and benefits, as well as the Companys personnel policies and procedures, may be changed with prospective effect, with or without notice, at any time in the sole discretion of the Company (subject to any ramification such changes may have under Section 6 of this Agreement). This at-will nature of Executives employment shall remain
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unchanged during Executives tenure as an employee and may not be changed, except in an express writing signed by Executive and a duly-authorized officer of the Company. If Executives employment terminates for any lawful reason, Executive shall not be entitled to any payments, benefits, damages, award, or compensation other than as provided in this Agreement.
(b) Notice of Termination. During the Term of Employment, any termination of Executives employment by the Company or by Executive (other than by reason of death) shall be communicated by written notice (a Notice of Termination) from one Party hereto to the other Party hereto (i) indicating the specific termination provision in this Agreement relied upon, if any, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated, and (iii) specifying the Date of Termination (as defined below). The failure by the Company to set forth in the Notice of Termination all of the facts and circumstances which contribute to a showing of Cause (as defined below) shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing their rights hereunder.
(c) Termination Date. For purposes of this Agreement, Date of Termination shall mean the date of the termination of Executives employment with the Company specified in a Notice of Termination.
(d) Deemed Resignation. Upon termination of Executives employment for any reason, Executive shall be deemed to have resigned from all offices and board memberships, if any, then held with the Company or any of its affiliates, and, at the Companys request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations.
6. Consequences of Termination.
(a) Payments of Accrued Obligations upon all Terminations of Employment. Upon a termination of Executives employment for any reason, Executive (or Executives estate or legal representative, as applicable) shall be entitled to receive, within thirty (30) days after Executives Date of Termination (or such earlier date as may be required by applicable law): (i) any portion of Executives Annual Base Salary earned through Executives Date of Termination not theretofore paid, (ii) any expenses owed to Executive under Section 3(d) above, (iii) any accrued but unused paid time-off owed to Executive, (iv) any Annual Bonus approved by the Board, Compensation Committee of the Board and/or the CEO on or prior to the Date of Termination but unpaid as of the Date of Termination, and (v) any amount arising from Executives participation in, or benefits under, any employee benefit plans, programs, or arrangements under Section 3(c) above, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs, or arrangements. Except as otherwise set forth in Section 6(b) below, the payments and benefits described in this Section 6(a) shall be the only payments and benefits payable in the event of Executives termination of employment for any reason.
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(b) Severance Payments upon Termination Without Cause or For Good Reason In Connection with a Change in Control. If, during the Term of Employment and within the period beginning three months prior to and ending 18 months following a Change in Control, Executives employment is terminated by the Company without Cause or Executive resigns for Good Reason, in addition to the payments and benefits described in Section 6(a) above, the Company shall, subject to Executives delivery to the Company of a waiver and release of claims agreement in a form approved by the Company that becomes effective and irrevocable in accordance with Section 11(d) hereof (a Release):
(i) The Company shall pay to Executive an amount equal to 0.75 times the sum of (i) Executives Annual Base Salary and (ii) Executives target Annual Bonus. Such amount will be subject to applicable withholdings and payable in a single lump sum cash payment on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) hereof.
(ii) During the period commencing on the Date of Termination and ending on the nine month anniversary thereof or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage under a subsequent employers group health plan (in any case, the COBRA Period), subject to Executives valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the Code) and the regulations thereunder, the Company shall, in its sole discretion, either (A) continue to provide to Executive and Executives dependents, at the Companys sole expense, or (B) reimburse Executive and Executives dependents for coverage under its group health plan (if any) at the same levels in effect on the Date of Termination; provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover Executive or Executives dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments over the COBRA Period (or remaining portion thereof).
(iii) Cause any unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting, held by Executive as of the Date of Termination, to become fully vested and, if applicable, exercisable, and cause all restrictions and rights of repurchase on such awards to lapse with respect to all of the shares of the Companys Common Stock subject thereto.
(c) No Other Severance. The provisions of this Section 6 shall supersede in their entirety any severance payment provisions in any severance plan, policy, program, or other arrangement maintained by the Company except as otherwise approved by the Board.
(d) No Requirement to Mitigate; Survival. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to the contrary in this Agreement, the termination of Executives employment shall not impair the rights or obligations of any Party.
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(e) Definition of Cause. For purposes hereof, Cause shall mean any one of the following: (i) Executives material violation of any applicable material law or regulation respecting the business of the Company; (ii) Executives conviction of, or plea of nolo contendere to, a felony or other crime involving moral turpitude; (iii) any act of dishonesty, fraud, or misrepresentation in relation to Executives duties to the Company which act is materially and demonstrably injurious to the Company; (iv) Executives willful and repeated failure to perform in any material respect Executives duties hereunder after fifteen (15) days notice and an opportunity to cure such failure and a reasonable opportunity to present to the Board Executives position regarding any dispute relating to the existence of such failure (other than on account of disability); (v) Executives failure to attempt in good faith to implement a clear and reasonable directive from the CEO or to comply with any of the Companys policies and procedures which failure is either material or occurs after written notice from the CEO; (vi) any act of gross misconduct which is materially and demonstrably injurious to the Company; or (vii) Executives breach of fiduciary duty owed to the Company.
(f) Definition of Change in Control. For purposes of this Agreement, Change in Control shall mean (i) the acquisition by any person or group of affiliated or associated persons of more than fifty percent (50%) of the outstanding capital stock of the Company or voting securities representing more than fifty percent (50%) of the total voting power of outstanding securities of the Company; (ii) the consummation of a sale of all or substantially all of the assets of the Company to a third party; (iii) the consummation of any merger involving the Company in which, immediately after giving effect to such merger, less than a majority of the total voting power of outstanding stock of the surviving or resulting entity is then beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders of the Company, as applicable, immediately prior to such merger. For the avoidance of doubt and notwithstanding anything herein to the contrary, in no event shall a transaction constitute a Change in Control if: (w) its sole purpose is to change the state of the Companys incorporation; (x) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction; (y) it is effected primarily for the purpose of financing the Company with cash (as determined by the Board without regard to whether such transaction is effectuated by a merger, equity financing, or otherwise); or (z) it constitutes, or includes sales of shares in connection with, the initial public offering of the Companys capital stock. Notwithstanding the foregoing, a Change in Control must also constitute a change in control event, as defined in Treasury Regulation §1.409A-3(i)(5).
(g) Definition of Good Reason. For purposes hereof, Good Reason shall mean any one of the following: (i) the material reduction of Executives base salary or target annual performance bonus, (ii) the assignment to Executive of any duties materially and negatively inconsistent in any respect of Executives position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (including without limitation a requirement to report to any person or entity other than the CEO); or (iii) the Companys material breach of this Agreement, provided, that, in each case, Executive will not be deemed to have Good Reason unless (1) Executive first provides the Company with written notice of the condition giving rise to Good Reason within thirty (30) days of its initial
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occurrence, (2) the Company or the successor company fails to cure such condition within thirty (30) days after receiving such written notice (the Cure Period), and (3) Executives resignation based on such Good Reason is effective within thirty (30) days after the expiration of the Cure Period.
7. Assignment and Successors. The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executives rights or obligations may be assigned or transferred by Executive, other than Executives rights to payments hereunder, which may be transferred only by will, operation of law, or as otherwise provided herein.
8. Miscellaneous Provisions.
(a) Confidentiality Agreement. Executive hereby affirms Executives obligations under that certain At-Will Employment, Confidential Information, Invention and Assignment, and Arbitration Agreement by and between Executive and the Company dated as of November 10, 2015 (the Confidentiality Agreement). The Confidentiality Agreement shall survive the termination of this Agreement and Executives employment with the Company for the applicable period(s) set forth therein. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(b) Non-Solicitation of Employees. For a period of one (1)-year following Executives Date of Termination, Executive shall not, either directly or indirectly (i) solicit for employment by any individual, corporation, firm, or other business, any employees, consultants, independent contractors, or other service providers of the Company or any of its affiliates, or (ii) solicit any employee or consultant of the Company or any of its affiliates to leave the employment or consulting of or cease providing services to the Company or any of its affiliates; provided, however, that the foregoing clauses (i) and (ii) shall not apply to a general advertisement or solicitation (or any hiring pursuant to such advertisement or solicitation) that is not specifically targeted to such employees or consultants.
(c) Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of California, without giving effect to any principles of conflicts of law, whether of the State of California or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.
(d) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
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(e) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be deemed effective for all purposes.
(f) Entire Agreement. The terms of this Agreement, together with the Confidentiality Agreement, are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, regarding Executives service to the Company, including without limitation, the Offer Letter. The Parties further intend that this Agreement, together with the Confidentiality Agreement, shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement or the Confidentiality Agreement. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(g) Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
(h) Dispute Resolution. Executive and the Company affirm the Parties obligations under Section 12 of the Confidentiality Agreement and hereby agree that any dispute, claim or controversy arising under this Agreement shall be subject to Section 12 of the Confidentiality Agreement as a dispute, claim or controversy arising from, relating to or resulting from Executives employment.
(i) Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.
(j) Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local, or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.
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(k) Whistleblower Protections and Trade Secrets. Notwithstanding anything to the contrary contained herein, nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833, notwithstanding anything to the contrary in this Agreement: (i) Executive shall not be in breach of this Agreement, and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (ii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executives attorney, and may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.
9. Prior Employment. Executive represents and warrants that Executives acceptance of employment with the Company has not breached, and the performance of Executives duties hereunder will not breach, any duty owed by Executive to any prior employer or other person. Executive further represents and warrants to the Company that (a) the performance of Executives obligations hereunder will not violate any agreement between Executive and any other person, firm, organization, or other entity; (b) Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by Executive entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement; and (c) Executives performance of Executives duties under this Agreement will not require Executive to, and Executive shall not, rely on in the performance of Executives duties or disclose to the Company or any other person or entity or induce the Company in any way to use or rely on any trade secret or other confidential or proprietary information or material belonging to any previous employer of Executive.
10. Golden Parachute Excise Tax.
(a) Best Pay. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise (Payment) would (i) constitute a parachute payment within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then such Payment will be equal to the Reduced Amount (as defined below). The Reduced Amount will be either (A) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (B) the entire Payment, whichever amount after taking into account
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all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in Executive s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (1) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (2) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (3) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(b) Accounting Firm. The accounting firm engaged by the Company for general tax purposes as of the day prior to the Change in Control will perform the calculations set forth in Section 10(a) above. If the firm so engaged by the Company is serving as the accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company within thirty (30) days before the consummation of a Change in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder will be final, binding and conclusive upon the Company and Executive.
11. Section 409A.
(a) General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date, (Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies the Company that Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any
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provision of this Agreement would cause Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company and Executive shall take commercially reasonable efforts to reform such provision to try to comply with or be exempt from Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A, provided that any such modifications shall not increase the cost or liability to the Company. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) Separation from Service. Notwithstanding any provision to the contrary in this Agreement: (i) no amount that constitutes deferred compensation under Section 409A shall be payable pursuant to Section 6(b) above unless the termination of Executives employment constitutes a separation from service within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations (Separation from Service); (ii) for purposes of Section 409A, Executives right to receive installment payments shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes deferred compensation under Section 409A, such reimbursement or benefit shall be provided no later than December 31st of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.
(c) Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executives Separation from Service to be a specified employee for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executives benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of Executives Separation from Service with the Company or (ii) the date of Executives death. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executives estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.
(d) Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of Executives termination of employment are subject to Executives execution and delivery of a Release, (i) the Company shall deliver the Release to Executive within ten (10) business days following Executives Date of Termination, and the Companys failure to deliver a Release prior to the expiration of such ten (10) business day period shall constitute a waiver of any requirement to execute a Release, (ii) if Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes Executives acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release, and (iii) in any case
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where Executives Date of Termination and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 11(d), Release Expiration Date shall mean the date that is twenty-one (21) days following the date upon which the Company timely delivers the Release to Executive, or, in the event that Executives termination of employment is in connection with an exit incentive or other employment termination program (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of Executives termination of employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or, in the case of any payments subject to Section 11(d)(iii), on the first payroll period to occur in the subsequent taxable year, if later.
12. Employee Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executives own judgment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date and year first above written.
UNITY BIOTECHNOLOGY, INC. | ||
By: | /s/ Keith R. Leonard | |
Name: Keith R. Leonard | ||
Title: CEO | ||
EXECUTIVE | ||
By: | /s/ Dan Marquess | |
Name: Dan Marquess | ||
Address: | ||
***** | ||
***** | ||
|
Exhibit 10.13
UNITY BIOTECHNOLOGY, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement), entered into as of January 29, 2018 (the Effective Date), is made by and between Unity Biotechnology, Inc., a Delaware corporation (the Company) and Tamara Tompkins (Executive and, together with the Company, the Parties). This Agreement supersedes in its entirety that certain offer letter by and between Executive and the Company dated as of May 31, 2017 (Offer Letter).
WHEREAS, the Company desires to assure itself of the continued services of Executive by engaging Executive to perform services as an employee of the Company under the terms hereof;
WHEREAS, Executive desires to provide continued services to the Company on the terms herein provided; and
WHEREAS, the Parties desire to execute this Agreement to supersede the Offer Letter in its entirety and reflect certain changes to Executives employment with the Company effective as of the Effective Date.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1. Employment.
(a) General. The Company shall employ Executive upon the terms and conditions provided herein effective as of the Effective Date.
(b) Position and Duties. Effective on the Effective Date, Executive: (i) shall continue to serve as the Companys General Counsel, with responsibilities, duties, and authority usual and customary for such position, subject to direction by the Chief Executive Officer of the Company (the CEO); (ii) shall continue to report directly to the CEO; and (iii) agrees promptly and faithfully to comply with all present and future policies, requirements, rules and regulations, and reasonable directions and requests, of the Company in connection with the Companys business. At the Companys request, Executive shall serve the Company and/or its subsidiaries and affiliates in such other capacities in addition to the foregoing as the Company shall designate, provided that such additional capacities are consistent with Executives position as the Companys General Counsel. In the event that Executive serves in any one or more of such additional capacities, Executives compensation shall not automatically be increased on account of such additional service.
(c) Performance of Executives Duties. During Executives employment with the Company, and except for periods of illness, vacation, disability, or reasonable leaves of absence or as discussed in Section 1(e) below, Executive shall devote Executives full time and attention to the business and affairs of the Company pursuant to the general direction of the CEO. The rights of Executive under this Agreement shall not be affected by any change in the title, duties, or capacity of Executive during Executives employment with the Company.
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(d) Principal Office. Executive will work principally at the Companys facility located in Brisbane, California.
(e) Exclusivity. Except with the prior written approval of the CEO (which the CEO may grant or withhold in his or her sole and absolute discretion), Executive shall devote substantially all of Executives working time, attention, and energies to the business of the Company, except during any paid vacation or other excused absence periods. Nothing in this section prevents Executive from engaging in additional activities in connection with personal investments and community affairs. Executive may also serve as a member of the board of directors or board of advisors of another organization provided (i) such organization is not a competitor of the Company; (ii) Executive receives prior written approval from the Companys CEO; and (iii) such activities do not individually or in the aggregate interfere with the performance of Executives duties under this Agreement, violate the Companys standards of conduct then in effect, or raise a conflict under the Companys conflict of interest policies.
2. Term. The period of Executives employment under this Agreement shall commence on the Effective Date and shall continue until Executives employment with the Company is terminated pursuant to Section 5 below. The phrase Term of Employment as used in this Agreement shall refer to the entire period of employment of Executive by the Company.
3. Compensation and Related Matters.
(a) Annual Base Salary. During the Term of Employment, Executive shall receive a base salary at the rate of $330,000.00 per annum (as may be increased from time to time, the Annual Base Salary), subject to withholdings and deductions, which shall be paid to Executive in accordance with the customary payroll practices and procedures of the Company. Such Annual Base Salary shall be reviewed by the CEO, and, as applicable, the Board of Directors of the Company (the Board) and/or the Compensation Committee of the Board, not less than annually.
(b) Annual Bonus. Executive shall be eligible to receive a discretionary annual bonus based on Executives achievement of performance objectives as mutually agreed between Executive and the CEO, such bonus to be targeted at thirty-five percent (35%) of Executives Annual Base Salary (the Annual Bonus). Any Annual Bonus approved by the Board, the Compensation Committee of the Board and/or the CEO shall be paid at the same time annual bonuses are paid to other executives of the Company generally, subject to Executives continuous employment through the date of approval.
(c) Benefits. Executive shall be entitled to participate in such employee and executive benefit plans and programs as the Company may from time to time offer to provide to its executives, subject to the terms and conditions of such plans. Notwithstanding the foregoing, nothing herein is intended, or shall be construed, to require the Company to institute or continue any, or any particular, plan or benefit.
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(d) Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executives duties to the Company in accordance with the Companys applicable expense reimbursement policies and procedures as are in effect from time to time.
(e) Vacation. Executive will be entitled to paid vacation in accordance with the Companys vacation policy.
4. Equity Awards.
(a) Outstanding Equity Awards. As of the Effective Date, Executive holds options to purchase 675,000 shares of Company common stock, a portion of which may remain subject to vesting. Each stock option is subject to the Companys 2013 Equity Incentive Plan and an option agreement entered into with the Company.
(b) Future Equity Awards. Executive shall be eligible for such additional stock options and equity awards as may be determined by the Company, in its sole discretion.
(c) Acceleration Upon a Change in Control. Notwithstanding anything herein to the contrary, in the event of a Change in Control (as defined below), the vesting of Executives then outstanding unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting (after giving effect to any vesting in connection with the Change in Control) (the Outstanding Awards), shall accelerate as of immediately prior to such a Change in Control (and, if applicable, all restrictions and rights of repurchase on such awards shall lapse) in respect of 50% of the then-unvested shares of Company common stock subject thereto (such unvested portion, the Unvested Portion). The Unvested Portion of any Outstanding Award subject to performance-based vesting shall convert into a time-based equity award, and the Unvested Portion of each Outstanding Award shall vest in substantially equal installments on each of the first twelve monthly anniversaries of the closing date of the Change in Control, subject to Executives continued service to the Company or its successor through the applicable vesting date. Notwithstanding the foregoing and for the avoidance of doubt, the Unvested Portion of each Outstanding Award shall be subject to accelerated vesting in accordance with Section 6(b)(iii) below.
5. Termination.
(a) At-Will Employment. The Company and Executive acknowledge that Executives employment is and shall continue to be at-will, as defined under applicable law. This means that it is not for any specified period of time and can be terminated by Executive or by the Company at any time, with or without advance notice, and for any or no particular reason or cause. It also means that Executives job duties, title, and responsibility and reporting level, work schedule, compensation, and benefits, as well as the Companys personnel policies and procedures, may be changed with prospective effect, with or without notice, at any time in the sole discretion of the Company (subject to any ramification such changes may have under Section 6 of this Agreement). This at-will nature of Executives employment shall remain unchanged during Executives tenure as an employee and may not be changed, except in an express writing signed by Executive and a duly-authorized officer of the Company. If Executives employment terminates for any lawful reason, Executive shall not be entitled to any payments, benefits, damages, award, or compensation other than as provided in this Agreement.
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(b) Notice of Termination. During the Term of Employment, any termination of Executives employment by the Company or by Executive (other than by reason of death) shall be communicated by written notice (a Notice of Termination) from one Party hereto to the other Party hereto (i) indicating the specific termination provision in this Agreement relied upon, if any, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated, and (iii) specifying the Date of Termination (as defined below). The failure by the Company to set forth in the Notice of Termination all of the facts and circumstances which contribute to a showing of Cause (as defined below) shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing their rights hereunder.
(c) Termination Date. For purposes of this Agreement, Date of Termination shall mean the date of the termination of Executives employment with the Company specified in a Notice of Termination.
(d) Deemed Resignation. Upon termination of Executives employment for any reason, Executive shall be deemed to have resigned from all offices and board memberships, if any, then held with the Company or any of its affiliates, and, at the Companys request, Executive shall execute such documents as are necessary or desirable to effectuate such resignations.
6. Consequences of Termination.
(a) Payments of Accrued Obligations upon all Terminations of Employment. Upon a termination of Executives employment for any reason, Executive (or Executives estate or legal representative, as applicable) shall be entitled to receive, within thirty (30) days after Executives Date of Termination (or such earlier date as may be required by applicable law): (i) any portion of Executives Annual Base Salary earned through Executives Date of Termination not theretofore paid, (ii) any expenses owed to Executive under Section 3(d) above, (iii) any accrued but unused paid time-off owed to Executive, (iv) any Annual Bonus approved by the Board, Compensation Committee of the Board and/or the CEO on or prior to the Date of Termination but unpaid as of the Date of Termination, and (v) any amount arising from Executives participation in, or benefits under, any employee benefit plans, programs, or arrangements under Section 3(c) above, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs, or arrangements. Except as otherwise set forth in Section 6(b) below, the payments and benefits described in this Section 6(a) shall be the only payments and benefits payable in the event of Executives termination of employment for any reason.
(b) Severance Payments upon Termination Without Cause or For Good Reason In Connection with a Change in Control. If, during the Term of Employment and within the period beginning three months prior to and ending 18 months following a Change in Control, Executives employment is terminated by the Company without Cause or Executive resigns for
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Good Reason, in addition to the payments and benefits described in Section 6(a) above, the Company shall, subject to Executives delivery to the Company of a waiver and release of claims agreement in a form approved by the Company that becomes effective and irrevocable in accordance with Section 11(d) hereof (a Release):
(i) The Company shall pay to Executive an amount equal to 0.75 times the sum of (i) Executives Annual Base Salary and (ii) Executives target Annual Bonus. Such amount will be subject to applicable withholdings and payable in a single lump sum cash payment on the first regular payroll date following the date the Release becomes effective and irrevocable or as otherwise provided in Section 11(d) hereof.
(ii) During the period commencing on the Date of Termination and ending on the nine month anniversary thereof or, if earlier, the date on which Executive becomes eligible for comparable replacement coverage under a subsequent employers group health plan (in any case, the COBRA Period), subject to Executives valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the Code) and the regulations thereunder, the Company shall, in its sole discretion, either (A) continue to provide to Executive and Executives dependents, at the Companys sole expense, or (B) reimburse Executive and Executives dependents for coverage under its group health plan (if any) at the same levels in effect on the Date of Termination; provided, however, that if (1) any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover Executive or Executives dependents under its group health plans, or (3) the Company cannot provide the benefit without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments over the COBRA Period (or remaining portion thereof).
(iii) Cause any unvested equity awards, including any stock options, restricted stock awards and any such awards subject to performance-based vesting, held by Executive as of the Date of Termination, to become fully vested and, if applicable, exercisable, and cause all restrictions and rights of repurchase on such awards to lapse with respect to all of the shares of the Companys Common Stock subject thereto.
(c) No Other Severance. The provisions of this Section 6 shall supersede in their entirety any severance payment provisions in any severance plan, policy, program, or other arrangement maintained by the Company except as otherwise approved by the Board.
(d) No Requirement to Mitigate; Survival. Executive shall not be required to mitigate the amount of any payment provided for under this Agreement by seeking other employment or in any other manner. Notwithstanding anything to the contrary in this Agreement, the termination of Executives employment shall not impair the rights or obligations of any Party.
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(e) Definition of Cause. For purposes hereof, Cause shall mean any one of the following: (i) Executives material violation of any applicable material law or regulation respecting the business of the Company; (ii) Executives conviction of, or plea of nolo contendere to, a felony or other crime involving moral turpitude; (iii) any act of dishonesty, fraud, or misrepresentation in relation to Executives duties to the Company which act is materially and demonstrably injurious to the Company; (iv) Executives willful and repeated failure to perform in any material respect Executives duties hereunder after fifteen (15) days notice and an opportunity to cure such failure and a reasonable opportunity to present to the Board Executives position regarding any dispute relating to the existence of such failure (other than on account of disability); (v) Executives failure to attempt in good faith to implement a clear and reasonable directive from the CEO or to comply with any of the Companys policies and procedures which failure is either material or occurs after written notice from the CEO; (vi) any act of gross misconduct which is materially and demonstrably injurious to the Company; or (vii) Executives breach of fiduciary duty owed to the Company.
(f) Definition of Change in Control. For purposes of this Agreement, Change in Control shall mean (i) the acquisition by any person or group of affiliated or associated persons of more than fifty percent (50%) of the outstanding capital stock of the Company or voting securities representing more than fifty percent (50%) of the total voting power of outstanding securities of the Company; (ii) the consummation of a sale of all or substantially all of the assets of the Company to a third party; (iii) the consummation of any merger involving the Company in which, immediately after giving effect to such merger, less than a majority of the total voting power of outstanding stock of the surviving or resulting entity is then beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) in the aggregate by the stockholders of the Company, as applicable, immediately prior to such merger. For the avoidance of doubt and notwithstanding anything herein to the contrary, in no event shall a transaction constitute a Change in Control if: (w) its sole purpose is to change the state of the Companys incorporation; (x) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction; (y) it is effected primarily for the purpose of financing the Company with cash (as determined by the Board without regard to whether such transaction is effectuated by a merger, equity financing, or otherwise); or (z) it constitutes, or includes sales of shares in connection with, the initial public offering of the Companys capital stock. Notwithstanding the foregoing, a Change in Control must also constitute a change in control event, as defined in Treasury Regulation §1.409A-3(i)(5).
(g) Definition of Good Reason. For purposes hereof, Good Reason shall mean any one of the following: (i) the material reduction of Executives base salary or target annual performance bonus, (ii) the assignment to Executive of any duties materially and negatively inconsistent in any respect of Executives position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities (including without limitation a requirement to report to any person or entity other than the CEO); or (iii) the Companys material breach of this Agreement, provided, that, in each case, Executive will not be deemed to have Good Reason unless (1) Executive first provides the Company with written notice of the condition giving rise to Good Reason within thirty (30) days of its initial occurrence, (2) the Company or the successor company fails to cure such condition within thirty (30) days after receiving such written notice (the Cure Period), and (3) Executives resignation based on such Good Reason is effective within thirty (30) days after the expiration of the Cure Period.
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7. Assignment and Successors. The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executives rights or obligations may be assigned or transferred by Executive, other than Executives rights to payments hereunder, which may be transferred only by will, operation of law, or as otherwise provided herein.
8. Miscellaneous Provisions.
(a) Confidentiality Agreement. Executive hereby affirms Executives obligations under that certain At-Will Employment, Confidential Information, Invention and Assignment, and Arbitration Agreement by and between Executive and the Company dated as of June 27, 2017 (the Confidentiality Agreement). The Confidentiality Agreement shall survive the termination of this Agreement and Executives employment with the Company for the applicable period(s) set forth therein. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(b) Non-Solicitation of Employees. For a period of one (1)-year following Executives Date of Termination, Executive shall not, either directly or indirectly (i) solicit for employment by any individual, corporation, firm, or other business, any employees, consultants, independent contractors, or other service providers of the Company or any of its affiliates, or (ii) solicit any employee or consultant of the Company or any of its affiliates to leave the employment or consulting of or cease providing services to the Company or any of its affiliates; provided, however, that the foregoing clauses (i) and (ii) shall not apply to a general advertisement or solicitation (or any hiring pursuant to such advertisement or solicitation) that is not specifically targeted to such employees or consultants.
(c) Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of California, without giving effect to any principles of conflicts of law, whether of the State of California or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.
(d) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
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(e) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be deemed effective for all purposes.
(f) Entire Agreement. The terms of this Agreement, together with the Confidentiality Agreement, are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, regarding Executives service to the Company, including without limitation, the Offer Letter. The Parties further intend that this Agreement, together with the Confidentiality Agreement, shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement or the Confidentiality Agreement. Notwithstanding the foregoing, in the event of any conflict between the terms of the Confidentiality Agreement and the terms of this Agreement, the terms of this Agreement shall prevail.
(g) Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
(h) Dispute Resolution. Executive and the Company affirm the Parties obligations under Section 12 of the Confidentiality Agreement and hereby agree that any dispute, claim or controversy arising under this Agreement shall be subject to Section 12 of the Confidentiality Agreement as a dispute, claim or controversy arising from, relating to or resulting from Executives employment.
(i) Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.
(j) Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local, or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.
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(k) Whistleblower Protections and Trade Secrets. Notwithstanding anything to the contrary contained herein, nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of state or federal law or regulation (including the right to receive an award for information provided to any such government agencies). Furthermore, in accordance with 18 U.S.C. § 1833, notwithstanding anything to the contrary in this Agreement: (i) Executive shall not be in breach of this Agreement, and shall not be held criminally or civilly liable under any federal or state trade secret law (x) for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (y) for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (ii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executives attorney, and may use the trade secret information in the court proceeding, if Executive files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.
9. Prior Employment. Executive represents and warrants that Executives acceptance of employment with the Company has not breached, and the performance of Executives duties hereunder will not breach, any duty owed by Executive to any prior employer or other person. Executive further represents and warrants to the Company that (a) the performance of Executives obligations hereunder will not violate any agreement between Executive and any other person, firm, organization, or other entity; (b) Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by Executive entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement; and (c) Executives performance of Executives duties under this Agreement will not require Executive to, and Executive shall not, rely on in the performance of Executives duties or disclose to the Company or any other person or entity or induce the Company in any way to use or rely on any trade secret or other confidential or proprietary information or material belonging to any previous employer of Executive.
10. Golden Parachute Excise Tax.
(a) Best Pay. Any provision of this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company pursuant to this Agreement or otherwise (Payment) would (i) constitute a parachute payment within the meaning of Section 280G of the Code and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then such Payment will be equal to the Reduced Amount (as defined below). The Reduced Amount will be either (A) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (B) the entire Payment, whichever amount after taking into account
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all applicable federal, state, and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes), results in Executive s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (A) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method). Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (1) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (2) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (3) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(b) Accounting Firm. The accounting firm engaged by the Company for general tax purposes as of the day prior to the Change in Control will perform the calculations set forth in Section 10(a) above. If the firm so engaged by the Company is serving as the accountant or auditor for the acquiring company, the Company will appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company will bear all expenses with respect to the determinations by such firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder will provide its calculations, together with detailed supporting documentation, to the Company within thirty (30) days before the consummation of a Change in Control (if requested at that time by the Company) or such other time as requested by the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it will furnish the Company with documentation reasonably acceptable to the Company that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder will be final, binding and conclusive upon the Company and Executive.
11. Section 409A.
(a) General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date, (Section 409A) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies the Company that Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any
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provision of this Agreement would cause Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company and Executive shall take commercially reasonable efforts to reform such provision to try to comply with or be exempt from Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A, provided that any such modifications shall not increase the cost or liability to the Company. To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company of the applicable provision without violating the provisions of Section 409A.
(b) Separation from Service. Notwithstanding any provision to the contrary in this Agreement: (i) no amount that constitutes deferred compensation under Section 409A shall be payable pursuant to Section 6(b) above unless the termination of Executives employment constitutes a separation from service within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations (Separation from Service); (ii) for purposes of Section 409A, Executives right to receive installment payments shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes deferred compensation under Section 409A, such reimbursement or benefit shall be provided no later than December 31st of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.
(c) Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executives Separation from Service to be a specified employee for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executives benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of Executives Separation from Service with the Company or (ii) the date of Executives death. Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executives estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.
(d) Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of Executives termination of employment are subject to Executives execution and delivery of a Release, (i) the Company shall deliver the Release to Executive within ten (10) business days following Executives Date of Termination, and the Companys failure to deliver a Release prior to the expiration of such ten (10) business day period shall constitute a waiver of any requirement to execute a Release, (ii) if Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes Executives acceptance of the Release thereafter, Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release, and (iii) in any case
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where Executives Date of Termination and the Release Expiration Date fall in two separate taxable years, any payments required to be made to Executive that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. For purposes of this Section 11(d), Release Expiration Date shall mean the date that is twenty-one (21) days following the date upon which the Company timely delivers the Release to Executive, or, in the event that Executives termination of employment is in connection with an exit incentive or other employment termination program (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of Executives termination of employment are delayed pursuant to this Section 11(d), such amounts shall be paid in a lump sum on the first payroll date following the date that Executive executes and does not revoke the Release (and the applicable revocation period has expired) or, in the case of any payments subject to Section 11(d)(iii), on the first payroll period to occur in the subsequent taxable year, if later.
12. Employee Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executives own judgment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date and year first above written.
UNITY BIOTECHNOLOGY, INC. | ||
By: | /s/ Keith R. Leonard | |
Name: Keith R. Leonard | ||
Title: CEO | ||
EXECUTIVE | ||
By: | /s/ Tamara Tompkins | |
Name: Tamara Tompkins | ||
Address: | ||
***** | ||
***** |
Exhibit 10.14(a)
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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COMPOUND LIBRARY AND OPTION AGREEMENT
This Compound Library and Option Agreement (the Agreement), dated as of February 2nd, 2016 (the Signing Date), is made by and between Ascentage Pharma Group Corp. Ltd., a Hong Kong corporation (Ascentage), with a business address at 11/F, AXA CENTRE, Gloucester Road, Wanchai, Hong Kong, and Unity Biotechnology, Inc., a Delaware corporation (Unity), with a business address at 1700 Owens Street, Suite 535, San Francisco, California 95158. Ascentage and Unity are sometimes referred to herein as individually as a party and collectively as the parties.
BACKGROUND
A. Ascentage is in the business of developing and commercializing therapeutic agents for the treatment of cancer and related conditions;
B. Unity is in the business of developing and commercializing therapeutic agents intended to delay aging and treat age-related conditions;
C. Unity and Ascentage have entered into that certain license agreement (the APG-1252 License Agreement) of even date herewith pursuant to which Unity obtained a license to commercialize that certain BCL-2/BCL-xL inhibitor known as APG-1252 for treatment of age-related conditions.
D. Ascentage possesses a collection of additional BCL-2/BCL-xL inhibitor compounds, some of which may be useful in the treatment of age-related conditions;
E. Unity and Ascentage have entered into a research agreement of even date herewith pursuant to which Unity will fund research by Ascentage intended to discover additional BCL-2/BCL-xL inhibitor compounds;
F. Unity desires to obtain the right to screen Ascentages collection of BCL-2/BCL-xL inhibitor compounds as well as any additional BCL-2/BCL-xL inhibitor compounds discovered by Ascentage during the term of this Agreement (including any such compounds discovered pursuant to the aforementioned research agreement) to identify compounds with potential utility in the treatment of age-related conditions other than Oncology Indications (as defined below);
G. Ascentage is willing to permit Unity to conduct the above described screening on the terms and conditions set forth in this Agreement.
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NOW, THEREFORE, for and in consideration of the covenants, conditions and undertakings hereinafter set forth, it is agreed by and between the parties as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms will have the meanings set forth below:
1.1 Active Compound means an Ascentage Active Compound or a Unity Active Compound, as applicable.
1.2 Affiliate means with respect to a particular party, another person that controls, is controlled by or is under common control with such party. For the purposes of the definition in this Section 1.2, the word control (including, with correlative meaning, the terms controlled by or under the common control with) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of at least fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.
1.3 Ascentage Active Compound means any Compound designated by Ascentage as an Active Compound in accordance with the Section 2.6.
1.4 Ascentage Future Compounds means any BCL-2/BCL-xL inhibitor compounds generated by or on behalf of Ascentage during the Term, but specifically excluding Unity Future Compounds.
1.5 Ascentage Intellectual Property means all Patents and Technology owned or Controlled by Ascentage or its Affiliates during the Term.
1.6 Carved Out Indication means any indication that is not an Oncology Indication and that [***] a compound that acts through the BCL-2 pathway to the [***] (e.g., [***]).
1.7 Collaboration Period means the period of time commencing on the Effective Date and continuing until expiration or earlier termination of the Research Agreement.
1.8 Compounds means (a) the Existing Compounds, (b) the Future Ascentage Compounds, and (iii) the Unity Compounds, and Compound means a single compound from any of the foregoing categories of compounds.
1.9 Compound Information means with respect to a given Compound, a brief summary of all material data readily available and known to Ascentage that relate to the biological activity of such Compound.
1.10 Compound-Related Patents means Patents within the Ascentage Intellectual Property that are directed to one or more Compounds.
1.11 Compound Screening has the meaning provided in Section 2.4.
1.12 Control and its correlative terms, Controlled or Controls shall mean, with respect to any Patent or item of Technology, that a Party or one of its Affiliates owns or possesses rights to such Patent or item of Technology sufficient to grant the access, license or sublicense contemplated in this Agreement without violating the terms of any agreement or other arrangement with any Third Party.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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1.13 Effective Date shall mean the date on which the Second Amendment takes effect.
1.14 [***] means the [***] to be negotiated by the parties pursuant to Section 4.2.3(c)(iv).
1.15 Exclusive Evaluation Period shall mean with respect to a given compound, the period commencing on the date of delivery of the New Compound Report disclosing such compound (and in the case of a Unity Compound, the [***]) and ending on the last day of the [***] following the [***] in which the Exclusive Evaluation Period commenced.
1.16 Existing Compounds means the [***] BCL-2/BCL-xL inhibitor compounds collectively comprising Ascentages BCL-2/BCL-xL library as of the Effective Date, and includes the [***] BCL-2/BCL-xL inhibitor compounds previously provided to Unity by Ascentage for analysis under that certain Materials Transfer Agreement entered into by the parties on March 19, 2015 (Prior Compounds). Notwithstanding the foregoing, APG-1252 shall not be considered an Existing Compound for purposes of this Agreement.
1.17 Grace Period means a period of [***] ([***]) to [***] ([***]) [***] following the expiration or earlier termination of the Collaboration Period. The length of the Grace Period shall be determined based on the duration of the Collaboration Period in accordance with the following:
1.17.1 If the duration of the Collaboration Period is [***] but less than [***], the Grace Period shall be [***] ([***]) [***];
1.17.2 If the duration of the Collaboration Period is [***] but less than [***], the Grace Period shall be [***] ([***]) [***];
1.17.3 If the duration of the Collaboration Period is at least [***] but less than [***], the Grace Period shall be [***] ([***]) [***];
1.17.4 If the duration of the Collaboration Period is [***] or more, the Grace Period shall be [***] ([***]) [***].
1.18 Greater China means the Peoples Republic of China, Hong Kong, Macau and Taiwan.
1.19 IND means (a) an Investigational New Drug Application as defined in the United States Federal Food, Drug and Cosmetic Act, as revised, or (b) the equivalent application in any other regulatory jurisdiction outside of the United States of America, the filing of which is necessary to commence or conduct clinical testing of a pharmaceutical product in humans in such jurisdiction.
1.20 Jiangsu Ascentage means Jiangsu Ascentage Pharma Development Ltd. (江苏亚盛医药开发有限公司).
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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1.21 JRC or Joint Research Committee has the meaning set forth in Section 5.1.
1.22 Library means, at any point in time, the collection of Compounds then available for screening in accordance with the terms of this Agreement.
1.23 Oncology Indications means indications where [***].
1.24 Patents means the rights and interests in and to issued patents and pending patent applications in any country, including all provisional applications, substitutions, continuations, continuations-in-part, divisions, and renewals, all letters patent granted thereon, and all reissues, reexaminations and extensions thereof.
1.25 Research Agreement means that certain research agreement of even date herewith, a copy of which is attached as Exhibit 1.25.
1.26 Senolytic Test means the assay described in Exhibit 1.26, Part A hereto.
1.27 Technology means all inventions, discoveries, improvements, trade secrets and proprietary methods and materials, whether or not patentable, directly relating to one or more Compounds, in each case that is Controlled by Ascentage or its Affiliates during the term of this Agreement and is necessary or reasonably useful to Unity in exercising its rights or performing its obligations under this Agreement, including (a) methods of production or use of, Compounds and (b) data, formulations and techniques arising from the synthesis or characterization of Compounds.
1.28 Third Party means any person or entity other than Unity and Ascentage.
1.29 UM License Agreement means that certain license agreement entered into by Ascentage and the Regents of the University of Michigan (UM) effective as of December 1, 2010, as amended by all amendments to such license agreement existing as of the Effective Date.
1.30 Unity Active Compounds means any Compound designated by Unity as an Active Compound in accordance with the Section 2.5.
1.31 Unity Compounds means the chemical compounds discovered or synthesized by (a) Ascentage pursuant to the Research Agreement and/or (b) [***] pursuant to the UM Sponsored Research Agreement (as further defined in Section 2.3.1 below).
ARTICLE 2
COMPOUND SELECTION AND EVALUATION
2.1 Objectives. The parties shall each have a right to screen the Library to identify Compounds of potential interest as further described in this Article 2.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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2.2 Existing Compound Delivery.
2.2.1 Within [***] ([***]) business days following the Effective Date, Ascentage shall provide Unity with access to the Compound Information described in Section 1.9 for all Existing Compounds. In addition, together with such Compound Information Ascentage shall provide Unity with the chemical structure of all Existing Compounds, provided that Ascentage shall not be obligated to provide Unity with the structure of any Existing Compounds for which Patents have been not been filed until such time as Patents have been filed with respect to such Compounds. Ascentage agrees to provide Unity with periodic updates disclosing to Unity the structures of any Compounds for which Patents were recently filed.
2.2.2 Upon Unitys request, Ascentage shall supply to Unity at least [***] ([***]) [***] of each of the Existing Compounds requested by Unity, with each such Compound to be supplied in a formulation as described in Exhibit 2.2. Ascentage shall use its commercially reasonable efforts to ensure delivery of such newly synthesized Compounds within [***] ([***]) business days following the date when Ascentage receives Unitys written request. At the time of delivery of such Existing Compounds, Ascentage shall also provide Unity with any Compound Information for such Compounds not previously supplied to Unity pursuant to Section 2.2.1. Ascentage shall provide supplemental information regarding the Compounds as reasonably requested by Unity for use in Unitys screening and evaluation of the Compounds [***]. Notwithstanding the foregoing, the parties acknowledge that Ascentage has previously provided Unity with the Prior Compounds and that Ascentages supply obligation under this Section 2.2.2 with respect to such Prior Compounds (other than with respect to Compound Information and chemical structures for such Prior Compounds not previously supplied to Unity) is deemed satisfied in full as of the Effective Date.
2.2.3 To the extent that Ascentage does not possess sufficient quantities of one or more Existing Compounds to provide Unity with at least [***] ([***]) [***] of the Existing Compound(s) requested by Unity under Section 2.2.2, Ascentage agrees to synthesize additional quantities of such Compound(s) for delivery to Unity and Unity shall reimburse Ascentage for such delivered Compound(s) at [***], which shall not exceed [***] Dollars ($[***]) per Compound without Unitys prior written approval. Ascentage shall [***] delivery of such newly synthesized Compounds within [***] ([***]) business days following the date when Ascentage receives Unitys written request. Notwithstanding the foregoing, in the event that Ascentage projects that [***] will exceed [***] Dollars ($[***]) and Unity does not agree to reimburse Ascentage for such additional projected costs, Ascentage shall not be obligated to supply Unity with the requested quantities of such Compound but shall at Unitys request [***] provide Unity or its designee with access and licenses to such Ascentage Intellectual Property as may be reasonably required to enable Unity or its designee to synthesize such Compound on its own, provided that Unity agrees that the licenses granted to it under this Section 2.2.3 shall: (a) be limited to the production of the named Compound(s) only, and (b) be limited to production of quantities of such Compound(s) of [***] or less.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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2.3 Addition of Ascentage Future Compounds and Unity Compounds to the Library.
2.3.1 UM Sponsored Research Agreement. Unity agrees to provide a total of $[***] in funding over [***] years following the Effective Date to be used to fund the discovery of additional BCL-2/BCL-xL inhibitor compounds [***]. Promptly following the Effective Date, the parties shall agree upon and implement a strategy for providing such funding to UM through that certain research agreement entered into by Ascentage and UM effective as of September 24, 2013 (UM SRA), which strategy shall be based on the following principles: (a) the parties shall amend the UM SRA to (i) add a new Project Plan to accommodate such additional funding and (ii)ensure that the intellectual property generated by [***] in the performance of such new Project Plan is subject to the option described in Section 8.2 of the UM SRA, and (b) the parties shall agree upon and update the Research Agreement to include a process by which Ascentage shall exercise the option under Section 8.2 of the UM SRA with respect to inventions arising under the new Project Plan that Unity would like included within the Ascentage Intellectual Property for purposes of this Agreement and/or one or more Compound License Agreements.
2.3.2 Notification. Within [***] ([***]) business days after the end of each [***], Ascentage will supply to Unity a brief written report disclosing to Unity all Ascentage Future Compounds and Unity Compounds discovered by Ascentage [***] during the previous [***] (New Compound Report), such report to include the structure of each Compound disclosed therein and any additional information [***] available and known to Ascentage that [***] relates to such Compounds. Together with each such New Compound Report, Ascentage will supply to Unity at least [***] ([***]) [***] of each of the Unity Compounds disclosed in such report in a formulation as described in Exhibit 2.2 or as otherwise specified in the Research Agreement or UM Sponsored Research Agreement.
2.3.3 Addition to Library.
(a) Ascentage Future Compounds.
(i) During the Exclusive Evaluation Period, Ascentage shall have the exclusive right to assess the Ascentage Future Compounds disclosed in such report and to designate one or more of such Ascentage Future Compounds as Ascentage Active Compounds, with any such designations being made in accordance with the procedures described in Section 2.6 below.
(ii) Following the end of the Exclusive Evaluation Period, any Ascentage Future Compounds disclosed in the applicable New Compound Report shall thereafter be included within the Library and all such compounds that have not been designated as Ascentage Active Compounds shall thereafter be available for designation by either Party as an Active Compound in accordance with Sections 2.5 and 2.6 (as applicable). Upon addition of such Ascentage Future Compounds to the Library, Ascentage will promptly supply to Unity at least [***] ([***]) [***] of each such Ascentage Future Compound for screening and evaluation purposes.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(b) Unity Compounds. During the Exclusive Evaluation Period following the Unitys receipt of a given New Compound Report, Unity shall have the exclusive right to assess the Unity Compounds disclosed in such report and to designate one or more of such Unity Compounds as Unity Active Compounds, with any such designations being made in accordance with the procedures described in Section 2.5 below. Following the end of the Exclusive Evaluation Period, any Unity Compounds disclosed in the applicable New Compound Report shall thereafter be included within the Library and all such compounds that have not been designated as Unity Active Compounds shall thereafter be available for designation by either Party as an Active Compound in accordance with Sections 2.5 and 2.6 (as applicable).
2.4 Compound Screening and Analysis. During the Term, Unity shall have the right to screen and evaluate the Compounds in the Library to identify Compounds with senolytic activity and potential therapeutic utility for the prophylaxis and treatment of, and palliation of symptoms associated with, indications other than Oncology Indications (collectively, Compound Screening). Should Unity identify through such Compound Screening Compounds in the Library of interest to Unity for which Patents have not been filed, upon Unitys request, Ascentage agrees to use commercially reasonable efforts to promptly file Patents with respect such Compounds and thereafter (or to allow Unity to do so at its expense in accordance with Section 7.2) shall disclose to Unity the chemical structure of such Compounds. For clarity, Unity expressly agrees that it shall use the Compounds and Compound Information transferred to Unity solely for the limited purposes of Compound Screening and the evaluation, development and optimization of Compounds in accordance with the terms of this Agreement and that the Compounds and Compound Information transferred to Unity shall not otherwise be used in conducting any screening or research aimed at identifying Compounds for use in the prophylaxis or treatment of Oncology Indications.
2.5 Designation of Active Compounds by Unity. Unity shall have the right to designate Compounds as Active Compounds, as set forth in this Section 2.5.
2.5.1 General.
(a) Existing Compounds. Commencing on the Effective Date and continuing for the duration of Term, Unity shall have the right to designate one or more Existing Compounds as Unity Active Compound, by providing Ascentage with written notice as described in Section 2.5.2(a) below and subject to the requirements of Section 2.5.2(b) below. Notwithstanding anything to the contrary in this Agreement, Unity acknowledges and agrees that the [***].
(b) Ascentage Future Compounds. Commencing on expiration of the Exclusive Evaluation Period for the applicable Ascentage Future Compound and continuing for the duration of Term, Unity may designate one or more Ascentage Future Compounds disclosed in such report as a Unity Active Compound by providing Ascentage with written notice as described in 2.5.2(a) below and subject to the requirements of Section 2.5.2(b) below.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(c) Unity Compounds. Commencing on the date of Unitys receipt of any given New Compound Report and continuing for the duration of Term, Unity shall have the right to designate one or more Unity Compounds as Unity Active Compound, by providing Ascentage with written notice as described in Section 2.5.2(a) below and subject to the requirements of Section 2.5.2(b) below.
2.5.2 Designation Process and Requirements.
(a) Notice. To designate an Existing Compound, an Ascentage Future Compound or a Unity Compound as a Unity Active Compound, Unity shall so notify Ascentage of such selection in writing and provide Ascentage a description of the applicable Compound, including to the extent the chemical structure of the applicable Compound has been provided to Unity by Ascentage, its chemical structure.
(b) Additional Requirements. Each such designation shall be effective upon receipt by Ascentage provided that:
(i) The Compound to be designated as a Unity Active Compound is not currently a validly designated Ascentage Active Compound; and
(ii) The designation of such Compound as a Unity Active Compound does not bring the total number of Unity Active Compounds to more than fifteen (15).
2.6 Designation of Active Compounds by Ascentage.
2.6.1 General.
(a) Existing Compounds. Without prejudice to and acknowledging the designation of Ascentage Active Compounds as set forth in Section 2.5.1(a), commencing on the [***] ([***]) [***] anniversary of the Effective Date and continuing for the duration of Term, Ascentage shall have the right to designate one or more Existing Compounds as Ascentage Active Compounds, by providing Unity with written notice as described in Section 2.6.2(a) below and subject to the requirements of Section 2.6.2(b) below.
(b) Ascentage Future Compounds. Commencing on the date of Unitys receipt of any given New Compound Report and continuing for the duration of Term, Ascentage may designate one or more Ascentage Future Compounds disclosed in such report as an Ascentage Active Compound by providing Unity with written notice as described in 2.6.2(a) below and subject to the requirements of Section 2.6.2(b) below.
(c) Unity Compounds. Commencing on expiration of the Exclusive Evaluation Period for the applicable Unity Compound, Ascentage shall have the right to designate one or more Unity Compounds as Ascentage Active Compound, by providing Unity with written notice as described in Section 2.6.2(a) below and subject to the requirements of Section 2.6.2(b) below.
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2.6.2 Designation Process and Requirements.
(a) Notice. To designate an Existing Compound, an Ascentage Future Compound or a Unity Compound as an Ascentage Active Compound, Ascentage shall so notify Unity of such selection in writing and provide Unity a description of the applicable Compound, including its chemical structure and a copy of results of the biochemical assay to be described in Exhibit 2.6.
(b) Additional Requirements. Each such designation shall be effective upon receipt by Unity provided that:
(i) The Compound to be designated as an Ascentage Active Compound is not currently a validly designated Unity Active Compound; and
(ii) The designation of such Compound as an Ascentage Active Compound does not bring the total number of Ascentage Active Compounds to more than fifteen (15).
2.7 Maximum Number of Active Compounds; Release of Active Compounds.
2.7.1 Maximum Number of Active Compounds. The maximum number of Compounds that may be designated by a Party as Active Compounds at any one time is fifteen (15).
2.7.2 Release of Active Compounds. A Party may terminate its designation of any particular Active Compound at any time by so notifying the other Party in writing (specifying the Active Compound for which such designation is being terminated). From and after the date the other Party receives such notice of termination, the specified Compound shall cease to be an Active Compound for all purposes of this Agreement.
2.8 Technology Transfer. Within [***] ([***]) days of Unitys designation of a Compound as a Unity Active Compound, Ascentage shall provide access to Unity all necessary and [***] Technology [***] available to Ascentage with respect to such Compound.
2.9 Rejection of Compounds; Resupply of Compounds.
2.9.1 Rejection of Compounds for Non-Conformance. Unity may reject the delivery of any Compounds delivered pursuant to Section 2.2, 2.3.2, or 2.3.3(a)(ii) that fails to materially conform to the requirements of Exhibit 2.2, by written notice to Ascentage within [***] ([***]) days of delivery of such Compounds, accompanied by documentation of the non-conformance and any original experimental data related thereto. In the event of any nonconformance under this paragraph, Ascentage shall have [***] ([***]) days to cure. Compounds that are not rejected by Unity within [***] ([***]) days after delivery shall be deemed accepted.
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2.9.2 Resupply of Compounds. Unity shall have the right to manufacture or have manufactured additional quantities of Compounds already delivered pursuant to Section 2.2, 2.3.2, or 2.3.3(a)(ii), provided that at its election, Unity may obtain additional quantities of such Compounds by written order to Ascentage specifying the Compounds desired (Re-supply Compounds) and provided further that Unity [***].
ARTICLE 3
DESIGNATION OF DEVELOPMENT CANDIDATES
3.1 General. In the event that either Party elects to advance a Compound into formal preclinical development, such Party shall first designate such Compound as a Development Candidate in accordance with the procedures set forth in this Article 3. For clarity, neither Party shall initiate GLP toxicity studies, nor carry out any subsequent preclinical or clinical development, with respect to any Compound, unless such Compound has been designated as a Development Candidate, and then only for so long as such Compound retains such designation (or in the case of Unity, only for so long as Unity retains its license to such Compound under a Compound License Agreement).
3.2 Requirements for Designation.
3.2.1 Eligibility. To be eligible for designation as a Development Candidate by a given Party, a Compound must be a validly designated Active Compound of such Party (all such eligible Compounds, hereinafter referred to as Eligible Compounds).
3.2.2 Timing Requirements. Commencing on the Effective Date and continuing for the duration of Term, each Party shall have the right to designate one or more Eligible Compounds as Development Candidates, by providing the other Party with written notice as described in Section 3.3.1 below and subject to the other requirements of this Section 3.2.
3.2.3 Maximum Number of Development Candidates.
(a) Unity. The maximum number of Existing Compounds and Ascentage Future Compounds that may be designated as Unity Development Candidates at any one time is [***] ([***]), provided that Unity shall be entitled to designate an additional [***] ([***]) Existing Compounds and/or Ascentage Future Compounds as Back-up Compounds as described in Section 3.5 below. For clarity there shall be no limit on the number of Unity Compounds that Unity may designate as Unity Development Candidates.
(b) Ascentage. The maximum number of Unity Compounds that may be designated as Ascentage Development Candidates at any one time is [***] ([***]). For clarity there shall be no limit on the number of Existing Compounds and Ascentage Future Compounds that Ascentage may designate as Ascentage Development Candidates.
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3.3 Designation of Development Candidates.
3.3.1 Notice. To designate an Eligible Compound as a Development Candidate, the Party making such designation shall notify the other Party of such designation in writing and provide the other Party a clear description of the applicable Eligible Compound, including its chemical structure.
3.3.2 Mechanics of Designation.
(a) Unity. As soon as practicable (and within [***] ([***]) days) after Unitys designation of each Development Candidate in accordance with this Article 3), Unity and Ascentage shall complete and execute the form of Compound License Agreement set forth in Exhibit 3.3.2(a). To complete the form of Compound License Agreement, the Parties shall: (i) fill in the effective date of the Compound License Agreement with the date of the notice provided under Section 3.3.1 above; and (ii) specify the Eligible Compound being designated as Development Candidate. It is understood that once a notice of designation has been submitted in accordance with Section 3.3.1 above, then provided that such designation is otherwise compliant with the requirements of this Article 3, Ascentage shall be obligated to enter into a Compound License Agreement with respect to the applicable Eligible Compound. For clarity, the intent of the Parties is that each Development Candidate shall be the subject of a separate Compound License Agreement and that each Compound License Agreement shall apply to only a single Development Candidate.
(b) Ascentage. Notices of designation submitted by Ascentage in accordance with Section 3.3.1 above shall be effective upon receipt by Unity, provided that such designation is otherwise compliant with the requirements of this Article 3.
3.3.3 Termination of Development Candidate Status. A Party may terminate its designation of any particular Development Candidate at any time by so notifying the other Party in writing (specifying the Development Candidate for which such designation is being terminated), such notice in the case of a termination by Unity to take the form of a notice of termination under the Compound License Agreement for such Development Candidate. From and after the date the other Party receives such notice of termination, the specified Compound shall cease to be an Development Candidate for all purposes of this Agreement and shall be returned to the Library where it shall be available for selection as an Active Compound pursuant to Sections 2.5 and 2.6 (as applicable), provided that such terminated Development Candidate shall not be available for re-selection by the terminating Party as either an Active Compound or a Development Candidate for a period of [***] ([***]) [***] following the date notice of termination was provided to the non-terminating Party pursuant to this Section 3.3.3.
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3.4 Diligence Requirements.
3.4.1 Unity. With respect to each Compound designated as a Development Candidate, Unity shall meet the diligence requirements set forth in the Compound License Agreement for such Development Candidate. In the event that Unity fails to meet such diligence requirements and fails to cure such default in accordance with the terms of such Compound License Agreement, Unitys right to continue to develop such Development Candidate will terminate, all as further described in such Compound License Agreement.
3.4.2 Ascentage. With respect to each Compound designated as a Development Compound, Ascentage shall meet the diligence requirements set forth in Exhibit 3.4.2. In the event that Ascentage fails to meet such diligence requirements and fails to cure such default accordance with Section 12.2, Ascentages right to continue to develop such Development Candidate will terminate, Ascentage shall [***] discontinue ([***]) all development activities with respect to such Development Candidate.
3.5 Back-up Compounds.
3.5.1 Designation. At the time Unity designates a Development Candidate, Unity shall have the right to designate [***] Active Compound to be used to replace such Development Candidate in the event Unity elects to abandon development of such Development Candidate (each, a Back-up Compound), all as further specified in the applicable Compound License Agreements.
3.5.2 Exclusivity. Ascentage shall be free to conduct research with respect to the Back-up Compounds, provided that Ascentage hereby covenants that it shall not [***], nor shall it authorize any Third Party (including its Affiliates) to [***] with respect to any Back-up Compound until such time as such Back-up Compound is released in accordance with Section 3.5.3. For clarity, once a Back-up Compound has been released, such Compound shall be available for development and commercialization by Ascentage in accordance with the applicable terms of this Agreement.
3.5.3 Release of Back-up Compounds. A Back-up Compound shall be deemed to be released upon the first to occur of either of the following events: (a) the termination of the Compound License Agreement for the Development Compound with which such Back-up Compound is associated, or (b) the [***] anniversary of the [***] of the Development Compound with which such Back-up Compound is associated. For clarity, it is acknowledged that a condition of Unitys maintaining its license with respect to any given Development Compound is that Unity meet the diligence requirements set forth in the Compound License Agreement for such Development Candidate. It is further acknowledged that in the event that Unity fails to meet such diligence requirements and fails to cure such
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default in accordance with the terms of such Compound License Agreement, Unitys right to continue to develop such Development Candidate will terminate, and any Back-up Compound associated with such Development Compound shall be released, all as further described in such Compound License Agreement.
ARTICLE 4
EXCLUSIVITY/RESTRICTIONS ON COMPOUND DEVELOPMENT
4.1 Unity.
4.1.1 No [***] of Ascentage Development Candidates. Unity hereby covenants that it shall not conduct, nor shall it authorize any Third Party (including its Affiliates) to conduct, any [***] with respect to any Compound that Ascentage has designated as a Development Candidate in accordance with the terms of Article 3 for so long as that Compound remains designated as an Ascentage Development Candidate (and in the case that [***]).
4.1.2 No Initiation of GLP Toxicology Studies without designation as a Development Candidate. Unity hereby covenants that it shall not initiate, nor shall it authorize any Third Party (including its Affiliates) to initiate, GLP toxicology studies (or any subsequent studies) with respect to any Compound which it has not designated as a Development Candidate in accordance with Article 3.
4.1.3 No Development for Oncology Indications. Unity hereby covenants that it shall not research or develop, nor shall it authorize any Third Party (including its Affiliates) to research or develop, any Compound for the diagnosis, prophylaxis, treatment or palliation of any Oncology Indications.
4.2 Ascentage.
4.2.1 No Initiation of GLP Toxicology Studies without designation as a Development Candidate. Ascentage hereby covenants that it shall not initiate, nor shall it authorize any Third Party (including its Affiliates) to initiate, GLP toxicology studies (or any subsequent studies) with respect to any Compound which it has not designated as a Development Candidate in accordance with Article 3.
4.2.2 Unity Compounds. Ascentage hereby covenants that it shall not research or develop, nor shall it authorize any Third Party (including its Affiliates) to research or develop, any Unity Compound for the diagnosis, prophylaxis, treatment or palliation of any indications that are not Oncology Indications. The foregoing restriction will survive the termination or expiration of this Agreement for any reason.
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4.2.3 Existing Compounds and Future Ascentage Compounds.
(a) Restrictions on Development for Indications Being Developed by Unity. Ascentage hereby covenants that it shall not develop or commercialize, nor shall it authorize any Third Party (including its Affiliates) to develop or commercialize, any Existing Compound or Future Ascentage Compound for the diagnosis, prophylaxis, treatment or palliation of any indication which:
(i) [***]: (A) [***], or (B) [***] with respect to an [***] in compliance with [***]. The foregoing restriction will survive on an indication-by-indication basis for so long as [***] or [***]. [***] agrees to [***] all indications which [***]. Additionally, [***] agrees to [***].
(ii) is one of up to [***] ([***]) indications [***] as being an indication with respect to which [***] within [***] ([***]) [***] of [***] (each, an [***]). Upon [***], [***] will [***]. The exclusivity granted to Unity with respect to such [***] will [***], such that (A) following the [***], if an [***] with respect to [***], then [***], (B) following the [***], if an [***] with respect to [***], then [***], and [***] until the [***], at which point this Section 4.2.3(a)(ii) shall be of no further force and effect.
(iii) As used herein, an [***] with respect to a given indication, means that either: (A) [***], or (B) either [***] or [***].
(iv) For clarity, it is understood that (A) Unitys rights to develop Compounds are limited to the development of Compounds for indications other than Oncology Indications, and (B) this Section 4.2.3(a) shall in no way restrict Ascentages right to develop and commercialize Existing Compounds or Future Ascentage Compounds for Oncology Indications.
(b) General Restrictions on Development outside of Oncology Indications. Within the Grace Period, Ascentage hereby covenants that it shall not research or develop any Existing Compounds or Future Ascentage Compounds for the diagnosis, prophylaxis, treatment or palliation of any indication that is not an Oncology Indication unless such Existing Compound or Future Ascentage Compound [***].
(c) Restrictions on Development of Carved Out Indications. Without limiting Section 4.2.3(a) and (b) above, Ascentage further covenants that it will not develop nor shall it authorize any Third Party (including its Affiliates) to develop, any Compound for a Carved Out Indication except as permitted under this Section 4.2.3(c).
(i) No more than [***] in any rolling [***] ([***]) [***] period, Ascentage may request permission to develop [***] (Subject Compound) for prophylaxis or treatment of one or more Carved Out Indications (Subject Indications). Such request shall be submitted in writing and shall include a description of the Compound (including its structure), a [***] below, and a description of the Carved Out Indication(s) proposes to pursue.
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(ii) Unity shall not withhold its consent with respect to such validly submitted request, so long as:
(A) [***];
(B) [***];
(C) [***].
(iii) Upon approval by Unity of such request (which approval shall be provided in writing), Ascentage shall be free to pursue the development of the Subject Compound for the Subject Indication(s) provided that:
(A) The [***] may be developed shall be limited to [***];
(B) Unity shall have a right of first refusal with respect to development and commercialization of such Subject Compound as further described in Article 8 below.
(iv) The Parties will negotiate and agree upon [***] for use under Section 4.2.3(c)(ii)(B) within [***] immediately after the Effective Date of this Agreement ([***]). Ascentage will appoint [***] and Unity will appoint [***] to negotiate such agreements on their respective behalf. Once agreed upon, the [***] shall be appended hereto as [***].
ARTICLE 5
MANAGEMENT
5.1 Joint Research Committee. Ascentage and Unity will establish a committee (the Joint Research Committee or JRC) to coordinate the parties activities under this Agreement. The responsibilities of the Joint Research Committee shall consist of:
5.1.1 Facilitating the exchange of materials and information between the parties;
5.1.2 Monitoring and reporting of the discovery of Ascentage Future Compounds and Unity Compounds;
5.1.3 Reviewing and discussing issues that may arise involving the designation or release of Active Compounds;
5.1.4 Initial, informal mediation of any other dispute that arises under this Agreement; and
5.1.5 Such other responsibilities as both parties may mutually agree to delegate to the JRC.
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5.2 Membership. The JRC shall include two (2) representatives of each of Ascentage and Unity, with each partys members selected by that party. Ascentage and Unity may each replace its JRC representatives at any time, upon written notice to the other party.
5.3 Meetings. The JRC shall meet at least [***], or more frequently as agreed by the parties, at such locations as the parties agree, and will otherwise communicate regularly. With the consent of the parties, other representatives of Ascentage or Unity may attend JRC meetings as nonvoting observers. Each party shall be responsible for all of its own expenses associated with attendance of such meetings.
5.4 Decision Making. With respect to decisions taken on matters placed by either party before the JRC, each party shall have one vote. Decisions of the JRC shall be made by unanimous approval of the parties. If the members of the JRC cannot reach an agreement after commercially reasonable efforts to do so, then either partys representative to the JRC may refer such dispute to the [***] of each party, who shall meet in person or by telephone within [***] ([***]) days after such referral to attempt in good faith to resolve such dispute.
ARTICLE 6
PAYMENTS
6.1 Upfront Fee. As partial consideration for the rights and licenses granted to Unity under this Agreement, Unity shall issue to Ascentage, subject to Ascentages execution and delivery to Unity of a Stock Issuance Agreement in substantially the form attached hereto as Exhibit 6.1 part A (such form of agreement, the Stock Agreement), Three Hundred Ninety Three Thousand Three Hundred Thirty Five (393,335) shares of Unity common stock; such shares to be issued to Ascentage within [***] ([***]) days of the Effective Date. A capitalization table for Unity true and complete as of the Effective Date, is attached hereto as Exhibit 6.1 part B.
6.2 First Locally-Dosed Licensed Compounds. Upon Unitys designation of each of the first two (2) locally-dosed Development Candidates, Unity shall issue to Ascentage Three Hundred Ninety Three Thousand Three Hundred Thirty Five (393,335) shares of Unity common stock, for each locally dosed Development Candidate; such shares to be issued to Ascentage pursuant to the Stock Agreement within [***] ([***]) days of date a Compound License Agreement is executed with respect to such Development Candidate.
6.3 Equity Cap. Notwithstanding anything in the contrary in this Agreement, any Compound License Agreement or the APG-1252 License Agreement, the maximum cumulative aggregate number of shares of Unity common stock that Ascentage is eligible to receive under Sections 6.1 and 6.2 of this Agreement, Section 5.1 of all Compound License Agreements and Section 5.1 of the APG-1252 License Agreement is:
(a) [***] ([***]) shares of Unity common stock if only one Licensed Product is developed; and
(b) Three Million Nine Hundred Thirty Three Thousand Three Hundred and Fifty (3,933,350) shares of Unity common stock if two or more Licensed Products is developed.
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6.4 Purchase of Ascentage Shares.
6.4.1 Disclosure of Series B Documentation. Promptly following the Effective Date, Ascentage shall provide to Unity true and correct copies of all of the relevant documents related to Jiangsu Ascentages most recent financing, including without limitation, the investment agreement, any stockholders agreement, and the charter documents (collectively the Series B Documentation)
6.4.2 First Tranche of Preferred Stock. Within [***] ([***]) days of the later of the Effective Date and Unitys receipt of the Series B Documentation, Unity shall purchase $[***] of Jiangsu Ascentages equity, at the same price and on the same terms as those applicable to the investors that participated in Jiangsu Ascentages most recent financing.
6.4.3 Second Tranche of Preferred Stock. Within [***] ([***]) days of the later of the Effective Date and Unitys receipt of the Series B Documentation, Unity shall purchase an additional $[***] of Ascentages preferred stock at a valuation equal to the greater of (a) $[***] on terms that are otherwise pari passu to the terms of the most recent financing, and (b) the most recent preferred stock valuation if Jiangsu Ascentage consummates a stock financing after the Effective Date, in which case Unity shall purchase such shares at the same price and on the same terms as those applicable to the investors that participated in such financing.
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6.5 Board Observer. After the purchase $[***] of Jiangsu Ascentages equity by Unity, Ascentage shall invite a representative of [***], initially [***], to attend in all meetings of its board of directors (including committees thereof) in a non-voting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors; provided, however, that Ascentage reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if (a) access to such information or attendance at such meeting could adversely affect the attorney-client privilege between Ascentage and its counsel; or (b) access to such information or attendance at such meeting could result in disclosure of trade secrets to Unity.
6.6 Unitys Covenants. Unity hereby agrees that any shares of common stock issued to Ascentage will not be diluted unless diluted in good faith by Unity on a proportionate basis to other shares of common stock of Unity outstanding at the time of any such dilution, and subject to the anti-dilution protections as set forth in Unitys certificate of incorporation, as may be amended from time to time in good faith; provided further, that Unity shall not take actions that specifically treat Ascentage differently from other holders of common stock, or issue any capital stock in a manner which is intended to circumvent this covenant. The shares of common stock issued to Ascentage shall be duly adjusted for any bonus issue, share split, consolidation, subdivision, reclassification, recapitalization or similar arrangement of Unity, in each case in accordance with, and as expressly contemplated by, Unitys certificate of incorporation, as may be amended from time to time in good faith.
ARTICLE 7
INTELLECTUAL PROPERTY
7.1 License Grants to Unity.
7.1.1 License to Conduct Compound Screening. Subject to the terms and conditions of this Agreement, Ascentage hereby grants to Unity an non-exclusive license under the Ascentage Intellectual Property solely to carry out Compound Screening of the Compounds in the Library;
7.1.2 License to Develop Unity Active Compounds. Subject to the terms and conditions of this Agreement, Ascentage hereby grants to Unity a license co-exclusive with Ascentage under the Ascentage Intellectual Property to develop Active Compounds for the prophylaxis and treatment of, and palliation of symptoms associated with, indications that are not Oncology Indications..
7.1.3 License to Manufacture Compounds. Subject to the terms and conditions of this Agreement, Ascentage hereby grants to Unity an non-exclusive license under the Ascentage Intellectual Property to manufacture or have manufactured additional quantities of Compounds previously delivered pursuant to Section 2.2, 2.3.2, or 2.3.3(a)(ii) solely for use in accordance with Sections 7.1.1 and 7.1.2. above.
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7.2 Prosecution of Compound-Related Patents. Subject to Unitys rights under any Compound License Agreements then in effect, Ascentage shall have the first right, but shall not be obligated under this Agreement, to prosecute and maintain Compound-Related Patents as it deems commercially reasonable and necessary. Ascentage shall bear all patent costs that it incurs in relation to the filing, prosecution and maintenance of the Compound-Related Patents under this Agreement. Unity shall have the right, at its own cost and expense, to reasonably assist Ascentage in connection with the filing, prosecution and maintenance of any Compound-Related Patent covering any Compound [***]. If Ascentage, prior or subsequent to filing any Compound-Related Patent anywhere in the world, elects not to file, prosecute or maintain such Patent or claims encompassed by such Patent in any country of the world, as the case may be, Ascentage shall give Unity notice thereof within [***] prior to allowing such Patent or such claims encompassed by such Patent to lapse or become abandoned or unenforceable, and Unity shall thereafter have the right, at its sole expense and [***], to prepare, file, prosecute and maintain such Patent or claims encompassed by such Patent in such country.
7.3 Interferences, Oppositions, Enforcement. As between the parties and subject to Unitys rights under any Compound License Agreements then in effect, Ascentage shall have the sole right (but not the obligation), at its expense, to conduct any interferences, oppositions, or reexaminations with respect to any Patents within the Ascentage Intellectual Property (including without limitation, the Compound-Related Patents), to request any reissues or patent term extensions thereof, and to initiate and prosecute enforcement actions against Third Parties infringing such Patents.
7.4 No Other Rights. No rights other than those expressly set forth in this Agreement are granted to either party hereunder, and no additional rights shall be deemed granted to either party by implication, estoppel or otherwise.
ARTICLE 8
RIGHT OF NOTICE AND OFFER FOR ASCENTAGE PRODUCTS FOR CARVED OUT
INDICATIONS
8.1 Ascentage Notice. In the event that Ascentage wishes to pursue development and commercialization of Subject Compound for use in treating one or more Subject Indications, Ascentage shall deliver written notice to Unity of Ascentages interest in pursuing the development of such Subject Compound together with a description of the Subject Indications it is proposing to pursue in reasonable detail to permit Unity to evaluate its interest in such opportunity.
8.2 Unity Notice. Within [***] ([***]) calendar days of Unitys receipt of such notice and description of the Subject Compound and Subject Indication(s), Unity will provide Ascentage with written notice either that (i) Unity is not interested in developing such Subject Compound for one or more of the Subject Indications, or (ii) Unity is interested in developing such Subject Compound for one or more of the Subject Indications. If Unity fails to deliver any notice within such [***] ([***])-day period, Unity will be deemed to have provided notice that it is not interested in developing such Subject Compound for one or more of the Subject Indications, in which case Ascentage will be free to develop and commercialize such Subject Compound for such Subject Indication(s) provided that such Subject Compound and Subject Indications are otherwise compliant with the requirements of Section 4.2.3.
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8.3 Entry into New Compound License Agreement. If Unity provides Ascentage with timely notice under Section 8.2 above that it is interested in developing such Subject Compound for one or more of the Subject Indications, Unity and Ascentage shall promptly complete and execute the form of Compound License Agreement set forth in Exhibit 3.3.2(a). It is understood that Unitys continuing rights to such Subject Compound shall be dependent upon Unity achieving the applicable diligence milestones set forth therein, all as further specified in such Compound License Agreement.
8.4 Negotiation of Form JV Agreement. The Parties agree that they will negotiate and agree to form agreements relating to joint venture to be established for the purpose of commercializing the Licensed Products in the Greater China within [***] immediately after the Effective Date of this Agreement. Ascentage will appoint [***] and Unity will appoint [***] to negotiate such agreements on their respective behalf. Neither Party may develop, manufacture, distribute, sell or otherwise commercialize the Licensed Products in the Greater China other than through the joint venture formed pursuant to this Agreement and the Compound License Agreement.
ARTICLE 9
CONFIDENTIALITY
9.1 Confidential Information. Except as otherwise expressly provided herein, the parties agree that the receiving party shall not, except as expressly provided in this Article 9, disclose to any Third Party or use for any purpose any proprietary information which is disclosed to it (whether orally or in writing) and identified as confidential (Confidential Information), except to the extent that it can be established by the receiving party by competent proof that such information:
(a) Was already known to the receiving party, other than under an obligation of confidentiality, at the time of disclosure;
(b) Was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party;
(c) Became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this Agreement;
(d) Was independently developed by the receiving party without reference to information provided by the disclosing party as demonstrated by documented evidence prepared contemporaneously with such independent development; or
(e) Was disclosed to the receiving party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing party not to disclose such information to others.
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9.2 Permitted Use and Disclosures. Each party hereto may use or disclose Confidential Information disclosed to it by the other party to the extent such use or disclosure (a) is reasonably necessary in the exercise of the rights granted to it hereunder or in carrying out its obligations hereunder, or (b) in prosecuting or defending litigation and complying with applicable governmental laws, regulations or court order, provided that if a party is required by law to make any such disclosure, other than pursuant to a confidentiality agreement, it will give reasonable advance notice to the other party of such disclosure and, save to the extent inappropriate in the case of patent applications or the like, will use its reasonable efforts to secure confidential treatment of such information in consultation with the other party prior to its disclosure (whether through protective orders or otherwise) and disclose only the minimum necessary to comply with such requirements.
9.3 Nondisclosure of Terms. Each of the parties hereto agrees not to disclose the terms of this Agreement to any Third Party without the prior written consent of the other party hereto, which consent shall not be unreasonably withheld, except to such partys attorneys, advisors, investors and others on a need to know basis under circumstances that reasonably ensure the confidentiality thereof, or to the extent required by law.
9.4 Public Announcement. Unity may, in its discretion, issue a press release announcing the formation of this Agreement, which shall be substantially in a form approved by Ascentage prior to execution of the Agreement. Except with respect to such initial release, neither party shall issue an additional press release or public announcement relating to this Agreement without the prior written approval of the other party, which shall not be withheld unreasonably. Either party may refer to the research collaboration under this Agreement in promotional and other communications with prospective customers and investors, provided that such disclosure shall not include any technical details or any financial terms of the collaboration.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 Warranty. Each party represents and warrants on its own behalf and on behalf of its Affiliates that: (a) it has the legal power and authority to enter into this Agreement and to perform all of its obligations hereunder; (b) this Agreement is a legal and valid obligation binding upon it and enforceable in accordance with its terms; and (c) it has not previously granted, and during the term of this Agreement will not make any commitment or grant, any rights which are in conflict in any material way with the rights and licenses granted herein.
10.2 Additional Ascentage Warranties. Ascentage represents and warrants on its own behalf and on behalf of its Affiliates that as of the Effective Date:
10.2.1 there are no actual or pending actions, suits or claims, by any third party (a) challenging the ownership of the Existing Compounds; (b) challenging the validity, effectiveness, enforceability, or ownership of Ascentage Intellectual Property.
10.2.2 The Patents within the Ascentage Intellectual Property are subsisting, in force or pending, as the case may be, and are not the subject of any interference, reissue, reexamination, opposition, cancellation or similar administrative proceedings.
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10.2.3 Ascentage has not brought a claim alleging an infringement by a Third Party of any of the Patents within the Ascentage Intellectual Property and to Ascentages actual knowledge, there is no actual or alleged infringement by a Third Party of any of the Patents within the Ascentage Intellectual Property.
10.2.4 there are no Patents: (a) filed by Ascentage and subsequently assigned to Third Party, or (b) with respect to which Ascentage or its Affiliates have acquired rights from a Third Party (i.e., through in-licenses, cross-licenses or otherwise), in each case that (i) would be required for Unity to research, develop, manufacture, use or commercialize the Existing Compounds and (ii) are not included within the Ascentage Intellectual Property.
10.2.5 there are no actual or pending actions, suits or claims, by any Third Party asserting that the manufacture, use, sale, offer for sale or importing of a Compound infringes the intellectual property of a Third Party and to Ascentages knowledge, the development and commercialization of the Compounds would not infringe (a) any issued Patents of any Third Party (other than Patents in-licensed from UM), or (b) any published Patent claim of any Third Party (other than claims of Patents in-licensed from UM) if such claim were to issue as published.
10.2.6 Ascentage has disclosed to Unity all material agreements with Third Parties in effect as of the Effective Date pursuant to which Ascentage Intellectual Property relating to BCL-2/BCL-xL inhibitors was licensed, acquired or sold.
10.2.7 The copy of UM License Agreement (including the first amendment to such license agreement) disclosed to Unity by Ascentage is a true, accurate, and complete copy of the UM License Agreement.
10.3 Certain Rights and Obligations under the UM License Agreement.
10.3.1 Ascentage shall not modify, amend or otherwise alter the UM License Agreement to the extent the same would materially and adversely affect Unitys rights under this Agreement.
10.3.2 Ascentage shall not (a) exercise or fail to exercise any right under the UM License Agreement or (b) provide or fail to provide any consent or approval with respect to any right or obligation under the UM License Agreement, in each case to the extent the same would materially and adversely affect Unitys rights under this Agreement.
10.3.3 Ascentage shall not unilaterally terminate the UM License Agreement.
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10.4 Disclaimer. ASCENTAGE AND UNITY SPECIFICALLY DISCLAIM ANY GUARANTEE THAT THE RESEARCH UNDERTAKEN HEREUNDER WILL BE SUCCESSFUL, IN WHOLE OR IN PART. THE FAILURE OF THE PARTIES TO SUCCESSFULLY DEVELOP ACTIVE COMPOUNDS OR PRODUCTS WILL NOT CONSTITUTE A BREACH OF ANY REPRESENTATION OR WARRANTY OR OTHER OBLIGATION UNDER THIS AGREEMENT. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, UNITY AND ASCENTAGE MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE ASCENTAGE INTELLECTUAL PROPERTY, COMPOUNDS, OR INFORMATION DISCLOSED HEREUNDER, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF ANY TECHNOLOGY, PATENTED OR UNPATENTED, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
ARTICLE 11
INDEMNIFICATION
11.1 Ascentage. Ascentage agrees to indemnify and defend Unity and their respective directors, officers, employees, agents and their respective successors, heirs and assigns (the Unity Indemnitees) against any losses, costs, claims, damages, liabilities or expense (including reasonable attorneys and professional fees and other expenses of litigation) (collectively, Liabilities) arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, to the extent (i) relating to any products based on the Compounds developed, manufactured, used, sold or otherwise distributed by or on behalf of Ascentage, its Affiliates, licensees or other designees including, without limitation, product liability and patent infringement claims, or (ii) resulting from a breach by Ascentage of its representations and warranties under this Agreement, except, in each case, to the extent such Liabilities result from the gross negligence or intentional misconduct of Unity.
11.2 Unity. Unity agrees to indemnify and defend Ascentage and their respective directors, officers, employees, agents and their respective heirs and assigns (the Ascentage Indemnitees) against any Liabilities arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, to the extent resulting from a breach by Unity of its representations and warranties under this Agreement, except, in each case, to the extent such Liabilities result from the gross negligence or intentional misconduct of Ascentage.
11.3 Procedure. In the event that any Indemnitee intends to claim indemnification under this Article 11 it shall promptly notify the other party in writing of such alleged Liability. The indemnifying party shall have the right to control the defense thereof with counsel of its choice as long as such counsel is reasonably acceptable to Indemnitee; provided, however, that any Indemnitee shall have the right to retain its own counsel at its own expense, for any reason, including if representation of any Indemnitee by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other party reasonably represented by such counsel in such proceeding. The affected Indemnitee shall cooperate with the indemnifying party and its legal representatives in the investigation of any action, claim or liability covered by this Article 11. The Indemnitee shall not compromise or settle any claim or suit, or voluntarily incur any expense with respect to any such claim or suit, in each case, without the prior written consent of the indemnifying party, which such party shall not be required to give.
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ARTICLE 12
TERM AND TERMINATION
12.1 Term. This Agreement shall commence on the Effective Date and shall continue in full force and effect until the expiration of the applicable Grace Period (Term), unless terminated earlier as provided in this ARTICLE 12.
12.2 Termination for Breach. In the event of a material breach of this Agreement, the nonbreaching party shall be entitled to terminate this Agreement by written notice to the breaching party, if such breach is not cured within sixty (60) days after written notice is given by the nonbreaching party to the breaching party specifying the breach.
12.3 Effects of Termination.
12.3.1 Accrued Rights and Obligations. Termination of this Agreement for any reason shall not release either party hereto from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination nor preclude either party from pursuing any rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement.
12.3.2 Return of Compound. Upon expiration or termination of this Agreement for any reason, Unity shall return to Ascentage all unused quantities of the Compounds, or destroy such quantities at the written request of Ascentage.
12.3.3 Survival. Articles 1 (Definitions), 8 (Right of Notice and Offer for Ascentage Products for Carved-Out Indications), 9 (Confidentiality), 10 (Representations and Warranties), 11 (Indemnification) 13 (Dispute Resolution) and 14 (Miscellaneous) and Sections 3.5, 4.2.3(a)(i) and (ii) (but only for the durations specified therein), 4.2.3(c), 6.4 and 12.3 shall survive the expiration or termination of this Agreement for any reason, provided that in the case of Sections 3.5, 4.2.3(a)(i), 4.2.3(a)(ii) and 4.2.3(c), survival of these sections shall be contingent upon Unity having fulfilled its obligations under Section 6.1. Except as otherwise provided in this Article 12, all rights and obligations of the parties under this Agreement shall terminate upon the expiration or termination of this Agreement.
12.4 Condition Precedent.
12.4.1 This Agreement is entered into subject to the condition precedent that Ascentage and UM agree upon and execute an amendment to the UM License Agreement (Second Amendment) adjusting the royalties owing to UM in connection with the activities contemplated by this Agreement (including the attached Exhibits). All rights and obligations set forth in the Agreement shall only become effective upon the Effective Date.
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12.4.2 Ascentage hereby agrees to use its commercially best efforts to complete and execute the Second Amendment as soon as reasonably practicable.
ARTICLE 13
DISPUTE RESOLUTION
13.1 Dispute Resolution.
13.1.1 Consultation. If an unresolved dispute (other than a dispute among members of the JRC regarding a decision of the JRC) arises out of or relates to this Agreement, or the breach thereof, either party may refer such dispute to the [***] of each party, who shall meet in person or by telephone within [***] ([***]) days after such referral to attempt in good faith to resolve such dispute. If such matter cannot be resolved by discussion of the respective [***]s within such [***] ([***]) days period (as may be extended by mutual agreement), either party shall be entitled to seek resolution of such dispute pursuant to Section 13.1.2 below.
13.1.2 Arbitration. If the parties are unable to resolve a dispute on an issue of interpretation, breach or enforcement of this Agreement, the parties shall refer such dispute to be finally resolved by binding arbitration under the terms of this Section 13.1.2, except that all disputes with respect to the validity or infringement of Patents shall be subject to applicable federal court jurisdiction and not subject to the terms of this Section 13.1.2. Whenever a party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other party. Any such arbitration shall be conducted under the commercial arbitration rules of the [***] in effect, which are deemed to be incorporated by reference into this paragraph by a panel of three (3) arbitrators in [***]. Each party shall select one (1) arbitrator who is not employed by, or otherwise affiliated with, such party within [***] ([***]) days after the institution of arbitration proceedings, and the two (2) arbitrators so selected shall designate the third arbitrator. The parties shall use their commercially reasonable efforts to conclude the arbitration hearings within [***] ([***]) [***] following the confirmation of the third and presiding arbitrator.
13.2 Injunctive Relief. This Article 13 shall not be construed to prohibit either party from seeking preliminary or permanent injunctive relief, restraining order or degree of specific performance in any court of competent jurisdiction to the extent not prohibited by this Agreement. For avoidance of doubt, any such equitable remedies provided under this Article 13 shall be cumulative and not exclusive and are in addition to any other remedies, which either party may have under this Agreement or applicable law.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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ARTICLE 14
MISCELLANEOUS
14.1 Governing Laws. This Agreement and any dispute arising from the construction, performance or breach hereof shall be governed by and construed, and enforced in accordance with, the laws of the state of New York, USA, without reference to conflicts of laws principles.
14.2 Waiver. It is agreed that no waiver by either party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.
14.3 Assignment. This Agreement shall not be assignable by either party without the written consent of the other party hereto, except that either party may assign this Agreement, without such consent, to an entity that acquires all or substantially all of the business or assets of such party whether by merger, reorganization, acquisition, sale, or otherwise; provided, however, that within [***] ([***]) days of such an assignment, the assignee shall agree in writing to be bound by the terms and conditions of this Agreement. Any assignment in contravention of the foregoing shall be null and void. Subject to the foregoing, this Agreement shall bind and inure to the benefit of each partys successors and permitted assigns.
14.4 Independent Contractors. The relationship of the parties hereto is that of independent contractors. The parties hereto are not deemed to be agents, partners or joint venturers of the others for any purpose as a result of this Agreement or the transactions contemplated thereby.
14.5 Compliance with Laws. In exercising their rights under this Agreement, the parties shall fully comply in all material respects with the requirements of any and all applicable laws, regulations, rules and orders of any governmental body having jurisdiction over the exercise of rights under this license including, without limitation, those applicable to the discovery, development, manufacture, distribution, import and export and sale of Ascentage Products pursuant to this Agreement.
14.6 Notices. All notices, requests and other communications hereunder shall be in writing and shall be personally delivered or by registered or certified mail, return receipt requested, postage prepaid, in each case to the respective address specified below, or such other address as may be specified in writing to the other parties hereto and shall be deemed to have been given upon receipt:
If to Unity: | Unity Biotechnology, Inc. | |||
1700 Owens Street, Suite 535 | ||||
San Francisco, CA 94158, USA | ||||
Attention: [***] | ||||
Email: [***] | ||||
If to Ascentage: | Ascentage Pharma Group Corp. Ltd. | |||
Room 201, QB3 Building, Medical City Avenue | ||||
Hi-Tech BioMed District, Taizhou City, Jiangsu Province | ||||
P.R. China, 225300 | ||||
Attention: [***] | ||||
Email: [***] |
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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14.7 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect to the fullest extent permitted by law without said provision, and the parties shall amend the Agreement to the extent feasible to lawfully include the substance of the excluded term to as fully as possible realize the intent of the parties and their commercial bargain.
14.8 Advice of Counsel. Unity and Ascentage have each consulted counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one party or another and will be construed accordingly.
14.9 Performance Warranty. Each party hereby warrants and guarantees the performance of any and all rights and obligations of this Agreement by its Affiliates and licensees.
14.10 Force Majeure. Neither party shall lose any rights hereunder or be liable to the other party for damages or losses (except for payment obligations) on account of failure of performance by the defaulting party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the non-performing party and such party has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a party be required to settle any labor dispute or disturbance.
14.11 Complete Agreement. This Agreement with its schedules and exhibits, constitutes the entire agreement, both written and oral, between the parties with respect to the subject matter hereof, and all prior agreements respecting the subject matter hereof, either written or oral, express or implied, shall be abrogated, canceled, and are null and void and of no effect. No amendment or change hereof or addition hereto shall be effective or binding on either of the parties hereto unless reduced to writing and executed by the respective duly authorized representatives of Unity and Ascentage.
14.12 Headings. The captions to the several Sections and Articles hereof are not a part of this Agreement, but are included merely for convenience of reference and shall not affect its meaning or interpretation.
14.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.
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14.14 Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by each party as a licensor are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title ll, U.S. Code (the Bankruptcy Code), licenses of rights to intellectual property as defined under section 101(35A) of the Bankruptcy Code. The parties agree that each licensee of such rights under this Agreement, shall retain and may fully exercise all rights and elections it would have in the case of a licensor bankruptcy under the Bankruptcy Code. Each party agrees during the term of this Agreement to create or maintain current copies, or if not amenable to copying, detailed descriptions or other appropriate embodiments, of all such intellectual property licensed to the other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their authorized representatives and delivered in duplicate originals as of the Signing Date.
ASCENTAGE PHARMA GROUP CORP. LTD. | UNITY BIOTECHNOLOGY, INC. | |
By: /s/ Dajun Yang | By: /s/ Nathaniel David | |
Name: Dajun Yang, MD, PhD | Name: Nathaniel David, PhD | |
Title: Chief Executive Officer | Title: Chief Executive Officer |
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EXHIBIT 1.25
RESEARCH AGREEMENT
This Research Services Agreement (the Agreement) is made this 2nd day of February, 2016 (the Signing Date) by and between Ascentage Pharma Group Corp. Ltd., a [Hong Kong corporation] (Ascentage), with a business address at 11/F, AXA CENTRE, Gloucester Road, Wanchai, Hong Kong, and Unity Biotechnology, Inc., a Delaware corporation (Unity), with a business address at 1700 Owens Street, Suite 535, San Francisco, California 95158.
WHEREAS, Unity and Ascentage entered into that certain license agreement (the APG-1252 License Agreement) of even date herewith, pursuant to which Unity obtained a license to commercialize that certain BCL-2/BCL-xL inhibitor known as APG-1252 for indications other than Oncology Indications (as defined in the Library Agreement).
WHEREAS, Unity and Ascentage have entered into that certain compound library and option agreement (the Library Agreement) of even date herewith pursuant to which Ascentage has granted to Unity the right to screen Ascentages existing collection of BCL-2/BCL-xL inhibitor compounds as well as any additional BCL-2/BCL-xL inhibitor compounds discovered by Ascentage during the term of the Library Agreement, in each case to identify compounds with potential utility in the treatment of age-related conditions other than cancer;
WHEREAS, Unity wishes to fund certain research services by Ascentage in furtherance of its screening and analysis with respect to Ascentages BCL-2/BCL-xL inhibitor compounds, including without limitation the synthesis and derivatization of BCL-2/BCL-xL inhibitor compounds discovered through such screening and analysis; and
WHEREAS, Ascentage wishes to provide such research services in accordance with the terms and conditions of this Agreement and attached Project Addenda (as defined below).
WHEREAS, the parties intend for this Agreement to become effective as of the date on which the Second Amendment (as defined in Section 5.8(a) below) takes effect (the Effective Date).
NOW, THEREFORE, in consideration of the premises and the mutual promises set forth in this Agreement, and other good and valuable consideration, the exchange, receipt and sufficiency of which are acknowledged, the parties agree as follows:
1.0 Projects and Project Addenda.
1.1 From time-to-time during the term of this Agreement Unity may request Ascentage to provide Unity with certain services, including without limitation services relating to the discovery, synthesis, characterization and derivatization of novel BCL-2/BCL-xL inhibitor compounds. Upon reaching agreement with respect to the requested services (including the
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consideration to be paid to Ascentage in connection with such services), a project addendum describing in detail the activities to be conducted (such activities, collectively a Project) and consideration to be paid to Ascentage shall be attached to this Agreement (each a Project Addendum), and such Project Addendum, together with this Agreement (but separate and apart from any other Project Addendum), shall collectively constitute the entire agreement for such Project. No Project Addendum, or any modification thereto, shall be attached to or made a part of this Agreement without first being executed by the parties hereto in a writing which specifically references this Agreement. To the extent any terms set forth in a Project Addendum conflict with the terms set forth in this Agreement, the terms of this Agreement shall control unless otherwise expressly agreed by the parties in such Project Addendum.
1.2 Within sixty (60) days of the Effective Date, the Unity and Ascentage shall agree upon the initial research services to be provided by Ascentage, which agreement shall be documented in a project addendum to be attached hereto as Appendix A (Project Addendum No. 1).
2.0 Services.
2.1 General.
a) Diligence. Ascentage hereby agrees to (i) complete the services for Projects described in each Project Addendum (the Services), (ii) comply with the terms of the applicable Project Addendum, and (iii) provide its Services under each Project in the timeframe specified in the Project Addendum unless Ascentage later decides such Services cannot be completed within such timeframe within commercially reasonable efforts by providing notice to Unity to request extended timeframe. If an extended timeframe is needed, both parties shall discuss in good faith about the new timeframe and the additional costs needed. Ascentage is not obligated to continue Services if such agreement is not achieved.
b) Subcontractors. Ascentage shall not assign, delegate, or subcontract any of the Services without the prior written approval of Unity, which approval shall not be unreasonably withheld. Notwithstanding the foregoing, it is agreed that prior written approval of Unity shall not be required in the event that Ascentage wishes to delegate specific portions of the Services to one or more of the following Affiliates and third party vendors listed on Appendix B, provided that Ascentage shall remain responsible for directly performing of the majority of the Services. Ascentage shall remain liable under this Agreement for the performance of all its obligations under this Agreement and shall be responsible for and liable for compliance by all permitted subcontractors with the applicable provisions of this Agreement.
2.2 Project Management.
a) The Project Coordinator for Unity and the Project Manager for Ascentage will be specified in the Project Addendum for each Project. The Project Coordinator and the Project Manager will be responsible for day-to-day communications between the parties regarding the subject matter of this Agreement, including without limitation all Project Addenda and any Services and other activities conducted under any Project.
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b) The Project Coordinator and the Project Manager will be responsible for (i) monitoring the schedules and progress of work pursuant to this Agreement; (ii) receiving and submitting requests for information and/or assistance; (iii) determining whether a request he or she receives for information and/or assistance from the other is necessary for the other party to complete a specific Deliverable (as defined in its respective Project Addendum); (iv) receiving and submitting Deliverables; (v) cooperating to implement acceptance testing; and (vi) supervising and recording the exchange of confidential information pursuant to this Agreement.
c) The Project Coordinator and the Project Manager will meet regularly to discuss the progress of the development effort and, if applicable, to exchange information and Deliverables.
d) Except in the case of an emergency, in the event the Project Manager will be unavailable to perform Services as set forth in the Project Addenda at any time during the Term for a period longer than [***] days (as defined below), Ascentage shall inform Unity and appoint a new Project Manager.
2.3 Exclusive Services. During the Term, Ascentage shall not, and shall ensure that the Project Manager and Ascentage Personnel shall not, conduct the Services in conjunction with any other projects being conducted at Ascentage that would (a) conflict with any of the provisions of this Agreement, or (b) preclude Ascentage from complying with the provisions hereof.
2.4 Records; Reports; Further Assurances.
a) Records. In connection with the Services performed hereunder, for each Project, Ascentage shall ensure that the Project Manager and Ascentage Personnel who perform such Services shall maintain laboratory notebooks, records and data (Records) in accordance with good laboratory and research practices and will make such records available to Unity or Unitys authorized representative throughout the term of this Agreement during normal business hours upon reasonable notice at Unitys expense. Upon request by Unity and at Unitys expense, Ascentage agrees to provide copies of all such materials to Unity within a reasonable timeframe, in whatever condition maintained by Project Manager and Ascentage Personnel working on the Project.
b) Reports. Ascentage shall ensure that the Project Manager, and Ascentage Personnel working on a Project, submit to Unity [***] within [***] ([***]) days after the end of each [***] a written technical report summarizing the research, data, methods, results, conclusions and other information that the Project Manager considers material and relevant (Results) obtained therefrom during the prior [***] ([***]) [***] period relating to such Project. Within [***] ([***]) days after the completion or termination of a Project, the Project Manager shall submit to Unity a final written technical report of major activities undertaken and major accomplishments achieved in connection with such Project (the Final Report).
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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3.0 Deliverables; Acceptance/Rejection/Correction.
3.1 Deliverables. When Ascentage believes that a Deliverable has been appropriately completed under a Project, Ascentage will deliver it to Unity. Unity will accept or reject each Deliverable within [***] ([***]) days after delivery; failure to give notice of acceptance or rejection within that period will constitute acceptance. Unity may reject a Deliverable only if such Deliverable fails to meet the Specifications in material respect therefor stated in the applicable Project Addendum or as otherwise agreed to by the parties in writing.
3.2 Acceptance/Rejection/Correction. If Unity rejects a Deliverable because such Deliverable fails to meet the Specifications in material respect, Ascentage will [***] to promptly correct the failures within a timeframe that such failures can be corrected with Ascentages [***]. When Ascentage believes that it has made the necessary corrections, Ascentage shall again deliver such Deliverable to Unity and the acceptance/rejection/correction provisions above shall be reapplied until such Deliverable is accepted. If Unity again rejects the deliverable, the parties shall discuss the reasons for such failures and if such failures can be corrected with [***].
4.0 Compensation and Payment.
4.1 To fund the Services to be provided hereunder, for so long as this Agreement remains in effect Unity shall pay to Ascentage Five Hundred Thousand U.S. Dollars ($500,000) per year, such amount to be paid in advance in [***] increments of [***] U.S. Dollars ($[***]) (such funds, the Advanced Funds). In consideration for Services rendered in connection with the performance of the Projects, Ascentage shall be entitled to deduct from the Advanced Funds the amounts due to Ascentage in accordance with the payment schedule (the Payment Schedule) included in the respective Project Addendum attached to this Agreement. Unless otherwise agreed, compensation for Services will be on a time and materials basis, with time spent being accounted for based on the number of FTEs dedicated to performing the applicable Services and the costs of materials and third party services being passed through without mark-up as further described below. Each Project Addendum shall set forth (a) the number of FTEs agreed upon by the parties, (b) the FTE Rate, and (c) the agreed upon Out-of-Pocket Costs. For purposes of this Agreement, FTE shall mean a full time dedicated scientific employee of Ascentage, or if less than a full time dedicated scientific employee, a full time, equivalent scientific employee year based upon a total of [***] ([***]) working hours per year of scientific work, on or directly related to the Services carried out by an employee dedicated to work on a Project, in each case, having necessary qualifications to perform the Services. FTE Rate means, unless otherwise agreed between the Parties, a rate per FTE equal to [***], which rate may be prorated on a daily or hourly basis as necessary and as may be adjusted from time to time by mutual agreement of the Parties. The FTE Rate is [***] and will cover [***]. Out-of-Pocket Costs means travel (airfare, mobile allowance, meal expenses, hotel expenses etc.) and other incidental expenses incurred by such personnel in the performance of the Services, and amounts paid to third party vendors or contractors for services or materials provided by them directly in the performance of Services under the applicable Project. For clarity, Out-of-Pocket Costs do not include [***] all of which shall be included in the FTE Rate. Any Advanced Funds not utilized in any contract year may be carried forward to future contract years until
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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expended. To the extent that the value of the Services requested by Unity in any contract year exceeds the amount of the Advanced Funds available in such contract year (i.e., Five Hundred Thousand U.S. Dollars ($500,000) plus any unexpended Advanced Funds from prior years), the total payment for such contract year shall be increased by an amount equal to the difference between the cost of the requested Services and the amount of the available Advanced Funds (such amount, the Additional Research Payment). At Unitys election, any Additional Research Payments from previous contract years may be credited against the Five Hundred Thousand U.S. Dollars ($500,000) funding obligation in subsequent years (e.g., in the event that Unity funds $750,000 of Services in contract year 1, Unity would only be obligated to fund $250,000 in Services in contract year 2).
4.2 In the event this Agreement or any Project Addendum is terminated pursuant to Article 5 of this Agreement, Ascentage shall be compensated for accrued fees and expenses as set forth in Section 5.5 below. Any funds held by Ascentage which are unearned at the date of termination shall be returned to Unity within [***] ([***]) days of termination of a Project, Project Addendum or this Agreement.
4.3 Payments to Ascentage shall be made to:
Ascentage Pharma Group Corp. Ltd.
[***]
4.4 Income taxes and withholding taxes (and any penalties and interest thereon) imposed on any payment made by Unity to Ascentage, as well as any sales tax. value-added or similar taxes for which a seller of goods and services is generally responsible, shall be the responsibility of Ascentage.
4.5 Ascentage shall ensure that its Project Manager and Ascentage Personnel maintain complete and accurate accounting records related to their participation in the Project(s) in accordance with applicable generally accepted accounting principles.
5.0 Term and Termination.
5.1 The term of this Agreement shall be four (4) years commencing upon the Effective Date (the Term).
5.2 Commencing on the first anniversary of the Effective Date, this Agreement or any Project or Project Addendum may be terminated by Unity, without cause, upon ninety (90) days notice to Ascentage.
5.3 This Agreement may be terminated by either party for material breach by the other party, provided that the terminating party has given the breaching party written notice of the breach and at least sixty (60) days to cure the breach prior to the effective date of termination.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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5.4 Ascentage shall have the right to terminate this Agreement upon sixty (60) days written notice to Unity if in any contract year Unity fails to pay Ascentage at least Five Hundred Thousand U.S. Dollars ($500,000) for Services contracted hereunder (taking into account any permitted credits for previous Additional Research Funding as described in Section 4.1 above).
5.5 Upon the effective date of termination, there shall be an accounting of costs and expenses related to the Agreement, Project, or Project Addendum, as appropriate, conducted by Ascentage and subject to verification by Unity. Within [***] ([***]) days after receipt of the results of such accounting and an invoice from Ascentage, Unity shall make a payment to Ascentage (and/or Ascentage may retain from Advanced Funds previously paid by Unity) for Services performed, including:
a) actual reasonable, documented costs, to the extent approved by Unity in a Project Addendum or in a prior written authorization, incurred by Ascentage in performing Services until the effective date of termination and for which Ascentage has not yet been paid by Unity; and
b) reasonable non-cancelable obligations incurred for the Project, to the extent approved by Unity in a Project Addendum or in a prior written authorization, by Ascentage prior to the effective date of termination to extent such obligations cannot reasonably be mitigated.
c) accrued fees for FTEs, to the extent devoted to performance of Project(s) prior to termination and pursuant to the applicable Project Addendum(a).
d) Except as provided in this Section 5.5, Unity shall have no obligation of payment to Ascentage for Services performed after the date of termination. In no event shall Unity have any obligation with respect to fees or expenses otherwise not approved by Unity in a Project Addendum or in a prior written authorization.
5.6 Upon request, expiration, or termination of this Agreement, Ascentage will deliver and/or return to Unity all materials containing Information of Unity, as well as data, records, information, reports and other property, furnished by Unity to Ascentage, together with all copies of any of the foregoing at Unitys expense.
5.7 The obligations of the parties contained in Sections 2.4(b), 4.2-4.4 and 5.4 through 5.7 and Articles 6.0, 7.0, 9.0, 10.0 and 14.0 through 25.0 hereof shall survive expiration or termination of any Project and/or this Agreement.
5.8 Condition Precedent.
a) This Agreement is entered into subject to the condition precedent that Ascentage and the Regents of the University of Michigan (UM) agree upon and execute an amendment to that certain license agreement, entered into by Ascentage and the Regents of the University of Michigan (UM) effective as of December 1, 2010, adjusting the royalties owing to
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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UM in connection with the activities contemplated by the APG-1252 License Agreement and the Library Agreement (including the Compound License Agreements contemplated by the Library Agreement) (such amendment, the Second Amendment). All rights and obligations set forth in the Agreement shall only become effective upon the Effective Date.
b) Ascentage hereby agrees to use its commercially best efforts to complete and execute the Second Amendment as soon as reasonably practicable.
6.0 Confidentiality.
6.1 Unity holds a proprietary interest in the written and oral information which Unity discloses to Ascentage and identifies as confidential (hereinafter Information). As used herein, the Information of Unity shall also include the Deliverables. Ascentage agrees to protect the confidentiality of any and all Information disclosed to Ascentage by Unity and to use such Information solely for the performance of the Services described herein with the exception of the following which Ascentage can demonstrate by competent written proof:
a) Information which is or (through no improper action or inaction by Ascentage or its employees) becomes generally known to the public; or
b) Information which was rightfully disclosed to Ascentage by a third party without restriction and with the legal right to disclose such information (including, without limitation, without any breach of the third partys obligations to the disclosing party); or
c) Information which was in Ascentage possession or was known to Ascentage prior to receipt from Unity, as evidenced by its contemporaneous written records; or
d) Information which was independently developed by employees of Ascentage without access to such Information, as evidenced by its contemporaneous written records.
6.2 Except as expressly allowed herein, Ascentage agrees (i) to hold the Information in strict confidence and to take all reasonable precautions to protect such Information, (ii) not to disclose, directly or indirectly, any Information or any information derived therefrom to any third person (except employees of Ascentage, subject to the conditions stated below), and (iii) not to use such Information, except as expressly permitted under this Agreement.
6.3 Ascentage may disclose any Information that is required to be disclosed by law, government regulation or court order. If disclosure is required, Ascentage will give Unity at least [***] ([***]) business days advance notice (unless prohibited by law or court order) so that Unity may seek a protective order or take other action reasonable in light of the circumstances.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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7.0 Intellectual Property.
7.1 Ownership. Subject to the rights and licenses granted to Unity under the Library Agreement and any Compound License Agreement(s) (as defined in the Library Agreement) that the parties may subsequently enter into, as between the parties, Ascentage shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work rights, database rights and all other intellectual property rights worldwide) in any inventions, works of authorship, mask works, ideas or information made or invented by employees and any permitted subcontractors of Ascentage (collectively, Ascentage Technology). Right, title and interest to any inventions, works of authorship, mask works, ideas or information that are made jointly by employees and/or permitted subcontractors of Ascentage and Unity (collectively, Joint Technology) shall be owned jointly. For purposes of this Section 7.1 whether any inventions, works of authorship, mask works, ideas or information that are made jointly shall be determined under the applicable laws of the United States of America, including in the case of patentable inventions, the principles of inventorship established in Title 35 of the United States Code (US Patent Law), and joint ownership means that Unity and Ascentage (subject to the rights granted by Ascentage to Unity under the APG-1252 License Agreement and the Library Agreement (including any future license agreement(s) contemplated in the Library Agreement), shall each be free to exploit such patent rights and authorize others to do so, with no obligation to obtain consent of the other or to account to the other party for profits or otherwise.
7.2 Inclusion of Program Technology in Ascentage Intellectual Property. All Ascentage Technology arising under the Subcontracted Project Plan(s), together with Ascentages interest in all Joint Technology arising under the Subcontracted Project Plan(s), shall be automatically included within the Ascentage Intellectual Property for purposes of the Library Agreement and any future Compound License Agreement(s).
8.0 Representations, Warranties and Covenants.
8.1 Representations and Warranties. Each party represents and warrants to the other party that as of the Effective Date:
a) it has full power and authority to enter into and perform this Agreement;
b) neither its entering nor performing this Agreement will violate any right of or breach any obligation to any third party under any agreement or arrangement between such party and such third party;
8.2 Certain Covenants.
a) the work under this Agreement will be performed in a professional and workman-like manner;
b) Ascentage has and will obtain agreements with its employees requiring them to assign to Ascentage all right, title and interest in any intellectual property they develop in the course of their employment by Ascentage.
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9.0 Indemnification. Ascentage agrees to indemnify and defend Unity and its directors, officers, employees, agents and their respective successors, heirs and assigns (the Unity Indemnitees) against any losses, costs, claims, damages, liabilities or expense (including reasonable attorneys and professional fees and other expenses of litigation) (collectively, Liabilities) arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, to the extent resulting from (a) injuries to persons or damages which occur on Ascentages premises or premises under the exclusive control of Ascentage, or (b) breach by Ascentage of its representations, warranties and covenants under Article 8 above, or (c) the negligence or intentional misconduct of Ascentage or any of its directors, officers, employees, agents or representatives, except in each case, to the extent such Liabilities result from the gross negligence or intentional misconduct of Unity.
10.0 Dispute Resolution.
10.1 Consultation. If an unresolved dispute arises out of or relates to this Agreement, or the breach thereof, either party may refer such dispute to the [***] of each party, who shall meet in person or by telephone within [***] ([***]) days after such referral to attempt in good faith to resolve such dispute. If such matter cannot be resolved by discussion of the respective [***] within such [***] ([***]) days period (as may be extended by mutual agreement), either party shall be entitled to seek resolution of such dispute pursuant to Section 10.2 below.
10.2 Arbitration. If the parties are unable to resolve a dispute on an issue of interpretation, breach or enforcement of this Agreement, the parties shall refer such dispute to be finally resolved by binding arbitration under the terms of this Section 10.2, except that all disputes with respect to the validity or infringement of Patents shall be subject to applicable federal court jurisdiction and not subject to the terms of this Section 10.2. Whenever a party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other party. Any such arbitration shall be conducted under the commercial arbitration rules of the [***], which are deemed to be incorporated by reference into this paragraph by a panel of three (3) arbitrators in [***]. Each party shall select one (1) arbitrator who is not employed by, or otherwise affiliated with, such party within [***] ([***]) days after the institution of arbitration proceedings, and the two (2) arbitrators so selected shall designate the third arbitrator. The parties shall use their commercially reasonable efforts to conclude the arbitration hearings within [***] ([***]) [***] following the confirmation of the third and presiding arbitrator.
10.3 Injunctive Relief. This Article 10 shall not be construed to prohibit either party from seeking preliminary or permanent injunctive relief, restraining order or degree of specific performance in any court of competent jurisdiction to the extent not prohibited by this Agreement. For avoidance of doubt, any such equitable remedies provided under this Article 10 shall be cumulative and not exclusive and are in addition to any other remedies, which either party may have under this Agreement or applicable law.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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11.0 Independent Contractor Relationship. The parties hereto are independent contractors and nothing contained in this Agreement shall be construed to place them in the relationship of partners, principal and agent, employer/employee or joint venturer. Both parties agree that neither shall have power or right to bind or obligate the other, nor shall either hold itself out as having such authority.
12.0 Publicity. Except as required by law, neither party shall use the name of the other party nor of any employee of the other party in connection with any publicity or media purposes without the prior written approval of the other party. It is understood and agreed that Unity may disclose Ascentages performance of the Services hereunder with Ascentages prior written approval, including, without limitation, by naming Ascentage, in government filings, regulatory disclosures and scientific publications.
13.0 Force Majeure. Neither party shall lose any rights hereunder or be liable to the other party for damages or losses (except for payment obligations) on account of failure of performance by the defaulting party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the non-performing party and such party has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a party be required to settle any labor dispute or disturbance.
14.0 Notices. Any notice required or permitted to be given hereunder by either party hereunder shall be in writing and shall be deemed given on the date received if delivered personally or by fax or [***] ([***]) days after the date postmarked if sent by registered or certified U.S. mail, return receipt requested, postage prepaid to the following address:
If to Unity: | Unity Biotechnology, Inc. | |||
1700 Owens Street, Suite 535 | ||||
San Francisco, CA 94158, USA | ||||
Attention: [***] | ||||
Email: [***] | ||||
If to Ascentage: | Ascentage Pharma Group Corp. Ltd. | |||
Room 201, QB3 Building, Medical City Avenue | ||||
Hi-Tech BioMed District, Taizhou City, Jiangsu Province | ||||
P.R. China, 225300 | ||||
Attention: [***] | ||||
Email: [***] |
15.0 Governing Law. This Agreement and any dispute arising from the construction, performance or breach hereof shall be governed by and construed, and enforced in accordance with, the laws of the state of New York, USA, without reference to conflicts of laws principles.
16.0 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect to the fullest extent permitted by law without said provision, and the parties shall amend the Agreement to the extent feasible to lawfully include the substance of the excluded term to as fully as possible realize the intent of the parties and their commercial bargain.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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17.0 Waiver. Waiver or forbearance by either party or the failure by either party to claim a breach of any provision of this Agreement or exercise any right or remedy provided by this Agreement or applicable law, shall not be deemed to constitute a waiver with respect to any subsequent breach of any provision hereof.
18.0 Changes and Modification. No changes or modifications of this Agreement or any Project Addendum shall be deemed effective unless in writing and executed by the parties hereto.
19.0 Assignment. Unity may assign this Agreement to an Affiliate (as defined in the Library Agreement). Otherwise, this Agreement may not be assigned by Ascentage or Unity without the prior written consent of the other, such consent not to be unreasonably withheld, except that either party may assign this Agreement, without such consent, to an entity that acquires all or substantially all of the business or assets of such party whether by merger, reorganization, acquisition, sale, or otherwise; provided, however, that within [***] ([***]) days of such an assignment, the assignee shall agree in writing to be bound by the terms and conditions of this Agreement. Any assignment in contravention of the foregoing shall be null and void. Subject to the foregoing, this Agreement shall bind and inure to the benefit of each partys successors and permitted assigns.
20.0 Advice of Counsel. Unity and Ascentage have each consulted counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one party or another and will be construed accordingly.
21.0 Complete Agreement. This Agreement with its schedules and appendices, constitutes the entire agreement, both written and oral, between the parties with respect to the subject matter hereof, and all prior agreements respecting the subject matter hereof, either written or oral, express or implied, shall be abrogated, canceled, and are null and void and of no effect. No amendment or change hereof or addition hereto shall be effective or binding on either of the parties hereto unless reduced to writing and executed by the respective duly authorized representatives of Unity and Ascentage.
22.0 Compliance with Laws. In exercising their rights under this Agreement, the parties shall comply in all material respects with the requirements of any and all applicable laws, regulations, rules and orders of any governmental body of applicable jurisdiction.
23.0 Headings. The captions to the several Sections and Articles hereof are not a part of this Agreement, but are included merely for convenience of reference and shall not affect its meaning or interpretation.
24.0 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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25.0 Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by each party as a licensor are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title ll, U.S. Code (the Bankruptcy Code), licenses of rights to intellectual property as defined under section 101(35A) of the Bankruptcy Code. The parties agree that each licensee of such rights under this Agreement, shall retain and may fully exercise all rights and elections it would have in the case of a licensor bankruptcy under the Bankruptcy Code. Each party agrees during the term of this Agreement to create or maintain current copies, or if not amenable to copying, detailed descriptions or other appropriate embodiments, of all such intellectual property licensed to the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their authorized representatives and delivered in duplicate originals as of the Signing Date.
ASCENTAGE PHARMA GROUP CORP. LTD. | UNITY BIOTECHNOLOGY, INC. | |
By: /s/ Dajun Yang | By: /s/ Nathaniel David | |
Name: Dajun Yang, MD, PhD | Name: Nathaniel David, PhD | |
Title: Chief Executive Officer | Title: Chief Executive Officer |
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APPENDIX A
UNITY AND ASCENTAGE
MASTER SERVICES AGREEMENT
PROJECT ADDENDUM
DESCRIPTION OF SERVICES; PAYMENT SCHEDULE
APPENDIX B
PERMITTED AFFILIATES AND THIRD PARTY VENDORS
[***]
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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EXHIBIT 1.26
SENOLYTIC TEST
Part A: Protocol for Senolytic Test
| [***] |
Part B: [***]
[***]
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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EXHIBIT 2.2
COMPOUND FORMULATION
[***]
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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EXHIBIT 2.5.1
ASCENTAGE ACTIVE COMPOUNDS AS OF THE EFFECTIVE DATE
[***]
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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EXHIBIT 2.6
BIOCHEMICAL ASSAY
[***]
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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EXHIBIT 3.3.2(a)
FORM OF COMPOUND LICENSE AGREEMENT
This Compound License Agreement (the Agreement) effective as of the day of , 20 , [Insert date of designation of applicable Development Candidate under Section 3.3.2(a) of the Compound Library and Option Agreement] (the Effective Date) is made by and between Ascentage Pharma Group Corp. Ltd., a Hong Kong corporation (Ascentage), with a business address at 11/F, AXA CENTRE, Gloucester Road, Wanchai, Hong Kong, and Unity Biotechnology, Inc., a Delaware corporation (Unity), with a business address at 1700 Owens Street, Suite 535, San Francisco, California 95158. Each of Ascentage and Unity shall be a Party, and both the Parties.
BACKGROUND
A. Unity and Ascentage entered into (i) that certain Compound Library and Option Agreement dated February 2, 2016 (the Library Agreement), pursuant to which Unity has certain rights to acquire a license under the Licensed Intellectual Property to commercialize specified compounds, and (ii) that certain license agreement dated February 2, 2016 (the APG-1252 License Agreement), pursuant to which Unity obtained a license to commercialize that certain BCL-2/BCL-xL inhibitor known as APG-1252 for treatment of age-related conditions; and
B. Unity has exercised its rights under the Library Agreement to acquire from Ascentage such a license under the Licensed Intellectual Property, all as set forth below on the terms and conditions herein.
NOW, THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the Parties as follows:
ARTICLE 1
DEFINITIONS
1.1 The following terms have the meanings set forth in the Library Agreement:
Active Compound
Affiliate
Ascentage Intellectual Property
Back-up Compounds
Compounds
Development Candidates
Greater China
IND
Oncology Indications
Patents
Stock Agreement
Technology
Third Party
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1.2 Fair Market Value means with respect to a share of Unity common stock, the average price that Unity common stock is publicly trading at for [***] ([***]) days prior to the date in question, or, if the security is not publicly traded, the value of such stock as determined in good faith by Unitys board of directors in reliance upon Unitys most recent IRC Section 409A independent valuation of Unitys common stock that it used for the purposes of granting stock options to its employees.
1.3 Control and its correlative terms, Controlled or Controls shall mean, with respect to any Patent or item of Technology, that a Party or one of its Affiliates owns or possesses rights to such Patent or item of Technology sufficient to grant the access, license or sublicense contemplated in this Agreement without violating the terms of any agreement or other arrangement with any Third Party.
1.4 Cover and its correlative terms, Covers, Covered or Covering means (a) with respect to an issued patent, that, in the absence of a license, the use, offer for sale, sale, importation or manufacture of the product in question would infringe one or more claims of such patent or (b) with respect to a pending patent application, that, in the absence of a license, the use, offer for sale, sale, importation or manufacture of the product in question would infringe one or more claims of such patent application, should such claims issue as published.
1.5 Enabling IP means Patents and/or Technology of a Third Party that Covers or relates to a Licensed Product and is necessary or useful for the research, development, manufacture, use, sale or import of Licensed Products, including Patents directed to the composition and manufacture of Licensed Compounds, but excluding Patents related to formulation and therapeutic methods.
1.6 EMA means the European Medicines Agency and any successor agency.
1.7 Existing Agreements means [***].
1.8 FDA means the United States Food and Drug Administration and any successor agency.
1.9 Field means the prophylaxis and treatment of, and palliation of symptoms associated with, indications other than Oncology Indications.
1.10 Generic Product means a product which (a) contains as its active pharmaceutical ingredient a compound that is (or is substantially the same as) the Licensed Compound, and (b) has been placed on the market pursuant to a validly granted marketing authorization.
1.11 Licensed Compound means the Development Candidate listed in Schedule 1.11 hereto.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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1.12 Licensed Product-Specific Patents means those Licensed Patents that [***] the Licensed Compound and/or Licensed Product and [***].
1.13 Licensed Intellectual Property means the Licensed Patents and Licensed Technology.
1.14 Licensed Patents means Patents owned or Controlled by Ascentage or its Affiliates during the Term, in each case to the extent Covering the Licensed Compound or a Licensed Product.
1.15 Licensed Product means a pharmaceutical product containing the Licensed Compound (either alone or with other active pharmaceutical ingredients), in all forms, presentations, formulation and dosage forms.
1.16 Licensed Technology means Technology owned or Controlled by Ascentage or its Affiliates during the Term, in each case to the extent such Technology is necessary or reasonably useful for the development, manufacture or commercialization of the Licensed Compound or a Licensed Product.
1.17 Marketing Approval Application or MAA means a New Drug Application (or its equivalent), as defined in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or any corresponding or similar application, registration or certification in any country.
(a) Net Sales means the gross amount invoiced to non-Affiliate Third Parties on sales of Licensed Products by Unity or its Affiliates or Third Party Sublicensees, less the actual amounts incurred, allowed, or paid for the following items (if not previously deducted from the amount invoiced and provided that such deductions are calculated in accordance with generally accepted accounting principles of the United States of America (GAAP) on a consistent basis): (a) trade, cash, and quantity discounts; (b) amounts for claims, allowances or credits for returns, rejections or recalls; (c) freight, shipping and insurance charges allocable to such Licensed Products; (d) sales taxes, duties and other governmental charges (including value added tax) on particular sales, but excluding what is commonly known as income taxes; (e) government mandated rebates; (f) contracted rebates; and (g) a provision for uncollectible accounts; in each case as determined from books and records of the selling party maintained in accordance with GAAP, as consistently applied by such selling party. In the event that Unity grants a sublicense to a Third Party Sublicensee hereunder, and receives payments based upon such Third Party Sublicensees sales of Licensed Product, Unity may, with Ascentages consent, which consent shall not be unreasonably withheld or delayed, substitute the definition of Net Sales, used by such Third Party Sublicensee to calculate its payments to Unity in place of the foregoing definition of Net Sales for purposes of calculating royalties payable to Ascentage on such Third Party Sublicensees sales.
1.18 Phase I Clinical Trial means a human clinical trial, the principal purpose of which is preliminary determination of safety of a drug in healthy individuals or patients, that would satisfy the requirements of 21 C.F.R. §312.21(a).
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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1.19 Phase II Clinical Trial means a clinical trial of a drug conducted on a limited number of patients for the purpose of preliminary evaluation of clinical efficacy and safety of such drug, and/or to obtain an indication of the dosage regimen required, in each case that would satisfy the requirements of 21 C.F.R. 312.21(b).
1.20 Phase III Clinical Trial means a pivotal human clinical trial intended to gather additional information regarding the safety and efficacy of the drug in patients with the disease being studied, which clinical study is designed to be of a size and statistical power sufficient to support the filing of an MAA and that would satisfy the requirements of 21 C.F.R. 312.21(c).
1.21 Territory means the entire world excluding Greater China.
1.22 Third Party Sublicensee means any Third Party to which Unity licenses the right to commercialize any Licensed Product. For the avoidance of doubt, Third Party Sublicensee shall not include Third Party distributors, service providers, vendors and suppliers that do not have the right to market or promote Licensed Product.
1.23 UM License Agreement means that certain license agreement entered into by Ascentage and the Regents of the University of Michigan (UM) effective as of December 1, 2010, as amended by all amendments to such license agreement existing as of the Effective Date.
1.24 Valid Claim means a claim contained in an issued Patent within the Licensed Patents in any country that (a) has not expired; (b) has not been disclaimed; (c) has not been cancelled or superseded, or if cancelled or superseded, has been reinstated; and (d) has not been revoked, held invalid, or otherwise declared unenforceable or not allowable by a tribunal or patent authority of competent jurisdiction over such claim in such country from which no further appeal has or may be taken.
ARTICLE 2
LICENSES
2.1 Licenses.
2.1.1 Development Licenses. Subject to the terms and conditions of this Agreement, Ascentage hereby grants to Unity:
(a) a royalty-free, exclusive license in the Field and the Territory, with the right to grant sublicenses as provided in Section 2.2, under the Licensed Intellectual Property to (i) research, develop and seek and obtain marketing approval for the Licensed Compound and Licensed Products and (ii) package the Clinical Materials (as defined in Schedule 4.1) supplied by or on behalf of Ascentage, in each case in the Field and Territory, and to have any of the foregoing performed on its behalf by a Third Party; and
(b) a royalty-free, non-exclusive license in the Field and the Territory, with the right to grant sublicenses as provided in Section 2.2, under the Ascentage Intellectual Property to manufacture or have manufactured Licensed Compound and Licensed Product for non-clinical research and development purposes.
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2.1.2 Commercialization Licenses. Subject to the terms and conditions of this Agreement, Ascentage hereby grants to Unity a royalty-bearing, exclusive license in the Field and the Territory, with the right to grant sublicenses as provided in Section 2.2, under the Licensed Intellectual Property: (a) to use the Licensed Compound supplied by or on behalf of Ascentage to make or have made the Licensed Products; (b) to make or have made Licensed Products and all components thereof (including without limitation, Licensed Compound) and (c) to use, offer for sale, sell, import, export, market, promote and distribute Licensed Compounds and Licensed Products; in each case, solely for use in the Field and Territory, and to have any of the foregoing performed on its behalf by a Third Party. For clarity, it is understood and agreed that Unitys right under subsection (b) above to make or have made Licensed Products and all components thereof may only be exercised as permitted under Schedule 4.1.
2.2 Sublicenses. Unity may grant and authorize sublicenses within the scope of the license granted to Unity pursuant to this Agreement, provided that for clarity, Unity shall remain responsible for all milestone and other payments due to Ascentage under this Agreement based on the activities of Unitys sublicensees.
2.3 Third Party Intellectual Property. If after the Effective Date, Ascentage acquires or licenses from a Third Party subject matter that would fall within the Licensed Intellectual Property (Third Party Intellectual Property) that is subject to any payment obligation to the Third Party, then Ascentage shall so notify Unity and Unity shall inform Ascentage if it wishes such subject matter to be included within the Licensed Intellectual Property. If Unity notifies Ascentage that it does wish such subject matter to be so included, the rights granted to Unity hereunder with respect to such Third Party Intellectual Property shall be subject to Unity promptly reimbursing Ascentage for [***] and Unity shall reimburse Ascentage for [***]. Upon request by Unity, Ascentage shall disclose to Unity a written description of such payment obligations. Notwithstanding the foregoing, Unity shall have the right to treat amounts paid to Ascentage as reimbursements for payments for Enabling IP for purposes of Section 5.5.
2.4 No Implied Licenses. Nothing herein shall be construed as granting Unity, by implication, estoppel or otherwise, any license or other right (a) to any intellectual property of Ascentage other than the Licensed Intellectual Property (b) to commercialize Licensed Products outside of the Field and Territory (c) not relating to the Licensed Compound and Licensed Products or (d) any right or license other than those expressly granted herein.
2.5 Exclusivity with Respect to Licensed Compounds. Ascentage hereby covenants that except as expressly permitted under any future agreement that the Parties may enter into pursuant to Article 8 below pertaining to the China JVCO, Ascentage shall not: (a) research, develop, use or commercialize, and shall not authorize any Affiliate or other Third Party to research, develop, use or commercialize, the Licensed Compound or any Licensed Product, and (b) manufacture, or authorize any Third Party to manufacture, the Licensed Compound or any Licensed Product, other than for supply to Unity in accordance with the terms of Schedule 4.1.
2.6 [***]. The Parties agree that within [***] of the Effective Date of this Agreement they will put in place a procedure pursuant to which [***] shall [***] that [***] to [***].
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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ARTICLE 3
DUE DILIGENCE
3.1 General. Unity shall use commercially reasonable efforts to develop and obtain marketing approval for at least one Licensed Product hereunder, and thereafter shall use commercially reasonable efforts to launch and commercialize each such Licensed Product and to fulfil the market demand therefor.
3.2 Diligence Milestones. Without limiting the its general diligence obligations under Section 3.1 above, Unity agrees that it shall achieve the following diligence milestones with respect to the Licensed Compound by the deadlines specified below:
Milestone |
Time Period | |
1. [***] | Within [***] ([***]) [***] of the Effective Date | |
2. [***] | Within [***] ([***]) [***] of the Effective Date | |
3. [***] | Within [***] ([***]) [***] of the Effective Date | |
4. [***] | Within [***] ([***]) [***] of the Effective Date |
If Unity is unable to meet [***], as applicable, by the specified deadline, Unity shall none-the-less be deemed to be in compliance with its diligence obligations hereunder so long as it [***].
3.3 Substitution of Licensed Compound.
3.3.1 General. If Unity elects to discontinue development of a Licensed Compound for [***] reasons, then Unity shall have a right to replace such abandoned Licensed Compound with the Back-up Compound listed in Schedule 3.3. Following such replacement pursuant to this Section 3.3, the Back-up Compound shall be considered a Substitute Licensed Compound.
3.3.2 Designation. In the event that Unity wishes to exercise its right under this Article 3 to select a Substitute Licensed Compound, Unity will provide Ascentage with written notice specifying the Licensed Compound for which development is being discontinued and the Back-up Compound that it wishes to replace it with (Substitution Notice).
3.3.3 Following designation of a Substitute Licensed Compound, the Parties shall promptly update Schedule 1.11 to reflect the substitution of the Substitute Licensed Compound for the current Licensed Compound. Upon any such substitution, all references to the Licensed Compound in this Agreement shall thereafter be deemed to refer to such Substitute Licensed Compound, and the compound for which such Substitute Licensed Compound was substituted shall cease to be considered a Licensed Compound.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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ARTICLE 4
MANUFACTURE AND SUPPLY
4.1 Subject to the terms and conditions of this Agreement, Ascentage (itself or through one or more Third Party contract manufacturers) shall manufacture and supply Unity, its Affiliates and their Third Party Sublicensees with (a) Clinical Materials, and (b) Licensed Compound, in each case in accordance with Schedule 4.1 (Supply Terms). Subject to the terms and conditions of this Agreement, Unity shall purchase Clinical Materials and Licensed Compound from Ascentage in accordance with Schedule 4.1. Upon Unitys request, Ascentage and Unity shall enter into a separate supply agreement substantially reflecting the Supply Terms set forth in Schedule 4.1 as well as other customary terms and conditions (the Supply Agreement). Unless and until such time as the Parties have executed the Supply Agreement, the terms of Schedule 4.1 shall govern any supply of Clinical Material and Licensed Compound requested by Unity.
ARTICLE 5
PAYMENTS
5.1 Equity Grants.
5.1.1 [***]. Upon the [***], Unity shall issue to Ascentage Three Hundred Ninety Three Thousand Three Hundred Thirty Five (393,335) shares of Unity common stock; such shares to be issued to Ascentage pursuant to the Stock Agreement within [***] ([***]) days of date that [***] occurs. For clarity, [***].
5.1.2 [***]. Upon the [***], Unity shall issue to Ascentage the following number of shares of Unity common stock based on how long after the Effective Date such [***]; such shares to be issued to Ascentage pursuant to the Stock Agreement within [***] ([***]) days of date that such [***] occurs:
(a) [***] ([***]) shares of Unity common stock if such [***] occurs within [***] ([***]) [***] of the Effective Date.
(b) [***] ([***]) shares of Unity common stock if such [***] occurs more than [***] ([***]) [***] after the Effective Date but less than [***] ([***]) [***] after the Effective Date.
(c) [***] ([***]) shares of Unity common stock if such [***] occurs more than [***] ([***]) [***] after the Effective Date.
5.1.3 Equity Cap. Notwithstanding anything in the contrary in this Agreement, the Library Agreement, the APG-1252 License Agreement or any other Compound License Agreement, the maximum cumulative aggregate number of shares of Unity common stock that Ascentage is eligible to receive under Sections 6.1 and 6.2 of the Library Agreement, Section 5.1 of the APG-1252 License Agreement, this Section 5.1 or Section 5.1 of any other Compound License Agreement is:
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(a) [***] ([***]) shares of Unity common stock if only one Licensed Product is developed; and
(b) Three Million Nine Hundred Thirty Three Thousand Three Hundred and Fifty (3,933,350) shares of Unity common stock if two or more Licensed Products is developed.
5.2 Development/Sales Milestones. In partial consideration of the rights and licenses granted herein to Unity, Unity shall pay Ascentage the following milestone payments.
[NTD: PRIOR TO EXECUTION PARTIES TO SELECT ONE OF THE THREE OPTIONS IN THIS SECTION 5.2 (DEVELOPMENT/SALES MILESTONES) AS WELL AS ONE OF THE THREE OPTIONS IN SECTION 5.3 (ROYALTIES) BASED ON WHETHER THE LICENSED COMPOUND IS (1) A [***], (2) A [***] OR (3) A [***]]
5.2.1 Option 1 [***]. Within [***] ([***]) days after the first achievement by Unity (or any of its Affiliates or Third Party Sublicensees) of each of the following milestones with respect to a Licensed Product containing a [***], Unity shall pay Ascentage the corresponding milestone payment set forth below, in accordance with the payment provisions of Article 6 below:
Milestone Event |
Milestone Payment |
|||
1. [***]: |
$ | [*** | ] | |
2. [***]: |
$ | [*** | ] | |
3. [***]: |
$ | [*** | ] | |
4. [***] |
$ | [*** | ] | |
5. [***] |
$ | [*** | ] | |
|
|
|||
Total per Licensed Product |
$ | [*** | ] | |
|
|
5.2.2 Option 2: [***]. Within [***] ([***]) days after the first achievement by Unity (or any of its Affiliates or Third Party Sublicensees) of each of the following milestones with respect to a [***], Unity shall pay Ascentage the corresponding milestone payment set forth below, in accordance with the payment provisions of Article 6 below:
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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Milestone Event |
Milestone Payment |
|||
1. [***]: |
$ | [***] | ||
2. [***]: |
$ | [***] | ||
3. [***]: |
$ | [***] | ||
4. [***] |
$ | [***] | ||
5. [***] |
$ | [***] | ||
|
|
|||
Total per Licensed Product |
$ | [***] | ||
|
|
5.2.3 Option 3: [***].
(a) Within [***] ([***]) days after the first achievement by Unity (or any of its Affiliates or Third Party Sublicensees) of each of the following milestones with respect to the [***] to achieve such milestone, Unity shall pay Ascentage the corresponding milestone payment set forth below, in accordance with the payment provisions of Article 6 below:
Milestone Event |
Milestone Payment |
|||
1. [***]: |
$ | [***] | ||
2. [***]: |
$ | [***] | ||
3. [***]: |
$ | [***] | ||
4. [***] |
$ | [***] | ||
5. [***] |
$ | [***] | ||
|
|
|||
Total per Licensed Product |
$ | [***] | ||
|
|
(b) Within [***] ([***]) days after the first achievement by Unity (or any of its Affiliates or Third Party Sublicensees) of each of the following milestones with respect to the [***] to achieve such milestone, Unity shall pay Ascentage the corresponding milestone payment set forth below, in accordance with the payment provisions of Article 5 below:
Milestone Event |
Milestone Payment |
|||
1. [***]: |
$ | [***] | ||
2. [***]: |
$ | [***] | ||
3. [***]: |
$ | [***] | ||
|
|
|||
Total per Licensed Product |
$ | [***] | ||
|
|
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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5.2.4 Certain Additional Terms.
(a) For clarity, all forms, presentations, formulation and dosage forms of a Licensed Product shall be considered one and the same Licensed Product for purposes of this Section 5.2.
(b) If Unity begins development of one Licensed Product and a milestone payment is made under this Section 5.2, and then Unity terminates development of such Licensed Product and begins development of a second Licensed Product, the milestone which was already paid under this Section 5.2 for the abandoned Licensed Product will not be repeated, but the remaining milestone payments hereunder will be due as the second Licensed Product advances; [NTD: IN THE EVENT OPTION 3 IS SELECTED, THE FOLLOWING ADDITIONAL SENTENCE SHALL BE ADDED TO SECTION 5.2.2(b): For clarity, it is acknowledged and agreed that should the first Licensed Product be abandoned prior to achieving all of the milestones set forth Section 5.2.1(a), such remaining unpaid milestones shall become due and payable when first achieved by the next Licensed Product.]
(c) In its sole discretion, Unity may elect in lieu of the payment of the milestone payments owing to Ascentage under this Section 5.2, to grant to Ascentage that number of shares of Unity common stock of equivalent value (based on the Fair Market Value of such Unity common stock at the time of such grant).
5.3 Royalties. In partial consideration of the licenses granted herein to Unity, Unity shall pay to Ascentage a running royalty equal to the percentage set forth below on the Net Sales of Licensed Product based on the type of Compound contained in such Licensed Product, subject to any adjustments set forth in Sections 5.5 and 5.6, and in accordance with the payment provisions of Article 6 below.
5.3.1 Option 1: [***].
Annual Net Sales of Licensed Product |
Applicable Royalty Rate |
|||
Portion of worldwide annual Net Sales of the Licensed Product less than or equal to [***] Dollars (US$[***]) |
[***] | % | ||
Portion of worldwide annual Net Sales of the Licensed Product over [***] Dollars (US$[***]) |
[***] | % |
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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5.3.2 Option 2: [***].
Annual Net Sales of Licensed Product |
Applicable Royalty Rate |
|||
Portion of worldwide annual Net Sales of the Licensed Product less than or equal to [***] Dollars (US$[***]) |
[***] | % | ||
Portion of worldwide annual Net Sales of the Licensed Product over [***] Dollars (US$[***]) |
[***] | % |
5.3.3 Option 3: [***].
(a) With respect to Net Sales of the [***] to receive marketing approval, Unity shall pay to Ascentage the royalties set forth below:
Annual Net Sales of Licensed Product |
Applicable Royalty Rate |
|||
Portion of worldwide annual Net Sales of the Licensed Product less than or equal to [***] Dollars (US$[***]) |
[***] | % | ||
Portion of worldwide annual Net Sales of the Licensed Product over [***] Dollars (US$[***]) |
[***] | % |
(b) With respect to Net Sales of the [***] to receive marketing approval, Unity shall pay to Ascentage the royalties set forth below:
Annual Net Sales of Licensed Product |
Applicable Royalty Rate |
|||
Portion of worldwide annual Net Sales of the Licensed Product less than or equal to [***] Dollars (US$[***]) |
[***] | % | ||
Portion of worldwide annual Net Sales of the Licensed Product over [***] Dollars (US$[***]) |
[***] | % |
5.4 Royalty Term. Unitys obligation to pay royalties on Net Sales of Licensed Product under this Agreement shall continue on a country-by-country and Licensed Product-by-Licensed Product basis until the later of (a) abandonment or expiration of the last Valid Claim that claims the [***] contained in such Licensed Product in such country, (b) the date of expiry of any applicable regulatory, pediatric, orphan drug or data exclusivity obtained for such Licensed Product in such country, or (c) ten (10) years after the first commercial sale of the Licensed Product by or under the authority of Unity in any country in the Territory.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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5.5 Royalty Stacking. Unity shall be entitled to deduct from the amounts owing to Ascentage under Sections 5.2 and 5.3 above [***] percent ([***]%) of any royalties or other payments made to Third Parties for Enabling IP, provided that (a) the total aggregate amount payable to Ascentage under Sections 5.2 and 5.3 in any [***] may not be reduced to less than [***] percent ([***]%) of the amounts that would otherwise be due Ascentage in such [***], and
(a) Unity shall not be entitled to deduct any royalties or other payments made under the Existing Agreements. If, in any [***], Unity is not able to fully recover its [***] percent ([***]%) portion of the payments due to a Third Party, it shall be entitled to carry forward such right of off-set to future [***] with respect to the excess amount
5.6 Generic Products. If at any time during the term of this Agreement a Generic Product enters the market in any country and has for a period of at least [***] ([***]) consecutive [***] a market share in such country of at least [***] percent ([***]%) of the then combined unit volume of the corresponding Licensed Product (i.e., the Licensed Product containing the same active pharmaceutical ingredient(s) as are present in the Generic Product) and such Generic Product, then Unitys obligation to pay royalties to Ascentage on Net Sales of such Licensed Product in such country shall be to reduced to [***] percent ([***]%) of the amounts that would otherwise be due Ascentage under Section 5.3 in such calendar quarter.
5.7 Maximum Reduction to Royalties. Notwithstanding anything to the contrary in this Article 5, in no event shall the royalties owing to Ascentage with respect to Net Sales of a Licensed Product in any country be reduced by cumulative operation of Sections 5.5 and 5.6 to less than [***] percent ([***]%) of the amounts that would otherwise be due Ascentage under Section 5.3 in such calendar quarter.
5.8 Combination Products. In the event that a Licensed Product is sold for a single price in combination with another therapeutically active pharmaceutical ingredient, or other product or service, for which no royalty would be due hereunder if sold separately, Net Sales from such combination sales, for purposes of calculating the applicable royalty rate and the applicable royalty due under Section 5.3 shall be calculated by multiplying the Net Sales of the combination product by the fraction A/(A + B), where A is the average gross selling price during the previous [***] of the Licensed Product sold separately and B is the gross selling price during the previous [***] of the therapeutically active ingredient, product or service. In the event that separate sales of the Licensed Product or the additional therapeutically active ingredient, product or service were not made during the previous [***], then the Net Sales shall be reasonably allocated between such Licensed Product and such other active ingredient, product or service as agreed upon by the Parties, or failing agreement, determined in accordance with Section 13.1 (Dispute Resolution) below.
5.9 Unitys Covenant. Unity hereby agrees that any shares of common stock issued to Ascentage will not be diluted unless diluted in good faith by Unity on a proportionate basis to the other shares of common stock of Unity outstanding at the time of any such dilution, and subject to the anti-dilution protections as set forth in Unitys certificate of incorporation, as may be amended from time to time in good faith; provided further, that Unity shall not take actions that specifically treat Ascentage differently from other holders of common stock, or issue any capital stock in a manner which is intended to circumvent this covenant. The shares of common stock
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
31
issued to Ascentage shall be duly adjusted for any bonus issue, share split, consolidation, subdivision, reclassification, recapitalization or similar arrangement of Unity, in each case in accordance with, and as expressly contemplated by, Unitys certificate of incorporation, as may be amended from time to time in good faith.
ARTICLE 6
ACCOUNTING; RECORDS; METHOD OF PAYMENT
6.1 Royalty Reports; Payments, Invoices. After the first sale of a Licensed Product on which royalties are payable by Unity hereunder, Unity shall make quarterly written reports to Ascentage within [***] ([***]) days after the end of each calendar quarter, stating in each such report the number, description, and aggregate Net Sales of Licensed Product sold during the calendar quarter upon which a royalty is payable under Article 5 above. Concurrently with the making of such reports, Unity shall pay to Ascentage all amounts payable pursuant to Article 5 above, in accordance with the payment provisions of Section 6.3.
6.2 Records; Inspection. During the term of this Agreement and for a period of [***] ([***]) years thereafter, Unity and its Affiliates shall keep complete, true and accurate books of account and records for the purpose of determining the amounts payable to Ascentage under this Agreement. Ascentage shall have the right to cause an independent, certified public accountant reasonably acceptable to Unity to audit such records to confirm gross sales, Net Sales and royalty payments for a period covering not more than the preceding [***] ([***]) years. Unity agrees to either: (a) require each of its Third Party Sublicensees to maintain similar books and records and to open such records for inspection by an independent, certified public accountant reasonably satisfactory to such Third Party Sublicensee, on behalf of, and as required by, Ascentage for the purpose of verifying payments hereunder, or (b) obtain such audits rights from the Third Party Sublicensee for itself and exercise such audit rights on behalf of Ascentage upon Ascentages request and disclose the results thereof to Ascentage. All such inspections may be made no more than [***] each calendar year at reasonable times and on reasonable notice. No accounting period of Unity or its Affiliate or Third Party Sublicensee shall be subject to audit more than one time hereunder. Such independent, certified public accountant will be obliged to execute a reasonable confidentiality agreement prior to commencing any such inspection. The results of any inspection hereunder shall be provided to both Parties, and Unity shall pay any underpayment to Ascentage within [***] ([***]) days. Inspections conducted under this Section 6.2 shall be at the expense of Ascentage (and Ascentage will reimburse Unitys reasonable out-of-pocket costs of those inspections conducted by Unity at Ascentages request under (b) above), unless a variation or error producing an increase exceeding [***] percent ([***]%) of the amount stated for any period is established in the course of any such inspection, whereupon all costs of such audit of such period will be paid by Unity.
6.3 Payment Method. All payments due hereunder shall be made in U.S. dollars, and shall be made by bank wire transfer in immediately available funds to an account designated by Ascentage in a written notice to Unity. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rates used by Unity in calculating Unitys own revenues for financial reporting purposes.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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6.4 Late Payments. Any payments due from Unity that are not paid on the date such payments are due under this Agreement shall bear interest at [***] ([***]%) above the then prevailing US Federal Funds Target Rate (Bloomberg page: FDTR <Index>) per annum calculated on a daily basis and payable for the period from the date payment is due until the date payment is actually made. This Section 6.4 shall in no way limit any other remedies available to any Party.
ARTICLE 7
PATENT PROSECUTION AND ENFORCEMENT
7.1 Prosecution of Patents within the Licensed Intellectual Property.
7.1.1 General.
(a) Except as set forth in Section 7.1.1(b) or Section 7.1.1(c) hereof, Ascentage shall have the sole right to control the preparation, filing, prosecution and maintenance of all Licensed Patents using patent counsel of its choice.
(b) Unity shall have the first right, but not the obligation, to prepare, file, prosecute and maintain Licensed Product-Specific Patents. Unity shall (i) keep Ascentage reasonably informed as to its filing and prosecution strategy for Licensed Product-Specific Patents and the filing, prosecution and maintenance of Licensed Product-Specific Patents, (ii) provide Ascentage with a reasonable opportunity to review drafts of proposed patent office submissions with respect to Licensed Product-Specific Patents; and (iii) consider in good faith the requests and suggestions of Ascentage with respect to strategies for filing and prosecuting such Licensed Product-Specific Patents. In the event that Unity desires to abandon or decline further responsibility for any such Licensed Product-Specific Patent, Unity shall provide reasonable prior written notice to Ascentage of such intention to abandon or decline responsibility, but in no case later than [***] ([***]) days prior to any required action relating to the filing, prosecution or maintenance of such Licensed Product-Specific Patent, and Ascentage shall have the right, at its discretion, to assume such responsibility.
(c) With respect to any Licensed Patent (other than a Licensed Product-Specific Patent) that claims the Licensed Compound and/or Licensed Product, Ascentage shall have the first right, but not the obligation, to prepare, file, prosecute and maintain such Licensed Patent and shall (i) keep Unity reasonably informed as to its filing and prosecution strategy for such Licensed Patent and the filing, prosecution and maintenance of such Licensed Patent, (ii) provide Unity with a reasonable opportunity to review drafts of proposed patent office submissions with respect to such Licensed Patent; and (iii) follow the directions given by Unity with respect to filing and prosecuting such Licensed Patents, unless [***], in which case [***] and [***]. In the event that Ascentage desires to abandon or decline further responsibility for any Licensed Patent, Ascentage shall provide Unity [***] notice and the opportunity to assume responsibility for such Licensed Patent.
7.1.2 For purposes of this Article 7, prosecution and maintenance of patents and patent applications shall be deemed to include, without limitation, the conduct of interferences or oppositions, and/or requests for re-examinations, reissues or extensions of patent terms.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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7.2 Enforcement of Licensed Patents. If either Party determines that a Third Party is making, using or selling a product that may infringe any Licensed Patent, that Party shall notify the other Party in writing.
7.2.1 Infringement by a Competitive Product.
(a) With respect to any such infringing activity that involves the manufacture, use or sale by a Third Party of any product that [***] (Competitive Product), Unity shall have the first right, at its sole option, to bring suit to enforce any Licensed Patent, and/or to defend any declaratory judgment action with respect thereto (Enforcement Action); provided, however, that Unity shall keep Ascentage reasonably informed as to the defense and/or settlement of any such Enforcement Action. Ascentage shall have the right to participate in any such Enforcement Action with counsel of its own choice at its own expense. All recoveries received by Unity from an Enforcement Action shall be first applied to reimburse Unitys and then Ascentages unreimbursed expenses, including without limitation, reasonable attorneys fees and court costs. Any remainder shall, to the extent the same pertains to an infringing activity that involves the manufacture, use or sale by a Third Party of any Competitive Product, be treated as Net Sales.
7.2.2 In the event Unity elects not to initiate an Enforcement Action with respect to any commercially significant infringing activity that involves the manufacture, use or sale by a Third Party of any Competitive Product within [***] ([***]) days of a request by Ascentage to do so ([***]), Ascentage may initiate such action at its expense. Unity shall have the right to participate in any such action with counsel of its own choice at its own expense. All recoveries received by Ascentage from an Enforcement Action shall be first applied to reimburse Ascentages and then Unitys unreimbursed expenses, including without limitation, reasonable attorneys fees and court costs. Any remainder shall, to the extent the same pertains to an infringement of the Licensed Patents, be split [***].
7.2.3 Other Instances of Infringement. With respect to any such infringing activity that does not involve the manufacture, use or sale by a Third Party of a Competitive Product, Ascentage shall have the sole right, at its sole option, to bring suit to enforce any Licensed Patent, and/or to defend any declaratory judgment action with respect thereto and to retain all recoveries received by Ascentage in connection therewith.
7.3 Infringement Claims Against Unity. If the production, sale or use of a Licensed Product pursuant to this Agreement results in any claim, suit or proceeding alleging patent infringement against Unity (or its Affiliates or sublicensees), Unity shall promptly notify Ascentage thereof in writing setting forth the facts of such claim in reasonable detail. As between the Parties, Unity will be entitled to control the defense in any such action(s). Unity agrees to keep Ascentage reasonably informed of all material developments in connection with any such claim, suit or proceeding as it relates to the Licensed Intellectual Property. Notwithstanding the above, Unity shall not admit the invalidity of any Licensed Patent without written consent from Ascentage.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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7.4 Cooperation. In any legal action undertaken by a Party pursuant to Sections 7.2 or 7.3 of this Agreement (the Party bringing or defending such legal action, the Enforcing Party), the non-Enforcing Party shall cooperate fully with the Enforcing Party, including without limitation by joining as a party plaintiff if necessary for legal standing and executing such documents as the Enforcing Party may reasonably request. Upon the request of, and at the expense of, the Enforcing Party, the non-Enforcing Party shall make available at reasonable times and under appropriate conditions all relevant personnel, records, papers, information, samples, specimens and other similar materials in its possession.
7.5 No Implied Obligations. Except as expressly provided in this Article 7, neither Party has any obligation to bring or prosecute actions or suits against any Third Party for patent infringement.
7.6 UM License Agreement. Notwithstanding the foregoing provisions of this Article 7, with respect to the Licensed Patents subject of the UM License Agreement, Unitys rights under this Article 7 shall be limited to the extent of Ascentages rights to prosecute and enforce such Licensed Patents under the UM License Agreement, provided that (a) with respect to Licensed Product-Specific Patents that have been in-licensed from UM, to the extent the UM License Agreement will not permit Unity to control the prosecution of such patents, Ascentage agrees to (i) share with Unity the information Ascentage receives from UM under Section 7.2 of the UM License Agreement with respect to such patents, (ii) provide Unity with a reasonable opportunity to review and comment upon such information; and (iii) pass along to UM Unitys comments and requested actions, and (b) Ascentage shall at Unitys request and expense cooperate with Unity in order exercise the enforcement rights granted to Ascentage under Section 8.1 of the UM License Agreement, in each case permitted by the UM License Agreement.
ARTICLE 8
OPTION FOR CHINA JOINT VENTURE
8.1 Option for China JVCO. Unity shall grant to Ascentage an option to commercialize Licensed Products in Greater China jointly with Unity through the joint venture entity (China JVCO) to be established in accordance with Section 8.4 of the Library Agreement (JVCO Option). The process for exercise of the JVCO Option and all documents relating to China JVCO shall be agreed upon by [***] and [***] within [***] following the execution of the Library Agreement.
8.2 Limitation of Obligations; Certain Covenants.
8.2.1 Notwithstanding anything to the contrary, nothing in this Agreement shall be deemed to have granted Unity or any of its sublicensees the right to develop, manufacture, distribute, sell or otherwise commercialize the Licensed Products in the Greater China.
8.2.2 Ascentage hereby covenants that it shall not develop, manufacture, distribute, sell or otherwise commercialize the Licensed Compound (including any Licensed Products containing the Licensed Compound) in the Greater China except through the China JVCO. In the event of a breach by Ascentage of its obligations under this Section 8.2.2, the [***] and [***] shall [***].
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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8.2.3 Unity and Ascentage hereby covenant that they shall cooperate with respect to the establishment of the China JVCO, including without limitation by (a) initiating negotiation of the form agreements relating to the JVCO within [***] of the effective date of the Library Agreement, (b) using commercially reasonable efforts to reach agreement on such form agreements within [***] ([***]) [***] of the effective date of the Library Agreement, including ensuring that [***] and [***] devote at least [***] to such negotiations until such form agreements are agreed upon, and (c) signing the agreements for establishment of the China JVCO agreed upon by [***] and [***].
ARTICLE 9
CONFIDENTIALITY
9.1 Confidential Information. Except as otherwise expressly provided herein, the parties agree that the receiving party shall not, except as expressly provided in this Article 9, disclose to any Third Party or use for any purpose any information which is disclosed to it by the other party, whether orally or in writing, and identified as confidential (Confidential Information), except to the extent that it can be established by the receiving party by competent proof that such information:
(a) Was already known to the receiving party, other than under an obligation of confidentiality, at the time of disclosure;
(b) Was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party;
(c) Became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this Agreement;
(d) Was independently developed by the receiving party without reference to information provided by the disclosing party as demonstrated by documented evidence prepared contemporaneously with such independent development; or
(e) Was disclosed to the receiving party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing party not to disclose such information to others.
9.2 Permitted Use and Disclosures. Each party hereto may use or disclose Confidential Information of the other party to the extent such use or disclosure is reasonably necessary in the following instances: (a) exercising the rights granted to it hereunder (including, in the case of Unity, developing, commercializing and/or sublicensing of Licensed Products) or in carrying out its obligations hereunder; (b) filing or prosecuting Patents as permitted by this Agreement;
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(a) prosecuting or defending litigation; and (d) complying with applicable court orders or governmental regulations. Notwithstanding the foregoing, in the event a party is required to make a disclosure of the other partys Confidential Information pursuant to clause (c) or (d) of this Section 8.2, it will, except where impracticable, give reasonable advance notice to the disclosing party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such party would use to protect its own confidential information, but in no event less than reasonable efforts. In addition, Unity shall have the right to disclose Confidential Information regarding the Licensed Compound or Licensed Products to Third Parties in connection with due diligence or similar investigations, to potential Third Party investors, and others on a need to know basis, in each case under terms of confidentiality that are appropriate for the circumstances, or to the extent required by law.
9.3 Nondisclosure of Terms. Each of the parties hereto agrees not to disclose the terms of this Agreement to any Third Party without the prior written consent of the other party hereto, which consent shall not be unreasonably withheld; provided that a party may disclose the terms of this Agreement without such consent to such partys attorneys and advisors, to Third Parties in connection with due diligence or similar investigations, to potential Third Party investors, and others on a need to know basis, in each case under terms of confidentiality that are appropriate for the circumstances, or to the extent required by law.
9.4 Public Announcement. Unity may, in its discretion, issue a press release announcing the formation of this Agreement, which shall be substantially in a form approved by Ascentage prior to execution of the Agreement. Except with respect to such initial release or as otherwise required by law, neither party shall issue an additional press release or public announcement relating to this Agreement without the prior written approval of the other party, which shall not be withheld unreasonably. Either party may refer to the license granted under this Agreement in promotional and other communications with prospective customers and investors, subject to the prior written approval of the other party of the form, substance and intended use of such reference, and provided that such disclosure shall not include any technical details or any financial terms of the license. For purposes of clarification, after a party has obtained the other partys written approval of the form, substance and intended use of a particular reference, no further approval of the other party will be required for inclusion of the same reference in future communications that are intended for the same use.
ARTICLE 10
INDEMNIFICATION
10.1 Unity. Unity agrees to indemnify and defend Ascentage and its directors, officers, employees, agents and their respective successors, heirs and assigns (the Ascentage Indemnitees) against any losses, costs, claims, damages, liabilities or expense (including reasonable attorneys and professional fees and other expenses of litigation) (collectively, Liabilities) arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, to the extent (a) relating to Licensed Products developed, manufactured, used, sold or otherwise distributed by or on behalf of Unity, its Affiliates, sublicensees or other designees (excluding Ascentage, its Affiliates and licensees) including, without limitation, product liability and patent infringement claims, or (b) resulting from a breach by Unity of its representations and warranties under this Agreement, except, in each case, to the extent such Liabilities result from the negligence or intentional misconduct of Ascentage or Ascentages breach of its representations and warranties under this Agreement, including without limitation its product warranties under Section 1.13 of Schedule 4.1.
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10.2 Ascentage. Ascentage agrees to indemnify and defend Unity and its directors, officers, employees, agents and their respective heirs and assigns (the Unity Indemnitees) against any Liabilities arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, to the extent resulting from a breach by Ascentage of its representations and warranties under this Agreement, including without limitation its product warranties under Section 1.13 of Schedule 4.1, except, in each case, to the extent such Liabilities result from the negligence or intentional misconduct of Unity or Unitys breach of its representations and warranties under this Agreement.
10.3 Procedure. In the event that any party intends to claim indemnification under this Article 10 (each such party, an Indemnitee) it shall promptly notify the other Party in writing of such alleged Liability. The indemnifying Party shall have the right to control the defense thereof with counsel of its choice as long as such counsel is reasonably acceptable to Indemnitee; provided, however, that any Indemnitee shall have the right to retain its own counsel at its own expense, for any reason, including if representation of any Indemnitee by the counsel retained by the indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other Party reasonably represented by such counsel in such proceeding. The indemnifying Party shall keep the Indemnitee regularly informed of the status of the defense of any action, claim or liability covered by this Article 10 and shall take into consideration the Indemnitees reasonable comments thereon. The affected Indemnitee shall cooperate with the indemnifying Party and its legal representatives in the investigation of any action, claim or liability covered by this Article 10. The Indemnitee shall not compromise or settle any claim or suit, or voluntarily incur any expense with respect to any such claim or suit, in each case, without the prior written consent of the indemnifying Party, which such Party shall not be required to give. The failure to deliver written notice to the indemnifying Party within a reasonable time after the commencement of any action with respect to any action, claim or liability covered by this Article 10, if prejudicial to its ability to defend such action, shall relieve the indemnifying Party of any liability to the Indemnitee under this Article 10.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 General Warranties. Each Party represents and warrants to the other Party that it is a corporation duly organized and validly existing under the laws of the state or country of its incorporation, the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action, and it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder (including, in the case of Ascentage, granting the rights and licenses described in Article 2).
11.2 Ascentage Warranties. Ascentage represents and warrants on its own behalf and on behalf of its Affiliates that as of the Effective Date:
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(a) except as otherwise disclosed to Unity in writing prior to the Effective Date, (i) Ascentage has not received written notice from a Third Party claiming that the Licensed Compound infringes the intellectual property rights of any Third Party, and (ii) Ascentage is not a party to any legal action, suit or proceeding relating to the Licensed Compound.
(b) except as otherwise disclosed to Unity in writing prior to the Effective Date, there are no actual or pending actions, suits or claims, by any Third Party (i) challenging the ownership of the Licensed Compound; or (b) challenging the validity, effectiveness, enforceability, or ownership of the Licensed Intellectual Property.
(c) except as otherwise disclosed to Unity in writing prior to the Effective Date, the Licensed Patents are subsisting, in force or pending, as the case may be, and are not the subject of any interference, reissue, reexamination, opposition, cancellation or similar administrative proceedings.
(d) except as otherwise disclosed to Unity in writing prior to the Effective Date, Ascentage has not brought a claim alleging an infringement by a Third Party of any of the Licensed Patents and to Ascentages actual knowledge, there is no actual or alleged infringement by a Third Party of any of the Patents within the Licensed Patents.
(e) there are no Patents: (a) filed by Ascentage and subsequently assigned to Third Party, or (b) with respect to which Ascentage or its Affiliates have acquired rights from a Third Party (i.e., through in-licenses, cross-licenses or otherwise), in each case that (i) would be required for Unity to research, develop, manufacture, use or commercialize the Licensed Compound and (ii) are not included within the Licensed Intellectual Property.
(f) except as otherwise disclosed to Unity in writing prior to the Effective Date, there are no actual or pending suits or claims by any Third Party asserting that the manufacture, use, sale, offer for sale or importing of the Licensed Compound infringes the intellectual property of a Third Party and to Ascentages knowledge, the development and commercialization of the Licensed Compound would not infringe (i) any issued Patents of any Third Party (other than Patents in-licensed from UM), or (ii) any published Patent claim of any Third Party (other than claims of Patents in-licensed from UM) if such claim were to issue as published.
(g) Ascentage has disclosed to Unity all material agreements with Third Parties in effect as of the Effective Date pursuant to which Licensed Intellectual Property was licensed, acquired or sold, including without limitation all amendments to the UM License Agreement entered into by UM and Ascentage subsequent to the effective date of the License Agreement.
(h) Ascentage has not previously granted and will not grant any rights in the Licensed Intellectual Property that are inconsistent with the rights and licenses granted to Unity herein.
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11.3 Certain Rights and Obligations under the UM License Agreement.
(a) Ascentage shall not modify, amend or otherwise alter the UM License Agreement to the extent the same would materially and adversely affect Unitys rights under this Agreement.
(b) Ascentage shall not (a) exercise or fail to exercise any right under the UM License Agreement or (b) provide or fail to provide any consent or approval with respect to any right or obligation under the UM License Agreement, in each case to the extent the same would materially and adversely affect Unitys rights under this Agreement.
(c) Ascentage shall not unilaterally terminate the UM License Agreement.
11.4 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES TO THE OTHER PARTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, REGARDING THE LICENSED COMPOUND, LICENSED PRODUCTS OR THE LICENSED INTELLECTUAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, AND VALIDITY OF LICENSED INTELLECTUAL PROPERTY CLAIMS, ISSUED OR PENDING.
11.5 Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 9, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT; provided, however, that this Section 11.5 shall not be construed to limit either partys indemnification obligations under Article 10.
ARTICLE 12
TERM AND TERMINATION
12.1 Term. The term of this Agreement shall commence on the Effective Date and, unless earlier terminated as provided in this Article 12, shall continue in full force and effect on a country-by-country basis until the expiration of all royalty obligations pursuant to this Agreement for such country, as provided in Section 5.4 above. Unitys license with respect to the Licensed Technology shall survive the expiration (but not an earlier termination) of this Agreement, provided that such license shall thereafter become nonexclusive and fully paid-up.
12.2 Termination for Breach. Either Party may terminate this Agreement in the event that the other Party shall have materially breached or defaulted in the performance of any of its material obligations hereunder, and such breach or default shall have continued for sixty (60) days after written notice of such breach and intent to terminate this Agreement therefor was provided to the breaching Party by the nonbreaching Party. Any such termination shall become effective at the end of such sixty (60) day period unless the breaching Party has cured any such breach or default prior to the expiration of the sixty (60) day period. Notwithstanding the foregoing, if the Party alleged to be in breach of this Agreement in good faith disputes such breach within such sixty (60) day period, the nonbreaching Party shall not have the right to terminate this Agreement unless it has been determined by arbitration pursuant to Section 13.2 that this Agreement was materially breached, and the breaching Party fails to comply with its obligations hereunder within sixty (60) days after such determination.
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12.3 Termination by Unity. Any provision herein notwithstanding, Unity may terminate this Agreement, in its entirety or as to any particular Patent within the Licensed Patents, or as to any particular Licensed Product, at any time by giving Ascentage at least ninety (90) days prior written notice. From and after the effective date of a termination under this Section 12.3 with respect to a particular Patent in a particular country, such Patent shall cease to be within the Licensed Patents for all purposes of this Agreement, and all rights and obligations of Unity with respect to such Patent(s) shall terminate. From and after the effective date of a termination under this Section 12.3 with respect to a particular Licensed Product, the license granted under Section 2.1 above shall terminate with respect to such Licensed Product, and the same shall cease to be a Licensed Product for all purposes of this Agreement. Upon a termination of this Agreement in its entirety under this Section 12.3, all rights and obligations of the parties shall terminate, except as provided in Section 12.4 below. For clarity, Unity shall remain obligated to pay any and all milestone and other payments accrued, due and payable to Ascentage prior to such termination.
12.4 Effect of Termination.
12.4.1 Accrued Obligations. Expiration or any termination of this Agreement shall not release either Party hereto from any liability which at the time of such expiration or termination has already accrued to such Party or which is attributable to a period prior to such expiration or termination, subject to the terms of this Agreement, nor preclude either Party from pursuing any rights and remedies it may have hereunder or at law or in equity which accrued to it prior to such expiration or termination, subject to the terms of this Agreement.
12.4.2 Sales of Existing Inventory of Licensed Product. In the event this Agreement is terminated for any reason with respect to a Licensed Product after the first approval of an MAA for such Licensed Product, Unity shall provide Ascentage with a written inventory of all quantities of such Licensed Product that Unity and its Affiliates have in stock and, for a period of [***] ([***]) [***] after such termination, Unity and its Affiliates shall have the right to sell or otherwise dispose of such Licensed Product, all subject to the payment to Ascentage of royalties pursuant to Article 5 hereof.
12.4.3 Survival of Sublicenses. Upon termination of this Agreement for any reason, any sublicense granted by Unity hereunder to a Third Party Sublicensee shall survive, provided that such Third Party Sublicensee continues to pay to Ascentage the milestones and royalties that would have been due to Ascentage under this Agreement based on such Third Party Sublicensees activities had this Agreement not terminated. For clarity, in the event that a Third Party Sublicensee fails to pay to Ascentage the applicable milestones and royalties due to Ascentage based on such Third Party Sublicensees activities, Ascentage shall be entitled to terminate such surviving sublicense by providing such Third Party Sublicensee written notice of termination, which notice shall take effect [***] ([***]) days after it is received by such Third Party Sublicensee unless such Third Party Sublicensee has cured any such breach or default prior to the expiration of the [***] ([***]) day period.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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12.4.4 Library Agreement. This Agreement is independent of, and shall not be affected by, the expiration or termination of the Library Agreement, and vice versa.
12.4.5 Survival. Articles 1 (Definitions), 6 (Accounting; Records; Method of Payment), 9 (Confidentiality), 10 (Indemnification), 13 (Dispute Resolution) and 14 (Miscellaneous) and Sections 7.2.1 (with respect to any ongoing Enforcement Action), 11.3, 11.4 and 12.4 shall survive the expiration or termination of this Agreement for any reason. Except as otherwise provided in this ARTICLE 12, all rights and obligations of the parties under this Agreement shall terminate upon the expiration or termination of this Agreement.
ARTICLE 13
DISPUTE RESOLUTION
13.1 Dispute Resolution. If an unresolved dispute arises out of or relates to this Agreement, or the breach thereof, either Party may refer such dispute to the [***] of Unity and Ascentage, who shall meet in person or by telephone within [***] ([***]) days after such referral to attempt in good faith to resolve such dispute. If such matter cannot be resolved by discussion of such officers within such [***] ([***]) days period (as may be extended by mutual agreement), either Party shall be entitled to seek resolution of such dispute pursuant to Section 13.2 below.
13.2 Arbitration. If the parties are unable to resolve a dispute on an issue of interpretation, breach or enforcement of this Agreement, the parties shall refer such dispute to be finally resolved by binding arbitration under the terms of this Section 13.2, except that all disputes with respect to the validity or infringement of Patents shall be subject to applicable federal court jurisdiction and not subject to the terms of this Section 13.2. Whenever a party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other party. Any such arbitration shall be conducted under the [***] by a panel of three (3) arbitrators in [***]. Each party shall select one (1) arbitrator who is not employed by, or otherwise affiliated with, such party within [***] ([***]) days after the institution of arbitration proceedings, and the two (2) arbitrators so selected shall designate the third arbitrator. The parties shall use their commercially reasonable efforts to conclude the arbitration hearings within [***] ([***]) [***] following the confirmation of the third and presiding arbitrator.
13.3 Injunctive Relief. Each Party shall be free to seek preliminary or permanent injunctive relief, restraining order or degree of specific performance in any court of competent jurisdiction. For avoidance of doubt, any such equitable remedies provided under this Section 13.3 shall be cumulative and not exclusive and are in addition to any other remedies, which either Party may have under this Agreement or applicable law.
ARTICLE 14
MISCELLANEOUS
14.1 Governing Laws. This Agreement and any dispute arising from the construction, performance or breach hereof shall be governed by and construed, and enforced in accordance with, the laws of the state of New York, USA, without reference to conflicts of laws principles.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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14.2 Waiver. It is agreed that no waiver by either Party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.
14.3 Assignment. This Agreement shall not be assignable by either party without the written consent of the other party hereto, except that either party may assign this Agreement, without such consent, to an entity that acquires all or substantially all of the business or assets of such party to which this Agreement relates, whether by merger, reorganization, acquisition, sale, or otherwise; provided, however, that within [***] ([***]) days of such an assignment, the assignee shall agree in writing to be bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall bind and inure to the benefit of each partys successors and permitted assigns.
14.4 Independent Contractors. The relationship of the Parties hereto is that of independent contractors. The Parties hereto are not deemed to be agents, partners or joint venturers of the others for any purpose as a result of this Agreement or the transactions contemplated thereby.
14.5 Compliance with Laws. In exercising their rights under this Agreement, the Parties shall fully comply in all material respects with the requirements of any and all applicable laws, regulations, rules and orders of any governmental body having jurisdiction over the exercise of rights under this license including, without limitation, those applicable to the discovery, development, manufacture, distribution, import and export and sale of Licensed Products pursuant to this Agreement.
14.6 Notices. All notices, requests and other communications hereunder shall be in writing and shall be personally delivered or by registered or certified mail, return receipt requested, postage prepaid, in each case to the respective address specified below, or such other address as may be specified in writing to the other Parties hereto and shall be deemed to have been given upon receipt:
If to Unity: | Unity Biotechnology, Inc. 1700 Owens Street, Suite 535 San Francisco, CA 94158, USA Attention: [***] Email: [***] | |
If to Ascentage: | Ascentage Pharma Group Corp. Ltd. Room 201, QB3 Building, Medical City Avenue Hi-Tech BioMed District, Taizhou City, Jiangsu Province P.R. China, 225300 Attention: [***] Email: [***] |
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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14.7 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect to the fullest extent permitted by law without said provision, and the Parties shall amend the Agreement to the extent feasible to lawfully include the substance of the excluded term to as fully as possible realize the intent of the Parties and their commercial bargain.
14.8 Advice of Counsel. Unity and Ascentage have each consulted counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one Party or another and will be construed accordingly.
14.9 Performance Warranty. Each Party hereby warrants and guarantees the performance of any and all rights and obligations of this Agreement by its Affiliates, licensees and sublicensees.
14.10 Force Majeure. Neither Party shall lose any rights hereunder or be liable to the other Party for damages or losses (except for payment obligations) on account of failure of performance by the defaulting Party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, unusual and unexpected governmental intervention, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the non-performing Party and such Party has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a Party be required to settle any labor dispute or disturbance.
14.11 Complete Agreement. This Agreement with its schedules, together with the Library Agreement and its exhibits, constitutes the entire agreement, both written and oral, between the Parties with respect to the subject matter hereof, and all prior agreements respecting the subject matter hereof, either written or oral, express or implied, shall be abrogated, canceled, and are null and void and of no effect. No amendment or change hereof or addition hereto shall be effective or binding on either of the Parties hereto unless reduced to writing and executed by the respective duly authorized representatives of Unity and Ascentage.
14.12 Headings. The captions to the several Sections and Articles hereof are not a Part of this Agreement, but are included merely for convenience of reference and shall not affect its meaning or interpretation.
14.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.
14.14 Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by each Party as a licensor are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title ll, U.S. Code (the Bankruptcy Code), licenses of rights to intellectual property as defined under section 101(35A) of the Bankruptcy Code. The Parties agree that each licensee of such rights under this Agreement, shall retain and may fully exercise all rights and elections it would have in the case of a licensor bankruptcy under the Bankruptcy Code. Each Party agrees during the term of this Agreement to create or maintain current copies, or if not amenable to copying, detailed descriptions or other appropriate embodiments, of all such intellectual property licensed to the other Party.
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IN WITNESS WHEREOF, the Parties hereto have caused their duly authorized representatives to execute this Agreement.
ASCENTAGE PHARMA GROUP CORP. LTD. | UNITY BIOTECHNOLOGY, INC. | |||||||
By: |
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By: |
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Name: | Dajun Yang, MD, PhD | Name: | Nathaniel David, PhD | |||||
Title: | Chief Executive Officer | Title: | Chief Executive Officer |
Schedule 1.11 Licensed Compound
Schedule 3.3 Back-up Compound
Schedule 4.1 Supply Terms
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SCHEDULE 1.11
LICENSED COMPOUND
SCHEDULE 3.3
BACK-UP COMPOUND
SCHEDULE 4.1
SUPPLY TERMS
1.1 Product Supply. Ascentage shall supply Unity, its Affiliates and Sublicensees with such quantities of Clinical Materials and Licensed Compound as Unity, its Affiliates and Sublicensees may order from time-to-time during the term of the Agreement.
1.2 Clinical Supplies. Unity shall be entitled to order quantities of Clinical Materials and Licensed Compound for use in clinical trials and for development purposes (e.g., stability studies and other analytical purposes) in accordance with the terms of this Section 1.2.
(a) Clinical Materials. As used herein, Clinical Materials shall means Licensed Product that has been manufactured, labeled and packaged in compliance with applicable laws relating to experimental materials to be administered to human test subjects.
(b) Prior to completion of Phase II Clinical Trial. Prior to the completion of the first Phase II Clinical Trial carried out by Unity, its Affiliates and Sublicensees with respect to the Licensed Product, Ascentage shall supply to Unity the quantities of Clinical Materials that Unity may order from time-to-time order from Ascentage in accordance with this Section 1.2.
(c) After completion of Phase II Clinical Trial. Following completion of the first Phase II Clinical Trial carried out by Unity, its Affiliates and Sublicensees with respect to the Licensed Product, Ascentage shall supply to Unity the quantities of (i) Clinical Materials and/or (ii) Licensed Compound, that Unity may order from time-to-time order from Ascentage in accordance with this Section 1.2, in each case for use by Unity, its Affiliates and Sublicensees in carrying out additional clinical studies of the Licensed Product.
(d) Procedures. Unity shall periodically submit purchase orders to Ascentage for quantities of Clinical Materials and/or Licensed Compound, which purchase orders shall set forth the specific quantities needed, requested delivery date and shipping instructions. Such purchase orders shall be submitted to Ascentage with a minimal lead time [***]. Ascentage shall supply the quantities of Clinical Materials and/or Licensed Compound ordered by Unity by the delivery date designated by Unity in the relevant purchase order provided such order has been placed by Unity with at least the minimum lead time [***]. Ascentage does not guarantee fulfillment of any purchase orders less than the minimal lead time, however Ascentage will use commercially reasonable efforts to fulfill those purchase orders. No terms contained in any purchase order, order acknowledgment or similar standardized form shall be construed to amend or modify the terms of this Schedule 4.1 and in the event of any conflict, this Schedule 4.1 shall control, unless the Parties otherwise expressly agree in writing.
1.3 Commercial Supply. Unity shall be entitled to order quantities Licensed Compound for use in the manufacture of Licensed Product for commercial use in accordance with the terms of this Section 1.3.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(a) Rolling Forecasts. At least [***] ([***]) [***] prior to the first calendar quarter for which Unity will order commercial supplies of Licensed Compound, and thereafter at least [***] ([***]) [***] prior to the start of each subsequent calendar quarter, Unity shall provide Ascentage with an updated rolling written forecast of the quantities of the Licensed Compound estimated to be required on a month-by-month basis during the first calendar quarter for which Unity will order commercial supplies of the Licensed Compound for sale in the Unity Territory (Q1) and the next three (3) quarters (Q2, Q3, Q4, respectively). Unity shall only be obligated to purchase, and Ascentage shall only be obligated to supply, the quantities of Licensed Compound set forth in such forecast to the extent provided in Section 1.3(b) below.
(b) Orders.
(i) Orders. Together with each forecast provided under Section 1.3(a) above (the Current Forecast), Unity shall place its purchase order with Ascentage for delivery in Q1 of that quantity of Licensed Compound equal to the greater of: (i) the quantity of Licensed Compound reflected for Q1 in the Current Forecast; (ii) [***] percent ([***]%) of the quantity forecast for Q2 in the forecast provided under Section 1.3(a) above for the immediately preceding calendar quarter (the First Preceding Forecast); and (iii) [***] percent ([***]%) of the quantity forecast for Q3 in the forecast immediately preceding the First Preceding Forecast (the Second Preceding Forecast). Ascentage shall accept such orders from Unity, subject to the remaining terms and conditions of this Agreement, provided that Ascentage shall not be obligated to accept orders for Q1 to the extent the quantity ordered exceeds the lesser of: (i) [***] percent ([***]%) of the quantity forecast for Q2 in the First Preceding Forecast; and (ii) [***] percent ([***]%) of the quantity forecast for Q3 in the Second Preceding Forecast, but shall use good faith efforts to fill orders for such excess quantities from available supplies.
(ii) Form of Order.
(1) Unitys orders shall be made pursuant to a purchase order which is in a form mutually acceptable to the Parties, and shall provide for shipment in accordance with reasonable delivery schedules as agreed upon from time to time by Ascentage and Unity. Unless otherwise agreed, each order shall be for a minimum of [***] ([***]) [***]. Ascentage shall accept all purchase orders delivered by Unity in accordance with this Schedule 4.1, and shall notify Unity within [***] ([***]) days from receipt of an order of its ability to fill any amounts of such order in excess of the quantities that Ascentage is obligated to supply.
(2) Notwithstanding the foregoing, during the period between the submission of the first purchase order for Licensed Compound under this Section 1.3 and [***] ([***]) months thereafter (Ramp-Up Period), Unity may order Product in any mutually agreed quantities provided that the timing of manufacture and delivery of such quantities of Licensed Compound, as well as the minimum remaining shelf life (as defined in Section 1.7) of such Licensed Compound at the time of delivery to Unity, shall be subject to mutual agreement on an order-by-order basis. The Parties shall reasonably cooperate during the Ramp-Up Period to coordinate Ascentages manufacturing of other quantities with Unitys orders during the Ramp-Up Period.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(3) No terms contained in any purchase order, order acknowledgment or similar standardized form shall be construed to amend or modify the terms of this Agreement and in the event of any conflict, this Agreement shall control, unless the Parties otherwise expressly agree in writing.
1.4 Delivery. With respect to exact shipping dates, Ascentage shall [***] (a) ship the ordered quantities of Licensed Compound for commercial use on the dates specified in Unitys purchase orders submitted and accepted in accordance with Section 1.3(b) above or (b) for Clinical Materials and Licensed Compound for use in clinical trials, to ship quantities of the Clinical Materials and Licensed Compound ordered by Unity pursuant to Section 1.2, on the dates requested by Unity in accordance with such Section. All Clinical Materials and Licensed Compound for use in clinical trials ordered under Section 1.2, and Licensed Compound for commercial use ordered under Section 1.3(b) (such Clinical Materials and Licensed Compound, collectively Products) will be delivered [***] (Incoterms 2010) named place of destination. Title and all risk of loss, delay or damage to the Products shall pass to Unity upon [***]. The shipping packaging shall be in accordance with good commercial practice and agreed by the Parties before shipment with respect to protection of the Product during transportation.
1.5 Specifications and Manufacturing Standards. Ascentage shall only release Product for shipment to Unity which complies with: (a) [***] (Specifications); and (b) [***] (Manufacturing Standards). Ascentage also agrees to meet the requirements of any regulatory authority in the Territory[***] as soon as reasonably practicable on the condition that: (i) Unity shall notify Ascentage of such requirements; and (ii) any increased cost to Ascentage associated with preparing for, coming into compliance with, and meeting such requirements shall be [***]. The Parties shall, at [***] before commencement of deliveries of the Product to Unity, conclude a separate quality agreement in a format suitable for submission to the Regulatory Authorities in all countries of the Territory, recording the agreed-upon Specifications and Manufacturing Standards and measures to assure compliance with cGMP regarding manufacturing, storage, transportation and release of Product (Quality Agreement).
1.6 Inspection; Product Rejection. Unity shall, promptly upon receipt of each shipment of the Product, perform a customary inspection.
(a) Each shipment of the Product to Unity shall be accompanied by the following written documentation: (i) the date of manufacture; (ii) delivered amount of Product units; (iii) a certificate of conformance issued by an Ascentage qualified person; (iv) a certificate of analysis setting forth the results of tests performed by Ascentage as required by the Specifications and Manufacturing Standards and (v) any other documentation set forth in the Quality Agreement.
(b) If the Product supplied by Ascentage under this Agreement fails to conform to the applicable Specifications and Manufacturing Standards, Unity shall notify Ascentage no later than [***] ([***]) [***] after its receipt of the Product of such non-conformity and Unity shall immediately present reasonable evidence to Ascentage of such non-conformity. Except as provided in Section 1.6(c) below, if Unity fails to notify Ascentage within such [***] ([***]) [***] period of any non-conformity, the Product shall be deemed to conform to the applicable Specifications and Manufacturing Standards.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(c) Notwithstanding the last sentence of Section 1.6(b) above, if within [***] ([***]) [***] after Unitys receipt of any Product, Unity discovers any Latent Defects in such Product, Unity shall immediately notify Ascentage in writing and shall present reasonable evidence to Ascentage of such Latent Defects together with such notice. In such case, Ascentage shall replace Product in which such Latent Defects have been discovered in accordance with Section 1.6(d) below, it being understood that the foregoing shall not serve to limit Ascentages obligations under Section 10.2 to indemnify Unity for Third Party Claims arising from a breach by Ascentage of its product warranties under Section 1.13 of this Schedule 4.1. For purposes of this Section 1.6, Latent Defect(s) shall mean any non-conformity of Product to the applicable Specifications and/or Manufacturing Standards at the time of the delivery of Product to Unity that [***]
(d) Ascentage shall replace, at no additional expense to Unity, any Product rejected by Unity pursuant to Section 1.6(b), or any Product in respect of which Unity notifies Ascentage a Latent Defect has been discovered in accordance with Section 1.6(c), as applicable, with new Product which does conform with the Specifications and Manufacturing Standards [***] after receipt of Unitys notification under Section 1.6(b) or Section 1.6(c), as applicable. The Parties may appoint a [***] to analyze any unit of the Product rejected by Unity under Section 1.6(b), or in respect of which Unity notifies Ascentage a Latent Defect has been discovered in accordance with Section 1.6(c), as applicable, and, if [***] that the Product was conforming, then Unity shall be responsible for payment for any such units of Product and any replacement Product shipped by Ascentage. Ascentage shall give Unity written instructions as to how Unity should, at Ascentages expense, dispose of any non-conforming Product, and such instructions shall comply with all appropriate governmental requirements. The costs of any Third Party determination initiated under this Section 1.6(d) shall be borne by the non-prevailing party.
1.7 Shelf Life. Except as otherwise agreed pursuant to Section 1.3(b)(ii)(2), all Licensed Compound ordered by Unity pursuant to Section 1.3 (i.e., all Licensed Compound to be used in the manufacture of Licensed Product for commercial use) shall at the time of receipt by Unity or its designee, have a minimum shelf-life [***].
1.8 Documentation. Ascentage shall keep and maintain for a duration in accordance with applicable laws: (i) reference samples and quality control records for each batch of raw material and packaging material used in the manufacture of the Product; and (ii) manufacturing and quality control records for each batch of the Product.
1.9 Purchase Price.
(a) Unity shall pay to Ascentage a purchase price for each Product equal to the Cost of Goods Sold for such Product plus [***] percent ([***]%).
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(b) Cost of Goods Sold or COGS means the cost of goods sold of Products ordered by Unity and supplied by or on behalf of Ascentage to Unity as follows:
(i) To the extent the Product is manufactured by a Third Party under contract with Ascentage, and supplied to Unity by Ascentage, the Cost of Goods Sold shall mean (1) [***] (2) [***].
(ii) To the extent the Product is manufactured or otherwise processed by Ascentage, Cost of Goods Sold shall mean Direct Expenses and Manufacturing Overhead incurred by Ascentage in, and reasonably allocable to, the manufacture of such Product.
(iii) As used herein:
(1) Direct Expenses are (A) [***], and (B) [***].
(2) Manufacturing Overhead consists of a [***] associated with the manufacture of quantities of Product, for supply to Unity[***] (A) [***], (B) [***], (C) [***], (D) [***], (E) [***], (F) [***], and (G) [***].
(b) Cost of Goods Sold shall be calculated consistent with [***], and shall be consistent from year-to-year. The methodology to be used in making the allocations for any costs included in Cost of Goods Sold shall upon request be reviewed by the Parties.
1.10 Facilities. Ascentage shall manufacture or have manufactured all Product at the Facility(ies) and in accordance with, and shall only release the Products for shipment to Unity which complies with: (i) the Specifications for the Products; and (ii) all applicable Manufacturing Standards and all requirements set forth in the Quality Agreement. As used in this Schedule 4.1, Facility shall mean Ascentages or Ascentages Third Parties contractors cGMP-compliant facilities through which the Products supplied to Unity are manufactured, processed, tested, stored or distributed.
1.11 Unity Right of Inspection. Ascentage shall, upon written request of Unity with reasonable advance notice, permit Unitys authorized representative, during normal working hours, to inspect (and if reasonably necessary, to copy) all manufacturing and quality control records for all manufacture of the Products.
1.12 Quality Audit. Unity shall be entitled, during normal working hours and upon reasonable prior notice to Ascentage, to inspect the Facility(ies), not more than once every [***], or if more frequent, at each variation of the manufacturing process for the Products. To that effect, Ascentage shall inform Unity of any variation to the manufacturing process of the Products in accordance with the Quality Agreement and as soon as reasonably practicable. Ascentage shall give Unity prior notice, to the extent practicable, of any inspections by the FDA, EMA or other regulatory authority in the Territory of the Facility(ies). Upon Unitys reasonable written request, Ascentage shall, to the extent Ascentage has the right to do so: (a) permit a representative of Unity to be present at such inspections; (b) disclose to Unity the results of any such inspection by the FDA, EMA or any other regulatory authority in the Territory to the extent related to the Products, but in no event shall Ascentage be obligated to disclose the results of any such inspection to the extent relating to any other product of Ascentage or its Affiliates and/or (c) implement any measures necessary to respond to the regulatory authorities in a satisfactory manner.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
5
1.13 Product Warranties. Ascentage represents, warrants and covenants to Unity as follows:
(a) All Products supplied hereunder shall comply with all material and applicable laws and Manufacturing Standards and meet all Specifications in all material respects, and Ascentage shall perform and document all manufacturing, processing, storage and supply activities with respect to Products supplied hereunder in compliance with all applicable laws.
(b) All Products supplied hereunder shall, at delivery to Unity or its designee, be in compliance in all respects with the minimum shelf-life requirements agreed upon as described in Section 1.7 of this Schedule 4.1.
(c) The Facility(ies), all equipment used for the manufacture of Products within the Facility(ies), and the activities contemplated herein will comply with all material and applicable laws and shall hold and maintain all governmental registrations, permits, licenses and approvals necessary for it to manufacture Products for Unity under this Agreement.
(d) Title to all Products delivered to Unity under this Agreement shall pass to Unity free and clear of any security interest, lien or other encumbrance.
1.14 Suppliers.
(a) Without limiting Ascentages responsibility under this Agreement, Ascentage shall have the right at any time to satisfy its supply obligations to Unity hereunder either in whole or in part through arrangements with Third Parties engaged to perform services or supply facilities or goods in connection with the manufacture, testing, and/or packaging of Products; provided that Ascentage shall remain responsible for such activities to the same extent as if Ascentage had performed such activities itself. Ascentage shall give Unity prior written notice of any such arrangement [***] and such notice shall be provided sufficiently in advance to permit Unity to [***] at [***].
(b) Unity shall have the right at any time during the term to qualify and register a Third Party manufacturer of Unitys choosing to manufacture Licensed Compound and/or Licensed Product so long as Unity continues to obtain at least fifty percent (50%) of its overall requirements (on an annualized basis) from Ascentage of Licensed Product (in the case of pre-Phase III Clinical Trials) and Licensed Compound (in the case of Phase III Clinical Trials and commercial supply).
(c) Within a reasonable period from receiving written notice from Unity informing Ascentage of Unitys decision to qualify a Third Party manufacturer to produce Licensed Compound and/or Licensed Products and after such Third Party manufacturer has executed a reasonable and customary confidentiality agreement with Ascentage to Ascentages reasonable satisfaction, Ascentage and Unity shall implement an appropriate exchange process and schedule for the transfer to Unity or a Third Party manufacturer of Unitys choosing of Technology that is necessary or useful for the manufacture of Licensed Compound and Licensed Products (Manufacturing Technology) and thereafter shall transfer such Manufacturing Technology to such Third Party manufacturer in accordance with the agreed upon process and schedule. If after such initial transfer Unity identifies a particular item of Technology pertaining to the Licensed Compound and/or the manufacture thereof that is necessary or useful for the manufacture of Licensed Compound and Licensed Products but has not been previously transferred to Unity, Ascentage agrees to use reasonable efforts to provide the same to Unity in a reasonable time frame.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
6
(d) In consideration for Ascentages providing the forgoing transfer of Manufacturing Technology with respect to a given Product, Unity agrees to pay to Ascentage a one-time technology transfer fee. The technology transfer fee is meant to compensate Ascentage for the [***] and will be a one-time payment of [***]. Additionally, the Parties agree that following the establishment of such second source, the purchase price due to Ascentage with respect to quantities of Licensed Compound and/or Licensed Product purchased thereafter shall be the [***] of the [***] and the [***] (Purchase Price Adjustment).
(e) Notwithstanding the foregoing, if Ascentage either materially breaches its obligations under the Supply Agreement or does not supply Unity with Licensed Compound or Licensed Product from [***] ([***]) or more orders submitted by Unity in accordance with Section 1.2(d) or 1.3(b) of this Exhibit 4.1 by the applicable delivery date, and in each case fails to cure such breach or supply failure within [***] ([***]) [***] of written notice from Unity, then (i) the requirement under Section 1.14(b) that Unity obtain at least fifty percent (50%) of its overall requirements from Ascentage of Licensed Compound and Licensed Product shall cease to apply, and (ii) any otherwise applicable Purchase Price Adjustment shall not apply.
1.15 Shortage of Supply.
(a) Cooperation. Ascentage and Unity shall cooperate to establish reasonable plans and procedures to avoid any shortage of supply of Products.
(b) Procedures. If at any time Ascentage becomes unable, or concludes that it will be unable, to supply Unitys requirements for the Products, Ascentage shall promptly notify Unity in writing. In such event, the Parties shall promptly convene to address the problem, including locating alternative suppliers and facilities to increase production and identifying other actions necessary to resolve the problem. Based on such interactions, the Parties shall reasonably agree on appropriate measures to remedy the shortage and shall promptly implement such measures. In any event, both Parties agree to respond with the level of speed and diligence commensurate with the severity of the problem.
(c) Allocation. If despite the foregoing measures Ascentage is unable to supply Unitys requirements of Product, Ascentage shall allocate the quantities of the Product that (i) Ascentage has in inventory [***], and (ii) Ascentage is able to produce [***].
1.16 Termination/Limitations of Minimum Purchase Obligations.
(a) It is understood and agreed that Unitys obligation to obtain at least fifty percent (50%) of its overall requirements of Licensed Compound and Licensed Product from Ascentage is expressly conditioned upon Ascentage achieving and maintaining [***] with respect to [***] of the manufacture of pharmaceutical products. In the event that Unity determines that it would be preferable to have one or more Third Party manufacturers assume responsibility for the manufacture of the majority (or all) of Unitys requirements of Licensed Compound and Licensed Product based on such Third Party manufacturer(s) being [***] with
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
7
respect to [***], then Unity will so inform Ascentage in writing, explaining to Ascentage the basis of its decision and citing the factor(s) with respect to which it has concluded the Third Party manufacturer is [***]. Upon Unitys delivery to Ascentage of such written notice, the requirement under Section 1.14(b) that Unity obtain at least fifty percent (50%) of its overall requirements from Ascentage of Licensed Compound and Licensed Product shall cease to apply. For clarity, it is understood that Unitys determination regarding the [***] of a Third Party manufacturer with respect to [***] (i.e., [***] of the manufacture) shall be [***] that it shall [***] to have one or more Third Party manufacturers assume responsibility for the manufacture of the majority (or all) of Unitys requirements of Licensed Compound and Licensed Product.
(b) It is further agreed that in the event that Unity sublicenses the commercialization of a Licensed Product to a Third Party commercialization partner, notwithstanding anything to the contrary in this Exhibit 4.1, such commercialization partner shall be free to manufacture its requirements of such Licensed Product (including the Licensed Compound contained therein) and that any quantities of Licensed Product and/or Licensed Compound manufactured by or on behalf of such Third Party commercialization partner shall not be taken into account when determining Unitys overall requirements of Licensed Compound and Licensed Product for purposes of minimum purchase obligation in Section 1.14(b) above.
(c) Upon a Change of Control of Unity, the minimum purchase obligations set forth in Section 1.14(b) shall immediately terminate. As used herein, Change of Control means (i) the acquisition of Unity by another entity by means of any transaction or series of related transactions to which Unity is party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction or series of related transactions in which the holders of the voting securities of Unity outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, as a result of shares in Unity held by such holders prior to such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of Unity or such other surviving or resulting entity (or if Unity or such other surviving or resulting entity is a wholly-owned subsidiary immediately following such acquisition, its parent) or (ii) a sale, lease or other disposition of all or substantially all of the assets of Unity and its subsidiaries taken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to a wholly-owned subsidiary of Unity.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
8
EXECUTION COPY
CONFIDENTIAL
EXHIBIT 3.4.2
DILIGENCE REQUIREMENTS
Ascentage shall use commercially reasonable efforts to develop and obtain marketing approval for each Compound that it designates as a Development Candidate, and thereafter shall use commercially reasonable efforts to launch and commercialize each such Compound [***].
Without limiting the foregoing, Ascentage agrees that:
| [***]; and |
| [***]. |
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
1
EXHIBIT 6.1
FORM OF STOCK ISSUANCE AGREEMENT;
CAPITALIZATION TABLE FOR UNITY
Part A: Form of Stock Issuance Agreement
UNITY BIOTECHNOLOGY, INC.
RESTRICTED STOCK GRANT AGREEMENT
This Restricted Stock Grant Agreement (the Agreement) is made as of [] by and between Unity Biotechnology, Inc., a Delaware corporation (the Company), and Ascentage Pharma Group Corp. Ltd. (the Grantee).
In consideration of the mutual covenants and representations set forth below, the Company and Grantee agree as follows:
1. Grant of the Shares. Subject to the terms and conditions of this Agreement, the Company agrees to grant to Grantee, and Grantee agree to acquire from the Company, on the Closing (as defined below) [] shares of the Companys Common Stock, $0.0001 par value per share (the Shares), as consideration for services to be provided by Grantee to the Company.
2. Closing. The transfer of the Shares shall occur at a closing (the Closing) to be held on the date first set forth above, or at any other time mutually agreed upon by the Company and Grantee. The Closing will take place at the principal office of the Company or at such other place as shall be designated by the Company. As promptly after the Closing as practicable, the Company will issue a stock certificate, registered in the name of Grantee, reflecting the Shares.
3. Restrictions on Transfer.
A. Investment Representations and Legend Requirements. The Grantee hereby make the investment representations listed on Exhibit A to the Company as of the date of this Agreement and as of the date of the Closing, and agrees that such representations are incorporated into this Agreement by this reference, such that the Company may rely on them in issuing the Shares. Grantee understand and agree that the Company shall cause the legends set forth below, or substantially equivalent legends, to be placed upon any certificate(s) evidencing ownership of the Shares, together with any other legends that may be required by the Company or by applicable state or federal securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, A RIGHT OF FIRST REFUSAL, AND A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC OFFERING HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE RESTRICTED STOCK GRANT AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST REFUSAL AND LOCK-UP PERIOD ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
B. Stop-Transfer Notices. Grantee agree that to ensure compliance with the restrictions referred to herein, the Company may issue appropriate stop transfer instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
C. Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any acquirer or other transferee to whom such Shares shall have been so transferred.
D. Lock-Up Period. Grantee hereby agree that Grantee shall not sell, offer, pledge, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, grant any right or warrant to purchase, lend or otherwise transfer or encumber, directly or indirectly, any Shares or other securities of the Company, nor shall Grantee enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares or other securities of the Company, during the period from the filing of the first registration statement of the Company filed under the Securities Act of 1933, as amended (the Securities Act), that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act through the end of the 180-day period following the effective date of such registration statement (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto). The obligations described in this section 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. Grantee further agree, if so requested by the Company or any representative of its underwriters, to enter into such underwriters standard form of lockup or market standoff agreement in a form satisfactory to the Company and such underwriter. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of any such restriction period.
4. Companys Right of First Refusal. Before any Shares acquired by the Grantee pursuant to this Agreement (or any beneficial interest in such Shares) may be sold, transferred, encumbered or otherwise disposed of in any way (whether by operation of law or otherwise) by the Grantee or any subsequent transferee (each a Holder), such Holder must first offer such Shares or beneficial interest to the Company and/or its assignee(s) as follows:
A. Notice of Proposed Transfer. The Holder shall deliver to the Company a written notice stating: (i) the Holders bona fide intention to sell or otherwise transfer the Shares; (ii) the name of each proposed transferee; (iii) the number of Shares to be transferred to each proposed transferee; (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares; and (v) that by delivering the notice, the Holder offers all such Shares to the Company and/or its assignee(s) pursuant to this section and on the same terms described in the notice.
B. Exercise of Right of First Refusal. At any time within 30 days after receipt of the Holders notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the proposed transferees, at the purchase price determined in accordance with Section 4.C.
C. Purchase Price. The purchase price for the Shares purchased by the Company and/or its assignee(s) under this section shall be the price listed in the Holders notice. If the price listed in the Holders notice includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in its sole discretion.
D. Payment. Payment of the purchase price shall be made, at the option of the Company and/or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company and/or its assignee(s), or by any combination thereof within 30 days after receipt by the Company of the Holders notice (or at such later date as is called for by such notice).
E. Holders Right to Transfer. If all of the Shares proposed in the notice to be transferred to a given proposed transferee are not purchased by the Company and/or its assignee(s) as provided in this section, then the Holder may sell or otherwise transfer such Shares to that proposed transferee; provided that: (i) the transfer is made only on the terms provided for in the notice, with the exception of the purchase price, which may be either the price listed in the notice or any higher price; (ii) such transfer is consummated within 60 days after the date the notice is delivered to the Company; (iii) the transfer is effected in accordance with any applicable securities laws, and if requested by the Company, the Holder shall have delivered an opinion of counsel acceptable to the Company to that effect; and (iv) the proposed transferee agrees in writing to receive and hold the Shares so transferred subject to all of the provisions of this Agreement, including but not limited to this section, and there shall be no further transfer of such Shares except in accordance with the terms of this section. If any Shares described in a notice are not transferred to the proposed transferee within the period provided above, then before any such Shares may be transferred, a new notice shall be given to the Company, and the Company and/or its assignees shall again be offered the right of first refusal described in this section.
F. Exception for Certain Family Transfers. Notwithstanding anything to the contrary contained elsewhere in this section, the transfer of any or all of the Shares during the Holders lifetime or on the Holders death by will or intestacy to (i) the Holders spouse; (ii) the Holders lineal descendants or antecedents, siblings, aunts, uncles, cousins, nieces and nephews (including adoptive relationships and step relationships), and their spouses; (iii) the lineal descendants or antecedents, siblings, cousins, aunts, uncles, nieces and nephews of Holders spouse (including adoptive relationships and step relationships), and their spouses; and (iv) a trust or other similar estate planning vehicle for the benefit of the Holder or any such person, shall be exempt from the provisions of this section; provided that, in each such case, the transferee agrees in writing to receive and hold the Shares so transferred subject to all of the provisions of this Agreement, including but not limited to this section, and there shall be no further transfer of such Shares except in accordance with the terms of this section; and provided further, that without the prior written consent of the Company, which may be withheld in the sole discretion of the Company, no more than three transfers may be made pursuant to this section, including all transfers by the Holder and all transfers by any transferee.
G. Termination of Right of First Refusal. The right of first refusal contained in this section shall terminate as to all Shares acquired hereunder upon the earlier of: (i) the closing date of the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act, and (ii) the closing date of a Change of Control pursuant to which the holders of the outstanding voting securities of the Company receive securities of a class registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. For purposes of this Agreement, a Change of Control means either: (i) the acquisition of the
Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation or stock transfer, but excluding any such transaction effected primarily for the purpose of changing the domicile of the Company), unless the Companys stockholders of record immediately prior to such transaction or series of related transactions hold, immediately after such transaction or series of related transactions, at least 50% of the voting power of the surviving or acquiring entity (provided that the sale by the Company of its securities for the purposes of raising additional funds shall not constitute a Change of Control hereunder); or (ii) a sale of all or substantially all of the assets of the Company.
5. General Provisions.
A. Choice of Law. This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California.
B. Integration. This Agreement, including all exhibits hereto, represents the entire agreement between the parties with respect to the acquisition of the Shares by the Grantee and supersedes and replaces any and all prior written or oral agreements regarding the subject matter of this Agreement including, but not limited to, any representations made during any interviews, relocation discussions or negotiations whether written or oral.
C. Notices. Any notice, demand, offer, request or other communication required or permitted to be given by either the Company or the Grantee pursuant to the terms of this Agreement shall be in writing and shall be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by facsimile (with receipt of appropriate confirmation), (iv) one business day after being deposited with an overnight courier service or (v) four days after being deposited in the U.S. mail, First Class with postage prepaid and return receipt requested, and addressed to the parties at the addresses provided to the Company (which the Company agrees to disclose to the other parties upon request) or such other address as a party may request by notifying the other in writing.
D. Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Companys business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term Company shall include any successor to the Companys business and/or assets which executes and delivers the assumption agreement described in this section or which becomes bound by the terms of this Agreement by operation of law. Subject to the restrictions on transfer set forth in this Agreement, this Agreement shall be binding upon Grantee and their heirs, executors, administrators, successors and assigns.
E. Assignment; Transfers. Except as set forth in this Agreement, this Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by the Grantee without the prior written consent of the Company. Any attempt by the Grantee without such consent to assign, transfer, delegate or
sublicense any rights, duties or obligations that arise under this Agreement shall be void. Except as set forth in this Agreement, any transfers in violation of any restriction upon transfer contained in any section of this Agreement shall be void, unless such restriction is waived in accordance with the terms of this Agreement.
F. Waiver. Either partys failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, nor prevent that party from thereafter enforcing any other provision of this Agreement. The rights granted both parties hereunder are cumulative and shall not constitute a waiver of either partys right to assert any other legal remedy available to it.
G. Grantee Investment Representations and Further Documents. The Grantee agree upon request to execute any further documents or instruments necessary or reasonably desirable in the view of the Company to carry out the purposes or intent of this Agreement, including (but not limited to) the applicable exhibits and attachments to this Agreement.
H. Severability. Should any provision of this Agreement be found to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable to the greatest extent permitted by law.
I. Rights as Stockholder. Subject to the terms and conditions of this Agreement, Grantee shall have all of the rights of a stockholder of the Company with respect to the Shares from and after the date that Grantee deliver a fully executed copy of this Agreement (including the applicable exhibits and attachments to this Agreement) and full payment for the Shares to the Company, and until such time as Grantee dispose of the Shares in accordance with this Agreement. Upon such transfer, Grantee shall have no further rights as a holder of the Shares so purchased except (in the case of a transfer to the Company) the right to receive payment for the Shares so purchased in accordance with the provisions of this Agreement, and Grantee shall forthwith cause the certificate(s) evidencing the Shares so purchased to be surrendered to the Company for transfer or cancellation.
J. Adjustment for Stock Split. All references to the number of Shares and the purchase price of the Shares in this Agreement shall be adjusted to reflect any stock split, stock dividend or other change in the Shares which may be made after the date of this Agreement.
K. Reliance on Counsel and Advisors. Grantee acknowledge that Wilson Sonsini Goodrich & Rosati, Professional Corporation, is representing only the Company in this transaction. Grantee acknowledges that he or she has had the opportunity to review this Agreement, including all attachments hereto, and the transactions contemplated by this Agreement with his or her own legal counsel, tax advisors and other advisors. Grantee are relying solely on his or her own counsel and advisors and not on any statements or representations of the Company or its agents for legal or other advice with respect to this investment or the transactions contemplated by this Agreement.
L. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile copies of signed signature pages shall be binding originals.
(Signature page follows)
The parties represent that they have read this Agreement in its entirety, have had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understand this Agreement.
COMPANY: | ||
UNITY BIOTECHNOLOGY, INC. | ||
By: |
| |
Name: Dr. Nathaniel E. David | ||
Title: President and Chief Executive Officer |
[Signature Page to Restricted Stock Grant Agreement]
The parties represent that they have read this Agreement in its entirety, have had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understand this Agreement. The Grantee agrees to notify the Company of any change in its address below.
GRANTEE: |
ASCENTAGE PHARMA GROUP CORP. LTD. |
Name: |
Title: |
Address:
11/F, AXA Centre
Gloucester Road,
Wanchai Hong Kong
[Signature Page to Restricted Stock Grant Agreement]
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
GRANTEE : | ASCENTAGE PHARMA GROUP CORP. LTD. | |
COMPANY : | UNITY BIOTECHNOLOGY, INC. | |
SECURITY : | COMMON STOCK | |
AMOUNT : | [] SHARES | |
DATE : | [] |
In connection with the acquisition of the above-listed shares, I, each of the undersigned, represent to the Company as follows:
1. The Company may rely on these representations. I understand that the Companys sale of the shares to me has not been registered under the Securities Act of 1933, as amended (the Securities Act), because the Company believes, relying in part on my representations in this document, that an exemption from such registration requirement is available for such sale. I understand that the availability of this exemption depends upon the representations I am making to the Company in this document being true and correct.
2. I am purchasing for investment. I am purchasing the shares solely for investment purposes, and not for further distribution. My entire legal and beneficial ownership interest in the shares is being acquired and shall be held solely for my account, except to the extent I intend to hold the shares jointly with my spouse. I am not a party to, and do not presently intend to enter into, any contract or other arrangement with any other person or entity involving the resale, transfer, grant of participation with respect to or other distribution of any of the shares. My investment intent is not limited to my present intention to hold the shares for the minimum capital gains period specified under any applicable tax law, for a deferred sale, for a specified increase or decrease in the market price of the shares, or for any other fixed period in the future.
3. I can protect my own interests. I can properly evaluate the merits and risks of an investment in the shares and can protect my own interests in this regard, whether by reason of my own business and financial expertise, the business and financial expertise of certain professional advisors unaffiliated with the Company with whom I have consulted, or my preexisting business or personal relationship with the Company or any of its officers, directors or controlling persons.
4. I am informed about the Company. I am sufficiently aware of the Companys business affairs and financial condition to reach an informed and knowledgeable decision to acquire the shares. I have had opportunity to discuss the plans, operations and financial condition of the Company with its officers, directors or controlling persons, and have received all information I deem appropriate for assessing the risk of an investment in the shares.
5. I recognize my economic risk. I realize that the acquisition of the shares involves a high degree of risk, and that the Companys future prospects are uncertain. I am able to hold the shares indefinitely if required, and am able to bear the loss of my entire investment in the shares.
6. I know that the shares are restricted securities. I understand that the shares are restricted securities in that the Companys sale of the shares to me has not been registered under the Securities Act in reliance upon an exemption for non-public offerings. In this regard, I also understand and agree that:
A. I must hold the shares indefinitely, unless any subsequent proposed resale by me is registered under the Securities Act, or unless an exemption from registration is otherwise available (such as Rule 144);
B. the Company is under no obligation to register any subsequent proposed resale of the shares by me; and
C. the certificate evidencing the shares will be imprinted with a legend which prohibits the transfer of the shares unless such transfer is registered or such registration is not required in the opinion of counsel for the Company.
7. I am familiar with Rule 144. I am familiar with Rule 144 adopted under the Securities Act, which in some circumstances permits limited public resales of restricted securities like the shares acquired from an issuer in a non-public offering. I understand that my ability to sell the shares under Rule 144 in the future is uncertain, and may depend upon, among other things: (i) the availability of certain current public information about the Company; (ii) the resale occurring more than a specified period after my acquisition and full payment (within the meaning of Rule 144) for the shares; and (iii) if I am an affiliate of the Company (A) the sale being made in an unsolicited brokers transaction, transactions directly with a market maker or riskless principal transactions, as those terms are defined under the Securities Exchange Act of 1934, as amended, (B) the amount of shares being sold during any three-month period not exceeding the specified limitations stated in Rule 144, and (C) timely filing of a notice of proposed sale on Form 144, if applicable.
8. I know that Rule 144 may never be available. I understand that the requirements of Rule 144 may never be met, and that the shares may never be saleable under the rule. I further understand that at the time I wish to sell the shares, there may be no public market for the Companys stock upon which to make such a sale, or the current public information requirements of Rule 144 may not be satisfied, either of which may preclude me from selling the shares under Rule 144 even if the relevant holding period had been satisfied.
9. I know that I am subject to further restrictions on resale. I understand that in the event Rule 144 is not available to me, any future proposed sale of any of the shares by me will not be possible without prior registration under the Securities Act, compliance with some other registration exemption (which may or may not be available), or each of the following: (i) my written notice to the Company containing detailed information regarding the proposed sale, (ii) my providing an opinion of my counsel to the effect that such sale will not require registration, and (iii) the Company notifying me in writing that its counsel concurs in such opinion. I understand that neither the Company nor its counsel is obligated to provide me with any such opinion. I understand that although Rule 144 is not exclusive, the Staff of the SEC has stated that persons proposing to sell private placement securities other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.
10. I know that I may have tax liability due to the uncertain value of the shares. I understand that the Board of Directors believes its valuation of the shares represents a fair appraisal of their worth, but that it remains possible that, with the benefit of hindsight, the Internal Revenue Service may successfully assert that the value of the shares on the date of my acquisition is substantially greater than the Boards appraisal. I understand that any additional value ascribed to the shares by such an IRS determination will constitute ordinary income to me as of the acquisition date, and that any additional taxes and interest due as a result will be my sole responsibility payable only by me, and that the Company need not and will not reimburse me for that tax liability.
11. Non-U.S. Investor. If I am not a United States person, I hereby represents that I am satisfied as to the full observance of the laws of my jurisdiction in connection with any invitation to receive the shares issuable pursuant to this Agreement, or any use of this Agreement, including (i) the legal requirements within my jurisdiction for the acquisition of the shares pursuant to this Agreement, (ii) any foreign exchange restrictions applicable to such receipt or transfer, (iii) any governmental or other consents that may need to be obtained and (iv) the income tax and other tax consequences, if any, that may be relevant to the acquisition, holding, redemption, sale or transfer of such securities. My subscription for, and my continued beneficial ownership of the shares will not violate any applicable securities or other laws of my jurisdiction.
12. Principal Place of Business. The address of my principal place of business is set forth on the signature page below.
By signing below, the undersigned acknowledge their agreement with each of the statements contained in this Investment Representation Statement as of the date first set forth above, and their intent for the Company to rely on such statements in issuing the shares to me.
ASCENTAGE PHARMA GROUP CORP. LTD. |
|
Address of Grantee Principal Place of Business:
11/F AXA Centre
Gloucester Road,
Wanchai Hong Kong
Part B: Capitalization Table
[***]
[Signature Page to Restricted Stock Grant Agreement]
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
Exhibit 10.14(b)
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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APG1252 License Agreement
This APG1252 License Agreement (the Agreement) effective as of the 2nd day of Feburary, 2016, (the Signing Date) is made by and between Ascentage Pharma Group Corp. Ltd., a Hong Kong corporation (Ascentage), with a business address at 11/F, AXA CENTRE, Gloucester Road, Wanchai, Hong Kong, and Unity Biotechnology, Inc., a Delaware corporation (Unity), with a business address at 1700 Owens Street, Suite 535, San Francisco, California 95158. Each of Ascentage and Unity shall be a Party, and both the Parties.
BACKGROUND
A. Unity and Ascentage entered into that certain Compound Library and Option Agreement of even date herewith (the Library Agreement), pursuant to which Ascentage has granted to Unity the right to screen Ascentages existing collection of BCL-2/BCL-xL inhibitor compounds as well as any additional BCL-2/BCL-xL inhibitor compounds discovered by Ascentage during the term of the Library Agreement, in each case to identify compounds with potential utility in the treatment of age-related conditions other than Oncology Indications; and
B. Ascentage has begun developing a BCL-2/BCL-xL inhibitor known as APG-1252 (as further defined below) and owns or controls certain patents, know-how and other intellectual property relating to APG-1252.
C. Unity desires to acquire from Ascentage a license under the Licensed Intellectual Property to develop APG-1252 in the Field and Territory (each as defined below), and Ascentage is willing to grant Unity such license on the terms and conditions herein, all as set forth below.
NOW, THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the Parties as follows:
ARTICLE 1
DEFINITIONS
1.1 The following terms have the meanings set forth in the Library Agreement:
Affiliate
Ascentage Intellectual Property
Collaboration Period
Compounds
Compound License Agreement(s)
Greater China
IND
Oncology Indications
Patents
Technology
Third Party
Unity Bcl-2 [***] Product
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1.2 APG-1252 means the chemical compound with the structure identified in Schedule 1.2, [***].
1.3 APG-1252 Work-a-Like Product means a Licensed Product under a Compound License Agreement, which product is [***] and is subject to the milestones and royalties described as [***] in Sections 5.2 (Development/Sales Milestones) and 5.3 (Royalties) of the Form of Compound License Agreement attached as Exhibit 3.3.2(a) of the Library Agreement.
1.4 Fair Market Value means with respect to a share of Unity common stock, the average price that Unity common stock is publicly trading at for [***] ([***]) days prior to the date in question, or, if the security is not publicly traded, the value of such stock as determined in good faith by Unitys board of directors in reliance upon Unitys most recent IRC Section 409A independent valuation of Unitys common stock that it used for the purposes of granting stock options to its employees.
1.5 Control and its correlative terms, Controlled or Controls shall mean, with respect to any Patent or item of Technology, that a Party or one of its Affiliates owns or possesses rights to such Patent or item of Technology sufficient to grant the access, license or sublicense contemplated in this Agreement without violating the terms of any agreement or other arrangement with any Third Party.
1.6 Cover and its correlative terms, Covers, Covered or Covering means (a) with respect to an issued patent, that, in the absence of a license, the use, offer for sale, sale, importation or manufacture of the product in question would infringe one or more claims of such patent or (b) with respect to a pending patent application, that, in the absence of a license, the use, offer for sale, sale, importation or manufacture of the product in question would infringe one or more claims of such patent application, should such claims issue as published.
1.7 Effective Date shall mean the date on which the Second Amendment takes effect.
1.8 Enabling IP means Patents and/or Technology of a Third Party that Covers or relates to a Royalty-bearing Product and is necessary or useful for the research, development, manufacture, use, sale or import of Royalty-bearing Products, including Patents directed to the composition and manufacture of Licensed Compound, but excluding Patents related to formulation and therapeutic methods.
1.9 EMA means the European Medicines Agency and any successor agency.
1.10 Existing Agreements means [***].
1.11 FDA means the United States Food and Drug Administration and any successor agency.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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1.12 Field means the prophylaxis and treatment of, and palliation of symptoms associated with, indications other than Oncology Indications.
1.13 Generic Product means a product which (a) contains as its active pharmaceutical ingredient a compound that is (or is substantially the same as) the Licensed Compound or the active pharmaceutical contained in a Unity Bcl-2 [***] Product, and (b) has been placed on the market pursuant to a validly granted marketing authorization.
1.14 Licensed Compound means APG-1252.
1.15 Licensed Intellectual Property means the Licensed Patents and Licensed Technology.
1.16 Licensed Patents means Patents owned or Controlled by Ascentage or its Affiliates during the Term, in each case to the extent Covering the Licensed Compound, a Licensed Product or a Unity Bcl-2 [***] Product.
1.17 Licensed Product means a pharmaceutical product containing the Licensed Compound (either alone or with other active pharmaceutical ingredients), in all forms, presentations, formulation and dosage forms.
1.18 Licensed Technology means Technology owned or Controlled by Ascentage or its Affiliates during the Term, in each case to the extent such Technology is necessary or reasonably useful for the development, manufacture or commercialization of the Licensed Compound, a Licensed Product or a Unity Bcl-2 [***] Product.
1.19 Marketing Approval Application or MAA means a New Drug Application (or its equivalent), as defined in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or any corresponding or similar application, registration or certification in any country.
1.20 Net Sales means the gross amount invoiced to non-Affiliate Third Parties on sales of Royalty-bearing Products by Unity or its Affiliates or Third Party Sublicensees, less the actual amounts incurred, allowed, or paid for the following items (if not previously deducted from the amount invoiced and provided that such deductions are calculated in accordance with generally accepted accounting principles of the United States of America (GAAP) on a consistent basis): (a) trade, cash, and quantity discounts; (b) amounts for claims, allowances or credits for returns, rejections or recalls; (c) freight, shipping and insurance charges allocable to such Royalty-bearing Products; (d) sales taxes, duties and other governmental charges (including value added tax) on particular sales, but excluding what is commonly known as income taxes; (e) government mandated rebates; (f) contracted rebates; and (g) a provision for uncollectible accounts; in each case as determined from books and records of the selling party maintained in accordance with GAAP, as consistently applied by such selling party. In the event that Unity grants a sublicense to a Third Party Sublicensee hereunder, and receives payments based upon such Third Party Sublicensees sales of Royalty-bearing Product, Unity may, with Ascentages consent, which consent shall not be unreasonably withheld or delayed, substitute the definition of Net Sales, used by such Third Party Sublicensee to calculate its payments to Unity in place of the foregoing definition of Net Sales for purposes of calculating royalties payable to Ascentage on such Third Party Sublicensees sales.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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1.21 Phase I Clinical Trial means a human clinical trial, the principal purpose of which is preliminary determination of safety of a drug in healthy individuals or patients, that would satisfy the requirements of 21 C.F.R. §312.21(a).
1.22 Phase II Clinical Trial means a clinical trial of a drug conducted on a limited number of patients for the purpose of preliminary evaluation of clinical efficacy and safety of such drug, and/or to obtain an indication of the dosage regimen required, in each case that would satisfy the requirements of 21 C.F.R. 312.21(b).
1.23 Phase III Clinical Trial means a pivotal human clinical trial intended to gather additional information regarding the safety and efficacy of the drug in patients with the disease being studied, which clinical study is designed to be of a size and statistical power sufficient to support the filing of an MAA and that would satisfy the requirements of 21 C.F.R. 312.21(c).
1.24 Royalty-bearing Product means a Licensed Product or a Unity Bcl-2 [***] Product.
1.25 Royalty-bearing Product-Specific Patents means those Licensed Patents that [***] the Licensed Compound, a Licensed Product or a Unity Bcl-2 [***] Product and [***].
1.26 Territory means the entire world excluding Greater China.
1.27 Third Party Sublicensee means any Third Party to which Unity licenses the right to commercialize any Royalty-bearing Product. For the avoidance of doubt, Third Party Sublicensee shall not include Third Party distributors, service providers, vendors and suppliers that do not have the right to market or promote the Royalty-bearing Product.
1.28 UM License Agreement means that certain license agreement entered into by Ascentage and the Regents of the University of Michigan (UM) effective as of December 1, 2010, as amended by all amendments to such license agreement existing as of the Effective Date.
1.29 Unity Bcl-2 [***] Product means any [***] product for [***], wherein the [***], and in each case that (a) is developed by Unity during the Collaboration Period, (b) is not an APG-1252 Work-a-Like Product, and (c) for which an IND is filed prior to the later of the [***] anniversary of the Effective Date or the [***] anniversary of the expiration or termination of the Library Agreement. Notwithstanding anything to the contrary in this Agreement, any compound that was designed ([***]) or [***] synthesized [***] shall not be considered a Unity Bcl-2 [***] Product without Unitys express written consent. [***] In addition, Unity agrees that upon request it will [***].
1.30 Valid Claim means a claim contained in an issued Patent within the Licensed Patents in any country that (a) has not expired; (b) has not been disclaimed; (c) has not been cancelled or superseded, or if cancelled or superseded, has been reinstated; and (d) has not been revoked, held invalid, or otherwise declared unenforceable or not allowable by a tribunal or patent authority of competent jurisdiction over such claim in such country from which no further appeal has or may be taken.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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ARTICLE 2
LICENSES
2.1 Licenses.
2.1.1 Development Licenses. Subject to the terms and conditions of this Agreement, Ascentage hereby grants to Unity a royalty-free, exclusive license in the Field and Territory, with the right to grant sublicenses as provided in Section 2.2, under the Licensed Intellectual Property to (a) research, develop and seek and obtain marketing approval for the Licensed Compound and Licensed Products using Licensed Compound and/or Licensed Products supplied by or on behalf of Ascentage and (b) research, make, develop and seek and obtain marketing approval for Unity Bcl-2 [***] Products; in each case solely in the Field and Territory, and to have any of the foregoing performed on its behalf by a Third Party; and
2.1.2 Commercialization Licenses. Subject to the terms and conditions of this Agreement, Ascentage hereby grants to Unity a royalty-bearing, exclusive license in the Field and Territory, with the right to grant sublicenses as provided in Section 2.2, under the Licensed Intellectual Property: (a) to use the Licensed Compound supplied by or on behalf of Ascentage to make or have made the Licensed Products; (b) to use, offer for sale, sell, import, export, market, promote and distribute Licensed Compound and Licensed Products, and (c) to make, use, offer for sale, sell, import, export, market, promote and distribute Unity Bcl-2 [***] Products; in each case, solely for use in the Field and Territory, and to have any of the foregoing performed on its behalf by a Third Party. It is understood and agreed that the licenses set forth in this Section 2.1.2 exclude the right to make or have made the Licensed Compound.
2.2 Sublicenses. Unity may grant and authorize sublicenses within the scope of the license granted to Unity pursuant to this Agreement, provided that for clarity, Unity shall remain responsible for all milestone and other payments due to Ascentage under this Agreement based on the activities of Unitys sublicensees.
2.3 Third Party Intellectual Property. If after the Effective Date, Ascentage acquires or licenses from a Third Party subject matter that would fall within the Licensed Intellectual Property (Third Party Intellectual Property) that is subject to any payment obligation to the Third Party, then Ascentage shall so notify Unity and Unity shall inform Ascentage if it wishes such subject matter to be included within the Licensed Intellectual Property. If Unity notifies Ascentage that it does wish such subject matter to be so included, the rights granted to Unity hereunder with respect to such Third Party Intellectual Property shall be subject to Unity promptly reimbursing Ascentage for [***] and Unity shall reimburse Ascentage for [***]. Upon request by Unity, Ascentage shall disclose to Unity a written description of such payment obligations. Notwithstanding the foregoing, Unity shall have the right to treat amounts paid to Ascentage as reimbursements for payments for Enabling IP for purposes of Section 5.5.
2.4 No Implied Licenses. Nothing herein shall be construed as granting Unity, by implication, estoppel or otherwise, any license or other right (a) to any intellectual property of Ascentage other than the Licensed Intellectual Property (b) to commercialize Licensed Products outside of the Field and Territory (c) not relating to the Licensed Compound, Licensed Products and Unity Bcl-2 [***] Products or (d) any right or license other than those expressly granted herein.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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2.5 [***].
2.6 Exclusivity/[***].
2.6.1 Exclusivity.
(a) No Development or Commercialization of Licensed Compound in the Field. Ascentage hereby covenants that except as expressly permitted under any future agreement that the Parties may enter into pursuant to Article 8 below pertaining to the China JVCO, Ascentage shall not: (a) research, develop, use or commercialize, and shall not authorize any Affiliate or other Third Party to research, develop, use or commercialize, the Licensed Compound (or any Licensed Product) in the Field, and (b) manufacture, or authorize any Third Party to manufacture, the Licensed Compound or any Licensed Product for use in the Field, other than for supply to Unity in accordance with the terms of the Supply Agreement to be negotiated pursuant to Article 4 below.
(b) No Development or Commercialization of Licensed Compounds. Ascentage hereby covenants that except as expressly permitted under any future agreement that the Parties may enter into pursuant to Article 8 below pertaining to the China JVCO, Ascentage shall not research, develop, manufacture, use or commercialize, and shall not authorize any Affiliate or other Third Party to research, develop, manufacture, use or commercialize, any Unity Bcl-2 [***] Products.
(c) Notwithstanding anything to the contrary, Ascentage shall be permitted to develop any products containing the Licensed Compound for Oncology Indications independently.
2.6.2 [***] Licensed Products. Within [***] of the effective date of the Library Agreement the Parties will [***] to [***]. The [***] is [***]. In addition, the [***] to [***]. Ascentage will appoint [***] and Unity will appoint [***] to [***].
2.7 [***]. The Parties agree that within [***] of the Effective Date of this Agreement they will put in place a procedure pursuant to which [***] shall [***] that [***] to [***].
ARTICLE 3
DUE DILIGENCE
3.1 General. Unity shall use commercially reasonable efforts to develop and obtain marketing approval for at least one Royalty Product or APG-1252 Work-a-Like Product (collectively, [***] Product), and thereafter shall use commercially reasonable efforts to launch and commercialize each such [***] Product and to fulfil the market demand therefor.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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3.2 Diligence Milestones. Without limiting the its general diligence obligations under Section 3.1 above, Unity agrees that it shall achieve the following diligence milestones with respect to a [***] Product by the deadlines specified below:
Milestone |
Time Period | |
1. [***] | Within [***] ([***]) [***] of the Effective Date | |
2. [***] | Within [***] ([***]) [***] of the Effective Date | |
3. [***] | Within [***] ([***]) [***] of the Effective Date | |
4. [***] | Within [***] ([***]) [***] of the Effective Date |
If Unity is unable to meet [***], as applicable, by the specified deadline, Unity shall none-the-less be deemed to be in compliance with its diligence obligations hereunder so long as it [***].
ARTICLE 4
MANUFACTURE AND SUPPLY
4.1 Within [***] of the effective date of the Library Agreement, the Parties will negotiate and agree upon the terms and conditions pursuant to which Ascentage (itself or through one or more Third Party contract manufacturers) shall manufacture and supply Unity, its Affiliates and their Third Party Sublicensees with (a) Licensed Product for clinical use, and (b) Licensed Compound for commercial use (the Supply Agreement). Ascentage will appoint [***] and Unity will appoint [***] to negotiate such Supply Agreement on their respective behalf. For clarity it is acknowledged that [***].
ARTICLE 5
PAYMENTS
5.1 Equity Grants.
5.1.1 Upfront Fee. As partial consideration for the rights and licenses granted to Unity under this Agreement, Unity shall issue to Ascentage, subject to Ascentages execution and delivery to Unity of a Stock Issuance Agreement in substantially the form attached hereto as Schedule 5.1 (such form of agreement, the Stock Agreement), One Million Five Hundred Seventy Three Thousand Three Hundred Forty (1,573,340) shares of Unity common stock; such shares to be issued to Ascentage within [***] ([***]) days of the Effective Date.
5.1.2 [***]. Upon the [***], Unity shall issue to Ascentage Three Hundred Ninety Three Thousand Three Hundred Thirty Five (393,335) shares of Unity common stock; such shares to be issued to Ascentage pursuant to the Stock Agreement within [***] ([***]) days of date that [***] occurs. For clarity, [***].
5.1.3 [***]. Upon the [***], Unity shall issue to Ascentage the following number of shares of Unity common stock based on how long after the Effective Date such [***]; such shares to be issued to Ascentage pursuant to the Stock Agreement within [***] ([***]) days of date that such [***] occurs:
(a) [***] ([***]) shares of Unity common stock if such [***] occurs within [***] ([***]) [***] of the Effective Date.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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(b) [***] ([***]) shares of Unity common stock if such [***] occurs more than [***] ([***]) [***] after the Effective Date but less than [***] ([***]) [***] after the Effective Date.
(c) [***] ([***]) shares of Unity common stock if such [***] occurs more than [***] ([***]) [***] after the Effective Date.
5.1.4 Equity Cap. Notwithstanding anything in the contrary in this Agreement, the Library Agreement or any Compound License Agreement(s), the maximum cumulative aggregate number of shares of Unity common stock that Ascentage is eligible to receive under Sections 6.1 and 6.2 of the Library Agreement, Section 5.1 of any Compound License Agreement(s) and this Section 5.1 is:
(a) [***] ([***]) shares of Unity common stock if only one Licensed Product is developed; and
(b) Three Million Nine Hundred Thirty Three Thousand Three Hundred and Fifty (3,933,350) shares of Unity common stock if two or more Licensed Products is developed.
5.2 Development/Sales Milestones. In partial consideration of the rights and licenses granted herein to Unity, Unity shall pay Ascentage the following milestone payments:
5.2.1 Licensed Products. Within [***] ([***]) days after the first achievement by Unity (or any of its Affiliates or Third Party Sublicensees) of each of the following milestones with respect to a Licensed Product, Unity shall pay Ascentage the corresponding milestone payment set forth below, in accordance with the payment provisions of Article 6 below:
Milestone Event |
Milestone Payment | |||
1. [***]: |
$ | [***] | ||
2. [***]: |
$ | [***] | ||
3. [***]: |
$ | [***] | ||
4. [***] |
$ | [***] | ||
5. [***] |
$ | [***] | ||
|
|
|||
Total per Licensed Product |
$ | [***] | ||
|
|
5.2.2 Unity Bcl-2 [***] Products. Within [***] ([***]) days after the first achievement by Unity (or any of its Affiliates or Third Party Sublicensees) of each of the following milestones with respect to a Unity Bcl-2 [***] Product, Unity shall pay Ascentage the corresponding milestone payment set forth below, in accordance with the payment provisions of Article 6 below:
Milestone Event |
Milestone Payment | |||
1. [***]: |
$ | [***] | ||
2. [***]: |
$ | [***] | ||
3. [***]: |
$ | [***] | ||
4. [***] |
$ | [***] | ||
5. [***] |
$ | [***] | ||
|
|
|||
Total per Unity Bcl-2 [***] Product |
$ | [***] | ||
|
|
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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5.2.3 Certain Additional Terms.
(a) For clarity, all forms, presentations, formulation and dosage forms of a Licensed Product or Unity Bcl-2 [***] Product shall be considered one and the same Licensed Product or Unity Bcl-2 [***] Product (as applicable) for purposes of this Section 5.2.
(b) If Unity begins development of one Licensed Product or Unity Bcl-2 [***] Product and a milestone payment is made under this Section 5.2, and then Unity terminates development of such product and begins development of a second Licensed Product or Unity Bcl-2 [***] Product, the milestone which was already paid under this Section 5.2 for the abandoned product will not be repeated, but the remaining milestone payments hereunder will be due as the second Licensed Product or Unity Bcl-2 [***] Product (as applicable) advances;
(c) In its sole discretion, Unity may elect in lieu of the payment of the milestone payments owing to Ascentage under this Section 5.2, to grant to Ascentage that number of shares of Unity common stock of equivalent value (based on the Fair Market Value of such Unity common stock at the time of such grant).
5.3 Royalties. In partial consideration of the licenses granted herein to Unity, Unity shall pay to Ascentage a running royalty equal to the percentage set forth below on the Net Sales of each Royalty-bearing Product based on whether such Royalty-bearing Product is a Licensed Product or Unity Bcl-2 [***] Product, subject to any adjustments set forth in Sections 5.5 and 5.6, and in accordance with the payment provisions of Article 6 below.
5.3.1 Licensed Products.
Annual Net Sales of Licensed Product |
Applicable Royalty Rate | |||
Portion of worldwide annual Net Sales of the Licensed Product less than or equal to [***] Dollars (US$[***]) |
[***] | % | ||
Portion of worldwide annual Net Sales of the Licensed Product over [***] Dollars (US$[***]) |
[***] | % |
5.3.2 Unity Bcl-2 [***] Products.
Annual Net Sales of Licensed Product |
Applicable Royalty Rate | |||
Portion of worldwide annual Net Sales of the Licensed Product less than or equal to [***] Dollars (US$[***]) |
[***] | % | ||
Portion of worldwide annual Net Sales of the Licensed Product over [***] Dollars (US$[***]) |
[***] | % |
5.4 Royalty Term. Unitys obligation to pay royalties on Net Sales of Royalty-bearing Products under this Agreement shall continue on a country-by-country and Royalty-bearing Product-by-Royalty-bearing Product basis until the later of (a) abandonment or expiration of the last Valid Claim that claims the [***] of the Licensed Compound (or the [***] contained in the Unity Bcl-2 [***] Product) in such country, (b) the date of expiry of any applicable regulatory, pediatric, orphan drug or data exclusivity obtained for such Royalty-bearing Product in such country, or (c) ten (10) years after the first commercial sale of the Royalty-bearing Product by or under the authority of Unity in any country in the Territory.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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5.5 Royalty Stacking. Unity shall be entitled to deduct from the amounts owing to Ascentage under Sections 5.2 and 5.3 above [***] percent ([***]%) of any royalties or other payments made to Third Parties for Enabling IP, provided that (a) the total aggregate amount payable to Ascentage under Sections 5.2 and 5.3 in any [***] may not be reduced to less than [***] percent ([***]%) of the amounts that would otherwise be due Ascentage in such [***], and (b) Unity shall not be entitled to deduct any royalties or other payments made under the Existing Agreements. If, in any [***], Unity is not able to fully recover its [***] percent ([***]%) portion of the payments due to a Third Party, it shall be entitled to carry forward such right of off-set to future [***] with respect to the excess amount
5.6 Generic Products. If at any time during the term of this Agreement a Generic Product enters the market in any country and has for a period of at least [***] ([***]) consecutive [***] a market share in such country of at least [***] percent ([***]%) of the then combined unit volume of the corresponding Royalty-bearing Product (i.e., the Royalty-bearing Product containing the same active pharmaceutical ingredient(s) as are present in the Generic Product) and such Generic Product, then Unitys obligation to pay royalties to Ascentage on Net Sales of such Royalty-bearing Product in such country shall be to reduced to [***] percent ([***]%) of the amounts that would otherwise be due Ascentage under Section 5.3 in such calendar quarter.
5.7 Maximum Reduction to Royalties. Notwithstanding anything to the contrary in this Article 5, in no event shall the royalties owing to Ascentage with respect to Net Sales of a Royalty-bearing Product in any country be reduced by cumulative operation of Sections 5.5 and 5.6 to less than [***] percent ([***]%) of the amounts that would otherwise be due Ascentage under Section 5.3 in such calendar quarter.
5.8 Combination Products. In the event that a Royalty-bearing Product is sold for a single price in combination with another therapeutically active pharmaceutical ingredient, or other product or service, for which no royalty would be due hereunder if sold separately, Net Sales from such combination sales, for purposes of calculating the applicable royalty rate and the applicable royalty due under Section 5.3 shall be calculated by multiplying the Net Sales of the combination product by the fraction A/(A + B), where A is the average gross selling price during the previous [***] of the Royalty-bearing Product sold separately and B is the gross selling price during the previous [***] of the therapeutically active ingredient, product or service. In the event that separate sales of the Royalty-bearing Product or the additional therapeutically active ingredient, product or service were not made during the previous [***], then the Net Sales shall be reasonably allocated between such Royalty-bearing Product and such other active ingredient, product or service as agreed upon by the Parties, or failing agreement, determined in accordance with Section 13.1 (Dispute Resolution) below.
5.9 Unitys Covenant. Unity hereby agrees that any shares of common stock issued to Ascentage will not be diluted unless diluted in good faith by Unity on a proportionate basis to the other shares of common stock of Unity outstanding at the time of any such dilution, and subject to the anti-dilution protections as set forth in Unitys certificate of incorporation, as may be amended
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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from time to time in good faith; provided further, that Unity shall not take actions that specifically treat Ascentage differently from other holders of common stock, or issue any capital stock in a manner which is intended to circumvent this covenant. The shares of common stock issued to Ascentage shall be duly adjusted for any bonus issue, share split, consolidation, subdivision, reclassification, recapitalization or similar arrangement of Unity, in each case in accordance with, and as expressly contemplated by, Unitys certificate of incorporation, as may be amended from time to time in good faith.
ARTICLE 6
ACCOUNTING; RECORDS; METHOD OF PAYMENT
6.1 Royalty Reports; Payments, Invoices. After the first sale of a Royalty-bearing Product on which royalties are payable by Unity hereunder, Unity shall make quarterly written reports to Ascentage within [***] ([***]) days after the end of each calendar quarter, stating in each such report the number, description, and aggregate Net Sales of Royalty-bearing Product sold during the calendar quarter upon which a royalty is payable under Article 5 above. Concurrently with the making of such reports, Unity shall pay to Ascentage all amounts payable pursuant to Article 5 above, in accordance with the payment provisions of Section 6.3.
6.2 Records; Inspection. During the term of this Agreement and for a period of [***] ([***]) years thereafter, Unity and its Affiliates shall keep complete, true and accurate books of account and records for the purpose of determining the amounts payable to Ascentage under this Agreement. Ascentage shall have the right to cause an independent, certified public accountant reasonably acceptable to Unity to audit such records to confirm gross sales, Net Sales and royalty payments for a period covering not more than the preceding [***] ([***]) years. Unity agrees to either: (a) require each of its Third Party Sublicensees to maintain similar books and records and to open such records for inspection by an independent, certified public accountant reasonably satisfactory to such Third Party Sublicensee, on behalf of, and as required by, Ascentage for the purpose of verifying payments hereunder, or (b) obtain such audits rights from the Third Party Sublicensee for itself and exercise such audit rights on behalf of Ascentage upon Ascentages request and disclose the results thereof to Ascentage. All such inspections may be made no more than once each calendar year at reasonable times and on reasonable notice. No accounting period of Unity or its Affiliate or Third Party Sublicensee shall be subject to audit more than one time hereunder. Such independent, certified public accountant will be obliged to execute a reasonable confidentiality agreement prior to commencing any such inspection. The results of any inspection hereunder shall be provided to both Parties, and Unity shall pay any underpayment to Ascentage within [***] ([***]) days. Inspections conducted under this Section 6.2 shall be at the expense of Ascentage (and Ascentage will reimburse Unitys reasonable out-of-pocket costs of those inspections conducted by Unity at Ascentages request under (b) above), unless a variation or error producing an increase exceeding [***] percent ([***]%) of the amount stated for any period is established in the course of any such inspection, whereupon all costs of such audit of such period will be paid by Unity.
6.3 Payment Method. All payments due hereunder shall be made in U.S. dollars, and shall be made by bank wire transfer in immediately available funds to an account designated by Ascentage in a written notice to Unity. If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rates used by Unity in calculating Unitys own revenues for financial reporting purposes.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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6.4 Late Payments. Any payments due from Unity that are not paid on the date such payments are due under this Agreement shall bear interest at [***] ([***]%) above the then prevailing US Federal Funds Target Rate (Bloomberg page: FDTR <Index>) per annum calculated on a daily basis and payable for the period from the date payment is due until the date payment is actually made. This Section 6.4 shall in no way limit any other remedies available to any Party.
ARTICLE 7
PATENT PROSECUTION AND ENFORCEMENT
7.1 Prosecution of Patents within the Licensed Intellectual Property.
7.1.1 General.
(a) Except as set forth in Section 7.1.1(b) or Section 7.1.1(c) hereof, Ascentage shall have the sole right to control the preparation, filing, prosecution and maintenance of all Licensed Patents using patent counsel of its choice.
(b) Unity shall have the first right, but not the obligation, to prepare, file, prosecute and maintain Royalty-bearing Product-Specific Patents. Unity shall (i) keep Ascentage reasonably informed as to its filing and prosecution strategy for Royalty-bearing Product-Specific Patents and the filing, prosecution and maintenance of Royalty-bearing Product-Specific Patents, (ii) provide Ascentage with a reasonable opportunity to review drafts of proposed patent office submissions with respect to Royalty-bearing Product-Specific Patents; and (iii) consider in good faith the requests and suggestions of Ascentage with respect to strategies for filing and prosecuting such Royalty-bearing Product-Specific Patents. In the event that Unity desires to abandon or decline further responsibility for any such Royalty-bearing Product-Specific Patent, Unity shall provide reasonable prior written notice to Ascentage of such intention to abandon or decline responsibility, but in no case later than [***] ([***]) days prior to any required action relating to the filing, prosecution or maintenance of such Royalty-bearing Product-Specific Patent, and Ascentage shall have the right, at its discretion, to assume such responsibility.
(c) With respect to any Licensed Patent (other than a Royalty-bearing Product-Specific Patent) that claims the Licensed Compound, a Licensed Product or Unity Bcl-2 [***] Product, Ascentage shall have the first right, but not the obligation, to prepare, file, prosecute and maintain such Licensed Patent and shall (i) keep Unity reasonably informed as to its filing and prosecution strategy for such Licensed Patent and the filing, prosecution and maintenance of such Licensed Patent, (ii) provide Unity with a reasonable opportunity to review drafts of proposed patent office submissions with respect to such Licensed Patent; and (iii) follow the directions given by Unity with respect to filing and prosecuting such Licensed Patents, unless [***], in which case [***] and [***]. In the event that Ascentage desires to abandon or decline further responsibility for any Licensed Patent, Ascentage shall provide Unity [***] notice and the opportunity to assume responsibility for such Licensed Patent.
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7.1.2 For purposes of this Article 7, prosecution and maintenance of patents and patent applications shall be deemed to include, without limitation, the conduct of interferences or oppositions, and/or requests for re-examinations, reissues or extensions of patent terms.
7.2 Enforcement of Licensed Patents. If either Party determines that a Third Party is making, using or selling a product that may infringe any Licensed Patent, that Party shall notify the other Party in writing.
7.2.1 Infringement by a Competitive Product.
(a) With respect to any such infringing activity that involves the manufacture, use or sale by a Third Party of any product that [***] (Competitive Product), Unity shall have the first right, at its sole option, to bring suit to enforce any Licensed Patent, and/or to defend any declaratory judgment action with respect thereto (Enforcement Action); provided, however, that Unity shall keep Ascentage reasonably informed as to the defense and/or settlement of any such Enforcement Action. Ascentage shall have the right to participate in any such Enforcement Action with counsel of its own choice at its own expense. All recoveries received by Unity from an Enforcement Action shall be first applied to reimburse Unitys and then Ascentages unreimbursed expenses, including without limitation, reasonable attorneys fees and court costs. Any remainder shall, to the extent the same pertains to an infringing activity that involves the manufacture, use or sale by a Third Party of any Competitive Product, be treated as Net Sales.
(b) In the event Unity elects not to initiate an Enforcement Action with respect to any commercially significant infringing activity that involves the manufacture, use or sale by a Third Party of any Competitive Product within [***] ([***]) days of a request by Ascentage to do so ([***]), Ascentage may initiate such action at its expense. Unity shall have the right to participate in any such action with counsel of its own choice at its own expense. All recoveries received by Ascentage from an Enforcement Action shall be first applied to reimburse Ascentages and then Unitys unreimbursed expenses, including without limitation, reasonable attorneys fees and court costs. Any remainder shall, to the extent the same pertains to an infringement of the Licensed Patents, be split [***].
7.2.2 Other Instances of Infringement. With respect to any such infringing activity that does not involve the manufacture, use or sale by a Third Party of a Competitive Product, Ascentage shall have the sole right, at its sole option, to bring suit to enforce any Licensed Patent, and/or to defend any declaratory judgment action with respect thereto and to retain all recoveries received by Ascentage in connection therewith.
7.3 Infringement Claims Against Unity. If the production, sale or use of a Royalty-bearing Product pursuant to this Agreement results in any claim, suit or proceeding alleging patent infringement against Unity (or its Affiliates or sublicensees), Unity shall promptly notify Ascentage thereof in writing setting forth the facts of such claim in reasonable detail. As between the Parties, Unity will be entitled to control the defense in any such action(s). Unity agrees to keep Ascentage reasonably informed of all material developments in connection with any such claim, suit or proceeding as it relates to the Licensed Intellectual Property. Notwithstanding the above, Unity shall not admit the invalidity of any Licensed Patent without written consent from Ascentage.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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7.4 Cooperation. In any legal action undertaken by a Party pursuant to Sections 7.2 or 7.3 of this Agreement (the Party bringing or defending such legal action, the Enforcing Party), the non-Enforcing Party shall cooperate fully with the Enforcing Party, including without limitation by joining as a party plaintiff if necessary for legal standing and executing such documents as the Enforcing Party may reasonably request. Upon the request of, and at the expense of, the Enforcing Party, the non-Enforcing Party shall make available at reasonable times and under appropriate conditions all relevant personnel, records, papers, information, samples, specimens and other similar materials in its possession.
7.5 No Implied Obligations. Except as expressly provided in this Article 7, neither Party has any obligation to bring or prosecute actions or suits against any Third Party for patent infringement.
7.6 UM License Agreement. Notwithstanding the foregoing provisions of this Article 7, with respect to the Licensed Patents subject of the UM License Agreement, Unitys rights under this Article 7 shall be limited to the extent of Ascentages rights to prosecute and enforce such Licensed Patents under the UM License Agreement, provided that (a) with respect to Royalty-bearing Product-Specific Patents that have been in-licensed from UM, to the extent the UM License Agreement will not permit Unity to control the prosecution of such patents, Ascentage agrees to (i) share with Unity the information Ascentage receives from UM under Section 7.2 of the UM License Agreement with respect to such patents, (ii) provide Unity with a reasonable opportunity to review and comment upon such information; and (iii) pass along to UM Unitys comments and requested actions, and (b) Ascentage shall at Unitys request and expense cooperate with Unity in order to allow Unity to exercise on Ascentages behalf the enforcement rights granted to Ascentage under Section 8.1 of the UM License Agreement, in each case as permitted by the UM License Agreement.
OPTION FOR CHINA JOINT VENTURE
7.6 Option for China JVCO. Unity shall grant to Ascentage an option to commercialize one or more Royalty-bearing Products for use in the Field in Greater China jointly with Unity through a joint venture entity (China JVCO) to be established in accordance with Section 8.4 of the Library Agreement(JVCO Option). The process for exercise of the JVCO Option shall be agreed upon by [***] and [***] at [***].
7.7 Limitation of Obligations; Certain Covenants
8.2.1. Notwithstanding anything to the contrary, nothing in this Agreement shall be deemed to have granted Unity or any of its sublicensees the right to develop, manufacture, distribute, sell or otherwise commercialize the Royalty-bearing Products in the Greater China.
8.2.2 Ascentage hereby covenants that it shall not develop, manufacture, distribute, sell or otherwise commercialize (a) Unity Bcl-2 [***] Products or (b) the Licensed Compound (including any Licensed Products containing the Licensed Compound) for use in the Field in the Greater China except through the China JVCO. In the event of a breach by Ascentage of its obligations under this Section 8.2.2, the [***] and [***], shall [***].
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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8.2.3 Unity and Ascentage hereby covenant that they shall cooperate with respect to the establishment of the China JVCO, including without limitation by (a) initiating negotiation of the form agreements relating to the JVCO within [***] of the Effective Date, (b) using commercially reasonable efforts to reach agreement on such form agreements within [***] ([***]) [***] of the Effective Date, including ensuring that [***] and [***] devote at least [***] to such negotiations until such form agreements are agreed upon, and (c) signing the agreements for establishment of the China JVCO agreed upon by [***] and [***].
CONFIDENTIALITY
7.8 Confidential Information. Except as otherwise expressly provided herein, the parties agree that the receiving party shall not, except as expressly provided in this Article 9, disclose to any Third Party or use for any purpose any information which is disclosed to it by the other party, whether orally or in writing, and identified as confidential (Confidential Information), except to the extent that it can be established by the receiving party by competent proof that such information:
(a) Was already known to the receiving party, other than under an obligation of confidentiality, at the time of disclosure;
(b) Was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party;
(c) Became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this Agreement;
(d) Was independently developed by the receiving party without reference to information provided by the disclosing party as demonstrated by documented evidence prepared contemporaneously with such independent development; or
(e) Was disclosed to the receiving party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing party not to disclose such information to others.
7.9 Permitted Use and Disclosures. Each party hereto may use or disclose Confidential Information of the other party to the extent such use or disclosure is reasonably necessary in the following instances: (a) exercising the rights granted to it hereunder (including, in the case of Unity, developing, commercializing and/or sublicensing of Royalty-bearing Products) or in carrying out its obligations hereunder; (b) filing or prosecuting Patents as permitted by this Agreement; (c) prosecuting or defending litigation; and (d) complying with applicable court orders or governmental regulations. Notwithstanding the foregoing, in the event a party is required to make a disclosure of the other partys Confidential Information pursuant to clause (c) or (d) of this Section 9.2, it will, except where impracticable, give reasonable advance notice to the disclosing
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party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such party would use to protect its own confidential information, but in no event less than reasonable efforts. In addition, Unity shall have the right to disclose Confidential Information regarding the Licensed Compound or Licensed Products to Third Parties in connection with due diligence or similar investigations, to potential Third Party investors, and others on a need to know basis, in each case under terms of confidentiality that are appropriate for the circumstances, or to the extent required by law.
7.10 Nondisclosure of Terms. Each of the parties hereto agrees not to disclose the terms of this Agreement to any Third Party without the prior written consent of the other party hereto, which consent shall not be unreasonably withheld; provided that a party may disclose the terms of this Agreement without such consent to such partys attorneys and advisors, to Third Parties in connection with due diligence or similar investigations, to potential Third Party investors, and others on a need to know basis, in each case under terms of confidentiality that are appropriate for the circumstances, or to the extent required by law.
7.11 Public Announcement. Unity may, in its discretion, issue a press release announcing the formation of this Agreement, which shall be substantially in a form approved by Ascentage prior to execution of the Agreement. Except with respect to such initial release or as otherwise required by law, neither party shall issue an additional press release or public announcement relating to this Agreement without the prior written approval of the other party, which shall not be withheld unreasonably. Either party may refer to the license granted under this Agreement in promotional and other communications with prospective customers and investors, subject to the prior written approval of the other party of the form, substance and intended use of such reference, and provided that such disclosure shall not include any technical details or any financial terms of the license. For purposes of clarification, after a party has obtained the other partys written approval of the form, substance and intended use of a particular reference, no further approval of the other party will be required for inclusion of the same reference in future communications that are intended for the same use.
ARTICLE 8
INDEMNIFICATION
8.1 Unity. Unity agrees to indemnify and defend Ascentage and its directors, officers, employees, agents and their respective successors, heirs and assigns (the Ascentage Indemnitees) against any losses, costs, claims, damages, liabilities or expense (including reasonable attorneys and professional fees and other expenses of litigation) (collectively, Liabilities) arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, to the extent (a) relating to Licensed Products developed, manufactured, used, sold or otherwise distributed by or on behalf of Unity, its Affiliates, sublicensees or other designees (excluding Ascentage, its Affiliates and licensees) including, without limitation, product liability and patent infringement claims, or (b) resulting from a breach by Unity of its representations and warranties under this Agreement, except, in each case, to the extent such Liabilities result from the negligence or intentional misconduct of Ascentage or Ascentages breach of its representations and warranties under this Agreement or the Supply Agreement to be negotiated pursuant to Article 4 above.
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8.2 Ascentage. Ascentage agrees to indemnify and defend Unity and its directors, officers, employees, agents and their respective heirs and assigns (the Unity Indemnitees) against any Liabilities arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, to the extent resulting from a breach by Ascentage of its representations and warranties under this Agreement or the Supply Agreement to be negotiated pursuant to Article 4 above, except, in each case, to the extent such Liabilities result from the negligence or intentional misconduct of Unity or Unitys breach of its representations and warranties under this Agreement.
8.3 Procedure. In the event that any party intends to claim indemnification under this Article 10 (each such party, an Indemnitee) it shall promptly notify the other Party in writing of such alleged Liability. The indemnifying Party shall have the right to control the defense thereof with counsel of its choice as long as such counsel is reasonably acceptable to Indemnitee; provided, however, that any Indemnitee shall have the right to retain its own counsel at its own expense, for any reason, including if representation of any Indemnitee by the counsel retained by the indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnitee and any other Party reasonably represented by such counsel in such proceeding. The indemnifying Party shall keep the Indemnitee regularly informed of the status of the defense of any action, claim or liability covered by this Article 10 and shall take into consideration the Indemnitees reasonable comments thereon. The affected Indemnitee shall cooperate with the indemnifying Party and its legal representatives in the investigation of any action, claim or liability covered by this Article 10. The Indemnitee shall not compromise or settle any claim or suit, or voluntarily incur any expense with respect to any such claim or suit, in each case, without the prior written consent of the indemnifying Party, which such Party shall not be required to give. The failure to deliver written notice to the indemnifying Party within a reasonable time after the commencement of any action with respect to any action, claim or liability covered by this Article 10, if prejudicial to its ability to defend such action, shall relieve the indemnifying Party of any liability to the Indemnitee under this Article 10.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 General Warranties. Each Party represents and warrants to the other Party that it is a corporation duly organized and validly existing under the laws of the state or country of its incorporation, the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action, and it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder (including, in the case of Ascentage, granting the rights and licenses described in Article 2).
9.2 Ascentage Warranties. Ascentage represents and warrants on its own behalf and on behalf of its Affiliates that as of the Effective Date:
(a) except as otherwise disclosed to Unity in writing prior to the Effective Date, (i) Ascentage has not received written notice from a Third Party claiming that the Licensed Compound infringes the intellectual property rights of any Third Party, and (ii) Ascentage is not a party to any legal action, suit or proceeding relating to the Licensed Compound.
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(b) except as otherwise disclosed to Unity in writing prior to the Effective Date, there are no actual or pending actions, suits or claims, by any Third Party (i) challenging the ownership of the Licensed Compound; or (b) challenging the validity, effectiveness, enforceability, or ownership of the Licensed Intellectual Property.
(c) except as otherwise disclosed to Unity in writing prior to the Effective Date, the Licensed Patents are subsisting, in force or pending, as the case may be, and are not the subject of any interference, reissue, reexamination, opposition, cancellation or similar administrative proceedings.
(d) except as otherwise disclosed to Unity in writing prior to the Effective Date, Ascentage has not brought a claim alleging an infringement by a Third Party of any of the Licensed Patents and to Ascentages actual knowledge, there is no actual or alleged infringement by a Third Party of any of the Patents within the Licensed Patents.
(e) there are no Patents: (a) filed by Ascentage and subsequently assigned to Third Party, or (b) with respect to which Ascentage or its Affiliates have acquired rights from a Third Party (i.e., through in-licenses, cross-licenses or otherwise), in each case that (i) would be required for Unity to research, develop, manufacture, use or commercialize the Licensed Compound and (ii) are not included within the Licensed Intellectual Property.
(f) except as otherwise disclosed to Unity in writing prior to the Effective Date, there are no actual or pending suits or claims by any Third Party asserting that the manufacture, use, sale, offer for sale or importing of the Licensed Compound infringes the intellectual property of a Third Party and to Ascentages knowledge, the development and commercialization of the Licensed Compound would not infringe (i) any issued Patents of any Third Party (other than Patents in-licensed from UM), or (ii) any published Patent claim of any Third Party (other than claims of Patents in-licensed from UM) if such claim were to issue as published.
(g) Ascentage has disclosed to Unity all material agreements with Third Parties in effect as of the Effective Date pursuant to which Licensed Intellectual Property was licensed, acquired or sold, including without limitation all amendments to the UM License Agreement entered into by UM and Ascentage subsequent to the effective date of the License Agreement.
(h) Ascentage has not previously granted and will not grant any rights in the Licensed Intellectual Property that are inconsistent with the rights and licenses granted to Unity herein.
9.3 Certain Rights and Obligations under the UM License Agreement.
(a) Ascentage shall not modify, amend or otherwise alter the UM License Agreement to the extent the same would materially and adversely affect Unitys rights under this Agreement.
(b) Ascentage shall not (a) exercise or fail to exercise any right under the UM License Agreement or (b) provide or fail to provide any consent or approval with respect to any right or obligation under the UM License Agreement, in each case to the extent the same would materially and adversely affect Unitys rights under this Agreement.
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(c) Ascentage shall not unilaterally terminate the UM License Agreement.
9.4 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES TO THE OTHER PARTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, REGARDING THE LICENSED COMPOUND, LICENSED PRODUCTS, UNITY BCL-2 SYSTEMIC PRODUCTS OR THE LICENSED INTELLECTUAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, AND VALIDITY OF LICENSED INTELLECTUAL PROPERTY CLAIMS, ISSUED OR PENDING.
9.5 Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 9, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT; provided, however, that this Section 11.5 shall not be construed to limit either partys indemnification obligations under Article 10.
ARTICLE 10
TERM AND TERMINATION
10.1 Term. The term of this Agreement shall commence on the Effective Date and, unless earlier terminated as provided in this Article 12, shall continue in full force and effect on a country-by-country basis until the expiration of all royalty obligations pursuant to this Agreement for such country, as provided in Section 5.4 above. Unitys license with respect to the Licensed Technology shall survive the expiration (but not an earlier termination) of this Agreement, provided that such license shall thereafter become nonexclusive and fully paid-up.
10.2 Termination for Breach. Either Party may terminate this Agreement in the event that the other Party shall have materially breached or defaulted in the performance of any of its material obligations hereunder, and such breach or default shall have continued for sixty (60) days after written notice of such breach and intent to terminate this Agreement therefor was provided to the breaching Party by the nonbreaching Party. Any such termination shall become effective at the end of such sixty (60) day period unless the breaching Party has cured any such breach or default prior to the expiration of the sixty (60) day period. Notwithstanding the foregoing, if the Party alleged to be in breach of this Agreement in good faith disputes such breach within such sixty (60) day period, the nonbreaching Party shall not have the right to terminate this Agreement unless it has been determined by arbitration pursuant to Section 13.2 that this Agreement was materially breached, and the breaching Party fails to comply with its obligations hereunder within sixty (60) days after such determination.
10.3 Termination by Unity. Any provision herein notwithstanding, Unity may terminate this Agreement, in its entirety or as to any particular Patent within the Licensed Patents, or as to any particular Licensed Product, at any time by giving Ascentage at least ninety (90) days prior written
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notice. From and after the effective date of a termination under this Section 12.3 with respect to a particular Patent in a particular country, such Patent shall cease to be within the Licensed Patents for all purposes of this Agreement, and all rights and obligations of Unity with respect to such Patent(s) shall terminate. From and after the effective date of a termination under this Section 12.3 with respect to a particular Licensed Product, the license granted under Section 2.1 above shall terminate with respect to such Licensed Product, and the same shall cease to be a Licensed Product for all purposes of this Agreement. Upon a termination of this Agreement in its entirety under this Section 12.3, all rights and obligations of the parties shall terminate, except as provided in Section 12.4 below. For clarity, Unity shall remain obligated to pay any and all milestone and other payments accrued, due and payable to Ascentage prior to such termination.
10.4 Effect of Termination.
10.4.1 Accrued Obligations. Expiration or any termination of this Agreement shall not release either Party hereto from any liability which at the time of such expiration or termination has already accrued to such Party or which is attributable to a period prior to such expiration or termination, subject to the terms of this Agreement, nor preclude either Party from pursuing any rights and remedies it may have hereunder or at law or in equity which accrued to it prior to such expiration or termination, subject to the terms of this Agreement.
10.4.2 Sales of Existing Inventory of Licensed Product. In the event this Agreement is terminated for any reason with respect to a Licensed Product after the first approval of an MAA for such Licensed Product, Unity shall provide Ascentage with a written inventory of all quantities of such Licensed Product that Unity and its Affiliates have in stock and, for a period of [***] ([***]) [***] after such termination, Unity and its Affiliates shall have the right to sell or otherwise dispose of such Licensed Product, all subject to the payment to Ascentage of royalties pursuant to Article 5 hereof.
10.4.3 Survival of Sublicenses. Upon termination of this Agreement for any reason, any sublicense granted by Unity hereunder to a Third Party Sublicensee shall survive, provided that such Third Party Sublicensee continues to pay to Ascentage the milestones and royalties that would have been due to Ascentage under this Agreement based on such Third Party Sublicensees activities had this Agreement not terminated. For clarity, in the event that a Third Party Sublicensee fails to pay to Ascentage the applicable milestones and royalties due to Ascentage based on such Third Party Sublicensees activities, Ascentage shall be entitled to terminate such surviving sublicense by providing such Third Party Sublicensee written notice of termination, which notice shall take effect [***] ([***]) days after it is received by such Third Party Sublicensee unless such Third Party Sublicensee has cured any such breach or default prior to the expiration of the [***] ([***]) day period.
10.4.4 Library Agreement. This Agreement is independent of, and shall not be affected by, the expiration or termination of the Library Agreement, and vice versa.
10.4.5 Survival. Articles 1 (Definitions), 6 (Accounting; Records; Method of Payment), 9 (Confidentiality), 10 (Indemnification), 13 (Dispute Resolution) and 14 (Miscellaneous), and Sections 2.1.1(b), 2.1.2(c), 5.2.2, 5.3.2 and 5.4-5.8, (with respect to [***]),
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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7.2.1 (with respect to any ongoing Enforcement Action), 11.3, 11.4 and 12.4 shall survive the expiration or termination of this Agreement for any reason, provided that such survival shall be contingent upon Unity having fulfilled its obligations under Section 5.1.1. Except as otherwise provided in this Article 12, all rights and obligations of the parties under this Agreement shall terminate upon the expiration or termination of this Agreement.
10.5 Condition Precedent.
10.5.1 This Agreement is entered into subject to the condition precedent that Ascentage and UM agree upon and execute an amendment to the UM License Agreement (Second Amendment) adjusting the royalties owing to UM in connection with the activities contemplated by this Agreement (including the attached Exhibits). All rights and obligations set forth in the Agreement shall only become effective upon the Effective Date.
10.5.2 Ascentage hereby agrees to use its commercially best efforts to complete and execute the Second Amendment as soon as reasonably practicable.
ARTICLE 11
DISPUTE RESOLUTION
11.1 Dispute Resolution. If an unresolved dispute arises out of or relates to this Agreement, or the breach thereof, either Party may refer such dispute to the [***] of Unity and Ascentage, who shall meet in person or by telephone within [***] ([***]) days after such referral to attempt in good faith to resolve such dispute. If such matter cannot be resolved by discussion of such officers within such [***] ([***]) days period (as may be extended by mutual agreement), either Party shall be entitled to seek resolution of such dispute pursuant to Section 13.2 below.
11.2 Arbitration. If the parties are unable to resolve a dispute on an issue of interpretation, breach or enforcement of this Agreement, the parties shall refer such dispute to be finally resolved by binding arbitration under the terms of this Section 13.2, except that all disputes with respect to the validity or infringement of Patents shall be subject to applicable federal court jurisdiction and not subject to the terms of this Section 13.2. Whenever a party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other party. Any such arbitration shall be conducted under the [***] by a panel of three (3) arbitrators in [***]. Each party shall select one (1) arbitrator who is not employed by, or otherwise affiliated with, such party within [***] ([***]) days after the institution of arbitration proceedings, and the two (2) arbitrators so selected shall designate the third arbitrator. The parties shall use their commercially reasonable efforts to conclude the arbitration hearings within [***] ([***]) [***] following the confirmation of the third and presiding arbitrator.
11.3 Injunctive Relief. Each Party shall be free to seek preliminary or permanent injunctive relief, restraining order or degree of specific performance in any court of competent jurisdiction. For avoidance of doubt, any such equitable remedies provided under this Section 13.3 shall be cumulative and not exclusive and are in addition to any other remedies, which either Party may have under this Agreement or applicable law.
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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ARTICLE 12
MISCELLANEOUS
12.1 Governing Laws. This Agreement and any dispute arising from the construction, performance or breach hereof shall be governed by and construed, and enforced in accordance with, the laws of the state of New York, USA, without reference to conflicts of laws principles.
12.2 Waiver. It is agreed that no waiver by either Party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.
12.3 Assignment. This Agreement shall not be assignable by either party without the written consent of the other party hereto, except that either party may assign this Agreement, without such consent, to an entity that acquires all or substantially all of the business or assets of such party to which this Agreement relates, whether by merger, reorganization, acquisition, sale, or otherwise; provided, however, that within [***] ([***]) days of such an assignment, the assignee shall agree in writing to be bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall bind and inure to the benefit of each partys successors and permitted assigns.
12.4 Independent Contractors. The relationship of the Parties hereto is that of independent contractors. The Parties hereto are not deemed to be agents, partners or joint venturers of the others for any purpose as a result of this Agreement or the transactions contemplated thereby.
12.5 Compliance with Laws. In exercising their rights under this Agreement, the Parties shall fully comply in all material respects with the requirements of any and all applicable laws, regulations, rules and orders of any governmental body having jurisdiction over the exercise of rights under this license including, without limitation, those applicable to the discovery, development, manufacture, distribution, import and export and sale of Licensed Products pursuant to this Agreement.
12.6 Notices. All notices, requests and other communications hereunder shall be in writing and shall be personally delivered or by registered or certified mail, return receipt requested, postage prepaid, in each case to the respective address specified below, or such other address as may be specified in writing to the other Parties hereto and shall be deemed to have been given upon receipt:
If to Unity: | Unity Biotechnology, Inc. |
1700 Owens Street, Suite 535
San Francisco, CA 94158, USA
Attention: [***]
Email: [***]
If to Ascentage: | Ascentage Pharma Group Corp. Ltd. |
Room 201, QB3 Building, Medical City Avenue
Hi-Tech BioMed District, Taizhou City, Jiangsu Province
P.R. China, 225300
Attention: [***]
Email: [***]
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
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12.7 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect to the fullest extent permitted by law without said provision, and the Parties shall amend the Agreement to the extent feasible to lawfully include the substance of the excluded term to as fully as possible realize the intent of the Parties and their commercial bargain.
12.8 Advice of Counsel. Unity and Ascentage have each consulted counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one Party or another and will be construed accordingly.
12.9 Performance Warranty. Each Party hereby warrants and guarantees the performance of any and all rights and obligations of this Agreement by its Affiliates, licensees and sublicensees.
12.10 Force Majeure. Neither Party shall lose any rights hereunder or be liable to the other Party for damages or losses (except for payment obligations) on account of failure of performance by the defaulting Party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, unusual and unexpected governmental intervention, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the non-performing Party and such Party has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a Party be required to settle any labor dispute or disturbance.
12.11 Complete Agreement. This Agreement with its schedules, together with the Library Agreement and its exhibits, constitutes the entire agreement, both written and oral, between the Parties with respect to the subject matter hereof, and all prior agreements respecting the subject matter hereof, either written or oral, express or implied, shall be abrogated, canceled, and are null and void and of no effect. No amendment or change hereof or addition hereto shall be effective or binding on either of the Parties hereto unless reduced to writing and executed by the respective duly authorized representatives of Unity and Ascentage.
12.12 Headings. The captions to the several Sections and Articles hereof are not a Part of this Agreement, but are included merely for convenience of reference and shall not affect its meaning or interpretation.
12.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.
12.14 Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by each Party as a licensor are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title ll, U.S. Code (the Bankruptcy Code), licenses of rights to intellectual property as defined under section 101(35A) of the Bankruptcy Code. The Parties agree that each licensee of such rights
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under this Agreement, shall retain and may fully exercise all rights and elections it would have in the case of a licensor bankruptcy under the Bankruptcy Code. Each Party agrees during the term of this Agreement to create or maintain current copies, or if not amenable to copying, detailed descriptions or other appropriate embodiments, of all such intellectual property licensed to the other Party.
IN WITNESS WHEREOF, the Parties hereto have caused their duly authorized representatives to execute this Agreement.
ASCENTAGE PHARMA GROUP CORP. LTD. | UNITY BIOTECHNOLOGY, INC. | |||||||
By: | /s/ Dajun Yang |
By: | /s/ Nathaniel David | |||||
Name: Dajun Yang, MD, PhD | Name: Nathaniel David, PhD | |||||||
Title: Chief Executive Officer | Title: Chief Executive Officer |
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SCHEDULE 1.2
APG-1252
[***]
Confidential Information
(Property of Ascentage Pharma Group)
[***] | Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
SCHEDULE 5.1
FORM OF STOCK ISSUANCE AGREEMENT
UNITY BIOTECHNOLOGY, INC.
RESTRICTED STOCK GRANT AGREEMENT
This Restricted Stock Grant Agreement (the Agreement) is made as of [] by and between Unity Biotechnology, Inc., a Delaware corporation (the Company), and Ascentage Pharma Group Corp. Ltd. (the Grantee).
In consideration of the mutual covenants and representations set forth below, the Company and Grantee agree as follows:
1. Grant of the Shares. Subject to the terms and conditions of this Agreement, the Company agrees to grant to Grantee, and Grantee agree to acquire from the Company, on the Closing (as defined below) [] shares of the Companys Common Stock, $0.0001 par value per share (the Shares), as consideration for services to be provided by Grantee to the Company.
2. Closing. The transfer of the Shares shall occur at a closing (the Closing) to be held on the date first set forth above, or at any other time mutually agreed upon by the Company and Grantee. The Closing will take place at the principal office of the Company or at such other place as shall be designated by the Company. As promptly after the Closing as practicable, the Company will issue a stock certificate, registered in the name of Grantee, reflecting the Shares.
3. Restrictions on Transfer.
A. Investment Representations and Legend Requirements. The Grantee hereby make the investment representations listed on Exhibit A to the Company as of the date of this Agreement and as of the date of the Closing, and agrees that such representations are incorporated into this Agreement by this reference, such that the Company may rely on them in issuing the Shares. Grantee understand and agree that the Company shall cause the legends set forth below, or substantially equivalent legends, to be placed upon any certificate(s) evidencing ownership of the Shares, together with any other legends that may be required by the Company or by applicable state or federal securities laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, A RIGHT OF FIRST REFUSAL, AND A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC OFFERING HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE RESTRICTED STOCK GRANT AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST REFUSAL AND LOCK-UP PERIOD ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER MAY BE EFFECTED WITHOUT AN EFFCTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
B. Stop-Transfer Notices. Grantee agree that to ensure compliance with the restrictions referred to herein, the Company may issue appropriate stop transfer instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
C. Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any acquirer or other transferee to whom such Shares shall have been so transferred
D. Lock-Up Period. Grantee hereby agree that Grantee shall not sell, offer, pledge, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, grant any right or warrant to purchase, lend or otherwise transfer or encumber, directly or indirectly, any Shares or other securities of the Company, nor shall Grantee enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Shares or other securities of the Company, during the period from the filing of the first registration statement of the Company filed under the Securities Act of
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1933, as amended (the Securities Act), that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act through the end of the 180-day period following the effective date of such registration statement (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto). The obligations described in this section 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. Grantee further agree, if so requested by the Company or any representative of its underwriters, to enter into such underwriters standard form of lockup or market standoff agreement in a form satisfactory to the Company and such underwriter. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of any such restriction period.
4. Companys Right of First Refusal. Before any Shares acquired by the Grantee pursuant to this Agreement (or any beneficial interest in such Shares) may be sold, transferred, encumbered or otherwise disposed of in any way (whether by operation of law or otherwise) by the Grantee or any subsequent transferee (each a Holder), such Holder must first offer such Shares or beneficial interest to the Company and/or its assignee(s) as follows:
A. Notice of Proposed Transfer. The Holder shall deliver to the Company a written notice stating: (i) the Holders bona fide intention to sell or otherwise transfer the Shares; (ii) the name of each proposed transferee; (iii) the number of Shares to be transferred to each proposed transferee; (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares; and (v) that by delivering the notice, the Holder offers all such Shares to the Company and/or its assignee(s) pursuant to this section and on the same terms described in the notice.
B. Exercise of Right of First Refusal. At any time within 30 days after receipt of the Holders notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the proposed transferees, at the purchase price determined in accordance with Section 4.C.
C. Purchase Price. The purchase price for the Shares purchased by the Company and/or its assignee(s) under this section shall be the price listed in the Holders notice. If the price listed in the Holders notice includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in its sole discretion.
D. Payment. Payment of the purchase price shall be made, at the option of the Company and/or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company and/or its assignee(s), or by any combination thereof within 30 days after receipt by the Company of the Holders notice (or at such later date as is called for by such notice).
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E. Holders Right to Transfer. If all of the Shares proposed in the notice to be transferred to a given proposed transferee are not purchased by the Company and/or its assignee(s) as provided in this section, then the Holder may sell or otherwise transfer such Shares to that proposed transferee; provided that: (i) the transfer is made only on the terms provided for in the notice, with the exception of the purchase price, which may be either the price listed in the notice or any higher price; (ii) such transfer is consummated within 60 days after the date the notice is delivered to the Company; (iii) the transfer is effected in accordance with any applicable securities laws, and if requested by the Company, the Holder shall have delivered an opinion of counsel acceptable to the Company to that effect; and (iv) the proposed transferee agrees in writing to receive and hold the Shares so transferred subject to all of the provisions of this Agreement, including but not limited to this section, and there shall be no further transfer of such Shares except in accordance with the terms of this section. If any Shares described in a notice are not transferred to the proposed transferee within the period provided above, then before any such Shares may be transferred, a new notice shall be given to the Company, and the Company and/or its assignees shall again be offered the right of first refusal described in this section.
F. Exception for Certain Family Transfers. Notwithstanding anything to the contrary contained elsewhere in this section, the transfer of any or all of the Shares during the Holders lifetime or on the Holders death by will or intestacy to (i) the Holders spouse; (ii) the Holders lineal descendants or antecedents, siblings, aunts, uncles, cousins, nieces and nephews (including adoptive relationships and step relationships), and their spouses; (iii) the lineal descendants or antecedents, siblings, cousins, aunts, uncles, nieces and nephews of Holders spouse (including adoptive relationships and step relationships), and their spouses; and (iv) a trust or other similar estate planning vehicle for the benefit of the Holder or any such person, shall be exempt from the provisions of this section; provided that, in each such case, the transferee agrees in writing to receive and hold the Shares so transferred subject to all of the provisions of this Agreement, including but not limited to this section, and there shall be no further transfer of such Shares except in accordance with the terms of this section; and provided further, that without the prior written consent of the Company, which may be withheld in the sole discretion of the Company, no more than three transfers may be made pursuant to this section, including all transfers by the Holder and all transfers by any transferee.
G. Termination of Right of First Refusal. The right of first refusal contained in this section shall terminate as to all Shares acquired hereunder upon the earlier of: (i) the closing date of the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act, and (ii) the closing date of a Change of Control pursuant to which the holders of the outstanding voting securities of the Company receive securities of a class registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. For purposes of this Agreement, a Change of Control means either: (i) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation or stock transfer, but excluding any such transaction effected primarily for the purpose of changing the domicile of the Company), unless the Companys stockholders of record immediately prior to such transaction or series of related transactions hold, immediately after such transaction or series of related
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transactions, at least 50% of the voting power of the surviving or acquiring entity (provided that the sale by the Company of its securities for the purposes of raising additional funds shall not constitute a Change of Control hereunder); or (ii) a sale of all or substantially all of the assets of the Company.
5. General Provisions.
A. Choice of Law. This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California.
B. Integration. This Agreement, including all exhibits hereto, represents the entire agreement between the parties with respect to the acquisition of the Shares by the Grantee and supersedes and replaces any and all prior written or oral agreements regarding the subject matter of this Agreement including, but not limited to, any representations made during any interviews, relocation discussions or negotiations whether written or oral.
C. Notices. Any notice, demand, offer, request or other communication required or permitted to be given by either the Company or the Grantee pursuant to the terms of this Agreement shall be in writing and shall be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by facsimile (with receipt of appropriate confirmation), (iv) one business day after being deposited with an overnight courier service or (v) four days after being deposited in the U.S. mail, First Class with postage prepaid and return receipt requested, and addressed to the parties at the addresses provided to the Company (which the Company agrees to disclose to the other parties upon request) or such other address as a party may request by notifying the other in writing.
D. Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Companys business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term Company shall include any successor to the Companys business and/or assets which executes and delivers the assumption agreement described in this section or which becomes bound by the terms of this Agreement by operation of law. Subject to the restrictions on transfer set forth in this Agreement, this Agreement shall be binding upon Grantee and their heirs, executors, administrators, successors and assigns.
E. Assignment; Transfers. Except as set forth in this Agreement, this Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by the Grantee without the prior written consent of the Company. Any attempt by the Grantee without such consent to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Except as set forth in this Agreement, any transfers in violation of any restriction upon transfer contained in any section of this Agreement shall be void, unless such restriction is waived in accordance with the terms of this Agreement.
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F. Waiver. Either partys failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, nor prevent that party from thereafter enforcing any other provision of this Agreement. The rights granted both parties hereunder are cumulative and shall not constitute a waiver of either partys right to assert any other legal remedy available to it.
G. Grantee Investment Representations and Further Documents. The Grantee agree upon request to execute any further documents or instruments necessary or reasonably desirable in the view of the Company to carry out the purposes or intent of this Agreement, including (but not limited to) the applicable exhibits and attachments to this Agreement.
H. Severability. Should any provision of this Agreement be found to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable to the greatest extent permitted by law.
I. Rights as Stockholder. Subject to the terms and conditions of this Agreement, Grantee shall have all of the rights of a stockholder of the Company with respect to the Shares from and after the date that Grantee deliver a fully executed copy of this Agreement (including the applicable exhibits and attachments to this Agreement) and full payment for the Shares to the Company, and until such time as Grantee dispose of the Shares in accordance with this Agreement. Upon such transfer, Grantee shall have no further rights as a holder of the Shares so purchased except (in the case of a transfer to the Company) the right to receive payment for the Shares so purchased in accordance with the provisions of this Agreement, and Grantee shall forthwith cause the certificate(s) evidencing the Shares so purchased to be surrendered to the Company for transfer or cancellation.
J. Adjustment for Stock Split. All references to the number of Shares and the purchase price of the Shares in this Agreement shall be adjusted to reflect any stock split, stock dividend or other change in the Shares which may be made after the date of this Agreement.
K. Reliance on Counsel and Advisors. Grantee acknowledge that Wilson Sonsini Goodrich & Rosati, Professional Corporation, is representing only the Company in this transaction. Grantee acknowledges that he or she has had the opportunity to review this Agreement, including all attachments hereto, and the transactions contemplated by this Agreement with his or her own legal counsel, tax advisors and other advisors. Grantee are relying solely on his or her own counsel and advisors and not on any statements or representations of the Company or its agents for legal or other advice with respect to this investment or the transactions contemplated by this Agreement.
L. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile copies of signed signature pages shall be binding originals.
(Signature page follows)
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The parties represent that they have read this Agreement in its entirety, have had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understand this Agreement.
COMPANY: | ||
UNITY BIOTECHNOLOGY, INC. | ||
By: |
| |
Name: | Dr. Nathaniel E. David | |
Title: | President and Chief Executive Officer |
[Signature Page to Restricted Stock Grant Agreement]
The parties represent that they have read this Agreement in its entirety, have had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understand this Agreement. The Grantee agrees to notify the Company of any change in its address below.
GRANTEE:
ASCENTAGE PHARMA GROUP CORP. LTD.
Name:
Title:
Address:
11/F, AXA Centre
Gloucester Road,
Wanchai Hong Kong
[Signature Page to Restricted Stock Grant Agreement]
EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
GRANTEE |
: | ASCENTAGE PHARMA GROUP CORP. LTD. | ||||
COMPANY |
: | UNITY BIOTECHNOLOGY, INC. | ||||
SECURITY |
: | COMMON STOCK | ||||
AMOUNT |
: | [] SHARES | ||||
DATE |
: | [] |
In connection with the acquisition of the above-listed shares, I, each of the undersigned, represent to the Company as follows:
1. The Company may rely on these representations. I understand that the Companys sale of the shares to me has not been registered under the Securities Act of 1933, as amended (the Securities Act), because the Company believes, relying in part on my representations in this document, that an exemption from such registration requirement is available for such sale. I understand that the availability of this exemption depends upon the representations I am making to the Company in this document being true and correct.
2. I am purchasing for investment. I am purchasing the shares solely for investment purposes, and not for further distribution. My entire legal and beneficial ownership interest in the shares is being acquired and shall be held solely for my account, except to the extent I intend to hold the shares jointly with my spouse. I am not a party to, and do not presently intend to enter into, any contract or other arrangement with any other person or entity involving the resale, transfer, grant of participation with respect to or other distribution of any of the shares. My investment intent is not limited to my present intention to hold the shares for the minimum capital gains period specified under any applicable tax law, for a deferred sale, for a specified increase or decrease in the market price of the shares, or for any other fixed period in the future.
3. I can protect my own interests. I can properly evaluate the merits and risks of an investment in the shares and can protect my own interests in this regard, whether by reason of my own business and financial expertise, the business and financial expertise of certain professional advisors unaffiliated with the Company with whom I have consulted, or my preexisting business or personal relationship with the Company or any of its officers, directors or controlling persons.
4. I am informed about the Company. I am sufficiently aware of the Companys business affairs and financial condition to reach an informed and knowledgeable decision to acquire the shares. I have had opportunity to discuss the plans, operations and financial condition of the Company with its officers, directors or controlling persons, and have received all information I deem appropriate for assessing the risk of an investment in the shares.
5. I recognize my economic risk. I realize that the acquisition of the shares involves a high degree of risk, and that the Companys future prospects are uncertain. I am able to hold the shares indefinitely if required, and am able to bear the loss of my entire investment in the shares.
6. I know that the shares are restricted securities. I understand that the shares are restricted securities in that the Companys sale of the shares to me has not been registered under the Securities Act in reliance upon an exemption for non-public offerings. In this regard, I also understand and agree that:
A. I must hold the shares indefinitely, unless any subsequent proposed resale by me is registered under the Securities Act, or unless an exemption from registration is otherwise available (such as Rule 144);
B. the Company is under no obligation to register any subsequent proposed resale of the shares by me; and
C. the certificate evidencing the shares will be imprinted with a legend which prohibits the transfer of the shares unless such transfer is registered or such registration is not required in the opinion of counsel for the Company.
7. I am familiar with Rule 144. I am familiar with Rule 144 adopted under the Securities Act, which in some circumstances permits limited public resales of restricted securities like the shares acquired from an issuer in a non-public offering. I understand that my ability to sell the shares under Rule 144 in the future is uncertain, and may depend upon, among other things: (i) the availability of certain current public information about the Company; (ii) the resale occurring more than a specified period after my acquisition and full payment (within the meaning of Rule 144) for the shares; and (iii) if I am an affiliate of the Company (A) the sale being made in an unsolicited brokers transaction, transactions directly with a market maker or riskless principal transactions, as those terms are defined under the Securities Exchange Act of 1934, as amended, (B) the amount of shares being sold during any three-month period not exceeding the specified limitations stated in Rule 144, and (C) timely filing of a notice of proposed sale on Form 144, if applicable.
8. I know that Rule 144 may never be available. I understand that the requirements of Rule 144 may never be met, and that the shares may never be saleable under the rule. I further understand that at the time I wish to sell the shares, there may be no public market for the Companys stock upon which to make such a sale, or the current public information requirements of Rule 144 may not be satisfied, either of which may preclude me from selling the shares under Rule 144 even if the relevant holding period had been satisfied.
9. I know that I am subject to further restrictions on resale. I understand that in the event Rule 144 is not available to me, any future proposed sale of any of the shares by me will not be possible without prior registration under the Securities Act, compliance with some other registration exemption (which may or may not be available), or each of the following: (i) my written notice to the Company containing detailed information regarding the proposed sale, (ii) my providing an opinion of my counsel to the effect that such sale will not require registration,
and (iii) the Company notifying me in writing that its counsel concurs in such opinion. I understand that neither the Company nor its counsel is obligated to provide me with any such opinion. I understand that although Rule 144 is not exclusive, the Staff of the SEC has stated that persons proposing to sell private placement securities other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.
10. I know that I may have tax liability due to the uncertain value of the shares. I understand that the Board of Directors believes its valuation of the shares represents a fair appraisal of their worth, but that it remains possible that, with the benefit of hindsight, the Internal Revenue Service may successfully assert that the value of the shares on the date of my acquisition is substantially greater than the Boards appraisal. I understand that any additional value ascribed to the shares by such an IRS determination will constitute ordinary income to me as of the acquisition date, and that any additional taxes and interest due as a result will be my sole responsibility payable only by me, and that the Company need not and will not reimburse me for that tax liability.
11. Non-U.S. Investor. If I am not a United States person, I hereby represents that I am satisfied as to the full observance of the laws of my jurisdiction in connection with any invitation to receive the shares issuable pursuant to this Agreement, or any use of this Agreement, including (i) the legal requirements within my jurisdiction for the acquisition of the shares pursuant to this Agreement, (ii) any foreign exchange restrictions applicable to such receipt or transfer, (iii) any governmental or other consents that may need to be obtained and (iv) the income tax and other tax consequences, if any, that may be relevant to the acquisition, holding, redemption, sale or transfer of such securities. My subscription for, and my continued beneficial ownership of the shares will not violate any applicable securities or other laws of my jurisdiction.
12. Principal Place of Business. The address of my principal place of business is set forth on the signature page below.
By signing below, the undersigned acknowledge their agreement with each of the statements contained in this Investment Representation Statement as of the date first set forth above, and their intent for the Company to rely on such statements in issuing the shares to me.
ASCENTAGE PHARMA GROUP CORP. LTD. |
|
Address of Grantee Principal Place of Business:
11/F AXA Centre
Gloucester Road, Wanchai
Hong Kong