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Section 1: 8-K (CURRENT REPORT)

 

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 28, 2019

 

  BiomX Inc.  
  (Exact Name of Registrant as Specified in its Charter)  

 

 

Delaware   0001-38762   82-3364020
(State or other jurisdiction of incorporation)   (Commission File Number)   (I.R.S. Employer Identification No.)
     
7 Pinhas Sapir St., Floor 2
Ness Ziona, Israel
  7414002
(Address of Principal Executive Offices)   (Zip Code)
             

 

Registrant’s telephone number, including area code: +972 723942377

 

  Chardan Healthcare Acquisition Corp.  
  (Former name or former address, if changed since last report)  

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class   Trading Symbol(s)  

Name of each exchange on

which registered

Units, each consisting of one share of Common Stock, $0.0001 par value, and one Warrant entitling the holder to receive one half share of Common Stock   PHGE.U   NYSE American
Shares of Common Stock, $0.0001 par value, included as part of the Units   PHGE   NYSE American
Warrants included as part of the Units   PHGE.WS   NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Sec.230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Sec.240.12b-2 of this chapter).

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 pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

TABLE OF CONTENTS

    Page No.
     
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 1
     
INTRODUCTORY NOTE 3
     
Item 1.01. Entry into a Material Definitive Agreement. 4
     
Item 2.01. Completion of Acquisition or Disposition of Assets. 6
     
THE MERGER AND RELATED TRANSACTIONS 6
     
DESCRIPTION OF BUSINESS 6
     
RISK FACTORS 6
     
SELECTED FINANCIAL DATA 6
   
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 6
     
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 7
     
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 8
     
DIRECTOR COMPENSATION 13
     
EXECUTIVE COMPENSATION 13
     
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 13
     
DESCRIPTION OF SECURITIES 13
     
LEGAL PROCEEDINGS 13
     
INDEMNIFICATION OF DIRECTORS AND OFFICERS 13
     
Item 3.02. Unregistered Sales of Equity Securities. 13
     
Item 4.01. Changes in Registrant’s Certifying Accountant. 14
     
Item 5.01. Changes in Control of Registrant. 14
     
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 14
     
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. 14
     
Item 5.06. Change in Shell Company Status. 15
     
Item 8.01. Other Events. 15
     
Item 9.01. Financial Statements and Exhibits. 15

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This current report on Form 8-K (this “Form 8-K”), including the documents incorporated herein by reference, contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, with respect to our disclosure concerning our operations, cash flows and financial position and all other statements that do not relate to historical facts.

 

Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. You should carefully read the risk factors described in “Risk Factors” herein and in the documents incorporated herein by reference for a description of certain risks that could, among other things, cause our actual results to differ from these forward-looking statements.

 

Forward-looking statements are based on our current beliefs and expectations of future events or future results and involve risks and uncertainties that are difficult to predict and subject to change. The risks and uncertainties include, but are not limited to:

·our limited operating history;
·the ability to generate revenues, and raise sufficient financing to meet working capital requirements;
·the unpredictable timing and cost associated with our approach to developing product candidates using phage technology;
·the U.S. Food and Drug Administration’s (“FDA’s”) classification of our BX001 product candidate as a drug or cosmetic and the impact of changing regulatory requirements on our ability to develop and commercialize BX001;
·obtaining FDA acceptance of any non-U.S. clinical trials of product candidates;
·the ability to pursue and effectively develop new product opportunities and acquisitions and to obtain value from such product opportunities and acquisitions;
·results from preclinical studies of BiomX’s product candidates BX001 and BX002 may not be predictive of the results of clinical trials or later stage clinical development;
·the selected bacterial targets BiomX’s phage therapies eradicate may not result in a clinically meaningful effect on the underlying disease;
·the time and cost development for our approach of developing product candidates using phage technology may be difficult to predict, and to BiomX’s knowledge, no bacteriophage has thus far been sold as a cosmetic or approved as a drug in the United States or in the European Union;
·penalties and market withdrawal associated with any unanticipated problems with product candidates and failure to comply with labeling and other restrictions;
·expenses associated with our compliance with ongoing regulatory obligations and successful continuing regulatory review;
·market acceptance of our product candidates and ability to identify or discover additional product candidates;
·our ability to obtain high titers for specific phage cocktails necessary for preclinical and clinical testing;
·the availability of specialty raw materials;
·the ability of our product candidates to demonstrate requisite safety and tolerability for cosmetics, safety and efficacy for drug products, or safety, purity and potency for biologics without causing adverse effects;
·the success of expected future advanced clinical trials of our product candidates;
·the ability to obtain required regulatory approvals;

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·the ability to enroll patients in clinical trials and achieve anticipated development milestones when expected;
·delays in developing manufacturing processes for our product candidates;
·competition from similar technologies, products that are more effective, safer or more affordable than our product candidates or products that obtain marketing approval before our product candidates;
·the impact of unfavorable pricing regulations, third-party reimbursement practices or health care reform initiatives on our ability to sell product candidates or therapies profitably;
·protection of our intellectual property rights and compliance with the terms and conditions of current and future licenses with third parties;
·infringement on the intellectual property rights of third parties and claims for remuneration or royalties for assigned service invention rights;
·the ability to acquire, in-license or use proprietary rights held by third parties necessary to our product candidates or future development candidates;
·ethical, legal and social concerns about synthetic biology and genetic engineering that may adversely affect market acceptance of our product candidates;
·reliance on third-party collaborators;
·the ability to manage the growth of the business;
·the ability to attract and retain key employees or to enforce the terms of noncompetition agreements with employees;
·the failure to comply with applicable laws and regulations;
·potential security breaches, including cybersecurity incidents;
·political, economic and military instability in the State of Israel;
·costs associated with being a public company; and
·other factors, including those factors described in the section entitled “Risk Factors” in Item 2.01 below, and in CHAC’s definitive proxy statement dated September 23, 2019 and Supplement No. 1 to the proxy statement dated October 10, 2019 (the “Definitive Proxy Statement”), which is incorporated herein by reference.

Actual results may differ materially from those expressed or implied by forward-looking statements. The information contained in this Form 8-K and the documents incorporated herein by reference is current only as of the date of that information. All forward-looking statements included in such documents are based upon information available at the time such statements are made, and we assume no obligation to update any forward-looking statements.

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INTRODUCTORY NOTE

On October 28, 2019 (the “Closing Date”), the Registrant consummated the previously announced business combination (the “Business Combination”) following a special meeting of stockholders held on October 23, 2019 (the “Special Meeting”) where the stockholders of Chardan Healthcare Acquisition Corp., a Delaware corporation which, immediately following the consummation of the Business Combination, became known as “BiomX Inc.” (the “Company”, and prior to the consummation of the Business Combination, sometimes referred to as “CHAC”), considered and approved, among other matters, a proposal to adopt that certain Merger Agreement (the “Merger Agreement”), dated as of July 16, 2019 and amended as of October 11, 2019, by and among (i) the Company; (ii) CHAC Merger Sub Ltd., an Israeli company (“Merger Sub”), (iii) BiomX Ltd., an Israeli company (“BiomX”), and (iv) Shareholder Representative Services LLC (the “SRS”), solely in its capacity as the Shareholders’ Representative thereunder.

Pursuant to the Merger Agreement, among other things, Merger Sub merged with and into BiomX, with BiomX continuing as the surviving entity and a wholly-owned subsidiary of the Company (the “Merger” and the “Surviving Company”). The Merger became effective on October 28, 2019 (the “Effective Time”).

At the Effective Time, all of the issued and outstanding shares and other equity interests in and of BiomX immediately prior to the consummation of the Business Combination were canceled, and, in consideration therefor, CHAC issued (or reserved for issuance) 16,625,000 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”) or options or warrants to purchase Common Stock to BiomX security holders. Additional shares of Common Stock have been reserved for issuance in respect of options to purchase ordinary shares of BiomX that are issued, outstanding and unvested immediately prior to the Effective Time.

In addition to the consummation of the Business Combination, at the closing of the Business Combination (the “Closing”):

 

1.Certain of the Company’s public stockholders sold an aggregate of 2,000,000 shares of Common Stock to certain BiomX shareholders at a price of $10.00 per share. In addition, CHAC paid such selling stockholders an amount equal to the difference between the redemption price per share at the Closing minus $10.00 per share. In addition, certain of the Company’s public stockholders sold an aggregate of 289,754 shares of Common Stock to certain BiomX shareholders at a price of $10.35 per share (including 19,391 shares of Common Stock expected to be sold after the Closing). In addition, CHAC also agreed to issue such BiomX shareholders the number of additional shares specified below in the aggregate, subject to the achievement of the conditions following the Closing:

 

a.If the daily volume weighted average price of a share of Common Stock in any 20 trading days within a 30 trading day period prior to January 1, 2022 is greater than or equal to $16.50 per share, then the Company shall issue 2,000,000 shares of Common Stock.

 

b.If the daily volume weighted average price of a share of Common Stock in any 20 trading days within a 30 trading day period prior to January 1, 2024 is greater than or equal to $22.75 per share, then the Company shall issue 2,000,000 shares of Common Stock.

 

c.If the daily volume weighted average price of a share of Common Stock in any 20 trading days within a 30 trading day period prior to January 1, 2026 is greater than or equal to $29.00 per share, then the Company shall issue 2,000,000 shares of Common Stock.

 

2.Certain third parties purchased 1,234,908 shares of Common Stock from certain CHAC public stockholders.

 

Pursuant to the Merger Agreement, 1,506,906 shares (the “Escrow Shares”) were deposited into an escrow account (the “Escrow Account”) to serve as security for, and the exclusive source of payment of, the Company’s indemnity rights under the Merger Agreement.

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As a result of the Business Combination, the Sellers, as the former shareholders of BiomX, became the controlling shareholders of the Company, now owning approximately 77% of the outstanding shares and vested securities of Common Stock, and BiomX became a wholly-owned subsidiary of the Company. The Business Combination was accounted for as a “reverse merger” in accordance with accounting principles generally accepted in the United States of America. For accounting purposes, BiomX is considered to be acquiring CHAC in this transaction. Therefore, for accounting purposes, the Business Combination will be treated as the equivalent of a capital transaction in which BiomX is issuing stock for the net assets of CHAC. The net assets of CHAC will be stated at historical cost, with no goodwill or other intangible assets recorded. The post-acquisition financial statements of CHAC will show the consolidated balances and transactions of CHAC and BiomX as well as comparative financial information of BiomX (the acquirer for accounting purposes).

 

Prior to the Business Combination, we were a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). As a result of the Business Combination, we have ceased to be a “shell company” and will continue the existing business operations of BiomX as a publicly traded company under the name “BiomX Inc.”

As used in this Form 8-K henceforward, unless otherwise stated or the context clearly indicates otherwise, the terms the “Registrant,” “Company,” “we,” “us” and “our” refer to BiomX Inc., and its subsidiaries at and after the Closing, giving effect to the Business Combination.

Item 1.01. Entry into a Material Definitive Agreement.

 

The information contained in Item 2.01 below is incorporated herein by reference.

Registration Rights Agreement

Upon Closing, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with certain shareholders of BiomX.

Under the Registration Rights Agreement, the shareholders were granted registration rights that obligate the Company to register for resale under the Securities Act of 1933, as amended (the “Securities Act”), all or any portion of the shares of common stock issued as consideration in the Business Combination (the “Registrable Securities”) on or after the six-month anniversary of the Closing upon the demand of the holders of 25% of the Registrable Securities; provided that the Company shall not be obligated to effect more than an aggregate of two demands for registration under the Registration Rights Agreement.

In addition, if at any time on or after the Closing, the Company proposes to file a registration statement under the Securities Act with respect to an offering of equity securities (or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities), the Company shall give written notice of such proposed filing to the holders of the Registrable Securities and offer them an opportunity to register the sale of such number of Registrable Securities as such holders may request in writing, subject to the rights of other persons having registration rights with respect to shares of Common Stock pursuant to written contractual piggy-back registration rights and customary cut-backs.

In addition, subject to certain exceptions, the holders of the Registrable Securities are entitled under the Registration Rights Agreement to request in writing that the Company register the resale of any or all of such Registrable Securities on Form S-3 or any similar short-form registration that may be available at such time.

The Company agrees to use its best efforts to effect the registration and sale of such Registrable Securities as expeditiously as possible.

Under the Registration Rights Agreement, the Company agreed to indemnify the holders of Registrable Securities and each of their respective officers, employees, affiliates, directors, partners, members, attorneys and agents and control persons from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement) of a material fact in any registration statement or prospectus pursuant to which the sale of such Registrable Securities is registered under the Securities Act, unless such liability arises from any untrue statement or allegedly untrue statement or omission or alleged omission made in such registration statement or prospectus in reliance upon and in conformity with information furnished to the Company by such selling holder expressly for use therein. Each selling holder of Registrable Securities, including Registrable Securities in any registration statement or prospectus, agreed to indemnify the Company and certain persons or entities related to the Company, such as its officers and directors and underwriters, against all losses caused by their misstatements or omissions in those documents.

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The Registration Rights Agreement is filed with this Form 8-K as Exhibit 10.1 and is incorporated herein by reference. The foregoing description of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Registration Rights Agreement.

Escrow Agreement

On October 28, 2019, the Company entered into an escrow agreement (the “Escrow Agreement”) with the SRS and Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”). Pursuant to the Escrow Agreement and the Merger Agreement, the Escrow Shares were deposited in the Escrow Account to serve as security for, and the exclusive source of payment of, the Company’s indemnity rights under the Merger Agreement.

The Escrow Agreement is filed with this Form 8-K as Exhibit 10.2 and is incorporated herein by reference. The foregoing description of the Escrow Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Escrow Agreement.

Voting Agreement

On October 28, 2019, we entered into a voting agreement (the “Voting Agreement”) with certain CHAC founders and BiomX security holders which provides that for a period of two years following the Closing, the parties agree to vote:

 

·in favor of two members of the Board of Directors to be selected by Chardan Investments, LLC;
·in favor of five members of the Board of Directors to be selected by SRS; and
·in favor of maintaining the size of the Board of Directors at seven.

The Voting Agreement is filed with this Form 8-K as Exhibit 10.3 and is incorporated herein by reference. The foregoing description of the Voting Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Voting Agreement.

Waiver Agreement

On October 28, 2019, the Company entered into a waiver agreement (the “Waiver Agreement”) whereby the parties to the Merger Agreement waived the requirement pursuant Section 9.8(b)(ii), 10.2(h)(ii) and 10.3(h)(ii) of the Merger Agreement that the balance of available funds contained in the Escrow Account immediately following the Closing equals or exceeds $3,000,000, provided that the balance of the Escrow Account immediately following the Closing equals or exceeds $2,798,250. In addition, the Company waived the closing condition pursuant to Section 10.3(f) of the Merger Agreement requiring that the aggregate amount of indebtedness, expenses and other liabilities of CHAC that remain unpaid prior to the Closing is less than $1,000,000.

The Waiver Agreement is filed with this Form 8-K as Exhibit 10.11 and is incorporated herein by reference. The foregoing description of the Waiver Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Waiver Agreement.

Cornix Purchase Agreement

On October 28, 2019, CHAC entered into a purchase agreement (the “Cornix Purchase Agreement”) with Cornix LLC (“Cornix”), an affiliate of Chardan Capital Markets LLC, wherein Cornix agreed to purchase $300,000 shares of Common Stock within three months of the date of the Cornix Purchase Agreement, and until the earlier of six months from the date of the last purchase of such shares and the date that the closing price of the Common Stock has been in excess of $15.00 per share for three consecutive trading days, Cornix agreed that it will not offer for sale, sell, pledge, grant any option to purchase or otherwise dispose of such shares.

The Cornix Purchase Agreement is filed with this Form 8-K as Exhibit 10.12 and is incorporated herein by reference. The foregoing description of the Cornix Purchase Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Cornix Purchase Agreement.

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Item 2.01. Completion of Acquisition or Disposition of Assets.

 

THE MERGER AND RELATED TRANSACTIONS

The disclosure set forth under “Introductory Note” above is incorporated in this Item 2.01 by reference. The material terms and conditions of the Merger Agreement and its related agreements are described on pages 102 to 105 of CHAC’s Definitive Proxy Statement in the section entitled “The Merger Agreement,” which is incorporated herein by reference.

 

BUSINESS

The business of the Company after the Business Combination is described in Definitive Proxy Statement in the section entitled “BiomX Ltd.’s Business” beginning on page 136, including in the section entitled “BiomX Ltd.’s Business—Facilities” beginning on page 172, and in the section entitled “Government Regulation” beginning on page 173, and that information is incorporated herein by reference.

RISK FACTORS

The risks associated with the Company’s business are described in the Definitive Proxy Statement in the section entitled “Risk Factors” beginning on page 15 and are incorporated herein by reference.

SELECTED FINANCIAL DATA

The disclosure contained in the Definitive Proxy Statement in the section entitled “Selected Historical Consolidated Financial and Operating Data of BiomX Ltd.” beginning on page 115 is incorporated herein by reference.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The disclosure contained in the Definitive Proxy Statement in the section entitled “Management’s Discussion And Analysis of Financial Condition And Results of Operations of BiomX” beginning on page 117 is incorporated herein by reference.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of our Common Stock as of the Closing (taking in account of the redemption in connection with the Business Combination and automatic exchange of rights into Common Stock at the Closing), based on information obtained from the persons named below, with respect to the beneficial ownership of our Common Stock, by:

  each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock;
  each of our executive officers and directors that beneficially owns our Common Stock; and
  all our executive officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all Common Stock beneficially owned by them. As of the Closing, we had 22,835,153 shares of Common Stock issued and outstanding.

Name and Address of Beneficial Owner(1)  Amount and Nature of Beneficial
Ownership
   Percent of
Class
 
Chardan Investments, LLC(2)   4,607,500    17.9%

Takeda Pharmaceutical Company Limited

Takeda Ventures, Inc.(3)

   2,470,935    10.8%

OrbiMed Advisors Israel Limited

OrbiMed Israel GP Ltd.

OrbiMed Israel Partners, Limited Partnership(4)

   2,290,490    10.0%
Johnson & Johnson Innovation – JJDC, Inc.(5)   2,133,402    9.3%

 

Jonathan Solomon(6)

   326,440    1.4%
Assaf Oron(7)   137,809    * 
Sailaja Puttagunta(8)   45,985    * 
Merav Bassan   0    0 
Inbar Gahali-Sass(9)   20,692    * 
Myriam Golembo(10)   26,610    * 
Uri Ben-Or   0    0 
Russell Greig   0    0 
Gbola Amusa(11)   527,862    2.3%
Yaron Breski   0    0 
Erez Chimovits   0    0 
Jonas Grossman(12)   4,607,500    17.9
Robbie Woodman   0    0 
           

All directors and officers as a group (Post-Business Combination)

(13 persons)

   5,692,898    20.0%

  

  * Less than 1%.

 

(1)Unless otherwise indicated, the business address of each of the individuals is c/o BiomX Ltd., 7 Pinhas Sapir St., Floor 2, Ness Ziona 7414002, Israel.
(2) Represents 1,707,500 shares of Common Stock held by Chardan Investments, LLC and warrants to purchase 2,900,000 shares of Common Stock held by Mount Wood, LLC, which owns approximately 67.96% of Chardan Investments, LLC. Jonas Grossman, a member of our Board of Directors is the managing member of each of Chardan Investments, LLC and Mountain Wood, LLC, and thereby has sole voting and dispositive power over such shares. The business address of each of the foregoing is c/o Chardan Healthcare Acquisition Corp., 17 State Street, 21st Floor, New York, NY 10004.

(3)The business address of Takeda Ventures, Inc. (“Takeda Ventures”) is 435 Tasso Street, Suite 300, Palo Alto, CA 94301 USA. Takeda Ventures is a wholly-owned direct subsidiary of Takeda Pharmaceuticals U.S.A., Inc. (“Takeda USA”). Takeda Pharmaceuticals International AG and Takeda Pharmaceutical Company Limited together own 100% of Takeda USA. Takeda Pharmaceuticals International AG is a wholly-owned direct subsidiary of Takeda Pharmaceutical Company Limited. As a result, Takeda Pharmaceutical Company Limited may be deemed to have voting and investment power over all of the shares of Common Stock held by Takeda Ventures, and Takeda Pharmaceutical Company Limited may be deemed to be the indirect beneficial owner of the shares held by Takeda Ventures.
(4)Represents 1,649,151 shares of Common Stock held directly by OrbiMed Israel Partners, Limited Partnership (“OIP LP”) and 641,339 shares of Common Stock held directly by OrbiMed Israel Incubator L.P. (“OII LP”). 89 Medinat Hayehudim St., Building E, Herzliya 4614001 Israel. OrbiMed Israel BioFund GP Limited Partnership (“BioFund GP LP”) is the general partner of each of OIP LP and OII LP, and OrbiMed Israel GP Ltd. (“Israel GP”) is the general partner of BioFund GP LP. OrbiMed Advisors Israel Limited (“Advisors Israel Ltd”) is the majority shareholder of Israel GP. As a result, Advisors Israel Ltd and Israel GP may be deemed to have shared voting and investment power over all of the shares of Common Stock held by each of OIP LP and OII LP, and both Advisors Israel Ltd and Israel GP may be deemed to directly or indirectly, including by reason of their mutual affiliation, to be the beneficial owners of the shares held by each of OIP LP and OII LP. Advisors Israel Ltd exercises this investment power through an investment committee comprised of Carl L. Gordon, Jonathan T. Silverstein, Nissim Darvish, Anat Naschitz, and Erez Chimovits, each of whom disclaims beneficial ownership of the shares held by OIP LP and OII LP.

 

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(5)The address for Johnson & Johnson Innovation-JJDC, Inc. (“JJDC”) is 410 George Street, New Brunswick, New Jersey 08901. JJDC has voting and dispositive power over 2,133,402 shares of common stock.
(6)Amount represents 326,440 options that will be exercisable within 60 days of the Closing Date.
(7)Amount represents 137,809 options that will be exercisable within 60 days of the Closing Date.
(8)Amount represents 45,985 options that will be exercisable within 60 days of the Closing Date.
(9)Amount represents 20,692 options that will be exercisable within 60 days of the Closing Date.
(10)Amount represents 26,610 options that will be exercisable within 60 days of the Closing Date.
(11)Represents 251,672 shares of Common Stock and warrants to purchase 276,190 shares of Common Stock. Mr. Amusa’s business address is c/o Chardan Healthcare Acquisition Corp., 17 State Street, 21st Floor, New York, NY 10004.
(12)See note (2) above regarding shares beneficially owned by Jonas Grosssman.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Following the Closing, the Board of Directors of the combined company was reconstituted and is now comprised of seven members, classified into three classes, each comprising as nearly as possible one-third of the directors to serve three-year terms. As Class I directors, each of Yaron Breski, Erez Chimovits and Robbie Woodman will serve until the 2020 annual meeting; as Class II directors, each of Gbola Amusa and Jonas Grossman will serve until the 2021 annual meeting; and as Class III directors, each of Russell Greig and Jonathan Solomon will serve until the 2022 annual meeting, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death.

The Company’s directors and executive officers are:

Name   Age   Position
Jonathan Solomon   42   Chief Executive Officer and Director
Assaf Oron   44   Chief Business Officer
Sailaja Puttagunta   51   Chief Medical Officer
Merav Bassan   54   Chief Development Officer
Inbar Gahali-Sass   46   Vice President of Platform Research & Development
Myriam Golembo   54   Vice President of Development
Uri Ben-Or(1)   49   Interim Chief Financial Officer
Russell Greig   67   Director and Chairman of the Board
Gbola Amusa   45   Director
Yaron Breski   41   Director
Erez Chimovits   55   Director
Jonas Grossman   45   Director
Robbie Woodman   41   Director

 

(1) Sigal Fattal, Chief Financial Officer of BiomX, resigned from her role as the Chief Financial Officer, effective upon the consummation of the Business Combination, and remains employed by BiomX as a consultant to the Chief Executive Officer. The Board of Directors appointed Mr. Uri Ben-Or to join the Company as its Interim Chief Financial Officer, effective October 30, 2019.

 

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Jonathan Solomon has served as the Chief Executive Officer and as a director of the Company since October 2019. Mr. Solomon served as Chief Executive Officer and director of BiomX from May 2017 to October 2019, and from February 2016 to May 2017, he served as a director of BiomX. From July 2007 to December 2015, Mr. Solomon was a co-founder, President, and Chief Executive Officer of ProClara Biosciences Inc. (formerly NeuroPhage Pharmaceuticals Inc.), a biotechnology company pioneering an approach to treating neurodegenerative diseases. Prior to joining ProClara, he served for ten years in a classified military unit of the Israeli Defense Forces. Mr. Solomon holds a B.Sc. magna cum laude in Physics and Mathematics from the Hebrew University, an M.Sc. summa cum laude in Electrical Engineering from Tel Aviv University, and an M.B.A. with honors from the Harvard Business School.

Assaf Oron has served as the Chief Business Officer of the Company since October 2019. Mr. Oron served as Chief Business Officer of BiomX from January 2017 to October 2019. Prior to this position, he served in various roles at Evogene Ltd., an agriculture biotechnology company, which utilizes a proprietary integrated technology infrastructure to enhance seed traits underlying crop productivity, from March 2006 to December 2016, including Executive Vice President of Strategy and Business Development and Executive Vice President of Corporate Development. Prior to joining Evogene, Mr. Oron served as Chief Executive Officer of ChondroSite Ltd., a biotechnology company that develops engineered tissue products in the field of orthopedics and as a senior project manager and strategic consultant at Israeli management consulting company POC Ltd. Mr. Oron holds an M.Sc. in Biology (bioinformatics) and a B.Sc. in Chemistry and Economics, both from Tel Aviv University.

Dr. Sailaja Puttagunta M.D. has served as the Chief Medical Officer of the Company since October 2019. Dr. Puttagunta served as the Chief Medical Officer of BiomX from December 2018 to October 2019. Prior to joining BiomX, Dr. Puttagunta served as Vice President, Development at Iterum Therapeutics plc, a clinical stage pharmaceutical company developing antibiotics against multi-drug resistant pathogens, from January 2016 to December 2018. Prior to Iterum, Dr. Puttagunta served as VP, Medical Affairs for Anti-infectives at pharmaceutical company Allergan plc from January 2015 to January 2016 and was the Vice President of Development and Medical Affairs from August 2014 to December 2014 and the Executive Director of Clinical and Medical Affairs from June 2012 through July 2014 at pharmaceutical company Durata Therapeutics, Inc., an innovative pharmaceutical company focused on the development and commercialization of novel therapeutics for patients with infectious diseases and acute illnesses, prior to its acquisition by Actavis plc. Prior to joining Durata, Dr. Puttagunta led teams within clinical development and medical affairs on various antibiotic compounds at pharmaceutical company Pfizer Inc. Dr. Puttagunta graduated from Gandhi Medical College in Hyderabad, India and completed her residency in Internal Medicine and a fellowship in Infectious Diseases at Yale University School of Medicine. She also holds an M.S. in Biochemistry from the New York University School of Medicine.

Dr. Merav Bassan has served as the Chief Development Officer of the Company since October 2019. Dr. Bassan joined as Chief Development Officer of BiomX in October 2019. Prior to this position, she served in various development roles at Teva Pharmaceutical Industries Limited since 2005, including Vice President, Head of Translational Sciences, Specialty Clinical Development R&D since 2017, Vice President, Pain and Global Internal Medicine, Project Leadership, Innovative Product Development, Global IR&D from 2015 to 2017, and Project Champion, Senior Director, Innovative Product Development, Global IR&D from 2009 to 2015. Dr. Bassan holds a B.Sc. in Biology, a M.Sc. in Human Genetics and a Ph.D. in Neurobiology from Tel Aviv University, and she completed a Post-Doctoral Fellowship in Neuroscience at Harvard Medical School at Harvard University.

Dr. Inbar Gahali-Sass has served as the Vice President of Platform Research & Development of the Company since October 2019. Dr. Gahali-Sass served as Vice President of Platform Research & Development of BiomX from December 2018 to October 2019. Prior to joining BiomX, Dr. Gahali-Sass served as Research & Development Manager at Omrix Biopharmaceuticals, Inc., a biotechnology company focused on developing protein-based biosurgery and passive immunotherapy products and a subsidiary of Ethicon, Inc. and Johnson& Johnson, from May 2012 through November 2018 and as a senior scientist from August 2006 to May 2012. Dr. Gahali-Sass holds a B.Sc. in Biology, an M.Sc. in Microbiology, a Ph.D and a post-Doctoral degree in Microbiology from The Hebrew University, and an M.B.A. from the College of Management Academic Studies.

Dr. Myriam Golembo has served as the Vice President of Development of the Company since October 2019. Dr. Golembo served as the Vice President of Development of BiomX from July 2017 to October 2019. Prior to this position, Dr. Golembo served as the Vice President of Regulatory and Clinical Operations at Efranat Ltd., a biotechnology company focused on the development of cancer therapies, from May 2016 to June 2017. From May 2015 to May 2016, Dr. Golembo served as the Vice President of Development for Otic Pharma Ltd., a pharmaceutical company focusing on the development of ear, nose, and throat products (now Novus Therapeutics, Inc.). Before joining Otic Pharma, Dr. Golembo served as Director of Product Development at Protalix BioTherapeutics, Inc., a biopharmaceutical company manufacturing a plant-based enzyme for the treatment of Gaucher disease, from May 2012 to May 2015 and as Associate Director of Products Development from May 2009 to May 2012. Dr. Golembo holds a B.Sc. in Biology and an M.Sc. in Molecular Biology from The Hebrew University and a Ph.D. in Molecular Genetics from Weizmann Institute of Science.

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Uri Ben-Or has served as the Interim Chief Financial Officer, effective October 30, 2019. In January 2007, Mr. Ben-Or founded CFO Direct Ltd., in which he has served as the Chief Executive Officer and through which he provides his services to our company. Mr. Ben-Or is currently the Chief Financial Officer of BiondVax Pharmaceuticals Ltd. (Nasdaq: BVXV), Together Pharma Ltd. (TASE), Cannabics Pharmaceuticals Inc. (OTC: CNBX), Opectra Ltd. (TASE), Geffen Biomed Investments Ltd. (TASE), and Medivie Therapeutic Ltd., and is the Chief Executive Officer and Chief Financial Officer of Maayan Ventures Ltd. (TASE). Mr. Ben-Or was also the Chief Financial Officer of My Size Inc. (Nasdaq: MYSZ; TASE) from September 2010 to May 2016, Intercure Ltd. (TASE) from February 2011 to January 2016, D. Medical Industries Ltd. (TASE) from February 2013 to April 2015, Therapix Biosciences Ltd. from October 2014 to March 2015 (Nasdaq: TRPX), Procognia Ltd. (TASE) from September 2012 to December 2014, Glycominds Ltd. (TASE) from October 2001 to April 2014, and WideMed Ltd. (TASE) from November 2007 to November 2010. Prior to that, Mr. Ben-Or was an auditor at PriceWaterhouseCoopers from May 1997 to July 1999. Mr. Ben-Or holds a B.A. in Accounting from The College of Management Academic Studies, and an M.B.A. from Bar-Ilan University and is a certified public accountant in Israel.

Dr. Russell Greig has served as a director and chairman of the Board of Directors of the Company since October 2019. Dr. Greig has more than 35 years’ experience in the pharmaceutical industry, with knowledge and expertise in research and development, business development and commercial operations. He spent the majority of his career at GlaxoSmithKline (“GSK”), where he held a number of positions including GSK’s President of Pharmaceuticals International from 2003 to 2008 and Senior Vice President Worldwide Business Development. From 2008 to 2010, Dr. Greig was also President of SR One, GSK’s Corporate Venture Group. He is currently Chairman of AM Pharma and Mint Solutions in The Netherlands, and Bionor in Norway. In addition, Dr. Greig serves as a board member of Onxeo S.A. in France, and previously served on the boards of Tigenix N.V. (acquired by Takeda Pharmaceutical Company Limited), and Ablynx N.V. (acquired by Sanofi, France). He is also a Venture Partner at Kurma Life Sciences (France). He was previously Chairman of Syntaxin Ltd (UK) (sold to Ipsen), Novagali Pharma S.A. (France) (acquired by Santen Pharmaceutical Co., Ltd.), and Isconova AB (Sweden) (acquired by Novavax, Inc. (Nasdaq:NVAX)). He served as acting Chief Executive Officer at Genocea Biosciences (Nasdaq: GNCA) and Isconova AB for an interim period. He was also a member of the Scottish Scientific Advisory Committee, reporting to the First Minister of Scotland.

Dr. Gbola Amusa has served as a director of the Company since March 2018, and served as the Executive Chairman of CHAC from March 2018 to October 2019. Dr. Amusa has served as Partner, Director of Research, and Head of Healthcare Equity Research at Chardan Capital Markets LLC since December 2014. At Chardan, he has established the healthcare vision by focusing on disruptive healthcare segments, such as gene therapy/genetic medicines, that have the highest potential for significant investment returns. Dr. Amusa was previously Managing Director, Head of European Pharma Research, and Global Pharma& Biotech Coordinator at UBS (from 2007 to 2013), where he oversaw 25 analysts. Prior to UBS, Dr. Amusa was a Senior Research Analyst and Head of European Pharma research at Sanford Bernstein. He started his career in finance at Goldman Sachs as an Associate in the Healthcare Investment Banking Group, where he worked on large transactions including the Amgen/Immunex merger. Additionally, Dr. Amusa was previously a Healthcare Finance & Strategy Consultant working with governments, companies, leading foundations and think tanks. He holds an M.D. from Washington University Medical School, an M.B.A. with High Honors from the University of Chicago Booth School of Business, and a B.S.E. with Honors from Duke University.

Yaron Breski has served as a director of the Company since October 2019, and served on the Board of Directors of BiomX from November 2018 to October 2019. Mr. Breski is a Partner at RMGP Bio-Pharma Investment Fund, L.P., which he co-founded in May 2017, and has served as Managing Director at RM Global Partners LLC since October 2014. Previously, Mr. Breski served as Executive Director of Business Development at biotechnology company Rosetta Genomics. Mr. Breski holds a B.Sc. in Biology, Magna Cum Laude, research track for honors students from the Tel Aviv University; and an M.B.A from The Wharton School, University of Pennsylvania.

Erez Chimovits has served as a director of the Company since October 2019, and served on the Board of Directors of BiomX from January 2016 to October 2019. Mr. Chimovits has served as Senior Managing Director at healthcare investment firm OrbiMed Advisors LLC since 2010. Prior to joining OrbiMed, Mr. Chimovits was the Chief Executive Officer of pharmaceutical company NasVax Ltd. (now Therapix Biosciences Ltd.) and spent more than seven years with predictive drug discovery and development company Compugen Ltd., serving as President of Compugen USA Inc. and as Executive Vice President of Commercial Operations. Mr. Chimovits earned his M.B.A., M.Sc. in Microbiology, and B.Sc. from Tel Aviv University.

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Jonas Grossman has served as a director of the Company since October 2019, and served on the Board of Directors of CHAC from its formation in November 2017 to October 2019. Mr. Grossman has served as Partner and Head of Capital Markets for Chardan Capital Markets LLC, a New York headquartered broker/dealer, since December 2003. Mr. Grossman has served as President of Chardan Capital Markets LLC since September 2015. Since 2003, Mr. Grossman has overseen the firm’s deal origination, syndication, secondary market sales and trading and corporate access initiatives. He has extensive transactional experience having led or managed over 400 transactions during his tenure at Chardan. Since December 2006, Mr. Grossman has served as a founding partner for Cornix Advisors, LLC, a New York based hedge fund. From 2001 until 2003, Mr. Grossman worked at Ramius Capital Group, LLC, a global multi-strategy hedge fund where he served as Vice President and Head Trader. Mr. Grossman has served as a director for China Broadband (NASDAQ: SSC) from January 2008 until November 2010. He holds a B.A. in Economics from Cornell University and an M.B.A. from NYU’s Stern School of Business.

Dr. Robbie Woodman has served as a director of the Company since October 2019, and served on the Board of Directors of BiomX from June 2018 to October 2019. Dr. Woodman joined Takeda Ventures, Inc. (“TVI”) in March 2018 as Senior Partner. Prior to joining TVI, Dr. Woodman served as Director of Healthcare Investments at venture capital and private equity firm Touchstone Innovations Plc (formerly Imperial Innovations) from December 2012 to January 2017 and as Director of Healthcare Ventures from September 2012 through December 2016. Dr. Woodman previously served as Principal in the life science team at venture capital firm Sofinnova Partners. Dr. Woodman holds an M.Sc. in Biochemistry from the University of Oxford and a Ph.D. in Oncology from the University of Cambridge.

Director Independence

 

The NYSE American Stock Exchange requires that a majority of our Board of Directors be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s Board of Directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

Messrs. Gbola Amusa, Yaron Breski, Erez Chimovits, Dr. Russell Greig, Jonas Grossman and Dr. Robbie Woodman are our independent directors. Our independent directors have regularly scheduled meetings at which only independent directors are present.  

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Committees of the Board of Directors

Audit Committee

The Audit Committee, which is established in accordance with Section 3(a)(58)(A) of the Exchange Act, engages Company’s independent accountants, reviewing their independence and performance; reviews the Company’s accounting and financial reporting processes and the integrity of its financial statements; the audits of the Company’s financial statements and the appointment, compensation, qualifications, independence and performance of the Company’s independent auditors; the Company’s compliance with legal and regulatory requirements; and the performance of the Company’s internal audit function and internal control over financial reporting. The Audit Committee has held three meetings during 2019.

The members of the Audit Committee are Gbola Amusa, Yaron Breski and Erez Chimovits, each of whom is an independent director under NYSE American Stock Exchange’s listing standards and satisfies the additional independence requirements of Rule 10A-3 of the Exchange Act. Gbola Amusa is the Chairperson of the Audit Committee. The Board of Directors has determined that Gbola Amusa qualifies as an “audit committee financial expert,” as defined under the rules and regulations of the SEC.

Compensation Committee

The Compensation Committee reviews annually the Company’s corporate goals and objectives relevant to the officers’ compensation, evaluates the officers’ performance in light of such goals and objectives, determines and approves the officers’ compensation level based on this evaluation; makes recommendations to the Board of Directors regarding approval, disapproval, modification, or termination of existing or proposed employee benefit plans, makes recommendations to the Board of Directors with respect to the compensation of our executive officers, other than the Chief Executive Officer, and administers the Company’s incentive-compensation plans and equity-based plans. The Compensation Committee has the authority to delegate any of its responsibilities to subcommittees as it may deem appropriate in its sole discretion. The Chief Executive Officer of the Company may not be present during voting or deliberations of the Compensation Committee with respect to his compensation. The Company’s executive officers do not play a role in suggesting their own salaries. Neither the Company nor the Compensation Committee has engaged any compensation consultant who has a role in determining or recommending the amount or form of executive or director compensation. The Compensation Committee has not held any meetings during 2019.

The members of the Compensation Committee are Erez Chimovits, Jonas Grossman and Russell Greig, each of whom is an independent director under NYSE American Stock Exchange’s listing standards. Erez Chimovits is the Chairperson of the Compensation Committee.

Nominating Committee

The Nominating Committee is responsible for overseeing the selection of persons to be nominated to serve on our Board of Directors. Specifically, the Nominating Committee makes recommendations to the Board of Directors regarding the size and composition of the Board of Directors, establishes procedures for the director nomination process and screens and recommends candidates for election to the Board of Directors. On an annual basis, the Nominating Committee recommends for approval by the Board of Directors certain desired qualifications and characteristics for Board of Directors membership. Additionally, the Nominating Committee establishes and oversees the annual assessment of the performance of the Board of Directors as a whole and its individual members. The Nominating Committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board of Directors. The Nominating Committee may require certain skills or attributes, such as financial or accounting experience, to meet specific needs of the Board of Directors that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board of Directors members. The Nominating Committee does not distinguish among nominees recommended by stockholders and other persons. The Nominating Committee has not held any meetings during 2019.

The members of the Nominating Committee are Russell Greig, Jonas Grossman and Robbie Woodman, each of whom is an independent director under NYSE American Stock Exchange’s listing standards. Russell Greig is the Chairperson of the Nominating Committee.

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DIRECTOR COMPENSATION

In connection with the Closing of the Merger Agreement, the Board of Directors intends to approve and implement a compensation program that will consist of annual retainer fees and long-term equity awards for our non-employee directors.

EXECUTIVE COMPENSATION

The disclosure contained in the Definitive Proxy Statement in the section entitled “Compensation of Directors and Executive Officers of BiomX” beginning on page 204 is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain transactions of CHAC and BiomX are described in the Definitive Proxy Statement in the section entitled “Certain Transactions” beginning on page 209 and are incorporated herein by reference.

In connection with the Closing, the Company adopted a new related party transactions approval policy that sets forth the policies and procedures for the review and approval or ratification of related person transactions.

As discussed above in Item 1.01, on October 28, 2019, CHAC entered into a purchase agreement with Cornix, an affiliate of CHAC. For further discussion, see Item 1.01.

DESCRIPTION OF SECURITIES

The disclosure contained in the Definitive Proxy Statement in the section entitled “Description of CHAC’s Securities” beginning on page 211 is incorporated herein by reference.

LEGAL PROCEEDINGS

From time to time, the Company may be involved in various claims and legal proceedings arising in the ordinary course of business. Neither the Company nor BiomX is currently a party to any such claims or proceedings which, if decided adversely to the Company or BiomX, would either, individually or in the aggregate, have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The information contained in Item 14 of CHAC’s Registration Statement on Form S-1 (File No. 333-228533), as originally filed with the Securities and Exchange Commission (“SEC”) on November 26, 2018, as amended, is incorporated herein by reference.

In addition, upon the Closing, the Company has entered into indemnification agreements with each of its directors and executive officers. These agreements require the Company to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to the Company, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.

The Form of the Indemnification Agreement is filed with this Form 8-K as Exhibit 10.4 and is incorporated herein by reference. The foregoing description of the Form of the Indemnification Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Form of the Indemnification Agreement.

Item 3.02. Unregistered Sales of Equity Securities.

 

The disclosure set forth under Item 2.01 above is incorporated in this Item 3.02 by reference. The 16,625,000 shares of Common Stock issued pursuant to the Merger Agreement were issued in reliance upon an exemption from the registration requirements pursuant to Section 4(a)(2) of the Securities Act. The securityholders of BiomX receiving the shares of Common Stock represented their intentions to acquire the shares for investment only and not with a view to or for sale in connection with any distribution, and appropriate restrictive legends were affixed to the certificates representing the shares. The parties also had adequate access, through business or other relationships, to information about the Company and BiomX.

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Item 4.01. Changes in Registrant’s Certifying Accountant.

 

(a)       On October 28, 2019, the Company dismissed Marcum LLP (“Marcum”) as the Company’s independent registered accounting firm. This decision was approved by the Board of Directors.

The reports of Marcum on the Company’s consolidated financial statements for the years ended June 30, 2019 and 2018 did not contain any adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

During the fiscal years ended June 30, 2019 and 2018, and the subsequent interim period through October 28, 2019, there were no (i) disagreements with Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to their satisfaction, would have caused them to make reference to the subject matter of the disagreement in connection with their report, or (ii) reportable events (as described in Item 304(a)(1)(v) of Regulation S-K).

The Company has provided Marcum with a copy of the above disclosures, and Marcum has furnished the Company with a letter addressed to the SEC stating that it agrees with the statements made above. A copy of Marcum’s letter, dated [November 1], 2019, is attached as Exhibit 16.1 to this Form 8-K.

(b)       On October 28, 2019, the Board of Directors approved the appointment of Brightman Almagor Zohar & Co. (“Deloitte Israel”) as the Company’s independent registered accounting firm. During the two most recent fiscal years ended June 30, 2019 and 2018 and during the subsequent interim period through October 28, 2019 neither the Company nor anyone on its behalf consulted Deloitte Israel regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that Deloitte Israel concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement” or a “reportable event”, each as defined in Regulation S-K Item 304(a)(1)(iv) and 304(a)(1)(v), respectively.

Item 5.01. Changes in Control of Registrant.

 

The description of the Merger Agreement and the related agreements to effect the Business Combination in the Definitive Proxy Statement in the section entitled “The Merger Agreement” beginning on page 102 and “The Merger Agreement—Additional Agreements” beginning on page 105, which is incorporated herein by reference. The information contained in Item 2.01 to this Form 8-K is also incorporated herein by reference.

As a result of the issuance of the shares of Common Stock pursuant to the Business Combination and related transactions, a change in control of the Company occurred as of October 28, 2019. Except as described in this Form 8-K, no arrangements or understandings exist among present or former controlling shareholders with respect to the election of members of our Board of Directors and, to our knowledge, no other arrangements exist that might result in a change of control of the Company.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Five incumbent directors of CHAC, George Kaufman, Michael Rice, Richard Giroux, Matthew Rossen, and Eric Kusseluk, M.D., resigned from the Board of Directors upon closing of the Business Combination. Our Board of Directors currently consists of two existing CHAC directors, Mr. Jonas Grossman and Dr. Gbola Amusa, and five newly appointed directors, Dr. Russell Grieg, Chairman of the Board of Directors, Mr. Yaron Breski, Mr. Erez Chimovits, Mr. Jonathan Solomon and Dr. Robbie Woodman.

The information contained in Item 2.01 to this Form 8-K is also incorporated herein by reference.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On October 28, 2019, as a result of the consummation of the Business Combination, the Board of Directors adopted a resolution to change the Company’s fiscal year end from June 30 to December 31, effective immediately. The Company is not required to file a transition report on Form 10-KT and plans to report the financial results of the combined company for the fiscal year ended December 31, 2019 on an annual report on Form 10-K.

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Item 5.06. Change in Shell Company Status.

 

On October 28, 2019, as a result of the consummation of the Business Combination, which fulfilled the “initial Business Combination” requirement of CHAC’s Amended and Restated Certificate of Incorporation, the Company ceased to be a shell company. The material terms of the Business Combination are described in the Definitive Proxy Statement in the section entitled “The Business Combination Proposal” beginning on page 82, which is incorporated herein by reference.

Item 8.01 Other Events.

 

On October 28, 2019, the Company issued a press release announcing the consummation of the Business Combination. A copy of the press release is filed as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

In accordance with Item 9.01(a), BiomX’s audited financial statements for the year ended December 31, 2018 and 2017 are attached to this Form 8-K as Exhibit 99.2 hereto.

(b) Pro Forma Financial Information.

In accordance with Item 9.01(b), unaudited pro forma condensed combined financial statements for the nine months ended September 30, 2019 for CHAC, and for the nine months ended June 30, 2019 for BiomX, are attached to this Form 8-K as Exhibit 99.3 hereto.

(d) Exhibits

Exhibit   Description
2.1   Merger Agreement (Incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed by the registrant on July 17, 2019)
2.2   Amendment Agreement to the Merger Agreement (Incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed by the registrant on October 11, 2019)
3.1   Amended and Restated Certificate of Incorporation of the Company, effective on December 11, 2018
3.2   Certificate of Amendment of Certificate of Incorporation of the Company, effective on October 28, 2019
3.3   Amended and Restated Bylaws of the Company, effective as of October [28], 2019
10.1   Registration Rights Agreement dated October 28, 2019
10.2   Escrow Agreement dated October 28, 2019, among Chardan Healthcare Acquisition Corp., Shareholder Representative Services LLC and Continental Stock Transfer & Trust Company
10.3   Voting Agreement dated October 28, 2019
10.4   Form of Indemnification Agreement with each director and officer
10.5*   Research and License Agreement, dated June 22, 2015, between BiomX Ltd. and Yeda Research and Development Company Limited, as amended
10.6*   Exclusive Patent License Agreement dated April 25, 2017, between BiomX Ltd. and the Massachusetts Institute of Technology
10.7*   Exclusive Patent License Agreement, dated December 15, 2017, among BiomX Ltd., Keio University and JSR Corporation, as amended
10.8*   Exclusive Patent License Agreement, dated April 22, 2019, among BiomX Ltd., Keio University and JSR Corporation
10.9*   Share Purchase Agreement, dated November 19, 2017, among BiomX Ltd., RondinX Ltd. and Guy Harmelin, as the Shareholders’ Representative
10.10**   Chardan Healthcare Acquisition Corp. 2019 Equity Incentive Plan
10.11   Waiver Agreement, dated October 28, 2019
10.12   Purchase Agreement, dated October 28, 2019, between Cornix LLC and Chardan Healthcare Acquisition Corp.
16.1   Letter from Marcum LLP
17.1   Resignation of George Kaufman
17.2   Resignation of Michael Rice
17.3   Resignation of Richard Giroux
17.4   Resignation of Matthew Rossen
17.5   Resignation of Eric Kusseluk, M.D.
21.1   Subsidiaries of Registrant
99.1   Press Release dated October 28, 2019
99.2   Audited Financial Statements of BiomX Ltd.
99.3   Pro Forma Financial Statements
*   Portions of this exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
**   Indicates a management contract or a compensatory plan or agreement.

 

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SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    BIOMX INC.
       
November 1, 2019   By: /s/ Jonathan Solomon
      Name:  Jonathan Solomon
      Title:  Chief Executive Officer

 

 

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Section 2: EX-3.1 (AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY, EFFECTIVE ON DECEMBER 11, 2018)

Exhibit 3.1

 

AMENDED AND RESTATED

 

CERTIFICATE OF INCORPORATION

 

OF

 

CHARDAN HEALTHCARE ACQUISITION CORP.

 

Pursuant to Section 245 of the

 

Delaware General Corporation Law

 

Chardan Healthcare Acquisition Corp., a corporation existing under the laws of the State of Delaware, by its Chief Executive Officer, hereby certifies as follows:

 

1.  The name of the corporation is Chardan Healthcare Acquisition Corp. (hereinafter called the “Corporation”).

 

2.  The Corporation’s Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware on November 1, 2017, and a Certificate of Amendment changing the total number of shares which the Corporation has the authority to issue to three million (3,000,000) shares of common stock, $0.0001 par value, was filed in the office of the Secretary of the State of Delaware on September 14, 2018.

 

3.  This Amended Restated Certificate of Incorporation restates, integrates and amends the Certificate of Incorporation of the Corporation.

 

4.  This Amended and Restated Certificate of Incorporation was duly adopted by the written consent of the directors and stockholders of the Corporation in accordance with the applicable provisions of Sections 141(f), 228, 242 and 245 of the General Corporation Law of the State of Delaware (“GCL”).

 

5.  The text of the Certificate of Incorporation of the Corporation is hereby amended and restated to read in full as follows:

 

First:  The name of the corporation is Chardan Healthcare Acquisition Corp. (hereinafter called the “Corporation”).

 

Second:  The registered office of the Corporation is to be located at 850 New Burton Road, Suite 201, in the City of Dover, in the County of Kent, 19904. The name of its registered agent at that address is Cogency Global Inc.

 

Third:  The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware (“GCL”).

 

 

 

 

Fourth:  The name and mailing address of the incorporator is: Jaszick Maldonado, c/o Loeb & Loeb LLP, 345 Park Avenue, New York NY 10154.

 

Fifth:  The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 31,000,000, of which 30,000,000 shares shall be common stock, par value $.0001 per share (“Common Stock”) and 1,000,000 shares shall be preferred stock, par value $.0001 per share (“Preferred Stock”).

 

A.  Preferred Stock. The Board of Directors is expressly granted authority to issue shares of the Preferred Stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a “Preferred Stock Designation”) and as may be permitted by the GCL. The number of authorized shares of 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 of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.

 

B.  Common Stock. Except as otherwise required by law or as otherwise provided in any Preferred Stock Designation, the holders of the Common Stock shall exclusively possess all voting power and each share of Common Stock shall have one vote.

 

Sixth:  This Article Sixth shall apply during the period commencing upon the filing of this Certificate of Incorporation and terminating upon the consummation of any “Business Combination” (as defined below). A “Business Combination” shall mean any merger, capital stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination involving the Corporation and one or more businesses or entities (“Target Business”), or entering into contractual arrangements that give the Corporation control over such a Target Business, and, if the Corporation is then listed on a national securities exchange, the Target Business has a fair market value equal to at least 80% of the balance in the Trust Fund (defined below), less any taxes payable on interest earned, at the time of signing a definitive agreement in connection with the initial Business Combination. “IPO Shares” shall mean the shares sold pursuant to the registration statement on Form S-1 (“Registration Statement”) filed with the Securities and Exchange Commission (“Commission”) in connection with the Corporation’s initial public offering (“IPO”). The “fair market value” for purposes of this Article Sixth will be determined by the Board of Directors of the Corporation based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). If the Board of Directors is unable to independently determine the fair market value of the Target Business, the Corporation will obtain an opinion from an independent investment banking firm, or another independent entity that commonly renders valuation opinions, with respect to the satisfaction of such criteria.

 

A.  Prior to the consummation of a Business Combination, the Corporation shall either (i) submit any Business Combination to its holders of Common Stock for approval (“Proxy Solicitation”) pursuant to the proxy rules promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”), or (ii) provide its holders of IPO Shares with the opportunity to sell their shares to the Corporation by means of a tender offer (“Tender Offer”).

 

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B.  If the Corporation engages in a Proxy Solicitation with respect to a Business Combination, the Corporation will consummate the Business Combination only if a majority of the then outstanding shares of Common Stock present and entitled to vote at the meeting to approve the Business Combination are voted for the approval of such Business Combination.

 

C.  In the event that a Business Combination is consummated by the Corporation or the Corporation holds a vote of its stockholders to amend its Certificate of Incorporation, any holder of IPO Shares who (i) voted on the proposal to approve such Business Combination or amend the Certificate of Incorporation, whether such holder voted in favor or against such Business Combination or amendment, and followed the procedures contained in the proxy materials to perfect the holder’s right to convert the holder’s IPO Shares into cash, if any, or (ii) tendered the holder’s IPO Shares as specified in the tender offer materials therefore, shall be entitled to receive the Conversion Price (as defined below) in exchange for the holder’s IPO Shares. The Corporation shall, promptly after consummation of the Business Combination or the filing of the amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware, convert such shares into cash at a per share price equal to the quotient determined by dividing (i) the amount then held in the Trust Fund (as defined below) less any income taxes owed on such funds but not yet paid, calculated as of two business days prior to the consummation of the Business Combination or the filing of the amendment, as applicable, by (ii) the total number of IPO Shares then outstanding (such price being referred to as the “Conversion Price”). “Trust Fund” shall mean the trust account established by the Corporation at the consummation of its IPO and into which the amount specified in Registration Statement is deposited. Notwithstanding the foregoing, a holder of IPO Shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (within the meaning of Section 13(d)(3) of the Exchange Act) (“Group”) with, will be restricted from demanding conversion in connection with a proposed Business Combination with respect to 20.0% or more of the IPO Shares. Accordingly, all IPO Shares beneficially owned by such holder or any other person with whom such holder is acting in concert or as a Group with in excess of 20.0% or more of the IPO Shares will remain outstanding following consummation of such Business Combination in the name of the stockholder and not be converted.

 

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D.  The Corporation will not consummate any Business Combination unless it has net tangible assets of at least $5,000,001 upon consummation of such Business Combination.

 

E.  In the event that the Corporation does not consummate a Business Combination by 24 months from the consummation of the IPO (such date being referred to as the “Termination Date”), the Corporation shall (i) cease all operations except for the purposes of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter redeem 100% of the IPO Shares for cash for a redemption price per share as described below (which redemption will completely extinguish such holders’ rights as stockholders, including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to approval of the Corporation’s then stockholders and subject to the requirements of the GCL, including the adoption of a resolution by the Board of Directors pursuant to Section 275(a) of the GCL finding the dissolution of the Corporation advisable and the provision of such notices as are required by said Section 275(a) of the GCL, dissolve and liquidate the balance of the Corporation’s net assets to its remaining stockholders, as part of the Corporation’s plan of dissolution and liquidation, subject (in the case of (ii) and (iii) above) to the Corporation’s obligations under the GCL to provide for claims of creditors and other requirements of applicable law. In such event, the per-share redemption price shall be equal to a pro rata share of the Trust Account plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Corporation for its working capital requirements or necessary to pay its taxes divided by the total number of IPO Shares then outstanding.

 

F.  A holder of IPO Shares shall only be entitled to receive distributions from the Trust Fund in the event (i) he demands conversion of his shares in accordance with paragraph C above or (ii) that the Corporation has not consummated a Business Combination by the Termination Date as described in paragraph E above. In no other circumstances shall a holder of IPO Shares have any right or interest of any kind in or to the Trust Fund.

 

G.  Prior to a Business Combination, the Board of Directors may not issue (i) any shares of Common Stock or any securities convertible into Common Stock; or (ii) any securities which participate in or are otherwise entitled in any manner to any of the proceeds in the Trust Fund or which vote as a class with the Common Stock on a Business Combination.

 

Seventh:  The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

 

A.  Election of directors need not be by ballot unless the by-laws of the Corporation so provide.

 

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B.  The Board of Directors shall have the power, without the assent or vote of the stockholders, to make, alter, amend, change, add to or repeal the by-laws of the Corporation as provided in the by-laws of the Corporation.

 

C.  The directors in their discretion may submit any contract or act for approval or ratification at any annual meeting of the stockholders or at any meeting of the stockholders called for the purpose of considering any such act or contract, and any contract or act that shall be approved or be ratified by the vote of the holders of a majority of the stock of the Corporation which is represented in person or by proxy at such meeting and entitled to vote thereat (provided that a lawful quorum of stockholders be there represented in person or by proxy) shall be as valid and binding upon the Corporation and upon all the stockholders as though it had been approved or ratified by every stockholder of the Corporation, whether or not the contract or act would otherwise be open to legal attack because of directors’ interests, or for any other reason.

 

D.  In addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation; subject, nevertheless, to the provisions of the statutes of Delaware, of this Amended and Restated Certificate of Incorporation, and to any bylaws from time to time made by the stockholders; provided, however, that no bylaw so made shall invalidate any prior act of the directors which would have been valid if such bylaw had not been made.

 

Eighth:   

 

A.  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, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the GCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the GCL 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 eliminated or limited to the fullest extent permitted by the GCL, as so amended. Any repeal or modification of this paragraph A by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation with respect to events occurring prior to the time of such repeal or modification.

 

B.  The Corporation, to the full extent permitted by Section 145 of the GCL, as amended from time to time, shall indemnify all persons whom it may indemnify pursuant thereto. Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such officer or director may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby.

 

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C.  Notwithstanding the foregoing provisions of this Article Eighth, no indemnification nor advancement of expenses will extend to any claims made by the Company’s officers and directors to cover any loss that such individuals may sustain as a result of such individuals’ agreement to pay debts and obligations to target businesses or vendors or other entities that are owed money by the Corporation for services rendered or contracted for or products sold to the Corporation, as described in the Registration Statement.

 

Ninth:  Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

 

IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by Jonas Grossman, its Chief Executive Officer, as of the 13th day of December, 2018.

 

/s/ Jonas Grossman    
Jonas Grossman, Chief Executive Officer    

 

 

 

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Section 3: EX-3.2 (CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF THE COMPANY, EFFECTIVE ON OCTOBER 28, 2019)

Exhibit 3.2

 

STATE OF DELAWARE
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CHARDAN HEALTHCARE ACQUISITION CORP.

 

Chardan Healthcare Acquisition Corp., a Delaware corporation (the “Corporation”), does hereby certify that:

 

First: That the Board of Directors and stockholders of the Corporation by unanimous written consent dated as of September 11, 2018, adopted resolutions setting forth an amendment to the Certificate of Incorporation of the Corporation. The resolutions setting forth the amendment are as follows:

 

RESOLVED, that the Corporation’s Certificate of Incorporation be amended as follows:

 

1)ARTICLE FIFTH is amended and restated in its entirety to read as follows:

 

“The total number of shares which the Corporation shall have authority to issue is three million (3,000,000) shares of common stock, $0.0001 par value.”

 

Second: That, pursuant to §228 of the General Corporation Law of the State of Delaware, a written consent approving the amendment set forth above was signed by the holders of outstanding voting stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting on such date at which all shares entitled to vote thereon were present and voted.

 

Third: That said amendment was duly adopted in accordance with the provisions of §242 of the General Corporation Law of the State of Delaware.

 

IN WITNESS WHEREOF, said corporation has caused this certificate to be signed this 11th day of September 2018.

 

  By: /s/ Jonas Grossman
  Name: Jonas Grossman
  Title: Chief Executive Officer 

 

 

 

 

State of Delaware
Secretary of State
Division of Corporations
Delivered 12:42 PM 11/01/2017
FILED 12:42 PM 11/01/2017
SR 20176883533 - File Number 6600337

 

CERTIFICATE OF INCORPORATION

 

OF

 

CHARDAN HEALTHCARE ACQUISITION CORP.

 

THE UNDERSIGNED, for the purpose of incorporating and organizing a corporation under the General Corporation Law of the State of Delaware, does hereby execute this Certificate of Incorporation and does hereby certify as follows:

 

FIRST: The name of the corporation is Chardan Healthcare Acquisition Corp. (hereinafter called the “Corporation”).

 

SECOND: The registered office of the Corporation is to be located at 28 Old Rudnick Lane, in the City of Dover, in the County of Kent, Delaware 19901. The name of its registered agent at that address is Corp l, Inc.

 

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

 

FOURTH: The name and mailing address of the incorporator is: Jaszick Maldonado, c/o Loeb & Loeb LLP, 345 Park Avenue, New York NY 10154,

 

FIFTH: The total number of shares which the Corporation shall have authority to issue is two million (2,000,000) shares of common stock, $0.0001 par value.

 

SIXTH: A Director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director of the Corporation, except to the extent that exculpation from liability is not permitted under the General Corporation Law of the State of Delaware as in effect at the time such liability is determined. No amendment or repeal of this paragraph shall apply to or have any effect on the liability or alleged liability of any Director of the Corporation for or with respect to any acts or omissions of such Director occurring

 

SEVENTH: In furtherance and not in imitation of the powers conferred by statute, the Board of Directors of the Corporation is expressly authorized to make, alter or repeal the By-Laws of the Corporation; provided, however, that no By-Laws hereafter adopted by the Board of Directors or stockholders shall invalidate any prior act of the Directors which would have been valid if such By-Laws had not been adopted.

 

 

 

 

 

EIGHTH: The Corporation shall, to the maximum extent permitted from time to time under the law of the State of Delaware, indemnify and upon request advance expenses to any person who is or was a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding or claim, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was or has agreed to be a Director or officer of the Corporation or while a Director or officer is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of any corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against expenses (including attorneys’ fees and expenses), judgments, fines, penalties and amounts paid in settlement incurred (and not otherwise recovered) in connection with the investigation, preparation to defend or defense of such action, suit, proceeding or claim; provided, however, that the foregoing shall not require the Corporation to indemnify or advance expenses to any person in connection with any action, suit, proceeding, claim or counterclaim initiated by or on behalf of such person, Such indemnification shall not be exclusive of other indemnification rights arising under any By-Law, agreement, vote of Directors or stockholders or otherwise and shall inure to the benefits of the heirs and legal representatives of such person. Any person seeking indemnification under this paragraph shall be deemed to have met the standard of conduct required for such indemnification unless the contrary shall be established. Any repeal or modification of the foregoing provisions of this paragraph shall not adversely affect any right or protection of a Director or officer of the Corporation with respect to any acts or omissions of such Director or officer occurring prior to such repeal or modification.

 

NINTH: In furtherance of and not in limitation of powers conferred by statute, it is further provided:

 

1. Election of Directors need not be by written ballot unless the By-Laws of the Corporation so provide,

 

2. Meetings of stockholders may be held within or without the State of Delaware, as the By Laws may provide,

 

3. To the extent permitted by law, the books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.

 

TENTH: Except as otherwise provided herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

 

IN WITNESS WHEREOF, the undersigned, being the incorporator herein before named, has executed this Certificate of Incorporation this 1” day of November, 2017.

 

  /s/ Jaszick Maldonado
  Jaszick Maldonado, Incorporator

 

 

 

 

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Section 4: EX-3.3 (AMENDED AND RESTATED BYLAWS OF THE COMPANY)

Exhibit 3.3

 

AMENDED AND RESTATED
BYLAWS
OF
BIOMX INC.

 

ARTICLE I

MEETINGS OF STOCKHOLDERS

 

Section 1. Place of Meetings. All meetings of the stockholders shall be held at such place within or outside the State of Delaware as may be fixed from time to time by the Board of Directors or the chief executive officer, or if not so designated, at the registered office of the corporation.

 

Section 2. Annual Meeting. An annual meeting of stockholders shall be held at such date, time and place as designated by the Board of Directors or the chief executive officer and stated in the notice of meeting. At the annual meeting the stockholders shall elect by a plurality vote those directors to hold office based on the number of directors in the class whose terms are expiring and do so for a term of three (3) years until the annual meeting of stockholders coinciding with the end of such term.

 

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 either (i) must be specified in a written notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors or the chief executive officer or secretary of the corporation, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at one of the principal executive office(s) of the corporation, not less than ninety (90) calendar days nor more than one-hundred and twenty (120) calendar days prior to the annual meeting; provided, however, that in the event that less than forty-five (45) calendar days’ notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10th) business day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder’s notice to the secretary of the corporation shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class and number of shares of the corporation which are beneficially owned by the stockholder and (iv) any material interest of the stockholder in such business. In no event shall the adjournment or postponement of an annual meeting commence a new notice time period (or extend any notice time period).

 

 

 

 

Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section 2 by any stockholder of any business properly brought before the annual meeting in accordance with said procedure.

 

The chairperson of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 2, or is otherwise not compliant with these bylaws, and if the chairperson should so determine, the chairperson shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

 

Section 3. Special Meetings. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the corporation’s certificate of incorporation, may be called only by the chief executive officer at his or her discretion, or by a resolution adopted by the affirmative vote of a majority of the Board of Directors. Business transacted at any special meeting shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

 

Section 4. Notice of Meetings. Except as otherwise provided by law, written notice of each meeting of stockholders, annual or special, stating the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty (60) calendar days before the date of the meeting, to each stockholder entitled to vote at such meeting. Without limiting the manner by which notices of meetings otherwise may be given to stockholders, any such notice may be given by electronic transmission in the manner provided in Section 232 of the Delaware General Corporation Law and as that statute may be amended. Notice of any meeting need not be given to any stockholder who, either before or after the meeting, shall submit a waiver of notice or who shall attend such meeting, except when the stockholder attends for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of the meeting shall be bound by the proceedings of the meeting in all respects as if due notice thereof had been given.

 

Section 5. Voting List. The officer responsible for the stock ledger of the corporation shall prepare and make, at least ten (10) calendar 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. Such list shall be open to the examination of any stockholder limited to any purpose germane to the meeting for a period of at least ten (10) calendar days before the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list was provided with the notice of the meeting; (b) during ordinary business hours, at the principal place of business of the corporation; or (c) either at a place within the city or town where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list also 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. Except as provided by applicable law, the stock ledger of the corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger and the list of stockholders or to vote in person or by proxy at any meeting of stockholders.

 

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Section 6. Quorum. The holders of one-third (1/3) of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of stockholders for transaction of business, except as otherwise provided by statute, the certificate of incorporation or these bylaws. A quorum, once established, shall not be broken by subsequent withdrawal of enough votes to leave less than a quorum.

 

Section 7. Adjournments. Any meeting of stockholders may be adjourned from time to time to any other time and/or any other place at which a meeting of stockholders may be held under these bylaws, which time and place shall be announced at the meeting, by a majority of the stockholders present in person or represented by proxy at the meeting and entitled to vote, though less than a quorum, or, if no stockholder is present or represented by proxy, by any officer entitled to preside at or to act as corporate secretary of such meeting, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) calendar days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

Section 8. Action at Meetings. When a quorum is present at any meeting, the vote of the holders of a majority of the stock present in person or represented by proxy and entitled to vote on the question shall decide any question brought before such meeting, unless the question is one upon which by express provision of law, the corporation’s certificate of incorporation or these bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question.

 

Section 9. Voting and Proxies. Unless otherwise provided in the corporation’s certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote, in person or by proxy, for each share of capital stock having voting power held of record by such stockholder. 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; provided that the instrument authorizing such proxy to act shall have been executed in writing (which shall include telegraphing, cabling or other means of electronically transmitted written copy) and signed and dated by the stockholder personally or by the stockholder’s duly authorized attorney in fact. No such proxy shall be voted or acted upon after three (3) years from its effective date, unless the proxy expressly provides for a longer period.

 

Section 10. Action by Consent. Unless otherwise restricted by the corporation’s certificate of incorporation or these bylaws, any action required or permitted to be taken at any annual or special meeting of the stockholders of the corporation may be taken without a meeting, if a majority of the stockholders of the corporation consent thereto in writing or by electronic transmission.

 

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ARTICLE II

DIRECTORS

 

Section 1. Number, Election, Tenure and Qualification. The number of directors which shall constitute the whole board shall not be less than five (5) nor more than nine (9); provided, however, the board shall be comprised of an odd number of directors. Within and according to such limit, the actual number of directors shall be determined by resolution of the Board of Directors, or by the stockholders at the annual , or at any special meeting of stockholders. The directors shall be elected at the annual meeting or at any special meeting of the stockholders, except as provided in Section 3 of this Article, and each director elected shall hold office until such director’s successor is elected and qualified or until the director's earlier death, resignation, disqualification, or removal. Directors need not be stockholders. Directors shall serve according to a set of staggered terms such that in any given year there is no more than twenty-five percent (25%) turnover of the Board.

 

Section 2. Enlargement. The number of the Board of Directors may be increased at any time by vote of a majority of the directors then in office, subject to maintaining an odd number for the Board.

 

Section 3. Nominations. Subject to the rights of holders of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, nominations for election to the Board of Directors of the corporation at a meeting of stockholders may be made on behalf of the board by the nominating committee appointed by the board, or by any stockholder of the corporation entitled to vote for the election of directors at such meeting. Such nominations, other than those made by the nominating committee on behalf of the board, shall be made by notice in writing delivered or mailed by first class United States mail or a nationally recognized courier service, postage prepaid, to the secretary or assistant secretary of the corporation, and received by such officer not less than one hundred-twenty (120) calendar days prior to any meeting of stockholders called for the election of directors; provided, however, that if less than ninety (90_ calendar days’ notice of the meeting is given to stockholders, such nomination shall have been mailed or delivered to the secretary or the assistant secretary of the corporation not later than the close of business on the seventh (7th) calendar day following the day on which the notice of meeting was mailed. Such notice shall set forth as to each proposed nominee who is not an incumbent director (i) the name, age, business address and, if known, residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of stock of the corporation which are owned beneficially by each such nominee and by the nominating stockholder, (iv) any other information concerning the nominee that must be disclosed of nominees in proxy solicitations regulated by Regulation 14A of the Securities Exchange Act of 1934, as amended, and (v) a written questionnaire with respect to the background and qualification of such nominee (which questionnaire shall be provided by the corporate secretary upon written request) and a written statement and agreement executed by each such nominee acknowledging that such person consents to being named in the corporation’s proxy statement as a nominee and to serving as a director if elected.

 

The chairperson of the meeting, if the facts warrant, may determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if the chairperson should so determine, the chairperson shall so declare the meeting and the defective nomination shall be disregarded.

 

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Section 4. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election at which the term of the class to which they have been elected expires and until their successors are duly elected and shall qualify or until the director's earlier death, resignation, disqualification, or removal. If there are no directors in office, then an election of directors may be held in the manner provided by statute. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law or these bylaws, may exercise the powers of the full board until the vacancy is filled.

 

Section 5. Resignation and Removal. Any director may resign at any time for any reason upon giving written or electronic notice to the corporation at its principal place of business or to the chief executive officer or the secretary of the corporation. Such resignation shall be effective upon receipt of such notice by any of the foregoing unless the notice specifies such resignation to be effective at some other time or upon the happening of some other event. Any director or the entire Board of Directors may be removed, but only for cause, by the holders of a majority of the shares then entitled to vote at an election of directors, unless otherwise specified by law or the certificate of incorporation of the corporation.

 

Section 6. General Powers. The business and affairs of the corporation shall be managed by its Board of Directors, which may exercise all powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done solely by the stockholders.

 

Section 7. Chairperson of the Board. If the Board of Directors appoints a chairperson of the board, such chairperson, when present, shall preside at all meetings of the stockholders and the Board of Directors. The chairperson shall perform such duties and possess such powers as are customarily vested in the office of the chairperson of the board or as may be vested in the chairperson by the Board of Directors.

 

Section 8. Place of Meetings. The Board of Directors may hold meetings, both regular and special, either within or outside the State of Delaware to the extent held in the United States of America.

 

Section 9. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the board; provided that any director who is absent when such a determination is made shall be given prompt written notice of such determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders. Notwithstanding the foregoing, the board shall meet at a minimum frequency of quarterly.

 

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Section 10. Special Meetings. Special meetings of the board may be called by the chief executive officer, secretary of the corporation, or on the written request of three (3) or more directors, or by one (1) director in the event that there is only one (1) director in office. Four (4) hours’ notice to each director, either personally or by e-mail or other electronic transmission, commercial delivery service or similar means sent to such director’s business or home address, or three (3) calendar days’ notice by written notice deposited in the mail or delivered by a nationally recognized courier service, shall be given to each director by the secretary of the corporation or by the officer or one of the directors calling the meeting. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.

 

Section 11. Quorum, Action at Meeting, Adjournments. At all meetings of the board, a majority of directors then in office, but in no event less than one third (1/3) of the entire board, shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be provided otherwise specifically by law or by the corporation’s certificate of incorporation. For purposes of this Section 11, the term “entire board” shall mean the number of directors last fixed by the stockholders or directors, as the case may be, in accordance with law and these bylaws; provided, however, that if less than all the number so fixed of directors were elected, the “entire board” shall mean the greatest number of directors so elected to hold office at any one time pursuant to such authorization. If a quorum shall not be present at any meeting of the Board of Directors, a majority of the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

 

Section 12. Action by Consent. Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or transmission or transmissions are filed with the minutes of proceedings of the board or committee.

 

Section 13. Telephonic Meetings. Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board of Directors or of any committee thereof may participate in a meeting of the Board of Directors or of any committee, as the case may be, by means of conference telephone or similar 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.

 

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Section 14. Committees. The Board of Directors, by resolution passed by a majority of the whole board, may designate one or more committees of the board, each committee to consist of one or more of the directors of the corporation; provided, however, the total number of Committee members shall be an odd number. 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. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation of the corporation or these bylaws, adopting an agreement of merger, acquisition or consolidation of the corporation in its entirety, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution; and, unless the resolution designating such committee or the corporation’s certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or stock options or warrants. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and make such reports to the Board of Directors as the Board of Directors may request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business in compliance with applicable laws and these bylaws and the corporation’s certificate of incorporation, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these bylaws for the conduct of its business by the Board of Directors.

 

Section 15. Compensation. Unless otherwise restricted by the certificate of incorporation of this corporation or these bylaws, the Board of Directors shall have the authority to fix from time to time the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and the performance of their responsibilities as directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors and/or a stated salary as director. Payment may be by cash or by stock or stock option or warrant, as determined by the Board of Directors otherwise in accordance with these bylaws. No such payment shall preclude any director from serving the corporation or its parent or subsidiary corporations in any other capacity and receiving compensation therefor. The Board of Directors may also allow compensation for members of special or standing committees for service on such committees.

 

ARTICLE III

OFFICERS

 

Section 1. Enumeration. The officers of the corporation shall be chosen by the Board of Directors and shall be a president, a secretary and a treasurer and such other officers with such titles, terms of office and duties as the Board of Directors may from time to time determine, including one or more vice-presidents, and one or more assistant secretaries and assistant treasurers. If authorized by resolution of the Board of Directors, the chief executive officer may be empowered to appoint from time to time assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these bylaws otherwise provide.

 

Section 2. Election. The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a president, a secretary and a treasurer. Other officers may be appointed by the Board of Directors at such meeting, at any other meeting, or by written consent.

 

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Section 3. Tenure. The officers of the corporation shall hold office until their successors are chosen and qualify, unless a different term is specified in the vote choosing or appointing such officer, or until such officer’s earlier death, resignation or removal. Any officer elected or appointed by the Board of Directors or by the chief executive officer may be removed at any time by the affirmative vote of a majority of the Board of Directors or a committee of the board duly authorized to do so, except that any officer appointed by the chief executive officer also may be removed at any time by the chief executive officer. Any vacancy occurring in any office of the corporation may be filled by the Board of Directors, at its discretion. Any officer may resign by delivering such officer’s written or electronic resignation to the corporation at its principal place of business or to the chief executive officer or the secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

 

Section 4. President. The president shall be the chief executive officer unless the Board of Directors otherwise provides. The president, unless the Board of Directors provides otherwise in a specific instance or generally, shall (i) preside at all meetings of the stockholders and the Board of Directors, (ii) conduct general and active management of the business of the corporation, and (iii) be responsible that all orders and resolutions of the Board of Directors are implemented. The president further shall execute bonds, mortgages, and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation.

 

Section 5. Vice-Presidents. In the absence of the president or in the event of the president’s inability or refusal to act, the vice-president, or if there be more than one vice-president, the vice-presidents in the order designated by the Board of Directors or the chief executive officer (or in the absence of any designation, then in the order determined by their tenure in office) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the Board of Directors or the chief executive officer may from time to time prescribe.

 

Section 6. Secretary. The secretary shall have such powers and perform such duties as are incident to the office of secretary. The secretary shall maintain a stock ledger and prepare lists of stockholders and their addresses as required and shall be the custodian of corporate records. The secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be from time to time prescribed by the Board of Directors or chief executive officer, under whose supervision the secretary shall be. The secretary shall have custody of the corporate seal of the corporation and the secretary, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the secretary’s signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by such officer’s signature.

 

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Section 7. Chief Financial Officer. The chief financial officer shall be the principal financial officer of the corporation and shall have such powers and perform such duties as may be assigned by the Board of Directors or the chief executive officer.

 

Section 8. Other Officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors.

 

Section 9. Bond. If required by the Board of Directors, any officer shall give the corporation a bond in such sum and with such surety or sureties and upon such terms and conditions as shall be satisfactory to the Board of Directors, including without limitation a bond for the faithful performance of the duties of such officer’s office and for the restoration to the corporation of all books, papers, vouchers, money and other property of whatever kind in such officer’s possession or under such officer’s control and belonging to the corporation.

 

Section 10. Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.

 

ARTICLE IV

NOTICES

 

Section 1. Delivery. Whenever, under the provisions of law, or of the certificate of incorporation or these bylaws, written notice is required to be given by the corporation to any director, officer or stockholder, such notice may be given by mail, addressed to such director, officer or stockholder, at such person’s address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited by the corporation in the United States mail or delivered to a nationally recognized courier service. Unless written notice by mail is required by law, written notice may also be given by e-mail or electronic transmission, commercial delivery services or similar means, addressed to such director, officer or stockholder at such person’s e-mail or address as it appears on the records of the corporation, in which case such notice shall be deemed to be given when delivered by the corporation into the control of the persons charged with effecting such transmission, the transmission charge to be paid by the corporation or the person sending such notice and not by the addressee. Oral notice or other in-hand delivery, in person or by telephone, shall be deemed given at the time it actually is given.

 

Section 2. Waiver of Notice. Whenever any notice is required to be given by the corporation under the provisions of law or of the certificate of incorporation or of these bylaws, a waiver thereof in writing, signed and dated by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

 

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ARTICLE V

INDEMNIFICATION

 

Section 1. Actions Other than by or in the Right of the Corporation. The corporation shall indemnify 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, investigative or otherwise (other than an action by or in the right of the corporation) by reason of the fact that such person 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, against expenses (including attorneys’ fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or 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 corporation, and, with respect to any criminal action or proceedings, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or 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 corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

 

Section 2. Actions by or in the Right of the Corporation. The corporation shall indemnify 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, investigative or otherwise, by or in the right of the corporation to procure a judgment or legally binding decision in its favor by reason of the fact that such person 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 against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action, suit or 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 corporation and 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 for negligence, fraud or misconduct in the performance of such person’s duty or obligations to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware 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 of the State of Delaware or such other court shall deem proper.

 

Section 3. Success on the Merits. To the extent that any person described in Section 1 or 2 of this Article V has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in said Sections, or in defense of any claim, issue or matter therein, such person shall be indemnified by the corporation against their expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

 

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Section 4. Specific Authorization. Any indemnification under Section 1 or 2 of this Article V (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of any person described in said Sections is proper in the circumstances because such person has met the applicable standards of conduct set forth in said Sections. Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by a majority vote of a quorum of the stockholders of the corporation.

 

Section 5. Advance Payment. Expenses incurred in defending a civil, criminal, administrative, investigative or other action, suit or proceeding for which indemnification is appropriate under these bylaws may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the manner provided for in Section 4 of this Article V upon receipt of an undertaking by or on behalf of any person described in said Section to repay such amount unless it ultimately is determined that such person is entitled to indemnification by the corporation as authorized in this Article V.

 

Section 6. Non-Exclusivity. The indemnification provided by this Article V shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in such person’s official capacity and as to action in any other capacity while holding such office, and shall continue as to a person who has ceased to be director, officer, employee or agent of the corporation and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

Section 7. Insurance. The Board of Directors may authorize, by a vote of the majority of the full board, the corporation to purchase and maintain insurance of any type and amount 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 or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under the provisions of this Article V or applicable law.

 

Section 8. Severability. If any word, clause or provision of this Article V or any award made hereunder shall for any reason be determined to be invalid, the provisions hereof shall not be affected otherwise thereby but shall remain in full force and effect.

 

Section 9. Intent of Article. The intent of this Article V is to provide for indemnification to the fullest extent permitted by section 145 of the General Corporation Law of Delaware or any other applicable law. To the extent that such Section or any successor section, or other applicable law, may be amended or supplemented from time to time, this Article V shall be amended automatically and construed so as to permit indemnification to the fullest extent from time to time permitted by the law.

 

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ARTICLE VI

CAPITAL STOCK

 

Section 1. Certificates of Stock. Every holder of stock in the corporation 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 of Directors, or the president or a vice-president and the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such stockholder in the corporation. 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 shall have 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 such person were such officer, transfer agent or registrar at the date of issue. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor, and the amount paid thereon shall be specified.

 

Section 2. Lost Certificates. The Board of Directors may direct a new stock certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed stock certificate or certificates, or such owner’s legal representative, to give reasonable evidence of such loss, theft or destruction, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of such new certificate.

 

Section 3. Transfer of Stock. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares, duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, and proper evidence of compliance with other conditions to rightful transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction upon its books.

 

Section 4. Record Date for Action at a Meeting or for Other Purposes. 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 of Directors may fix, in advance, a record date, which shall not be more than sixty (60) calendar days nor less than ten (10) calendar days before the date of such meeting, nor more than sixty (60) calendar days prior to any other action to which such record date relates. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. If no record date is fixed, 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 before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. The record date for determining stockholders for any other purpose within this Section 4 of Article VI shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

 

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Section 5. Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and any other rights related to ownership of these shares, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

 

ARTICLE VII

CERTAIN TRANSACTIONS

 

Section 1. Transactions with Interested Parties. No contract or transaction between the corporation and one or more of its directors or officers, or between the corporation and any other corporation, partnership, association or other organization in which one or more of the corporation’s directors or officers also are directors or have a financial interest, shall be void or voidable solely for these reasons, or solely because the director or officer is present at or participates in the meeting of the board or committee thereof which authorizes the contract or transaction, or solely because the vote or votes of such director or officer are counted for such purpose, if:

 

(a)       the material facts as to such person’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee of the board, and the board or committee in good faith authorizes the contract or transaction by written consent or the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

 

(b)       the material facts as to such person’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction specifically is approved in good faith by written consent or a majority vote of a quorum of the stockholders; or

 

(c)       the contract or transaction is fair and reasonable as to the corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders.

 

Section 2. Quorum. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

 

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ARTICLE VIII

GENERAL PROVISIONS

 

Section 1. Dividends. Dividends upon the capital stock of the corporation, if any, may be declared by the Board of Directors at any regular or special meeting of the board or stockholders, or by written consent, pursuant to applicable law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation.

 

Section 2. Reserves. The directors may set apart out of any funds of the corporation available for dividends a reserve or reserves for any proper purpose and, separately, may abolish any such reserve.

 

Section 3. Checks. All checks or demands for money and notes of the corporation shall be signed either by the corporation’s chief financial officer, chief accounting officer, or such officer or officers, or such other person or persons, as the Board of Directors may from time to time designate in writing.

 

Section 4. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors and may change at the discretion of the board.

 

Section 5. Seal. The Board of Directors, by resolution, may adopt a corporate seal but is not required to do so. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization, and the word “Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced. The seal may be altered from time to time by the Board of Directors.

 

ARTICLE IX

AMENDMENTS

 

The Board of Directors is expressly empowered to adopt, amend or repeal these bylaws, provided, however, that any adoption, amendment or repeal of these bylaws by the Board of Directors shall require the approval of at least sixty-six and two-thirds percent (66 ⅔%) of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any resolution providing for adoption, amendment or repeal is presented to the board). The stockholders also shall have power to adopt, amend or repeal these bylaws, provided, however, that in addition to any vote of the holders of any class or series of stock of this corporation required by law or by the certificate of incorporation of this corporation, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 ⅔%) of the voting power of all of the then outstanding shares of the stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for such adoption, amendment or repeal by the stockholders of any provisions of these bylaws.

 

 

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Section 5: EX-10.1 (REGISTRATION RIGHTS AGREEMENT)

Exhibit 10.1

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the 23rd day of October, 2019, by and among Chardan Healthcare Acquisition Corp., a Delaware corporation (the “Company”) and the undersigned parties listed under Stockholder on the signature page hereto (each, an “Stockholder” and collectively, the “Stockholders”).

 

WHEREAS, pursuant to a Merger Agreement dated as of July 16, 2019 (“Merger Agreement”) by and among the Company, the Stockholders and certain other persons and entities, the Stockholders agreed to accept the Merger Shares (i.e., Common Stock of the Company) in exchange for their shares of Capital Stock of BiomX Ltd., an Israeli company (“BiomX”);

 

WHEREAS, pursuant to the terms of the Merger Agreement, the Company agreed to register the Merger Shares (as defined below) held by the Stockholders for resale under the Securities Act (as defined below and the Stockholders and the Company desire to enter into this Agreement to provide the Stockholders with certain rights relating to the registration of the securities held by them as of the date hereof;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. DEFINITIONS. The following capitalized terms used herein have the following meanings:

 

Agreement” means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.

 

BiomX Securityholder Purchase Agreements” means those certain BiomX Stakeholder Stock Purchase Agreements, substantially in the form attached as an exhibit to the Merger Agreement, to be entered into among the Company, certain BiomX shareholders and persons who hold Company Securities.

 

Business Combination” means the acquisition of direct or indirect ownership through a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar type of transaction, of one or more businesses or entities.

 

Commission” means the Securities and Exchange Commission, or any other Federal agency then administering the Securities Act or the Exchange Act.

 

Common Stock” means the common stock, par value $0.0001 per share, of the Company.

 

Company” is defined in the preamble to this Agreement.

 

Demand Registration is defined in Section 2.1.1.

 

Demanding Holder is defined in Section 2.1.1.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

 

Form S-3” is defined in Section 2.3.

 

Indemnified Party” is defined in Section 4.3.

 

Indemnifying Party” is defined in Section 4.3.

 

Stockholder Indemnified Party” is defined in Section 4.1.

 

Maximum Number of Shares” means the number of shares of Common Stock of the Company in an underwritten offering, if the managing Underwriter or Underwriters advises the Company in writing that the dollar amount or number of shares of Registrable Securities which the Stockholders desire to sell, taken together with all other shares of Common stock or other securities which the Company desires to sell and the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual registration rights held by other stockholders of the Company who desire to sell, which exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering such maximum dollar amount or maximum number of shares.

 

 

 

 

Merger Shares” means the shares of Common Stock of the Company issued or issuable to the Stockholders pursuant to the terms of the Merger Agreement and shares of Common Stock of the Company issued or issuable pursuant to warrants to purchase Common Stock of the Company under Section 4.1(c) of the Merger Agreement.

 

Notices” is defined in Section 6.2.

 

Piggy-Back Registration” is defined in Section 2.2.1.

 

Prior Agreement” is defined in Section 2.2.2.

 

Pro Rata” is defined in Section 2.1.4.

 

Register,” “Registered” and “Registration” mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

Registrable Securities” means (i) the Merger Shares, (ii) any shares of Common Stock acquired by the Stockholders pursuant to the BiomX Securityholder Purchase Agreements or otherwise in connection with the Business Combination and (iii) any warrants, shares of capital stock or other securities of the Company issued as a dividend or other distribution with respect to or in exchange for or in replacement of such Merger Shares. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; (c) such securities shall have ceased to be outstanding, or (d) the Registrable Securities are freely saleable under Rule 144 without volume limitations.

 

Registration Statement” means a registration statement filed by the Company with the Commission in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities (other than a registration statement on Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).

 

SEC” means the Securities and Exchange Commission.

 

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

 

Stockholder” is defined in the preamble to this Agreement.

 

Underwriter” means a securities broker-dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such broker-dealer’s market-making activities.

 

2. REGISTRATION RIGHTS.

 

2.1 Demand Registration.

 

2.1.1 Request for Registration. At any time and from time to time on or after the six month anniversary of the closing of the transactions contemplated by the Merger Agreement, the holders of twenty-five percent (25%) of such Registrable Securities, may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a “Demand Registration”). Any demand for a Demand Registration shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. The Company will within ten (10) days of the Company’s receipt of the Demand Registration notify all holders of Registrable Securities of the demand, and each holder of Registrable Securities who wishes to include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including shares of Registrable Securities in such registration, a “Demanding Holder”) shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the provisos set forth in Section 3.1.1. The Company shall not be obligated to effect more than an aggregate of two (2) Demand Registrations under this Section 2.1.1 in respect of all Registrable Securities.

 

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2.1.2 Effective Registration. A registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all of its obligations under this Agreement with respect thereto; provided, however, that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter elect to continue the offering; provided, further, that the Company shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.

 

2.1.3 Underwritten Offering. If a majority-in-interest of the Demanding Holders so elect and such holders so advise the Company as part of their written demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such event, the right of any holder to include its Registrable Securities in such registration shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting to the extent provided herein. All Demanding Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such underwriting by a majority-in-interest of the holders initiating the Demand Registration.

 

2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises the Company and the Demanding Holders in writing that the dollar amount or number of shares of Registrable Securities which the Demanding Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other stockholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “Maximum Number of Shares”), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Demanding Holders (pro rata in accordance with the number of shares that each such Demanding Holder has requested be included in such registration, regardless of the number of shares held by each such Demanding Holder (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Shares.

 

2.1.5 Withdrawal. If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by giving written notice to the Company and the Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Demand Registration. If the majority-in-interest of the Demanding Holders withdraws from a proposed offering relating to a Demand Registration, then such registration shall not count as a Demand Registration provided for in Section 2.1.2.2 Piggy-Back Registration.

 

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2.2.1 Piggy-Back Rights. If at any time on or after the date of this Agreement the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for stockholders of the Company for their account (or by the Company and by stockholders of the Company), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities as soon as practicable but in no event less than ten (10) days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of such number of shares of Registrable Securities as such holders may request in writing within five (5) days following receipt of such notice (a “Piggy-Back Registration”). The Company shall cause such Registrable Securities to be included in such registration and shall use its best efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All holders of Registrable Securities proposing to distribute their securities through a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.

 

2.2.2 Reduction of Offering. If the managing Underwriter or Underwriters for a Piggy-Back Registration under this Agreement or a demand registration on behalf of other holders of the Company’s securities under that certain Registration Rights Agreement dated as of December 13, 2018 (“Prior Agreement”) that is to be an underwritten offering advises the Company and the holders of Registrable Securities hereunder in writing that the dollar amount or number of shares of Common Stock which the Company desires to sell, taken together with the shares of Common Stock, if any, as to which registration has been demanded pursuant to the Prior Agreement, the Registrable Securities as to which registration shall otherwise be required under this Section 2.2, and the shares of Common Stock, if any, as to which registration has been requested pursuant to the this Agreement and the Prior Agreement, exceeds the Maximum Number of Shares in an underwritten offering, then the Company shall include in any such registration:

 

a) If the registration is undertaken for the Company’s account and the Company has previously complied with a demand registration made pursuant to the Prior Agreement or the date of the initial filing of the registration statement for such offering is more than 12 months after the date of this Agreement: (A) first, the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock or other securities, if any, comprised of Registrable Securities, as to which registration has been requested pursuant to the applicable piggy-back registration rights of security holders party to this Agreement, and the holders of securities under the Prior Agreement, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; and (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such persons and that can be sold without exceeding the Maximum Number of Shares;

 

(b) If the registration is undertaken for the Company’s account and the Company has not complied with a demand registration made pursuant to the Prior Agreement or the date of the initial filing of the registration statement for such offering is within 12 months of the date of this Agreement: (A) first, the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), to the holders of securities party to the Prior Agreement, (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other securities, if any, comprised of Registrable Securities, as to which registration has been requested pursuant to the applicable piggy-back registration rights of security holders party to this Agreement, and the holders of securities under the Prior Agreement, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such persons and that can be sold without exceeding the Maximum Number of Shares;

 

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c) If the registration is a “demand” registration undertaken at the demand of persons, (A) first, the shares of Common Stock or other securities for the account of the demanding persons under the Prior Agreement that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (A), the shares of Common Stock or other securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (C) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A) and (B), collectively the shares of Common Stock or other securities comprised of Registrable Securities, Pro Rata, as to which registration has been requested pursuant to the terms hereof, that can be sold without exceeding the Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other securities for the account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons, that can be sold without exceeding the Maximum Number of Shares.

 

2.2.3 Withdrawal. Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 3.3.

 

2.2.4 Unlimited Piggy-Back Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.

 

2.3 Registrations on Form S-3. The holders of Registrable Securities may at any time and from time to time, request in writing that the Company register the resale of any or all of such Registrable Securities on Form S-3 or any similar short-form registration which may be available to the Company under the Securities Act and he rules and regulations of the SEC at such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through an underwritten offering. Upon receipt of such written request, the Company will promptly give written notice of the proposed registration to all other holders of Registrable Securities, and, as soon as practicable thereafter, effect the registration of all or such portion of such holder’s or holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities or other securities of the Company, if any, of any other holder or holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration pursuant to this Section 2.3: (i) if Form S-3 is not available for such offering; or (ii) if the holders of the Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at any aggregate price to the public of less than $500,000. Registrations effected pursuant to this Section 2.3 shall not be counted as Demand Registrations effected pursuant to Section 2.1.

 

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3. REGISTRATION PROCEDURES.

 

3.1 Filings; Information. Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section 2, the Company shall use its best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:

 

3.1.1 Filing Registration Statement. The Company shall use its best efforts to, as expeditiously as possible and in any event within thirty (30) days after receipt of a request for a Demand Registration pursuant to Section 2.1, prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of all Registrable Securities to be Registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its best efforts to cause such Registration Statement to become effective and use its best efforts to keep it effective for the period required by Section 3.1.3; provided, however, that the Company shall have the right to defer any Demand Registration for up to thirty (30) days, and any Piggy-Back Registration for such period as may be applicable to deferment of any Demand Registration to which such Piggy-Back Registration relates, in each case if the Company shall furnish to the holders a certificate signed by the President or Chairman of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders for such Registration Statement to be effected at such time; provided further, however, that the Company shall not have the right to exercise the right set forth in the immediately preceding proviso more than once in any 365-day period in respect of a Demand Registration hereunder.

 

3.1.2 Copies. The Company shall, prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the holders of Registrable Securities included in such registration, and such holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus), and such other documents as the holders of Registrable Securities included in such registration or legal counsel for any such holders may request in order to facilitate the disposition of the Registrable Securities owned by such holders.

 

3.1.3 Amendments and Supplements. The Company shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement or such securities have been withdrawn.

 

3.1.4 Notification. After the filing of a Registration Statement, the Company shall promptly, and in no event more than two (2) business days after such filing, notify the holders of Registrable Securities included in such Registration Statement of such filing, and shall further notify such holders promptly and confirm such advice in writing in all events within two (2) business days of the occurrence of any of the following: (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the Company shall take all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered by such Registration Statement, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and promptly make available to the holders of Registrable Securities included in such Registration Statement any such supplement or amendment; except that before filing with the Commission a Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference, the Company shall furnish to the holders of Registrable Securities included in such Registration Statement and to the legal counsel for any such holders, copies of all such documents proposed to be filed sufficiently in advance of filing to provide such holders and legal counsel with a reasonable opportunity to review such documents and comment thereon, and the Company shall not file any Registration Statement or prospectus or amendment or supplement thereto, including documents incorporated by reference, to which such holders or their legal counsel shall object.

 

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3.1.5 State Securities Laws Compliance. The Company shall use its best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or subject itself to taxation in any such jurisdiction.

 

3.1.6 Agreements for Disposition. The Company shall enter into customary agreements (including, if applicable, an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities. The representations, warranties and covenants of the Company in any underwriting agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of the holders of Registrable Securities included in such registration statement. No holder of Registrable Securities included in such registration statement shall be required to make any representations or warranties in the underwriting agreement except, if applicable, with respect to such holder’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such sale with such holder’s material agreements and organizational documents, and with respect to written information relating to such holder that such holder has furnished in writing expressly for inclusion in such Registration Statement or as otherwise provided herein.

 

3.1.7 Cooperation. The principal executive officer of the Company, the principal financial officer of the Company, the principal accounting officer of the Company and all other officers and members of the management of the Company shall cooperate fully in any offering of Registrable Securities hereunder, which cooperation shall include, without limitation, the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential stockholders.

 

3.1.8 Records. The Company shall make available for inspection by the holders of Registrable Securities included in such Registration Statement, any Underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by any holder of Registrable Securities included in such Registration Statement or any Underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information requested by any of them in connection with such Registration Statement.

 

3.1.9 Opinions and Comfort Letters. Upon request, the Company shall furnish to each holder of Registrable Securities included in any Registration Statement a signed counterpart, addressed to such holder, of (i) any opinion of counsel to the Company delivered to any Underwriter and (ii) any comfort letter from the Company’s independent public accountants delivered to any Underwriter. In the event no legal opinion is delivered to any Underwriter, the Company shall furnish to each holder of Registrable Securities included in such Registration Statement, at any time that such holder elects to use a prospectus, an opinion of counsel to the Company to the effect that the Registration Statement containing such prospectus has been declared effective and that no stop order is in effect.

 

3.1.10 Earnings Statement. The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make available to its stockholders, as soon as practicable, an earnings statement covering a period of twelve (12) months, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

 

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3.1.11 Listing. The Company shall use its best efforts to cause all Registrable Securities included in any registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the holders of a majority of the Registrable Securities included in such registration.

 

3.1.12 Road Show. If the registration involves the registration of Registrable Securities involving gross proceeds in excess of $5,000,000, the Company shall use its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any underwritten offering.

 

3.2 Obligation to Suspend Distribution. Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.4(iv), or, in the case of a resale registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company, pursuant to a written insider trading compliance program adopted by the Company’s Board of Directors, of the ability of all “insiders” covered by such program to transact in the Company’s securities because of the existence of material non-public information, which period shall not exceed more than thirty (30) days, each holder of Registrable Securities included in any registration shall immediately discontinue disposition of such Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until such holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv) or the restriction on the ability of “insiders” to transact in the Company’s securities is removed, as applicable, and, if so directed by the Company, each such holder will deliver to the Company all copies, other than permanent file copies then in such holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice.

 

3.3 Registration Expenses. The Company shall bear all costs and expenses incurred in connection with any Demand Registration pursuant to Section 2.1, Piggy-Back Registration pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section 2.3, and all expenses incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) the Company’s internal expenses (including, without limitation, all salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as required by Section 3.1.12; (vi) Financial Industry Regulatory Authority fees; (vii) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the reasonable fees and expenses of any special experts retained by the Company in connection with such registration and (ix) the reasonable fees and expenses of one legal counsel selected by the holders of a majority-in-interest of the Registrable Securities included in such registration. The Company shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions shall be borne by such holders. Additionally, in an underwritten offering, all selling stockholders and the Company shall bear the expenses of the Underwriter pro rata in proportion to the respective amount of shares each is selling in such offering.

 

3.4 Information. The holders of Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the preparation of any Registration Statement, including amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the Company’s obligation to comply with Federal and applicable state securities laws. In addition, the holders of Registrable Securities shall comply with all prospectus delivery requirements under the Securities Act and applicable SEC regulations.

 

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4. INDEMNIFICATION AND CONTRIBUTION.

 

4.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless each Stockholder and each other holder of Registrable Securities, and each of their respective officers, employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any, who controls an Stockholder and each other holder of Registrable Securities (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) (each, an “Stockholder Indemnified Party”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement) of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to such Registration Statement, or arising out of or based upon any omission (or alleged omission) to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration; and the Company shall promptly reimburse the Stockholder Indemnified Party for any legal and any other expenses reasonably incurred by such Stockholder Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, or summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company, in writing, by such selling holder expressly for use therein. The Company also shall indemnify any Underwriter of the Registrable Securities, their officers, affiliates, directors, partners, members and agents and each person who controls such Underwriter on substantially the same basis as that of the indemnification provided above in this Section 4.1.

 

4.2 Indemnification by Holders of Registrable Securities. Each selling holder of Registrable Securities will, in the event that any registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling holder, indemnify and hold harmless the Company, each of its directors and officers and each Underwriter (if any), and each other selling holder and each other person, if any, who controls another selling holder or such Underwriter within the meaning of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or the alleged omission to state a material fact required to be stated therein or necessary to make the statement therein not misleading, if the statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company by such selling holder expressly for use therein, and shall reimburse the Company, its directors and officers, and each other selling holder or controlling person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such loss, claim, damage, liability or action. Each selling holder’s indemnification obligations hereunder shall be several and not joint and shall be limited to the amount of any net proceeds actually received by such selling holder.

 

4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such person (the “Indemnified Party”) shall, if a claim in respect thereof is to be made against any other person for indemnification hereunder, notify such other person (the “Indemnifying Party”) in writing of the loss, claim, judgment, damage, liability or action; provided, however, that the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party and its controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding.

 

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4.4 Contribution.

 

4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of any Indemnified Party and any Indemnifying Party 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 such Indemnified Party or such Indemnifying Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

4.4.2 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding Section 4.4.1.

 

4.4.3 The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, no holder of Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment of any underwriting fees, discounts, commissions or taxes) actually received by such holder from the sale of Registrable Securities which gave rise to such contribution obligation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

5. RULE 144.

 

5.1 Rule 144. The Company covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the holders of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission.

 

6. MISCELLANEOUS.

 

6.1 Assignment; No Third Party Beneficiaries. This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part. This Agreement and the rights, duties and obligations of the holders of Registrable Securities hereunder may be freely assigned or delegated by such holder of Registrable Securities in conjunction with and to the extent of any transfer of Registrable Securities by any such holder. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties, to the permitted assigns of the Stockholders or holder of Registrable Securities or of any assignee of the Stockholders or holder of Registrable Securities. This Agreement is not intended to confer any rights or benefits on any persons that are not party hereto other than as expressly set forth in Article 4 and this Section 6.1.

 

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6.2 Notices. All notices, demands, requests, consents, approvals or other communications (collectively, “Notices”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided, that if such service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed given on the next business day. Notice otherwise sent as provided herein shall be deemed given on the next business day following timely delivery of such notice to a reputable air courier service with an order for next-day delivery.

 

To the Company:

 

Chardan Healthcare Acquisition Corp.

17 State Street, Floor 21

New York, NY 10004

Attn: Jonas Grossman, President

 

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

 

Loeb& Loeb LLP

345 Park Avenue

New York, NY 10154

Attention: Giovanni Caruso

 

To a Stockholder, to the address set forth below such Stockholder’s name on Exhibit A hereto.

 

6.3 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.

 

6.4 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.

 

6.5 Entire Agreement. This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.

 

6.6 Modifications and Amendments. No amendment, modification or termination of this Agreement shall be binding upon the Company unless executed in writing by the Company. No amendment, modification or termination of this Agreement shall be binding upon the holders of the Registrable Securities unless executed in writing by the holders of a majority of the Registrable Securities.

 

6.7 Titles and Headings. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.

 

6.8 Waivers and Extensions. Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.

 

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6.9 Remedies Cumulative. In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Stockholder or any other holder of Registrable Securities may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.

 

6.10 Governing Law. This Agreement shall be governed by, interpreted under, and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed within the State of New York, without giving effect to any choice-of-law provisions thereof that would compel the application of the substantive laws of any other jurisdiction.

 

6.11 Waiver of Trial by Jury. Each party hereby irrevocably and unconditionally waives the right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement, the transactions contemplated hereby, or the actions of the Stockholder in the negotiation, administration, performance or enforcement hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.

 

  COMPANY:
   
  CHARDAN HEALTHCARE ACQUISITION CORP.
   
  By:   /s/ Jonas Grossman
  Name:   Jonas Grossman
  Title:   President
       
  STOCKHOLDERS:
   
   
   

 

 

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Section 6: EX-10.2 (ESCROW AGREEMENT DATED OCTOBER 28, 2019)

Exhibit 10.2

 

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (“Agreement”) is made and entered into as of October 28, 2019, by and between: Chardan Healthcare Acquisition Corp., a Delaware corporation (“Parent”), Shareholder Representative Services LLC, a Colorado limited liability company, (the “Stockholder Representative”), solely in its capacity as representative of the stockholders of the Company, and Continental Stock Transfer & Trust Company, a New York corporation (the “Escrow Agent”).

 

WHEREAS, the Purchaser, CHAC Merger Sub Ltd., a wholly-owned subsidiary of Parent (“Merger Sub”), Biomx Ltd. (the “Company”), the stockholders of the Company, and the Stockholder Representative entered into a Merger Agreement, dated July 16, 2019, as amended and restated on October 11, 2019 (the “Merger Agreement”), providing for, among other things, the merger of Merger Sub with and into the Company and the conversion of shares of Company Common Stock (excluding any shares held in the treasury of the Company) into the right to receive the Applicable Per Share Merger Consideration in accordance with the terms set forth in the Merger Agreement; and

 

WHEREAS, pursuant to Section 11.3 of the Merger Agreement, the Purchaser is required to deposit shares of Purchaser Common Stock, par value $0.0001 per share (the “Escrow Shares”), which Escrow Shares would otherwise be issuable to the Escrow Participants (as defined in the Merger Agreement), with the Escrow Agent on the date hereof in connection with the indemnification obligations of the Escrow Participants as contemplated by the Merger Agreement; and

 

WHEREAS, the Parent and Company have waived the requirement pursuant to Section 4.1(c) of the Merger Agreement to deposit the number of shares of Purchaser Common Stock issuable upon conversion of each Ordinary Warrant and Preferred A-1 Warrant held by an Escrow Participant and assumed by Purchaser as of the Effective Time (each such capitalized term as defined in the Merger Agreement).

 

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

 

I. Appointment; Defined Terms.

 

(a) The Parent and the Stockholder Representative hereby appoint the Escrow Agent as its escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment under the terms and conditions set forth herein.

 

(b) All capitalized terms with respect to the Escrow Agent shall be defined herein. The Escrow Agent shall act only in accordance with the terms and conditions contained in this Agreement and shall have no duties or obligations with respect to the Underlying Agreement.

 

2. Escrow Shares.

 

(a) The Parent agrees to deposit with the Escrow Agent 1,506,906 Escrow Shares on the date hereof. The Escrow Agent shall hold the Escrow Shares as a book-entry position registered in the name of the stockholders of the Company as indicated on Exhibit A.

 

(b) Escrow Shares.

 

(i) With respect to any matter for which the Escrow Shares are permitted to vote, the Escrow Agent shall vote, or cause to be voted, the Escrow Shares in the manner directed by the Stockholder Representative. In the absence of an instruction from the Stockholder Representative, the Escrow Agent shall not vote any of the shares comprising the Escrow Shares.

 

 

 

 

(ii) Any dividends paid with respect to the Escrow Shares shall be deemed part of the Escrow Shares and be delivered to the Escrow Agent to be held in a bank account and be deposited in one or more interest-bearing accounts to be maintained by the Escrow Agent in the name of the Escrow Agent.

 

(iii) In the event of any stock split, reverse stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any distribution to holders of the common stock of Parent other than a regular cash dividend, the Escrow Shares under Section 2(a) above shall be appropriately adjusted on a pro rata basis and consistent with the terms of any applicable Agreements.

 

3. Disposition and Termination.

 

(a) In the event that the Escrow Agent receives an instruction letter signed by the Purchaser and the Stockholder Representative, the Escrow Agent shall promptly distribute all or any portion of the Escrow Shares as directed by such instruction letter.

 

4. Escrow Agent.

 

(a) The Escrow Agent shall have only those duties as are specifically and expressly provided herein, which shall be deemed purely ministerial in nature, and no other duties shall be implied. The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any requirements to comply with, the terms and conditions of any other agreement, instrument or document between Purchaser and any other person or entity, in connection herewith, if any, including without limitation the Underlying Agreement or nor shall the Escrow Agent be required to determine if any person or entity has complied with any such agreements, nor shall any additional obligations of the Escrow Agent be inferred from the terms of such agreements, even though reference thereto may be made in this Agreement. In the event of any conflict between the terms and provisions of this Agreement , those of the Merger Agreement, any schedule or exhibit attached to this Agreement, or any other agreement between Purchaser and any other person or entity, the terms and conditions of this Agreement shall control. The Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon any written notice, document, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the applicable person without inquiry and without requiring substantiating evidence of any kind. The Escrow Agent shall not be liable to any beneficiary or other person for refraining from acting upon any instruction setting forth, claiming, containing, objecting to, or related to the transfer or distribution of the Escrow Shares, or any portion thereof, unless such instruction shall have been delivered to the Escrow Agent in accordance with Section 10 below and the Escrow Agent has been able to satisfy any applicable security procedures as may be required hereunder and as set forth in Section 10. The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. The Escrow Agent shall have no duty to solicit any payments which may be due it or the Escrow Shares nor shall the Escrow Agent have any duty or obligation to confirm or verify the accuracy or correctness of any amounts deposited with it hereunder.

 

(b) The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in good faith except to the extent that a final adjudication of a court of competent jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of any loss. The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through affiliates or agents. The Escrow Agent may consult with counsel, accountants and other skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with, or in reliance upon, the advice or opinion of any such counsel, accountants or other skilled persons except to the extent that a final adjudication of a court of competent jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of any loss. In the event that the Escrow Agent shall be uncertain or believe there is some ambiguity as to its duties or rights hereunder or shall receive instructions, claims or demands which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be given a direction in writing which eliminates such ambiguity or uncertainty to the satisfaction of the Escrow Agent or by a final and non-appealable order or judgment of a court of competent jurisdiction.

 

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5. Succession.

 

(a) The Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving thirty (30) days’ advance notice in writing of such resignation to the other parties hereto specifying a date when such resignation shall take effect, provided that such resignation shall not take effect until a successor escrow agent has been appointed in accordance with this Section 5. If the parties hereto have jointly failed to appoint a successor escrow agent prior to the expiration of thirty (30) days following receipt of the notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and any such resulting appointment shall be binding upon all of the parties hereto. The Escrow Agent’s sole responsibility after such thirty (30) day notice period expires shall be to hold the Escrow Shares and to deliver the same to a designated substitute escrow agent, if any, or in accordance with the directions of a final order or judgment of a court of competent jurisdiction, at which time of delivery the Escrow Agent’s obligations hereunder shall cease and terminate, subject to the provisions of Section 7 below. In accordance with Section 7 below, the Escrow Agent shall have the right to withhold, as security, an amount of shares equal to any dollar amount due and owing to the Escrow Agent, plus any costs and expenses the Escrow Agent shall reasonably believe may be incurred by the Escrow Agent in connection with the termination of this Agreement.

 

(b) Any entity into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any entity to which all or substantially all the escrow business may be transferred, shall be the Escrow Agent under this Agreement without further act.

 

6. Compensation and Reimbursement. The Escrow Agent shall be entitled to compensation for its services under this Agreement as Escrow Agent and for reimbursement for its reasonable out-of-pocket costs and expenses, in the amounts and payable as set forth on Schedule 2. All amounts owing under the foregoing sentence shall be paid by Purchaser. The Escrow Agent shall also be entitled to payment of any amounts to which the Escrow Agent is entitled under the indemnification provisions contained herein as set forth in Section 7; provided, however, that such compensation, expenses, disbursements and advances shall not be paid from the Escrow Shares. The obligations of Purchaser set forth in this Section 6 shall survive the resignation, replacement or removal of the Escrow Agent or the termination of this Agreement.

 

7. Indemnity.

 

a) The Escrow Agent shall be indemnified and held harmless by Purchaser from and against any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in the any state or federal court located in New York County, State of New York.

 

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b) The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, tem1ination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

 

c) The Escrow Agent shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement, and may consult with counsel of its own choice and shall have full and complete authorization and indemnification, for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.

 

d) This Section 7 shall survive termination of this Agreement or the resignation, replacement or removal of the Escrow Agent for any reason.

 

8. Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting.

 

(a) Patriot Act Disclosure. Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires the Escrow Agent to implement reasonable procedures to verify the identity of any person that opens a new account with it. Accordingly, parties hereto acknowledge that Section 326 of the USA PATRIOT Act and the Escrow Agent’s identity verification procedures require the Escrow Agent to obtain information which may be used to confirm identity, including without limitation name, address and organizational documents (“identifying information”). The parties hereto agree to provide the Escrow Agent with information and consent to the Escrow Agent obtaining from third parties any such identifying information required as a condition of opening an account with or using any service provided by the Escrow Agent.

(b) The underlying transaction does not constitute an installment sale requiring any tax reporting or withholding of imputed interest or original issue discount to the IRS or other taxing authority.

 

9. Notices. All notices and communications hereunder shall be deemed to have been duly given and made if in writing and if (i) served by personal delivery upon the party for whom it is intended, (ii) delivered by registered or certified mail, return receipt requested, or by Federal Express or similar overnight courier, or (iii) sent by facsimile or email, provided that the receipt of such facsimile or email is promptly confirmed, by telephone, electronically or otherwise, to the party at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such party:

 

If to Purchaser:

 

If to the Stockholder Representative:

 

Shareholder Representative Services LLC

950 17th Street, Suite 1400

Denver, Colorado 80202

Attention: Managing Director

Facsimile No.: (303)623-0294

Email: [email protected]

 

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If to the Escrow Agent:

 

Continental Stock Transfer and Trust

One State Street - 30th Floor

New York, New York 10004

Facsimile No: (212) 616-7615

Attention:

 

Notwithstanding the above, in the case of communications delivered to the Escrow Agent, such communications shall be deemed to have been given on the date received by an officer of the Escrow Agent or any employee of the Escrow Agent who reports directly to any such officer at the above-referenced office. In the event that the Escrow Agent, in its sole discretion, shall determine that an emergency exists, the Escrow Agent may use such other means of communication as the Escrow Agent deems appropriate. For purposes of this Agreement, “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which the Escrow Agent located at the notice address set forth above is authorized or required by law or executive order to remain closed.

 

10. Security Procedures. Notwithstanding anything to the contrary as set forth in Section 9, any instructions setting forth, claiming, containing, objecting to, or in any way related to the transfer or distribution, including but not limited to any transfer instructions that may otherwise be set forth in a written instruction permitted pursuant to Section 3 of this Agreement, may be given to the Escrow Agent only by confirmed facsimile or other electronic transmission (including e-mail) and no instruction for or related to the transfer or distribution of the Escrow Shares, or any portion thereof, shall be deemed delivered and effective unless the Escrow Agent actually shall have received such instruction by facsimile or other electronic transmission (including e-mail) at the number or e-mail address provided to Purchaser and the Stockholder Representative by the Escrow Agent in accordance with Section 9 and as further evidenced by a confirmed transmittal to that number.

 

(a) In the event transfer instructions are so received by the Escrow Agent by facsimile or other electronic transmission (including e-mail), the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule 1 hereto, and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent.

 

(b) Assuming compliance with the provisions of this Agreement, Purchaser acknowledges that the Escrow Agent is authorized to deliver the Escrow Shares to the custodian account or recipient designated by Purchaser and the Stockholder Representative in writing.

 

11. Compliance with Court Orders. In the event that any escrow property shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a com1, or any order, judgment or decree shall be made or entered by any court order affecting the property deposited under this Agreement, the Escrow Agent is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by opinion of legal counsel of its own choosing is binding upon it, whether with or without jurisdiction, and in the event that the Escrow Agent reasonably obeys or complies with any such writ, order or decree it shall not be liable to any of the parties hereto or to any other person, entity, firm or corporation, by reason of such compliance notwithstanding such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.

 

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12. . Miscellaneous. Except for changes to transfer instructions as provided in Section 10, the provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by the Escrow Agent and the other parties hereto. Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by the Escrow Agent or any other party hereto without the prior consent of all the other parties hereto. This Agreement shall be governed by and construed under the laws of the State of New York. Each of the parties hereto irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of any court of the State of New York or United States federal court, in each case, sitting in New York County, New York. To the extent that in any jurisdiction any party may now or hereafter be entitled to claim for itself or its assets, immunity from suit, execution attachment (before or after judgment), or other legal process, such party shall not claim, and it hereby irrevocably waives, such immunity. The parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement. No party to this Agreement is liable to any other party for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of, acts of God, fire, war, terrorism, floods, strikes, electrical outages, equipment or transmission failure, or other causes reasonably beyond its control. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the parties to this Agreement may be transmitted by facsimile or other electronic transmission (including e-mail), and such facsimile or other electronic transmission (including e-mail) will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces, and will be binding upon such party. If any provision of this Agreement is determined to be prohibited or unenforceable by reason of any applicable law of a jurisdiction, then such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in such jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. A person who is not a party to this Agreement shall have no right to enforce any term of this Agreement. The parties represent, warrant and covenant that each document, notice, instruction or request provided by such party to the other party shall comply with applicable laws and regulations. Where, however, the conflicting provisions of any such applicable law may be waived, they are hereby irrevocably waived by the parties hereto to the fullest extent permitted by law, to the end that this Agreement shall be enforced as written. Except as expressly provided in Section 7 above, nothing in this Agreement, whether express or implied, shall be construed to give to any person or entity other than the Escrow Agent and the other parties hereto any legal or equitable right, remedy, interest or claim under or in respect of this Agreement or the Escrow Shares escrowed hereunder.

 

[remainder of page intentional left blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above.

 

PURCHASER:  
   
CHARDAN HEALTHCARE ACQUISITION CORP.
     
By: /s/ Jonas Grossman                    
Name: Jonas Grossman  
Title: Member  
Telephone:     
     
STOCKHOLDER REPRESENTATIVE:
   
SHAREHOLDER REPRESENTATIVE SERVICES LLC,
solely in its capacity as the Stockholder Representative.
     
By: /s/ Sam Riffe  
Name: Sam Riffe  
Title: Managing Director  
Telephone:  (303) 648-4085                      
     
ESCROW AGENT:
   
CONTINENTAL STOCK TRANSFER AND TRUST
     
By: /s/ George Dalton  
Name: George Dalton  
Title: Account Administrator  
Telephone:  212-845-3291  

 

[Signature Page to Escrow Agreement]

 

 

 

 

Schedule l

 

Telephone Number(s) and authorized signature(s) for

Person(s) Designated to give Escrow Shares Transfer Instructions

 

Name   Telephone Number   Signature
         
Purchaser:        
         
         
         
Stockholder Representative:        
         
Chris Letang   303-957-2855    
         
Casey McTigue   415-363-6081    
         
Lon LeClair   303-222-2078    
         
Paul Koenig   303-957-2850    

 

*Please complete call-backs in the order indicated above (i.e., call Chris Letang first, Casey McTigue second, etc.)

 

 

 

 

EXHIBIT A

 

Shareholder  Escrow Shares 
Yeda Research And Development Company Limited   19,340 
FutuRx Ltd.   41,171 
OrbiMed Israel Incubator LP   64,133 
OrbiMed Israel Partners Limited Partnership   132,509 
Johnson and Johnson Innovation – JJDC, Inc.   183,158 
Takeda Ventures, Inc.   212,137 
SBI JI Innovation Fund LP   69,348 
Dr. Juerg F. Geigy   23,655 
Hans W. Schoepflin Trust   62,833 
Stichting Lichfield   62,418 
Stichting Administratiekantoor the invisible hand at work   7,747 
Health for Life Capital S.C.A. SICAR   60,191 
Health for Life Capital FPCI ALPHA Compartment   34,972 
MiraeAsset Capital Co., Ltd   35,484 
2016 KIF-MIRAE ASSET ICT Venture Fund   17,741 
MIRAE ASSET Young Start-Up Investment Fund   17,741 
MiraeAsset-Celltrion New Growth Fund I   21,997 
8VC Angel Fund I, L.P   34,667 
8VC Fund I Associates, L.P   816 
8VC Fund I, L.P   86,819 
8VC Entrepreneurs Fund I, L.P.   1,412 
RMGP Bio-Pharma Investment Fund LP   68,584 
Chong Kun Dang Pharmaceutical Corp.   42,865 
Handok Inc.   34,292 
Rhee, Joo Won   6,858 
Rhee, Joo Kyung   5,144 
Rhee, Joo Ah   5,144 
CFAM 2017 LLC   429 
Telmina Ltd.   68,584 
KB Investment Co., Ltd   20,575 
KB Digital Innovation Investment Fund Limited Partnership   30,863 
Baruch Family Revocable Trust   4,731 
Elevator Venture Holdings, Ltd.   5,914 
Nhaft LLC   2,365 
Tamar Lifshitz   1,183 
Noa Eliasaf-Shoham   1,183 
33Steps Ltd.   1,183 
Gigi Levy   3,548 
Rafi Gidron   3,812 
Guy Harmelin   874 
Alon Hirsch   170 
Altsuler Shaham Trusts (Behalf of Einat Zisman )   2,210 
Altshuler Shaham Trusts Ltd (behalf of Ronald Ellis)   1,103 
Altshuler Shaham Trusts Ltd (Behalf of Moshe Talbi)   442 
Altshuler Shaham Trusts Ltd (Behalf of Limor Miara)   442 
Altshuler Shaham Trusts Ltd (Behalf of Kobi Sudakov)   1,571 
Altshuler Shaham Trusts Ltd (Behalf of Boris Vaisman)   2,330 
Altshuler Shaham Trusts Ltd (Behalf of Alina Shitrit)   218 
TOTAL   1,506,906 

 

 

 

 

(Back To Top)

Section 7: EX-10.3 (VOTING AGREEMENT)

Exhibit 10.3

 

CHARDAN HEALTHCARE ACQUISITION CORP.

 

VOTING AGREEMENT

 

This Voting Agreement (this “Agreement”) is made as of October 28, 2019 by and among Chardan Healthcare Acquisition Corp., a Delaware corporation (the “Company”), BiomX Ltd., an Israeli company (“BiomX”), Chardan Investments, LLC (“Chardan”) and each of the individuals and entities set forth on the signature page hereto (each a “Voting Party” and collectively, the “Voting Parties”). For purposes of this Agreement, capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Merger Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Company, BiomX, CHAC Merger Sub Ltd., an Israeli company (“Merger Sub”), and Shareholder Representative Services LLC, as the representative of the shareholders of the Company (the “Shareholders’ Representative”) entered into a Merger Agreement, dated July 16, 2019 (the “Merger Agreement”); and

 

WHEREAS, each of the Voting Parties, currently owns, or on closing of the transactions contemplated by the Merger Agreement, will own, shares of the Company’s capital stock, and wishes to provide for orderly elections of the Company’s board of directors as described herein.

 

NOW THEREFORE, in consideration of the foregoing and of the promises and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

AGREEMENT

 

1. Agreement to Vote. During the term of this Agreement, each Voting Party agrees to vote all securities of the Company that may vote in the election of the Company’s directors that such Voting Party owns from time to time (hereinafter referred to as the “Voting Shares”) in accordance with the provisions of this Agreement, whether at a regular or special meeting of stockholders or any class or series of stockholders or by written consent.

 

2. Election of Boards of Directors.

 

2.1 Voting. During the term of this Agreement, each Voting Party agrees to vote all Voting Shares in such manner as may be necessary to elect (and maintain in office) as members of the Company’s Board of Directors the following persons:

 

(a) Two (2) person(s) (each a “Chardan Designee”) designated by Chardan to serve for two (2) years from the Closing Date (as defined in the Merger Agreement); and

 

(b) Five (five) person(s) (each a “Stockholder Designee,” and collectively, the “Stockholder Designees”) designated below, which may be subsequently (following Closing) changed by the Shareholders’ Representative; and

 

2.2 Initial Designees. The initial Chardan Designees are Jonas Grossman and Gbola Amusa. The initial Stockholder Designees are Jonathan Solomon, Yaron Breski, Erez Chimovitz, Robbie Woodman and one vacancy.

 

2.3 Size of the Board. The parties hereto agree that they shall, and that they shall cause their respective designees to, maintain the size of the Company’s Board of Directors at seven (7) persons for two (2) years from the Closing Date.

 

2.4 Obligations; Removal of Directors; Vacancies. The obligations of the Voting Parties pursuant to this Section 2 shall include any stockholder vote to amend the Company’s Amended and Restated Certificate of Incorporation as required to effect the intent of this Agreement. Each of the Voting Parties and the Company agree not to take any actions that would contravene or materially and adversely affect the provisions of this Agreement and the intention of the parties with respect to the composition of the Company’s Board of Directors as herein stated. The parties acknowledge that the fiduciary duties of each member of the Company’s Board of Directors are to the Company’s stockholders as a whole. In the event any director elected pursuant to the terms hereof ceases to serve as a member of the Company’s Board of Directors, the Company and the Voting Parties agree to take all such action as is reasonable and necessary, including the voting of shares of capital stock of the Company by the Voting Parties as to which they have beneficial ownership, to cause the election or appointment of such other person designated by the Company or the Shareholders’ Representative (after Closing) , as the case may be, to the Board of Directors as may be designated on the terms provided herein.

 

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3. Approval of Amendment to the BiomX 2015 Equity Incentive Plan. During the term of this Agreement each Voting Party agrees to vote all Voting Shares in such manner as may be necessary to approve an amended BiomX 2015 Employee Stock Option Plan (the “Equity Incentive Plan”), (or the adoption of a new equity incentive plan having the same effect) that will be assumed by Company as of the Effective Time), subject to and in accordance with Section 9.11 of the Merger Agreement.

 

4. Successors in Interest of the Voting Parties and the Company. The provisions of this Agreement shall be binding upon the successors in interest of any Voting Party with respect to any of such Voting Party’s Voting Shares or any voting rights therein, unless such shares are sold into the public markets. Each Voting Party shall not, and the Company shall not, permit the transfer of any Voting Party’s Voting Shares (except for sales of Voting Shares into the public markets), unless and until the person to whom such securities are to be transferred shall have executed a written agreement pursuant to which such person becomes a party to this Agreement and agrees to be bound by all the provisions hereof as if such person was a Voting Party hereunder.

 

5. Covenants. The Company and each Voting Party agrees to take all actions required to ensure that the rights given to each Voting Party hereunder are effective and that each Voting Party enjoys the benefits thereof. Such actions include, without limitation, the use of best efforts to cause the nomination of the designees, as provided herein, for election as directors of the Company. Neither the Company nor any Voting Party will, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be performed hereunder by the Company or any such Voting Party, as applicable, but will at all times in good faith assist in the carrying out of all of the provisions of this Agreement and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of each Voting Party hereunder against impairment.

 

6. Grant of Proxy. The parties agree that this Agreement does not constitute the granting of a proxy to any party or any other person; provided, however, that should the provisions of this Agreement be construed to constitute the granting of proxies, such proxies shall be deemed coupled with an interest and are irrevocable for the term of this Agreement.

 

7. Specific Enforcement. It is agreed and understood that monetary damages would not adequately compensate an injured party for the breach of this Agreement by any party hereto, that this Agreement shall be specifically enforceable, and that any breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach and agrees that a party’s rights would be materially and adversely affected if the obligations of the other parties under this Agreement were not carried out in accordance with the terms and conditions hereof.

 

8. Manner of Voting. The voting of shares pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law.

 

9. Termination. This Agreement shall terminate upon the first to occur of the following:

 

9.1 The date that is two (2) years from the Closing Date; or

 

9.2 immediately prior to a transaction pursuant to which a person or group other than current shareholders of the Company or the Voting Parties, or their respective affiliates, will control greater than 50% of the Company’s voting power with respect to the election of directors of the Company.

 

10. Amendments and Waivers. Except as otherwise provided herein, any provision of this Agreement may be amended or the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of (a) the Company, and (b) the holders of a majority of Voting Shares then held by the Voting Parties and the Shareholders’ Representative, voting separately as a class; provided, however, that the right of the Company to nominate the Company Designee shall not be amended without the written consent of a majority in interest of the stockholders of the Company; and provided further, that the right of the Shareholders’ Representative to nominate the Stockholder Designees shall not be amended without the written consent of the Shareholders’ Representative.

 

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11. Stock Splits, Stock Dividends, etc. In the event of any stock split, stock dividend, recapitalization, reorganization or the like, any securities issued with respect to Voting Shares held by Voting Parties shall become Voting Shares for purposes of this Agreement.

 

12. Severability. In the event that any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

13. Governing Law. This Agreement and the legal relations between the parties arising hereunder shall be governed by and interpreted in accordance with the laws of the State of New York without reference to its conflicts of laws provisions, except that all matters relating to the fiduciary duties of the Company’s Board of Directors shall be subject to the laws of Delaware.

 

14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

 

15. Successors and Assigns. Except as otherwise expressly provided in this Agreement, the provisions hereof shall inure to the benefit of, and be binding upon, the successors and assigns of the parties hereto.

 

16. Entire Agreement. This Agreement constitutes the full and entire understanding and agreement among the parties, and supersedes any prior agreement or understanding among the parties, with regard to the subjects hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.

 

[Remainder of page intentionally left blank; signature page follows]

 

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This Voting Agreement is hereby executed effective as of the date first set forth above.

 

“COMPANY”    
   
CHARDAN HEALTHCARE ACQUISITION CORP.,  
a Delaware corporation    
   
By: /s/ Jonas Grossman    
Name: Jonas Grossman    
Title: President    
   
“CHARDAN”    
   
CHARDAN INVESTMENTS, LLC    
a Delaware limited liability company    
   
By: /s/ Jonas Grossman  
Name: Jonas Grossman    
Title: Managing Member    
   
“BiomX”    
   
BIOMX LTD.,    
an Israeli company    
   
By: /s/ Jonathan Solomon    
Name: Jonathan Solomon    
Title: Chief Executive Officer    
   
[SHAREHOLDERS]    
   
   

  

4

 

  

This Voting Agreement is hereby executed effective as of the date first set forth above.

 

Yeda Research and Development Company Limited

 

By: /s/ Gil Granot-Mayer   
Name:  Gil Granot-Mayer   
Title: C.E.O.  

 

By: /s/ Mudi Sheves  
Name:  Mudi Sheves  
Title: Chairman  

 

ORBIMED ISRAEL PARTNERS, LIMITED PARTNERSHIP

and

ORBIMED ISRAEL INCUBATOR L.P.

 

By:OrbiMed Israel Biofund GP, L.P., its general partner;

and

 

By:OrbiMed Israel GP Limited, its general partner

 

By: /s/ Erez Chimovits  
Name:  Erez Chimovits  
Title: Senior Managing Director  

 

By: /s/ Nissim Darvish  
Name:  Nissim Darvish  
Title: Senior Managing Director  

 

JOHNSON & JOHNSON INNOVATION-JJDC, INC.

 

By: /s/ Zeev Zehavi  
Name:  Zeev Zehavi  
Title: Vice President  

 

TAKEDA VENTURES, INC.

 

By: /s/ Michael Martin  
Name:  Michael Martin  
Title: President  

 

SBI JI INNOVATION FUND LIMITED PARTNERSHIP

 

By:SBI JI Innovation Partners Ltd.,
its General Partner

 

By: /s/ Yusuke Inaba  
Name:  Yusuke Inaba  
Title: Director  

 

HANS W. SCHOEPFLIN TRUST

 

By: /s/ Hans Schoepflin  
Name:  Hans Schoepflin  
Title:    

  

STICHTING LICHFIELD

 

By: /s/ J.M. Wolkers  
Name:  J.M. Wolkers  
Title: Director  

 

[Voting Agreement]

 

5

 

 

STICHTING ADMINISTRATIEKANTOOR THE INVISIBLE HAND AT WORK

 

By: /s/ Hendrik Brulleman  
Name:  Hendrik Brulleman  
Title: Director  

 

HEALTH FOR LIFE CAPITAL S.C.A. SICAR

 

By: Health For Life Management   /s/ Isabelle de Cremoux  
Name:  Isabelle de Cremoux  
Title: Manager  

 

HEALTH FOR LIFE CAPITAL FPCI – ALPHA COMPARTMENT

 

By: SEVENTURE PARTNERS  
Name:  Isabelle de Cremoux  
Title: CEO  

 

MIRAE ASSET CAPITAL CO. LTD.

 

By: /s/ Ji Kwang Chung  
Name:  Ji Kwang Chung  
Title: Managing Director  

 

MIRAE ASSET VENTURE INVESTMENT, CO, LTD. (THROUGH MIRAE ASSET YOUNG START-UP INVESTMENT FUND)

 

By: /s/ Eung Suk Kim  
Name:  Eung Suk Kim  
Title: CEO  

 

MIRAE ASSET VENTURE INVESTMENT, CO, LTD. (THROUGH 2016 KIF-MIRAE ASSET ICT VENTURE FUND)

 

By: /s/ Eung Suk Kim  
Name:  Eung Suk Kim  
Title: CEO  

 

MIRAE ASSET-CELLTRION NEW GROWTH FUND I

 

By: /s/ Jikwang Chung  
Name:  Jikwang Chung  
Title: Managing Director  

  

[Voting Agreement]

 

6

 

 

8VC ANGEL FUND I, L.P.

 

By:8VC Angel GP I, LLC,
its General Partner

 

By: /s/ Drew Oetting  
Name:  Drew Oetting  
Title: Managing Member  

 

8VC ANGEL FUND I ASSOCIATES, L.P.

 

By:8VC Angel GP I, LLC,
its General Partner

 

By: /s/ Drew Oetting  
Name:  Drew Oetting  
Title: Managing Member  

 

8VC FUND I, L.P.

 

By:8VC GP I, LLC
its General Partner

 

By: /s/ Joe Lonsdale  
Name:  Joe Lonsdale  
Title: Managing Member  

 

8VC ENTREPRENEURS FUND I, L.P.

 

By:8VC GP I, LLC
its General Partner

 

By: /s/ Joe Lonsdale  
Name:  Joe Lonsdale  
Title: Managing Member  

 

RMGP BIO-PHARMA INVESTMENT FUND, L.P.

 

By:RMGP Bio-Pharma Investments, L.P., its general partner

 

By:RMGP Bio-Pharma General Partner Ltd., its general partner

 

By: /s/ Asset Korat  
Name:  Asset Korat  
Title: Partner  
  July 15 2019  

 

CHONG KUN DANG PHARMACEUTICAL CORP.

 

By: /s/ Young Joo Kim  
Name:  Young Joo Kim  
Title: President  

 

HANDOK INC.

 

By: /s/ Jeong Yol Cho  
Name:  Jeong Yol Cho  
Title: President  

 

[Voting Agreement]

 

7

 

 

/s/ RHEE, JOO WON  
RHEE, JOO WON  

 

/s/ RHEE, JOO KYUNG  
RHEE, JOO KYUNG  

 

/s/ RHEE, JOO AH  
RHEE, JOO AH  

 

CFAM 2017 LLC

 

By: /s/ Neil L. Cohen  
Name:  Neil L. Cohen  
Title: Special Member  

 

TELMINA LTD.

 

For and on behalf of Champel Directors Limited

 

By: /s/ Tobias Reinmann  
Name:  Tobias Reinmann  
Title: Corporate Director  

 

KB INVESTMENT CO., LTD.

 

By: /s/ Jong Pil Kim  
Name:  Jong Pil Kim  
Title: Chief Executive Officer  

 

KB DIGITAL INNOVATION INVESTMENT FUND LIMITED PARTNERSHIP

 

By: /s/ Jong Pil Kim  
Name:  Jong Pil Kim  
Title: Chief Executive Officer  

 

BARUCH FAMILY REVOCABLE TRUST

 

By: /s/ Thomas Baruch  
Name:  Thomas Baruch  
Title: Manager  

 

/s/ RAFI GIDRON  
RAFI GIDRON  

 

/s/ GUY HARMELIN  
GUY HARMELIN  

 

/s/ ALON HIRSCH  
ALON HIRSCH  

  

/s/ GBOLA AMUSA  
GBOLA AMUSA  

 

[Voting Agreement]

 

8

 

(Back To Top)

Section 8: EX-10.4 (FORM OF INDEMNIFICATION AGREEMENT WITH EACH DIRECTOR AND OFFICER)

Exhibit 10.4

 

BIOMX INC.

 

Indemnification Agreement

 

This Indemnification Agreement (this “Agreement”) is made as of                        , by and between BiomX Inc., a Delaware corporation (the “Company”), and _________________________ (“Indemnitee”).

 

RECITALS

 

The Company and Indemnitee recognize the increasing difficulty in obtaining liability insurance for directors, officers and key employees, the significant increases in the cost of such insurance and the general reductions in the coverage of such insurance. The Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting directors, officers and key employees to expensive litigation risks at the same time as the availability and coverage of liability insurance has been severely limited. Indemnitee does not regard the current protection available as adequate under the present circumstances, and Indemnitee may not be willing to continue to serve in Indemnitee’s current capacity with the Company without additional protection. The Company desires to attract and retain the services of highly qualified individuals, such as Indemnitee, and to indemnify its directors, officers and key employees so as to provide them with the maximum protection permitted by law.

 

AGREEMENT

 

In consideration of the mutual promises made in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Indemnitee hereby agree as follows:

 

1. Indemnification.

 

(a) Third-Party Proceedings. To the fullest extent permitted by applicable law, the Company shall indemnify Indemnitee, if Indemnitee was, is or is threatened to be made, a party to or a participant (as a witness or otherwise) in any Proceeding (other than a Proceeding by or in the right of the Company to procure a judgment in the Company’s favor), against all Expenses, judgments, fines 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 by Indemnitee in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

 

(b) Proceedings By or in the Right of the Company. To the fullest extent permitted by applicable law, the Company shall indemnify Indemnitee, if Indemnitee was, is or is threatened to be made a party to or a participant (as a witness or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in the Company’s favor, against all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee 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 Indemnitee shall have been finally adjudicated by court order or judgment to be liable to the Company unless and only to the extent that the Court of Chancery or the court in which such Proceeding is or was pending shall determine upon application that, in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

 

 

 

 

(c) Success on the Merits. To the fullest extent permitted by applicable law and to the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding referred to in Section 1(a) or Section 1(b) hereof or the defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. Without limiting the generality of the foregoing, if Indemnitee is successful on the merits or otherwise as to one or more but less than all claims, issues or matters in a Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with such successfully resolved claims, issues or matters to the fullest extent permitted by applicable law. If any Proceeding is disposed of on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Company, (iii) a plea of guilty by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and (v) with respect to any criminal Proceeding, an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

 

(d) Witness Expenses. To the fullest extent permitted by applicable law and to the extent that Indemnitee is a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding.

 

2. Indemnification Procedure.

 

(a) Advancement of Expenses. To the fullest extent permitted by applicable law, the Company shall advance all Expenses actually and reasonably incurred by Indemnitee in connection with a Proceeding within thirty (30) days after receipt by the Company of a statement requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Such advances shall be unsecured and interest free and shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Indemnitee shall be entitled to continue to receive advancement of Expenses pursuant to this Section 2(a) unless and until the matter of Indemnitee’s entitlement to indemnification hereunder has been finally adjudicated by court order or judgment from which no further right of appeal exists. Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it ultimately is determined that Indemnitee is not entitled to be indemnified by the Company under the other provisions of this Agreement. Indemnitee shall qualify for advances upon the execution and delivery of this Agreement, which shall constitute the requisite undertaking with respect to repayment of advances made hereunder and no other form of undertaking shall be required to qualify for advances made hereunder other than the execution of this Agreement.

 

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(b) Notice and Cooperation by Indemnitee. Indemnitee shall promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter for which indemnification will or could be sought under this Agreement. Such notice to the Company shall include a description of the nature of, and facts underlying, the Proceeding, shall be directed to the Chief Executive Officer of the Company and shall be given in accordance with the provisions of Section 13(e) below. In addition, Indemnitee shall give the Company such additional information and cooperation as the Company may reasonably request. Indemnitee’s failure to so notify, provide information and otherwise cooperate with the Company shall not relieve the Company of any obligation that it may have to Indemnitee under this Agreement, except to the extent that the Company is adversely affected by such failure.

 

(c) Determination of Entitlement.

 

(i) Final Disposition. Notwithstanding any other provision in this Agreement, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

(ii) Determination and Payment. Subject to the foregoing, promptly after receipt of a statement requesting payment with respect to the indemnification rights set forth in Section 1 hereof, to the extent required by applicable law, the Company shall take the steps necessary to authorize such payment in the manner set forth in Section 145 of the Delaware General Corporation Law. The Company shall pay any claims made under this Agreement, under any statute, or under any provision of the Company’s Certificate of Incorporation or Bylaws providing for indemnification or advancement of Expenses, within thirty (30) days after a written request for payment thereof has first been received by the Company, and if such claim is not paid in full within such thirty (30) day-period, Indemnitee may, but need not, at any time thereafter bring an action against the Company in the Delaware Court of Chancery to recover the unpaid amount of the claim and, subject to Section 12 hereof, Indemnitee shall also be entitled to be paid for all Expenses actually and reasonably incurred by Indemnitee in connection with bringing such action. It shall be a defense to any such action (other than an action brought to enforce a claim for advancement of Expenses under Section 2(a) hereof) that Indemnitee has not met the standards of conduct which make it permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement and the Company shall have the burden of proof to overcome that presumption with clear and convincing evidence to the contrary. 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 Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or, in the case of a criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful. In addition, it is the parties’ intention that if the Company contests Indemnitee’s right to indemnification, the question of Indemnitee’s right to indemnification shall be for the court to decide, and neither the failure of the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its stockholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including its Board of Directors, any committee or subgroup of the Board of Directors, independent legal counsel, or its stockholders) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable standard of conduct. If any requested determination with respect to entitlement to indemnification hereunder has not been made within ninety (90) days after the final disposition of the Proceeding, the requisite determination that Indemnitee is entitled to indemnification shall be deemed to have been made.

 

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(d) Payment Directions. To the extent payments are required to be made hereunder, the Company shall, in accordance with Indemnitee’s request (but without duplication), (i) pay such Expenses on behalf of Indemnitee, (ii) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (iii) reimburse Indemnitee for such Expenses.

 

(e) Notice to Insurers. If, at the time of the receipt of a notice of a claim pursuant to Section 2(b) hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

(f) Defense of Claim and Selection of Counsel. In the event the Company shall be obligated under Section 2(a) hereof to advance Expenses with respect to any Proceeding, the Company, if appropriate, shall be entitled to assume the defense of such Proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election so to do. 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 of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee shall have the right to employ counsel in any such Proceeding at Indemnitee’s expense; and (ii) if (A) the employment of 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, in fact, have employed counsel to assume the defense of such Proceeding, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. In addition, if there exists a potential, but not an actual, conflict of interest between the Company and Indemnitee, the actual and reasonable legal fees and expenses incurred by Indemnitee for separate counsel retained by Indemnitee to monitor the Proceeding (so that such counsel may assume Indemnitee’s defense if the conflict of interest between the Company and Indemnitee becomes an actual conflict of interest) shall be deemed to be Expenses that are subject to indemnification hereunder. The existence of an actual or potential conflict of interest, and whether such conflict may be waived, shall be determined pursuant to the rules of attorney professional conduct and applicable law. The Company shall not be required to obtain the consent of Indemnitee for the settlement of any Proceeding the Company has undertaken to defend if the Company assumes full and sole responsibility for each such settlement; provided, however, that the Company shall be required to obtain Indemnitee’s prior written approval, which shall not be unreasonably withheld, before entering into any settlement which (1) does not grant Indemnitee a complete release of liability, (2) would impose any penalty or limitation on Indemnitee, or (3) would admit any liability or misconduct by Indemnitee.

 

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3. Additional Indemnification Rights.

 

(a) Scope. Notwithstanding any other provision of this Agreement, the Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws or by statute. 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 a member of its board of directors or an officer, such changes shall be deemed to be within the purview of Indemnitee’s rights and the Company’s obligations under this Agreement. In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, such changes, 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.

 

(b) Non-exclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote of stockholders or disinterested members of the Company’s Board of Directors, the Delaware General Corporation Law, or otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity while holding such office.

 

(c) Interest on Unpaid Amounts. If any payment to be made by the Company to Indemnitee hereunder is delayed by more than ninety (90) days from the date the duly prepared request for such payment is received by the Company, interest shall be paid by the Company to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies or is obligated to indemnify for the period commencing with the date on which Indemnitee actually incurs such Expense or pays such judgment, fine or amount in settlement and ending with the date on which such payment is made to Indemnitee by the Company.

 

(d) Third-Party Indemnification. The Company hereby acknowledges that Indemnitee has or may from time to time obtain certain rights to indemnification, advancement of expenses and/or insurance provided by one or more third parties (collectively, the “Third-Party Indemnitors”). The Company hereby agrees that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Third-Party Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), and that the Company will not assert that the Indemnitee must seek expense advancement or reimbursement, or indemnification, from any Third-Party Indemnitor before the Company must perform its expense advancement and reimbursement, and indemnification obligations, under this Agreement. No advancement or payment by the Third-Party Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing. The Third-Party Indemnitors shall be subrogated to the extent of such advancement or payment to all of the rights of recovery which Indemnitee would have had against the Company if the Third-Party Indemnitors had not advanced or paid any amount to or on behalf of Indemnitee. If for any reason a court of competent jurisdiction determines that the Third-Party Indemnitors are not entitled to the subrogation rights described in the preceding sentence, the Third-Party Indemnitors shall have a right of contribution by the Company to the Third-Party Indemnitors with respect to any advance or payment by the Third-Party Indemnitors to or on behalf of the Indemnitee.

 

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4. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines or amounts paid in settlement, actually and reasonably incurred in connection with a Proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses, judgments, fines and amounts paid in settlement to which Indemnitee is entitled.

 

5. Director and Officer Liability Insurance.

 

(a) D&O Policy. The Company shall, from time to time, make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the directors and officers of the Company with coverage for losses from wrongful acts, or to ensure the Company’s performance of its indemnification obligations under this Agreement. Among other considerations, the Company will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage. In all policies of director and officer liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of the Company but is an officer; or of the Company’s key employees, if Indemnitee is not an officer or director but is a key employee. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith that such insurance is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by a parent or subsidiary of the Company.

 

(b) Tail Coverage. In the event of a Change of Control or the Company’s becoming insolvent (including being placed into receivership or entering the federal bankruptcy process and the like), the Company shall maintain in force any and all insurance policies then maintained by the Company in providing insurance (directors’ and officers’ liability, fiduciary, employment practices or otherwise) in respect of Indemnitee, for a period of seven years thereafter.

 

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6. Severability. Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law. The Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement. If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms.

 

7. Exclusions. Any other provision of this Agreement to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:

 

(a) Claims Initiated by Indemnitee. To indemnify or advance Expenses to Indemnitee with respect to Proceedings initiated or brought voluntarily by Indemnitee and not by way of defense, except with respect to Proceedings brought to establish, enforce or interpret a right to indemnification under this Agreement or any other statute or law or otherwise as required under Section 145 of the Delaware General Corporation Law, but such indemnification or advancement of Expenses may be provided by the Company in specific cases if the Board of Directors finds it to be appropriate; provided, however, that the exclusion set forth in the first clause of this subsection shall not be deemed to apply to any investigation initiated or brought by Indemnitee to the extent reasonably necessary or advisable in support of Indemnitee’s defense of a Proceeding to which Indemnitee was, is or is threatened to be made, a party;

 

(b) Lack of Good Faith. To indemnify Indemnitee for any Expenses incurred by Indemnitee with respect to any Proceeding instituted by Indemnitee to establish, enforce or interpret a right to indemnification under this Agreement or any other statute or law or otherwise as required under Section 145 of the Delaware General Corporation Law, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous;

 

(c) Insured Claims. To indemnify Indemnitee for Expenses to the extent such Expenses have been paid directly to Indemnitee by an insurance carrier under an insurance policy maintained by the Company; or

 

(d) Certain Exchange Act Claims. To indemnify Indemnitee in connection with any claim made against Indemnitee for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or any similar successor statute or any similar provisions of state statutory law or common law, 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 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 Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection 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 to the fullest extent permitted by applicable law and to the extent Indemnitee is successful on the merits or otherwise with respect to any such Proceeding, the Expenses actually and reasonably incurred by Indemnitee in connection with any such Proceeding shall be deemed to be Expenses that are subject to indemnification hereunder.

 

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8. Contribution Claims.

 

(a) If the indemnification provided in Section 1 hereof is unavailable in whole or in part and may not be paid to Indemnitee for any reason other than those set forth in Section 7 hereof, then in respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permitted by applicable law, the Company, in lieu of indemnifying Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for Expenses, judgments, fines or amounts paid in settlement, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.

 

(b) With respect to a Proceeding brought against directors, officers, employees or agents of the Company (other than Indemnitee), to the fullest extent permitted by applicable law, the Company shall indemnify Indemnitee from any claims for contribution that may be brought by any such directors, officers, employees or agents of the Company (other than Indemnitee) who may be jointly liable with Indemnitee, to the same extent Indemnitee would have been entitled to such indemnification under this Agreement if such Proceeding had been brought against Indemnitee.

 

9. No Imputation. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or the Company itself shall not be imputed to Indemnitee for purposes of determining any rights under this Agreement.

 

10. Determination of Good Faith. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or the Board of Directors of the Enterprise or any counsel selected by any committee of the Board of Directors of the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser, investment banker, compensation consultant, or other expert selected with reasonable care by the Enterprise or the Board of Directors of the Enterprise or any committee thereof. The provisions of this Section 10 shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct. Whether or not the foregoing provisions of this Section are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company.

 

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11. Defined Terms and Phrases. For purposes of this Agreement, the following terms shall have the following meanings:

 

(a) “Beneficial Owner” and “Beneficial Ownership” shall have the meanings set forth in Rule 13d-3 promulgated under the Exchange Act as in effect on the date hereof.

 

(b) “Change of Control” shall be deemed to occur upon the earliest of any of the following events:

 

(i) Acquisition of Stock by Third Party. Any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors, unless (1) the change in the relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors, or (2) such acquisition was approved in advance by the Continuing Directors and such acquisition would not constitute a Change of Control under part (iii) of this definition.

 

(ii) Change in Board of Directors. Individuals who, as of the date of this Agreement, constitute the Company’s Board of Directors (the “Board”), and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds of the directors then still in office who were directors on the date of this Agreement (collectively, the “Continuing Directors”), cease for any reason to constitute at least a majority of the members of the Board.

 

(iii) Corporate Transaction. The effective date of a reorganization, merger, or consolidation of the Company (a “Business Combination”), in each case, unless, following such Business Combination: (1) all or substantially all of the individuals and entities who were the Beneficial Owners of securities entitled to vote generally in the election of directors immediately prior to such Business Combination beneficially own, directly or indirectly, more than 51% of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors resulting from such Business Combination (including a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the securities entitled to vote generally in the election of directors and with the power to elect at least a majority of the Board or other governing body of the surviving entity; (2) no Person (excluding any corporation resulting from such Business Combination) is the Beneficial Owner, directly or indirectly, of 15% or more of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of such corporation except to the extent that such ownership existed prior to the Business Combination; and (3) at least a majority of the Board of Directors of the corporation resulting from such Business Combination were Continuing Directors at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination.

 

(iv) Liquidation. The approval by the Company’s stockholders of a complete liquidation of the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than factoring the Company’s current receivables or escrows due (or, if such approval is not required, the decision by the Board to proceed with such a liquidation, sale or disposition in one transaction or a series of related transactions).

 

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(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item or any similar schedule or form) promulgated under the Exchange Act whether or not the Company is then subject to such reporting requirement.

 

(c) “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, and employees or agents, so that if Indemnitee 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, trustee, general partner, managing member, fiduciary, employee or agent of any 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) “Enterprise” means the Company and any other enterprise that Indemnitee was or is serving at the request of the Company as a director, officer, partner (general, limited or otherwise), member (managing or otherwise), trustee, fiduciary, employee or agent.

 

(e) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(f) “Expenses” shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever, including all attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, fees of private investigators and professional advisors, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payment under this Agreement (including taxes that may be imposed upon the actual or deemed receipt of payments under this Agreement with respect to the imposition of federal, state, local or foreign taxes), fax transmission charges, secretarial services and all other disbursements, obligations or expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settlement or appeal of, or otherwise participating in a Proceeding. Expenses also shall include any of the forgoing expenses incurred in connection with any appeal resulting from any Proceeding, including the principal, premium, security for, and other costs relating to any costs bond, supersedes bond, or other appeal bond or its equivalent. Expenses also shall include any interest, assessment or other charges imposed thereon and costs incurred in preparing statements in support of payment requests hereunder. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

(g) “Person” shall have the meaning as set forth in Section 13(d) and 14(d) of the Exchange Act as in effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any direct or indirect majority owned subsidiaries of the Company; (iii) any employee benefit plan of the Company or any direct or indirect majority owned subsidiaries of the Company or of any corporation owned, directly or indirectly, by the Company’s stockholders in substantially the same proportions as their ownership of stock of the Company (an “Employee Benefit Plan”); and (iv) any trustee or other fiduciary holding securities under an Employee Benefit Plan.

 

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(h) “Proceeding” shall include any actual, threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by a third party, a government agency, the Company or its Board of Directors or a committee thereof, whether in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative, legislative or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is, will or might be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company, by reason of any action (or failure to act) taken by Indemnitee or of any action (or failure to act) on Indemnitee’s part while acting as a director, officer, employee or agent of the Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, partner (general, limited or otherwise), member (managing or otherwise), trustee, fiduciary, employee or agent of any other enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement.

 

(i) In addition, references to “other enterprise” shall include another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; 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 Indemnitee with respect to an employee benefit plan, its participants, or 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; references to “include” or “including” shall mean include or including, without limitation; and references to Sections, paragraphs or clauses are to Sections, paragraphs or clauses in this Agreement unless otherwise specified.

 

12. Attorneys’ Fees. In the event that any Proceeding is instituted by Indemnitee under this Agreement to enforce or interpret any of the terms hereof, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding, unless a court of competent jurisdiction determines that each of the material assertions made by Indemnitee as a basis for such Proceeding were not made in good faith or were frivolous. In the event of a Proceeding instituted by or in the name of the Company under this Agreement or to enforce or interpret any of the terms of this Agreement, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with such Proceeding (including with respect to Indemnitee’s counterclaims and cross-claims made in such action), unless a court of competent jurisdiction determines that each of Indemnitee’s material defenses to such action were made in bad faith or were frivolous.

 

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13. Miscellaneous.

 

(a) Governing Law. The validity, interpretation, construction and performance of this Agreement, and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the state of Delaware, without giving effect to principles of conflicts of law.

 

(b) Entire Agreement; Binding Effect. Without limiting any of the rights of Indemnitee described in Section 3(b) hereof, this Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions and supersedes any and all previous agreements between them covering the subject matter herein. The indemnification provided under this Agreement applies with respect to events occurring before or after the effective date of this Agreement, and shall continue to apply even after Indemnitee has ceased to serve the Company in any and all indemnified capacities.

 

(c) Amendments and Waivers. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance.

 

(d) Successors and Assigns. This Agreement shall be binding upon the Company and its successors (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) and assigns, and inure to the benefit of Indemnitee and Indemnitee’s heirs, executors, administrators, legal representatives and assigns. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially all 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.

 

(e) Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page, as subsequently modified by written notice, or if no address is specified on the signature page, at the most recent address set forth in the Company’s books and records.

 

(f) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

 

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(g) Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

 

(h) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same agreement. Execution of a facsimile copy will have the same force and effect as execution of an original, and a facsimile signature will be deemed an original and valid signature.

 

(i) No Employment Rights. Nothing contained in this Agreement is intended to create in Indemnitee any right to continued employment.

 

(j) Company Position. The Company shall be precluded from asserting, in any Proceeding brought for purposes of establishing, enforcing or interpreting any right to indemnification under this Agreement, that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary.

 

(k) Subrogation. In 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, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company to effectively bring suit to enforce such rights.

 

[Signature Page Follows]

 

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The parties have executed this Agreement as of the date first set forth above.

 

  the company:
     
  BIOMX INC.
     
  By:          
    (Signature)
     
  Name:  
  Title:  
     
  Address:
   
   
   

 

AGREED TO AND ACCEPTED:  
 
INDEMNITEE:  
   
 
(Signature)  
   
Address:  
 
   
Email:                

 

 

 

 

 

(Back To Top)

Section 9: EX-10.5 (RESEARCH AND LICENSE AGREEMENT, DATED JUNE 22, 2015, BETWEEN BIOMX LTD. AND YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED, AS AMENDED)

Exhibit 10.5

 

Pursuant to Item 601(B)(10) of Regulation S-K, certain portions of this exhibit have been redacted and, where applicable, have been marked “[***],” such redactions are immaterial and would be competitively harmful if publicly disclosed.

 

 

 

RESEARCH AND LICENCE AGREEMENT

 

between

 

YEDA RESEARCH AND

DEVELOPMENT COMPANY LIMITED

 

and

 

MBCURE LTD.

 

 

 

 

 

 

TABLE OF CONTENTS

 

Clause   Description   Page
         
1.   Preamble, Appendices and Interpretation   3
         
2.   Performance Of The Research   17
         
3.   Funding The Research   20
         
4.   Records and Reporting By Yeda   20
         
5.   Title   21
         
6.   Patents; Patent Infringements   22
         
7.   Licence   28
         
8.   Development and Commercialisation   34
         
9.   Royalties   36
         
10.   Confidentiality   42
         
11.   No Assignment   44
         
12.   Exclusion of Liability and Indemnification   45
         
13.   Term and Termination   46
         
14.   Notices   53
         
15.   Value Added Tax   53
         
16.   Governing law and jurisdiction   54
         
17.   Miscellaneous   54

 

(i)

 

 

Execution Version

 

RESEARCH AND LICENCE AGREEMENT

 

Between

 

YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED

 

a company duly registered under the laws of Israel of P O Box 95, Rehovot 76100, Israel

 

(hereinafter, “Yeda”)

 

and

 

MBCURE LTD.

 

a company duly registered under the laws of Israel with company number 51-522055-6, having its principal place of business at 2 Ilan Ramon Street, Science Part, Ness Ziona, 7403635, Israel

 

(hereinafter, “the Company”)

 

preamble:

 

WHEREAS: (A) in the course of research conducted at the Weizmann Institute of Science (“the Institute”), under the supervision of Dr. Eran Elinav of Department of Immunology and Professor Rotem Sorek of the Department of Molecular Genetics (“the Scientists”), the Scientists together with other scientists of the Institute (all of the aforementioned persons collectively “the Inventors”) created and/or generated the know-how and/or materials and other information described in Appendix A hereto, using the Institute’s state of the art preclinical germ-free mouse facility, anaerobic facility, robotic facility for high throughput phage discovery and sequencing facility (“the Existing Know-How”); and

 

 

 

 

  (B) the Company is: (i) interested in the performance of further research at the Institute under the supervision of the Scientists in the field of the Technology (as hereinafter defined), as specified in the Research Program (as hereinafter defined) (“the Research”); and (ii) willing, subject to and in accordance with the terms and conditions of this Agreement, to finance the performance of the Research in accordance with the Research Budget (as hereinafter defined); and
     
  (C) Yeda is willing, subject to and in accordance with the terms and conditions of this Agreement, to procure the performance of the Research at the Institute as aforesaid; and
     
  (D) by operation of Israeli law and/or under the terms of employment of the Inventors at the Institute and pursuant to an agreement between the Institute, Yeda and the Inventors, all right, title and interest of the Institute and the Inventors in and to the Know How and in and to the Initial Research Results and the Subsequent Results (all as hereinafter defined) vests and shall vest in Yeda; and
     
  (E) it is contemplated that following the commencement of the Research, there will be collaborative activity between the Inventors and the Company, for example by way of the provision by the Inventors of phages for validation by the Company;
     
  (F) subject to and in accordance with the terms of this Agreement, the Company wishes to receive, and Yeda is willing to grant to the Company, the License in respect of the Licensed Information and Yeda’s rights in the Subsequent Results and under the Yeda Patents and Yeda’s rights in the Joint Patents (all as hereinafter defined), all subject to and in accordance with the terms and conditions of this Agreement; and

 

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  (G) the Company warrants and represents that: (i) the Company was duly incorporated on 3 March 2015, its initial purpose being to implement an “incubator project” (as such term is defined in section 2.13 of Directive No. 8.22 of the Director-General of the Ministry of the Economy (“the Ministry”)) (“the Incubators Directive”) for the development and commercialisation of Products (“the Project”); (ii) the Project has been accepted by the biotechnological incubator FutuRX Limited (“FutuRx”); (iii) pursuant to a written authorisation (“the Letter of Approval”) dated 29 December 2014 as amended on 3 March 2015, the Project was approved by the “biotechnology incubators committee” at the Ministry (as defined in section 3 of the Incubators Directive (“the Incubators Committee”) on the terms set out therein for receipt of government support (including grants) and incubator services pursuant to the Incubators Directive and applicable law; and (iv) FutuRx has undertaken to invest the amount of [***] in the Company over the course of a [***] period in excess of the investment therein required of FutuRx as an incubator pursuant to law and regulations.

 

NOW THEREFORE IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:

 

1.Preamble, Appendices and Interpretation

 

1.1.The Preamble and Appendices hereto form an integral part of this Agreement.

 

1.2.In this Agreement the terms below shall bear the meanings assigned to them below, unless the context shall indicate a contrary intention:

 

  1.2.1. “Affiliated Entity” - shall mean, with respect to any body, any company, corporation, other entity or person (hereinafter, collectively, “entity”), which directly or indirectly, is controlled by, or controls, or is under common control with, such body. For the purposes of this definition, “control” shall mean the ability, directly or indirectly, to direct the activities of the relevant entity (save for an ability flowing solely from the fulfilment of the office of director or another office) and shall include, the holding, directly or indirectly, of more than [***] of the issued share capital or of the voting power of the relevant entity or the holding, directly or indirectly, of a right to appoint more than [***] of the directors of such entity or of a right to appoint the chief executive officer of such entity;

 

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  1.2.2. “Companion Diagnostic Kits” - shall mean with respect to any Product or Other Product, a Diagnostic Kit as referred to in  clause 1.2.17 below used in the development and/or application of such Product or Other Product;
         
  1.2.3. “Company Products” - shall mean Group 1 Company Products and Group 2 Company Products;
         
  1.2.4. “Company Results” - shall mean all and any inventions, products, materials, compounds, compositions, substances, methods, processes, techniques, know-how, data, information, discoveries and other results of whatsoever nature covering or constituting Group 2 Company Products Discovered or occurring in the course of, or arising from, the performance of activities of any nature by the Company outside the facilities of the Institute which are not joint or collaborative with the Scientists (including via consultancy or other agreements or arrangements), WIS or Yeda and to which the Scientists have not contributed in any way;
         
  1.2.5. “Development Program” - shall mean, with respect to any Product or Products, a development program specifying the activities and timetable necessary to develop such Products to commercialisation;
         
  1.2.6. “Discovered” - shall mean, with regard to a Group 2 Product, the time when such Product or any part thereof was first identified, whether by way of a claim in a patent application or in any written record;

 

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  1.2.7. “Distributor”   shall mean an independent third party not affiliated with either the Company or any Sublicensee with whom there is a bona fide distribution, reseller or similar agreement pursuant to which such third party does not have any rights under the Licensed Information, the Subsequent Results or the Patents and purchases Products or Other Products from the Company or a Sublicensee or from another Distributor in consideration for the purchase price therefor only (and no other consideration), solely for resale and/or distribution in the same form (meaning without any change and/or reconfiguration thereof or incorporation thereof into any other product) to another Distributor or to end-users, for monetary consideration only;
         
  1.2.8. “Exchange Rate” - shall mean, with respect to any amount to be calculated, or which is paid or received in a currency other than US Dollars, the average of the selling and buying exchange rates of such currency (in respect of cheques and remittances) and the US Dollar prevailing at Bank Hapoalim B.M. at the end of business on the date of calculation, payment or receipt, as the case may be;
         
  1.2.9. “First Commercial Sale” - shall mean, with respect to any Product in any country, the first commercial sale of such Product in such country after  new drug approval by the U.S. Food and Drug Administration (“the FDA”), or, in the case of any member state of the European Union, the European Medicines Agency (“the EMA”) or any other national medicinal agency marketing approval or equivalent approval in such country has been obtained for such Product;

 

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  1.2.10. “Group 1 Company Products” - shall mean drug products (other than WIS Products) for the treatment of any indication based on the drug product candidates detailed in the Research Program, containing bacteriophages for use as antibacterial agents where such bacteriophages were specifically developed under the Research Plan;
         
  1.2.11. “Group 2 Company Products” - shall mean drug products (other than WIS Products or Group 1 Company Products) for the treatment of any indication which contain bacteriophages for use as microbiome or Microbiota antibacterial agents or modulators, which products were developed or discovered by the Company during a period of [***] commencing on the date hereof; however, if at the expiration of such [***] period there are fewer than [***] Company Products which are drugs, such period will be extended until there are [***] Company Products in total which are drugs;
         
  1.2.12. “Incubator Period” - shall mean the period during which the Company receives services from FuturRx, as approved by the OCS from time to time, being approximately [***] in total as from the commencement date indicated in the Letter of Approval;
         
  1.2.13. “Initial Development Program” - shall mean a program detailing the research and development activities which the Company aims to accomplish during the Incubator Period, as submitted to the Incubators Committee and amended on an annual basis during the Incubator Period, and which will include all activities to be funded by the Company during the Incubator Period;

 

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  1.2.14. “Initial Research Results” - shall mean all and any inventions, products, materials (which may include bacteria and phages), compounds, compositions, substances, methods, processes, techniques, know-how, data, information, discoveries and other results of whatsoever nature discovered or occurring in the course of, or arising from, the performance of:
         
       

(i)    the Research; or

 

(ii)    activities of any nature which are joint or collaborative between the Inventors (including via consultancy or other agreements or arrangements) and the Company,

         
        in either case related to or underlying WIS Products (or to any Companion Diagnostic Kits to such WIS Products) as described in clause 1.2.30 below;
         
  1.2.15. “Investment” - shall mean any amount received by or invested in the Company  in return for the issuance of either equity or debt, and any amounts received by the Company from the Incubators Committee or otherwise from the Office of the Chief Scientist of the Ministry of Economics (the “OCS”);

 

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  1.2.16. “Know-How” - shall mean (i) the Existing Know-How; (ii) any non-patented information disclosed to the Company hereunder and which is not in the public domain, including information obtained during the Research (other than the Initial Research Results); (iii) proprietary materials emanating from the Research or part of the Existing Know How (which may include bacteria and phages); and (iv) any future developments, improvements or inventions by either of the Scientists of or related to the Technology, provided that during the calendar year in which the creation thereof occurs the Company is providing funding for research related to the Technology at the laboratories of the Scientists at the Institute in the sum of at least [***] per calendar year per each of the two laboratories (above and beyond any amounts directly required for the purchase of mice);
         
  1.2.17. “Licence” - shall mean an exclusive worldwide licence under:
         
       

(i)     the Licensed Information;

 

(ii)    Yeda’s rights in the Subsequent Results; and

 

(iii)   Yeda’s rights in the Yeda Patents and the Joint Patents;

 

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        for (a) the development, testing manufacture, production, and sale of Products, (b) for the development, testing manufacture, production, and sale of drug products, other than Products, for the treatment of any indication which contain bacteriophages for use as microbiome or Microbiota antibacterial agents or modulators (“Other Products”); and (c) for the use of bacteriophages in kits to be used  only for diagnosis in the development of any Product or Other Product or for the purpose of diagnosis in applying any Product or Other Product (“Diagnostic Kits”), but for the avoidance of doubt not for sale by the Company unless such Diagnostic Kits are sold with  labelling showing that such Diagnostic Kits may be used only in order to determine which Product or Other Product, if any, may appropriately be used (and not for any other form of diagnosis, including with respect to products, other than a Product or Other Product), all the above in this clause 1.2.17, subject to the provisions of clause 7.1 below and the other terms and conditions of this Agreement.  Notwithstanding anything to contrary in this Agreement, the Licence shall not include the use of bacteriophages to treat against free-living bacteria (such as for environmental treatment) outside the human organism, but there shall be no restriction on the Company developing such treatments independently of the Institute without any use of the Licensed Information or the Subsequent Results;
         
  1.2.18. “Licensed Information” - shall mean: (i) the Know-How; and (ii) the Initial Research Results.  Specific genes or proteins for targeted anti-bacterial treatment which are identified and/or developed by any of the Scientists shall not be regarded as Technology and shall not be included in the Licensed Information;
         
  1.2.19. “Microbiota” - shall mean the community of commensal, symbiotic, and pathogenic microorganisms found within the human body;
         
  1.2.20. “Net Sales” - shall mean:
         
        (i)     the total amount invoiced by the Company or any Affiliated Entity thereof and the total amount invoiced by each Sublicensee in connection with the sale of WIS Products (including any Companion Diagnostic Kits of any WIS Products, whether sold together with or separately from any WIS Products); and

 

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        (ii)    the total amount invoiced by the Company or any Affiliated Entity thereof in connection with the sale of Company Products (including any Companion Diagnostic Kits of any Company Products, whether sold together with or separately from any Company Products);
         
        (for the avoidance of doubt, whether such sales are made before or after the First Commercial Sale of any Product in any country); in all cases after deduction of:
         
       

(i)     sales taxes (including value added taxes) to the extent applicable to such sale and included in the invoice in respect of such sale;

 

(ii)   freight and insurance charges to the extent such items are separately itemised on invoices;

 

(iii)   credits or allowances, if any, actually granted on account of price adjustments, recalls, rejections or returns of Products previously sold;

 

(iv)   bad debts (as determined in accordance with relevant GAAP rules) deriving from Net Sales in respect of which royalties were paid by the Company hereunder;

 

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        provided that:
         
       

(a)    with respect to sales which are not at arms-length and/or are not in the ordinary course of business and/or are not according to then current market conditions for such a sale, the term “Net Sales” shall mean the total amount that would have been due in an arms-length sale made in the ordinary course of business and according to the then current market conditions for such sale or, in the absence of such current market conditions, according to market conditions for sale of products similar to the Products (or Companion Diagnostic Kits, as applicable); and

 

(b)    with respect to sales by the Company of Products (or Companion Diagnostic Kits, as applicable) and/or sales by a Sublicensee of WIS Products (or Companion Diagnostic Kits, as applicable), as applicable, to any Affiliated Entity of the Company or of such Sublicensee, as the case may be, the term, “Net Sales” shall mean the higher of: (A) ”Net Sales”, as defined in paragraph (a) above; and (B) the total amount invoiced by such Affiliated Entity on resale to an independent third party purchaser after the deductions specified in subparagraphs (i) and (ii) above, to the extent applicable;

         
  1.2.21. “Patents” - shall mean:
         
       

(i)     all patent applications or applications for certificates of invention covering portions of the Licensed Information and all patents or certificates of invention which may be granted thereon (“the Yeda Patents”); and

 

(ii)    all patent applications or applications for certificates of invention (if any) covering all or some of the Subsequent Results and all patents or certificates of invention which may be granted thereon (“the Joint Patents”);

 

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        in each case as well as all continuations, continuations-in-part, patents of addition, divisions, renewals, reissues and extensions (including any patent term extension) of any of the aforegoing patents, but excluding: (a) patents that have been invalidated or cancelled pursuant to the final (i.e., unappealed or unappealable) judgment of a competent court; and (b) patent applications that have been withdrawn or have expired, in each case such exclusion to be effective only from the date of such invalidation, cancellation, withdrawal or expiry, as the case may be.
         
        For the purposes of this Agreement, the term “Patent” shall also mean Supplementary Protection Certificate (within the meaning of such term under Council Regulation (EU) No. 1768/92) or any application therefor or any other similar statutory protection (by way of patent extension or otherwise) or application therefor in any jurisdiction;
         
  1.2.22. “Products” - shall mean WIS Products and Company Products;
         
  1.2.23. “Research Budget” - shall mean the agreed research budget for the first [***] of the Research Period attached hereto and marked Appendix B, and any further research budget as may be agreed by the parties in writing from time to time;

 

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  1.2.24. “Research Period” - shall mean the [***] period commencing on May 1, 2015, as such period may be extended from time to time by agreement in writing of the parties;
         
  1.2.25. “Research Program” - shall mean the research program agreed upon for the first [***] of the Research Period attached hereto and marked Appendix C, and any further research program as maybe agreed by the parties in writing from time to time;
  1.2.26. Subcontract” and “Subcontractor - shall mean a bona fide written subcontracting agreement pursuant to which a contractor is engaged on a pure work order basis for the sole purpose of manufacturing or development of a product (or part thereof) on the Company’s behalf, for monetary consideration only;
         
  1.2.27. “Sublicence” and “Sublicensee” - “Sublicence” shall mean any right granted, licence given, or agreement entered into, by the Company to or with any other person or entity, permitting any use of the Licensed Information and/or the Subsequent Results and/or the Yeda Patents and/or the Joint Patents (or any part thereof), including for the development and/or testing and/or manufacture and/or production and/or marketing and/or sale of Products (whether or not such grant of rights, licence given or agreement entered into is described as a sublicence or as an agreement with respect to the development and/or testing and/or manufacture and/or production and/or marketing and/or sale of Products or otherwise) and/or use of the Company Results for the development and/or testing and/or manufacture and/or production and/or marketing and/or sale of Group 2 Company Products and the term “Sublicensee” shall be construed accordingly.  For the purposes of this Agreement, “Sublicensee” shall not include a Subcontractor or a Distributor, as defined herein;

 

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  1.2.28. “Sublicensing Receipts” - shall mean consideration, whether monetary or otherwise, including fees and lump sum payments, received (for the avoidance of doubt, whether received before or after the First Commercial Sale in any country) by the Company for or from the grant of Sublicences and/or pursuant thereto, or in connection with the grant of an option for a Sublicence (where such option is in return for consideration) (for the further avoidance of doubt, including amounts received by the Company which constitute royalties based on sales of Company Products by Sublicensees), except for:
         
       

(i)     amounts received by the Company which constitute royalties based on sales of WIS Products by Sublicensees in respect of which royalties are payable to Yeda hereunder;

 

(ii)    amounts received by the Company from:

         
        (1)    a Sublicensee to cover direct costs of Product-related research or development activities to be performed by the Company for such Sublicensee after the date of signature of the relevant Sublicence (or, as the case may be, option for a Sublicence) or

 

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        (2)    governmental or philanthropic sources, including the Incubators Committee, for Product-related research or development activities
         
        and actually expended by the Company (as evidenced by invoices, receipts or other appropriate documentation), provided that:
         
       

(a)    any such amounts constitute research and/or development funding only and not payment for Products nor any other type of grant or benefit,

 

(b)    such research and/or development activities are performed pursuant to a defined research and development program and research and development budget agreed with the relevant Sublicensee, a copy of which is provided to Yeda; and

 

(c)    the Company submits to Yeda a written expense report, confirmed by the Company’s independent accountant or chief financial officer, setting out the time and materials utilised, and reasonable overhead costs and other expenses actually incurred by the Company in the conduct of the said research and development activities, which report demonstrates that such amounts have actually been expended by the Company in the conduct of such research and/or development activities in accordance with such work program and budget and at the times set out therein,

 

it being agreed, for the avoidance of doubt, that any amounts received by the Company as aforesaid, but not expended as set out in this sub-clause (ii), shall be deemed to be Sublicensing Receipts;

 

(iii)   amounts received by the Company which are used by the Company for the purpose of the payment of costs and fees incurred in the preparation, filing, prosecution and the like of patent applications filed in accordance herewith and the maintenance of any patents granted thereon; and

 

(iv)   investments in the equity or debt of the Company to the extent such investments are at fair value (amounts above fair value will be deemed Sublicensing Receipts);

         
  1.2.29. “Subsequent Results” - shall mean all and any inventions, products, materials (which may include bacteria and phages), compounds, compositions, substances, methods, processes, techniques, know-how, data, information, discoveries and other results of whatsoever nature discovered or occurring in the course of, or arising from, the performance of
         
        (i)    the Research; or

 

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        (ii)   activities of any nature which are joint or collaborative between the Inventors (including via consultancy or other agreements or arrangements) and the Company,
         
        in either case related to or underlying Group 1 Company Products (including any Companion Diagnostic Kits of any Group 1 Company Products);
         
  1.2.30. “Technology” - shall mean a technology for identification and/or development of bacteriophages as candidates for targeted anti-bacterial treatment through human-body associated microbiome or Microbiota modulation;
         
  1.2.31. “WIS Products” - shall mean drug products based on the first two drug product candidates, as detailed in the Research Program (being in respect of colorectal cancer and inflammatory bowel disease), which are submitted to the Incubators Committee by the Company within the framework of the Project, containing bacteriophages for use as antibacterial agents where such bacteriophages were initially identified in the Licensed Information.
         
  1.2.32. the terms: “Yeda”, “the Company”, “the Institute”, “the Scientists”, “the Inventors”, “the Existing Know-How”, “the Research”, “the Ministry”, “the Incubators Directive”, “the Project”, “FutuRx”, “the Letter of Approval” and “the Incubators Committee” - shall bear the definitions assigned to them respectively in the heading or the preamble hereto, as the case may be.

 

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1.3.In this Agreement:

 

1.3.1.words importing the singular shall include the plural and vice-versa and words importing any gender shall include all other genders and references to persons shall include partnerships, corporations and unincorporated associations;

 

1.3.2.any reference in this Agreement to the term “patent” shall also include any re-issues, divisions, continuations or extensions thereof (including measures having equivalent effect);

 

1.3.3.any reference in this Agreement to the term “patent applications” shall include any provisional patent applications, PCT, national or regional patent applications, applications for continuations, continuations-in-part, divisions, patents of addition or renewals, as well as any other applications or filings for similar statutory protection;

 

1.3.4.any reference in this Agreement to the term “sale” shall include the sale, lease, rental or other disposal of any Product; and

 

1.3.5.“including” and “includes” means including, without limiting the generality of any description preceding such terms.

 

2.PERFORMANCE OF THE RESEARCH

 

2.1.In consideration of the sums to be paid by the Company to Yeda pursuant to clause 3 below and, subject to the execution of such payments, Yeda undertakes, subject to clause 2.2 below, to procure the performance of the Research at the Institute under the supervision of the Scientists during the Research Period. By written agreement of the parties, the Research Period may be extended by such period and upon such terms and conditions as the parties shall so agree.

 

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2.2.If either or both of the Scientists shall cease to be available for the supervision of the performance of the Research, such cessation shall not constitute a breach of this Agreement by Yeda. In the event that either or both of the Scientists shall cease to be available as aforesaid, Yeda shall use its reasonable efforts to find from amongst the scientists of the Institute replacement scientists acceptable to the Company (such acceptance to be in writing, and not to be unreasonably withheld), but no undertaking to find such replacements is given by Yeda. If no such acceptable replacement scientists can be found within [***] of either or both of the Scientists becoming unavailable as aforesaid, then the Company shall be entitled, by written notice to Yeda, to terminate the Research Period, in which event the Research Period and the performance of Research hereunder shall cease at the end of the calendar quarter during which such written notice was given. During the period between the date of such notice by the Company and the cessation of the Research, Yeda shall make reasonable efforts to procure the minimising of further Research expenses (save with respect to any obligations already undertaken which cannot be cancelled or reduced) and in co-operation with the Company shall make reasonable efforts to procure that experiments covered by the Research Budget applicable until the date of such cessation are completed. In the event of such termination, Yeda shall be released from any obligation to procure the performance of the Research during the period after such termination, and the Company shall be released from any obligation to finance the Research in respect of the period commencing after such termination, but without affecting the Licence and all the other terms and conditions of this Agreement which shall remain in full force and effect (save for those relating to the performance and financing of the Research). In the event of such termination, Yeda shall make reasonable efforts to provide to the Company all data including any raw data generated in the course of the Research.

 

2.3.It is agreed that if the performance of the Research shall involve the conduct of experiments on and/or using animals, the performance of the Research and the Research Program shall be subject to the Israeli Anti-Cruelty Law, 1994 and to the approval of, and any modifications requested by, the Institutional Animal Care and Use Committee and the Safety Committee of the Institute, in order to ensure compliance with the above law. It is agreed that, in view of the fact that the performance of the Research may involve the conduct of experiments using human material (such as cells, blood, tissue, DNA, RNA, lysates, or body fluids) the performance of the Research and the Research Program shall be subject to the approval of, and any modifications requested by the Safety Committee of the Institute and the Institutional Review Board for Human Experimentation.

 

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2.4.It is further agreed that if the performance of the Research shall involve generators of biological diseases, as defined in the Regulation of Research into Generators of Biological Diseases Law, 2008 (“the Biological Research Law”), the performance of the Research and the Research Program shall be subject to the provisions of the Biological Research Law and to the obtaining of all the necessary approvals required thereunder. In the event that if, during the performance of Research for which initially no approval was required pursuant to the Biological Research Law, there shall be discovered findings which may increase the aggressiveness, transferability or host range of biological diseases, which findings require the suspension of the Research until the approvals required pursuant to the Biological Research Law are obtained, any such suspension of the Research shall not constitute a breach of this Agreement by Yeda.

 

2.5.For the avoidance of doubt, it is agreed that nothing in this Agreement shall constitute a representation or warranty by Yeda, express or implied, (i) that any patent applications relating to the Licensed Information or the Subsequent Results or any portion thereof respectively will be granted; or (ii) that the patents obtained on any of the said patent applications are or will be valid or will afford proper protection; or (iii) that any portion of the Licensed Information or the Subsequent Results is or will be commercially exploitable or of any other value; or (iv) that the exploitation of the Patents, the Licensed Information or the Subsequent Results will not infringe the rights of any third party, save that Yeda confirms that as of the date hereof it is not aware of any allegations by any third party as to the infringement by the Licensed Information of any patent or as to the misappropriation of the Licensed Information or as to the right of Yeda to license any of the foregoing. Yeda furthermore makes no warranties and representations, express or implied, whatsoever as to the Research, the Initial Research Results, the Subsequent Results or the Licensed Information.

 

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3.FUNDING THE RESEARCH

 

3.1.The Company undertakes to pay to Yeda the total amount (in US Dollars) of the Research Budget, as follows: during each year of the Research Period, [***] of the proportionate amount due in respect of such year in [***], payable in advance at the beginning of each [***] period during such year, the first such payment to be made on the [***] of such year (which in respect of the first year of the Research Period is the date of Company activation as indicated in the Letter of Approval), with the remaining [***] of such annual amount to be paid immediately following the delivery to the Company of the twelve-monthly research report and transfer of the reagents both as referred to in clause 4.1 below due at the end of each year of the Research Period.

 

3.2.An invoice in respect of an instalment paid as aforesaid shall be issued by Yeda promptly after the receipt by Yeda of such instalment. All payments of the Research Budget shall be made by direct wire transfer to Yeda’s bank account, the details of which are set out in clause 19.8 below.

 

3.3.For the avoidance of doubt, nothing contained in this Agreement shall prevent Yeda and/or the Institute from obtaining further finance for the Research from other entities, provided that such other entities are not granted any rights in respect of the Research or the Licensed Information which prejudice any rights granted to the Company under the Licence.

 

4.RECORDS AND REPORTING BY YEDA

 

4.1.Yeda shall procure that the Scientists (and any persons participating in the performance of the Research at the Institute under the supervision of the Scientists) will prepare and keep in accordance with practice at the Institute records of all Research activities and results.  The Company will be entitled to have through Yeda reasonable access to such records, following written request from the Company to Yeda.

 

4.2.Yeda will procure the preparation by the Scientists of, and shall submit to the Company: (i) an interim written report on the progress of the Research in each [***] period during the Research Period, within [***] of the end of each such [***] period, and of a written report summarising the results of the Research within [***] of the end of the Research Period; and (ii) reports of any significant findings in the Research promptly upon such findings being made.

 

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4.3.Yeda shall submit to the Company, with respect to each [***] period of the Research Period, a financial report setting forth the monies received and expended in connection with the Research during such [***] period. Each report as aforesaid shall be submitted to the Company not later than [***] after the end of the period covered by such report.

 

5.TITLE

 

5.1.Subject only to the Licence:

 

5.1.1.all right, title and interest in and to the Existing Know-How and the Yeda Patents covering all or part of the Existing Know How, vest and shall vest in Yeda;

 

5.1.2.all right, title and interest in and to the Know-How (other than the Existing Know-How), the Initial Research Results, the Subsequent Results, the Yeda Patents (other than the Yeda Patents covering all or part of the Existing Know How) and the Joint Patents, shall vest jointly in Yeda and the Company in equal shares.

 

5.2.For the avoidance of doubt, all right, title and interest in and to the Company Results and all right, title and interest in and to all other data, results, information, know-how, and any new invention generated by the Company in connection with its activities hereunder not falling within clause 5.1.1. or 5.1.2 above (as between the Company and Yeda) vest and shall vest in the Company.

 

5.3.In the event of the termination of this Agreement for any reason whatsoever, any interest which the Company shall have in the Initial Research Results and in those Yeda Patents referred to in clause 5.1.2 shall be automatically assigned to Yeda. To secure such assignment as aforesaid, concurrently with the execution of this Agreement, the Company shall execute an irrevocable Power of Attorney in the form attached hereto as Appendix D, authorising the automatic assignment of all rights of the Company in the Initial Research Results and such Yeda Patents to Yeda, upon Yeda’s written instructions, which instructions Yeda may issue in the event of the termination of this Agreement for any reason whatsoever. Such Power of Attorney shall be held in escrow by patent counsel chosen by the parties. It is understood and agreed that such patent counsel shall have no discretion, shall release such Power of Attorney to Yeda upon notice from Yeda to such patent counsel confirming that this Agreement has been terminated, and shall act upon Yeda’s instructions by virtue thereof, upon Yeda’s first demand. The Company [***] shall execute any additional document and perform any acts as may be required to do so. Notwithstanding the foregoing, any such transfer shall be subject, if required, to the consent of the Incubators Committee and/or to Yeda’s undertaking to comply with and assume any regulatory obligations in respect thereof, including the payment of royalties to the OCS.

 

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6.Patents; Patent Infringements

 

6.1.

 

6.1.1.At the initiative of either party, the parties shall consult with one another regarding the filing of patent applications in respect of any portion of the Licensed Information and/or the Subsequent Results, including the jurisdictions in which such applications should be filed, the timing of the filing of such applications and the contents thereof. Following such consultations, Yeda shall (subject to payment by the Company under clause 6.2 below) retain outside patent counsel approved by the Licensee to prepare, file and prosecute patent applications in respect of any portion of the Licensed Information, and the Company shall retain outside patent counsel to prepare, file and prosecute patent applications in respect of any portion of the Subsequent Results, in each case in such jurisdiction or jurisdictions as shall be determined by the parties in consultation as aforesaid. Each of Yeda and the Company (in the case of Yeda, subject to clause 6.3 below) shall also maintain at the applicable patent office any patents granted as a result of any of the above patent applications made by them respectively as aforesaid. The parties agree that their joint policy will be to seek comprehensive patent protection for all Licensed Information and Subsequent Results licensed to the Company hereunder at least in the following countries: [***], unless, with respect to any country as aforesaid and any patent application, all of the subject matter claims in such patent application are as a matter of law not patentable in such country. The Company and Yeda shall co-operate fully in the preparation, filing, prosecution and maintenance of all such patent applications and patents as aforesaid.

 

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6.1.2.Without derogating from the aforegoing, the Company shall [***] take all necessary steps in order to obtain, or, at Yeda’s election in the case of patents covering any part of the Licensed Information, assist Yeda to obtain, the extension of each patent referred to in this clause 6.1 above, or, in the case of a patent in any member state of the European Union, a Supplementary Protection Certificate as referred to in clause 1.2.20 above (including, the preparation and filing of applications for such extensions and Supplementary Protection Certificates), within the period prescribed therefor under applicable law and, if applicable, take all necessary steps in order to obtain “Orphan Drug” status (within the meaning of such term under the US Orphan Drug Act or under Council Regulation (EU) No. 141/2000, as the case may be), or paediatric use approval, within the period prescribed therefor under applicable law. The Company shall notify Yeda promptly in writing and shall provide a copy to Yeda of each marketing authorisation granted in respect of each Product in each country and, if applicable, of “Orphan Drug” or paediatric use approval granted in respect of a Product and shall keep Yeda informed and shall provide copies to Yeda of all documents regarding all applications, activities and/or proceedings regarding such extensions and/or any Supplementary Protection Certificates and/or “Orphan Drug” or paediatric use approval, as aforesaid.

 

6.1.3.All applications to be filed in accordance with the provisions of clauses 6.1.1 and 6.1.2 above covering any part of the Existing Know-How shall be filed in the name of Yeda or, should the law of the relevant jurisdiction so require, in the name of the relevant inventors and then assigned to Yeda. All applications to be filed in accordance with the provisions of clauses 6.1.1 and 6.1.2 above covering any part of the Know-How (other than the Existing Know-How), the Initial Research Results and the Subsequent Results shall be filed in the joint names of Yeda and the Company or, should the law of the relevant jurisdiction so require, in the name of the relevant inventors and then assigned to Yeda and the Company in joint names.

 

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6.2.

 

6.2.1.The Company shall bear and pay all costs and fees incurred in the preparation, filing, prosecution and the like of all patent applications filed in accordance with the provisions of clauses 6.1.1 and 6.1.2 above, and the maintenance at the appropriate patent office and like of all patent applications referred to above, and all costs and fees incurred in undertaking any activities referred to in clause 6.1.2 above.

 

6.2.2.Unless otherwise instructed by Yeda in writing, the Company shall, where applicable, pay directly to Yeda’s relevant outside patent counsel amounts payable by the Company pursuant to this clause 6.2 above or otherwise pursuant to this clause 6 above.

 

6.3.

 

6.3.1.Should the Company determine that a third party is infringing one or more of the Patents or misappropriating all or some of the Licensed Information or the Subsequent Results, then the Company shall notify Yeda promptly in writing, giving full particulars of such infringement or misappropriation. The Company shall within [***] of such notification (“Notification Deadline”) indicate to Yeda in writing as to whether the Company wishes to sue for such infringement or misappropriation (the Company not being obliged to sue for such infringement or misappropriation). In the event that the Company shall fail to give any indication in writing to Yeda as aforesaid, the Company shall be deemed to have decided not to sue for such infringement or misappropriation.

 

6.3.2.In the event that the Company shall notify Yeda that it wishes to sue for such infringement or misappropriation, the Company shall, as part of such notification, advise Yeda of its proposed choice of legal counsel to represent the Company in such suit. Yeda shall, within [***] of such notification, notify the Company in writing whether it approves such proposed legal counsel (such approval not to be unreasonably withheld). In the event that Yeda shall fail to respond to the Company during such [***] period, Yeda shall be deemed to have approved such legal counsel.

 

6.3.3.Yeda may elect, at its own initiative, to join as a party to such suit, or Yeda may consent (in response to a request by the Company) to being named as a party to such suit (and will consent with regard to any jurisdiction where this is required in order for suit to be brought). Yeda may elect to be represented in such suit by the Company’s choice of legal counsel, or at any time during such suit, engage its own legal counsel therein.

 

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6.3.4.Any consent by Yeda to being named as a party to such suit may be conditional upon, inter alia, the provision by the Company of security, satisfactory to Yeda, for the payment of any expenses or costs or other liabilities incurred in connection with such suit (including the fees and costs of Yeda’s legal counsel, and attorneys’ fees, costs or other sums awarded to the counterparty in such suit) (such expenses or costs “Litigation Expenses”).

 

6.3.5.All Litigation Expenses in connection with any such suit where Yeda consents to be named as a party shall be borne by the Company, which shall indemnify Yeda against any such expenses or costs or other liabilities (without derogating from the provisions of clause 12 below). Provided, however, that if Yeda shall have approved the Company’s choice of legal counsel in accordance with clause 6.3.2 above but shall have engaged its own legal counsel, Yeda shall bear the fees and costs of such legal counsel, unless such engagement shall be due to the perception of the joint legal counsel as aforesaid, whether at the commencement of such suit or thereafter, that there is or may be a conflict of interests between the Company and Yeda, or due to the Company’s legal counsel having declined to represent Yeda, in which case the Litigation Expenses shall be borne by the Company. Should Yeda elect to join such suit and choose its own legal counsel, then Yeda shall bear its own Litigation Expenses.

 

6.3.6.In the event that the Company: (a) shall not have notified Yeda of the Company’s intention to commence suit by the Notification Deadline; or (b) shall not have commenced such suit within [***] thereafter, then Yeda shall have the right (but not the obligation) to commence suit for such infringement [or misappropriation.

 

6.4.

 

6.4.1.Should the Company discover any allegation by a third party that, or be sued on the grounds that, the manufacture, use or sale of a Product by it or by a Sublicensee under any of the Patents infringes upon the patent rights of a third party, then the Company shall notify Yeda promptly in writing, giving full particulars thereof, and the Company shall, after first having consulted Yeda, be entitled to defend such suit, subject to clause 6.4.2 below.

 

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6.4.2.If a suit as referred to in clause 6.4.1 above includes (or it is reasonable to assume that it will include) a Patent Challenge (as hereinafter defined), then the following provisions shall apply:

 

6.4.2.1.the Company shall, as part of such notification, advise Yeda of its proposed choice of legal counsel to represent the Company in such suit. Yeda shall, within [***] of such notification, notify the Company in writing whether it approves such proposed legal counsel (such approval not to be unreasonably withheld). In the event that Yeda shall fail to respond to the Company during such [***] period, Yeda shall be deemed to have approved such legal counsel;

 

6.4.2.2.Yeda may elect, at its own initiative, to join as a party to such suit; and

 

6.4.2.3.Yeda may elect to be represented in such suit by the Company’s choice of legal counsel, or at any time during such suit, engage its own legal counsel therein.

 

6.5.With regard to any action or proceeding to which the Company is a party referred to in clauses 6.3 and 6.4 above (“Company Litigation”):

 

6.5.1.Subject to the Company’s compliance with its obligation to bear Litigation Expenses as aforesaid, Yeda shall cooperate and shall use its reasonable efforts to cause the Scientists to cooperate with the Company in prosecuting or defending such Company Litigation, as relevant.

 

6.5.2.No settlement, consent order, consent judgment or other voluntary final disposition of any Company Litigation may be entered into without the prior written consent of Yeda, which consent shall not be unreasonably withheld in the case of settlements for monetary damages payable by the Company or by the counterparty in such Company Litigation only. Moreover, Yeda shall not unreasonably delay its response to any request for such consent.

 

6.5.3.Any recovery in any Company Litigation shall first be applied to cover costs and thereafter shall be deemed to be Sublicensing Receipts, entitling Yeda to consideration in respect thereof as set out in clause 9 below and divided between the Company and Yeda accordingly.

 

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6.5.4.The Company shall promptly keep Yeda informed and provide copies to Yeda of all documents regarding all Company Litigation instituted by or against the Company.

 

6.6.The provisions of clauses 6.4 and 6.5 notwithstanding, if any proceeding of any nature which could lead to the invalidity of the Yeda Patents is brought before any authority (a “Patent Challenge”), then Yeda shall have the right (but not the obligation) to take over the sole defence of such Patent Challenge.

 

6.7.If Yeda shall take over the sole defence of a Patent Challenge as aforesaid, or shall commence suit for infringement and misappropriation in accordance with clause 6.3.6 above, then Yeda shall take the relevant action or proceedings at Yeda’s expense, and the Company shall co-operate in such Patent Challenge or suit (either such matter an “Action”) at the Company’s expense and, if required under applicable law or contract, consent to be named as a party to any such Action. Yeda shall have full control of such Action and shall have full authority to settle such Action on such terms as Yeda shall determine. Any recovery in any such Action shall first be applied to cover the parties’ respective costs (pro rata if the recovery amount is insufficient to cover such costs in full), and shall thereafter be applied as follows: if deriving from a suit for infringement and misappropriation commenced by Yeda in accordance with clause 6.3.6 above, to be for the account of Yeda only; but if deriving from the assumption by Yeda of the sole defence of a Patent Challenge brought within the framework of a suit for infringement or misappropriation brought by the Company as aforesaid, to be split between the parties pro rata to the out-of-pocket costs that each of them incurred in connection with such proceedings.

 

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7.Licence

 

7.1.Yeda hereby grants the Licence to the Company, and the Company hereby accepts the Licence from Yeda, during the period, for the consideration and subject to the terms and conditions set out in this Agreement. For the avoidance of doubt: (i) no licence is granted hereunder with regard to any patents or patent applications or other intellectual property (owned now or in the future by Yeda or the Institute), other than the Patents and intellectual property in the Know-How; and (ii) no licence is granted with respect to the use of bacteriophages to treat against free-living bacteria (such as for environmental treatment) outside the human organism, provided that there shall be no restriction on the Company developing such treatments independently of the Institute or Yeda without any use of the Licensed Information or the Subsequent Results;

 

7.2.The Licence shall remain in force in each country in the world (with respect to each Product (if not previously terminated in accordance with the provisions of this Agreement) until the later of:

 

7.2.1.the date of expiry in such country of the last of any Patent (including, for the avoidance of doubt, any patent application, as referred to in the definition of “Patents” in clause 1.2.20 above) in such country covering such Product to expire; or

 

7.2.2.if there is any Licensed Information, Initial Research Results or Subsequent Results that is or are identifiable, secret and of value relating to such Product, the date of expiry of a period of 11 (eleven) years commencing on the date of First Commercial Sale by the Company or a Sublicensee of such Product in such country.

 

For the purposes of clause 7.2.1 above and clause 9.1.2 below, a Product shall be deemed to be covered by a Patent in any country even after the Patent in such country covering such Product has expired, in the event that, and for so long as, such Product is protected and/or covered by “Orphan Drug” status as referred to in clause 6.1.2 above, paediatric use approval and/or by any type of data exclusivity (including any exclusivity granted in respect of biological products pursuant to the US Biologics Price Competition and Innovation Act) or data protection or by any other regulations and/or provisions granting similar statutory or regulatory protection of such Product in such country (each of the aforegoing, “Additional Protection”).

 

The Company shall notify Yeda in writing immediately upon the making of each such First Commercial Sale referred to in clause 7.2.2 above, specifying its date, the country in which such sale took place and the type of Product sold.

 

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At the end of the term of the Licence in a country or countries with respect to any Product as set forth above, subject to the Company’s continued compliance with the terms of this Agreement, the Company shall have a fully paid-up, royalty-free, exclusive, freely sublicenseable and assignable, perpetual and irrevocable licence in relation to the intellectual property included in the Licence and constituting know-how in such country or countries with respect to such Product which has not at such time become part of the public domain.

 

With respect to each Other Product, the Licence shall remain in force in each country in the world for so long as this Agreement has not been terminated in accordance with the provisions of this Agreement.

 

7.3.A Sublicence under the Licence with respect to Products may be granted by the Company without the prior written consent of Yeda, provided that:

 

7.3.1.the proposed Sublicence is for monetary consideration or money’s worth only;

 

7.3.2.the proposed Sublicence is to be granted in a bona fide arms-length commercial transaction, or if the proposed Sublicence is to be granted to an Affiliated Entity or a shareholder of the Company, such Sublicence shall be granted on market terms;

 

7.3.3.a draft of the proposed Sublicence (either final or close to final) is submitted to Yeda at least [***] prior to the signature thereof;

 

7.3.4.the proposed Sublicence is made by written agreement, the provisions of which are consistent with the terms of the Licence and contain, inter alia, the following terms and conditions:

 

7.3.4.1.the Sublicence shall expire automatically on the termination of the Licence for any reason, provided, however, that if pursuant to such Sublicence, such Sublicensee is granted an exclusive worldwide Sublicence in respect of one or more Products, and if such Sublicensee is not at the time of such termination in breach of its Sublicence with the Company such that the Company would have the right to terminate such Sublicence, Yeda shall be obligated, if such Sublicensee shall so request within [***] from the date of such termination, to negotiate in good faith with such Sublicensee the grant to such Sublicensee of a licence upon the same terms and conditions as this Agreement, or if applicable, in view of the scope of the Sublicence, substantially the same terms and conditions as this Agreement, for the development, testing manufacture, production, and sale of such Product or Products, mutatis mutandis, as if such Sublicensee had been the original licensee hereunder in respect of such Product or Products, provided that such Sublicensee has also agreed to indemnify Yeda, to Yeda’s satisfaction, against any losses or damage (including legal costs) resulting from or in connection with any claims brought by the Company following or in connection with such termination;

 

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7.3.4.2.the Company shall have audit rights vis-à-vis the Sublicensee consistent with Yeda’s rights under clause 9.5, and should the Company fail to exercise its rights thereunder, following Yeda’s demand, Yeda shall be entitled to appoint its representative to carry out such inspection in the Company’s stead.

 

7.3.4.3.the Sublicensee shall be bound by provisions substantially similar to those in clause 10 below relating to confidentiality binding the Company (the obligations of the Sublicensee so arising being addressed also to Yeda directly);

 

7.3.4.4.an exclusion of liability and indemnification undertaking in the same form, mutatis mutandis, as the provisions of clause 12 below (the indemnification obligations of the Sublicensee to be given also in favour of, and shall be actionable by Yeda, the Institute, any director, officer or employee of Yeda or of the Institute, or by the Inventors);

 

7.3.4.5.all terms necessary to enable performance by the Company of its obligations hereunder;

 

7.3.4.6.that the Sublicence shall not be assignable, otherwise transferable or further sublicenseable, save that the Sublicence shall be further sublicenseable (“Further Sublicence”) provided that:

 

(i)the proposed Further Sublicence shall be consistent, mutatis mutandis, with the provisions of clauses 7.3.1, 7.3.2, 7.3.4.1 (other than the proviso thereto) to 7.3.4.5, this clause 7.3.4.6 and 7.3.4.7 as if references in such clauses to “Sublicence” or “Sublicensee” were references to “Further Sublicence” or “Further Sublicensee” respectively;

 

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(ii)the proposed Further Sublicence shall not be assignable, otherwise transferable or further sublicenseable; and

 

(ii)any act or omission by the Further Sublicensee which would have constituted a breach of this Agreement by the Company had it been the act or omission of the Company shall constitute a breach of the Further Sublicence entitling the Sublicensee to terminate the Sublicence, and the Company hereby undertakes to procure that the Sublicensee will be obliged to inform the Company of such breach, to inform Yeda forthwith upon receipt of knowledge by the Company of such breach and, at the request of Yeda, and at the Company’s cost and expense, to procure that the Sublicensee shall exercise such right of termination.

 

In the event that a Further Sublicence shall be granted, all references in this Agreement to a Sublicensee shall be deemed to include references to a Further Sublicensee (for the avoidance of doubt, including in the definition of Net Sales and with respect to all payment obligations pursuant to clause 9 below).

 

7.3.4.7.that: (i) a copy of the agreement granting the Sublicence shall be made available to Yeda, within [***] of its execution; (ii) no amendments shall be made to any such Sublicence agreement which are not consistent with the criteria set out in this clause 7.3.4; and (iii) the Company shall submit to Yeda copies of all such amendments (as approved by Yeda, if required), promptly upon execution thereof;

 

and

 

7.3.5.any act or omission by the Sublicensee which would have constituted a breach of this Agreement by the Company had it been the act or omission of the Company, and which is not cured during the relevant cure period pursuant to this Agreement shall constitute a breach of the Sublicence with the Company entitling the Company to terminate the Sublicence, and the Company hereby undertakes to inform Yeda forthwith upon receipt of knowledge by the Company of such uncured breach and, at the request of Yeda, and at the Company’s cost and expense, to exercise such right of termination.

 

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7.4.A Sublicence under the Licence with respect to Other Products may be granted by the Company without the prior written consent of Yeda, provided only that the provisions of clauses 7.3.4.1 (other than the proviso thereto), 7.3.4.3, 7.3.4.4 and 7.3.5 above shall apply thereto.

 

7.5.For the avoidance of doubt, the Company shall not be entitled to grant, directly or indirectly, to any person or entity any right of whatsoever nature to exploit or use in any way the Licensed Information, the Subsequent Results, the Yeda Patents or the Joint Patents with respect to Products or Other Products or to develop, test, manufacture, produce and/or sell the Products or Other Products or any part of any of the aforegoing, save by way of Sublicence within the meaning of such term in clause 1.2.26 above or by way of a Subcontract with a Subcontractor and a distribution agreement with a Distributor and subject to the conditions of this clause 7 relating to any such grant.

 

7.6.The Company and/or its Sublicensees shall be entitled to enter into Subcontracts with Subcontractors and distribution agreements with Distributors without obtaining Yeda’s consent, provided that: (i) with regard to any agreement with such Distributor the terms of clauses 7.3.4.1, 7.3.4.2 and 7.3.4.4 and 7.3.4.5 are observed, mutatis mutandis; (ii) without in any way derogating from the Company’s obligations under this Agreement,  the Company shall be liable to Yeda for any loss or damage caused to Yeda in connection with or resulting from the grant of such rights; and (iii) any sales of Products made by any Distributor shall only be without making any alteration to such Products. The Company shall provide Yeda with a copy of all agreements entered into with Distributors as part of any audit carried out by Yeda pursuant to clause 9.5 below.

 

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7.7.The parties acknowledge that the Scientists plan to attempt to develop outside of the Research Program at the Institute a unique animal model intended to combine genetic and Microbiota simulation of inflammatory bowel disease (“Currently Planned Model”). In addition, the Scientists may develop, outside of the Research Program, other unique animal models intended to combine genetic and Microbiota simulation of human diseases, which Yeda and the Company may (without being under any obligation to do so) expressly agree are to be used within the framework of an agreed Research Program (such other unique animal models as aforesaid, which Yeda and the Company have in fact expressly agreed are to be used within the framework of an agreed Research Program, “Other Models”). In the event that the Currently Planned Model or any Other Models (collectively “Models”) are developed as aforesaid, then, during the term hereof, for such time as such Models are reasonably available, Yeda will use good faith efforts to procure that the Company will be provided with (and shall be granted a non-exclusive licence to use) such Models (if and when developed and, with respect to Other Models, for the avoidance of doubt, if Yeda and the Company have in fact expressly agreed that such Other Models are to be used within the framework of an agreed Research Program), at the actual cost of provision of such service, solely for the purpose of use as tools in enhancing the development of Products within the framework of the development of Products as referred to in clause 8 below, with no additional consideration being due to Yeda or to the Scientists in respect of such use, subject to the compliance by the Company with all conditions (determined by Yeda, the Institute, the Scientists or otherwise) necessary to permit such use (including, if so required by Yeda, the signature of a separate material transfer or services agreement) and subject to Yeda’s obligations to any third party that may fund or own the Models or components thereof (though the Company will not be afforded entry to the facility where the Models are kept). For purposes hereof, actual cost of the provision of such services means the actual out-of-pocket cost, plus overhead, in accordance with the Institute’s customary terms, of providing the Models, and not any development costs. For the avoidance of doubt, all right, title and interest in the Models shall remain with Yeda, and any data and results that may be generated from the Company’s use of the Models shall be deemed Subsequent Results and jointly owned pursuant to clause 5.1.2. The parties acknowledge that the Research Program (Appendix C) envisages the use of the Currently Planned Model, if developed and available in the course of the Research.

 

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7.8.For the avoidance of doubt, nothing contained in this Agreement shall prevent Yeda or the Institute or the Inventors from using the Licensed Information, the Subsequent Results, the Yeda Patents and the Joint Patents for internal academic research, which shall include transfer to other scientists of the Institute. Yeda and the Institute shall not transfer phages or sequences of phages created within the framework of the Research financed by the Company in accordance with the provisions of this Agreement, to any third party, including scientists at institutions other than the Institute. Other materials and data created within the framework of the Research financed by the Company in accordance with the provisions of this Agreement may be transferred by Yeda and the Institute to scientists at institutions other than the Institute solely for academic research purposes and only under a Material Transfer Agreement in the form attached hereto as Appendix E.

 

8.Development and CommercialiSation

 

8.1.The Initial Development Program is attached hereto as Appendix F. The Company will submit to Yeda copies of all additional or amended Development Programs for the development of Products as approved by the Company’s board of directors from time to time following the date hereof, as soon as practicable after the date of approval (each such Development Program a “Development Program”). The foregoing notwithstanding, the Company undertakes to submit copies of the following Development Programs: (i) during the Incubator Period, such development programs as are filed with the OCS, and (ii) within [***] of the end of the Incubator Period, a Development Program covering the period up to the end of Phase I clinical studies for at least [***] Products, to include milestones at intervals of no more than [***].

 

8.2.The Company is of the opinion that the Existing Know-How is revolutionary and that to the best of its knowledge, no product containing phages has been approved as a therapeutic to date. As the scientific, technical and regulatory hurdles that will be encountered in developing, producing, testing and registering Licensed Products cannot be assessed at present, the Company cannot commit to carrying out the Development Programs within set time frames. The Company does undertake, however, at its own expense, to use commercially reasonable efforts to expedite the commencement of the commercial sale of the Products (compliance with such obligation will be evaluated on the basis of current industry standards for research and development activities applicable to companies of similar size as the Company as generally applied to products of similar potential at similar stages in their life cycles), and to make commercially reasonable efforts to raise sufficient funds to carry out the Development Programs. The Company further undertakes to continue with development and/or commercialisation of at least [***] Products diligently throughout the period of the Licence.

 

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8.3.During the Incubator Period, the Company shall provide Yeda with copies of the reports that it submits to the OCS. Thereafter, on [***] of each calendar year, the Company shall provide Yeda with written progress reports (“Progress Reports”) which shall include descriptions of the progress and results, if any, of: (i) the tests and trials (if applicable) conducted and all other actions taken by the Company pursuant to the Initial Development Program or any other Development Program; (ii) manufacturing, sublicensing, marketing and sales; (iii) the Company’s plans in respect of the testing, undertaking of trials (if applicable) or commercialisation of Products; and (v) the amount of money invested in the Company during the preceding [***]. If the Company has provided a Development Program for more than 1 (one) Product, then such Progress Report shall provide such information separately for each such Product. The Company shall also provide any reasonable additional data that Yeda requires to evaluate the performance of the Company hereunder.

 

8.4.For the avoidance of doubt, without derogating from the remaining provisions of this clause 8 or of clause 13.2 below, nothing contained in this Agreement shall be construed as a warranty by the Company that any Development Program to be carried out by it as aforesaid will actually achieve its aims and the Company makes no warranties whatsoever as to any results to be achieved in consequence of the carrying out of any such Development Program.

 

8.5.The Company shall mark, and cause all its Sublicensees and Distributors to mark, all Products (including any Companion Diagnostic Kits of any Products) that are manufactured or sold under this Agreement with the number or numbers of each Patent applicable to such Product (or Companion Diagnostic Kit, as applicable).

 

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8.6.Without derogating from the aforegoing in this clause 8, the Company undertakes that an average of [***], calculated on a [***] rolling basis (meaning, in respect of [***]), (but no less than [***]) will be invested (by the Company and/or by a Sublicensee, if a Sublicence has been entered into) in the development of Products, [***].

 

9.Royalties

 

9.1.In consideration for the grant of the Licence, the Company shall pay Yeda:

 

9.1.1.a non-refundable licence fee of US $10,000 (ten thousand) United States Dollars) per year (or part thereof) during the term of this Agreement (“the Annual Licence Fee”) to be paid in advance at [***] during the term of this Agreement, commencing on [***] following the date on which the written report at the end of the Research Period, as referred to in clause 4.1 above, was provided to the Company, and thereafter on each 1 January during the term of the Licence;

 

9.1.2.the following royalty amounts:

 

9.1.2.1.a royalty of the following percentages of Net Sales of WIS Products (including any Companion Diagnostic Kits of any such WIS Products) by or on behalf of the Company or any Sublicensees:

 

a)[***] on Net Sales [***];

 

b)[***] on Net Sales [***]; and

 

c)[***] on Net Sales [***];

 

and

 

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9.1.2.2.a royalty of the following percentages of Net Sales by or on behalf of the Company of Company Products (including any Companion Diagnostic Kits of any such Company Products):

 

a)[***] on Net Sales [***];

 

b)[***] on Net Sales [***]; and

 

c)[***] on Net Sales [***];

 

provided that in respect of Group 2 Company Products which were Discovered during the [***] period commencing [***], such rates will be payable [***], and in respect of Group 2 Company Products which were Discovered during subsequent [***] periods commencing [***], such rates will be payable [***] per each [***] period starting as from [***].

 

provided further that:

 

i)in the event that there are any sales of a Product in any country that are not, at the time of such sales, covered by a Patent (within the meaning of such term in clause 1.2.20 above) and/or by Additional Protection as referred to in the third last paragraph of clause 7.2 above, in such country, then the royalty rate referred to in clauses 9.1.2.1 and 9.1.2.2 above shall, with respect to Net Sales of such Product made in such country during the period such Product is not so covered by a Patent as aforesaid, be reduced by [***], or by [***] upon the commencement of sale in such country of a product which is a Generic Equivalent to such Product. In this clause 9.1.2, “a Generic Equivalent” shall, with respect to any Product, mean a product in respect of which the following applies: (1) such product has the same active ingredient as such Product; and (2) such product has a full and unchallenged marketing approval as a generic equivalent of such Product by the appropriate regulatory authority and, in each case, is administered by a mode of administration substantially similar to such Product; and

 

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ii)if, after arm’s length bona fide negotiations, the Company enters into a licence agreement with any third party the subject matter of which licence is employed in the provision of technologies for production, manufacturing, stabilisation, storage, quality assurance or delivery of a Product or other active ingredients thereof, or which licence is required in order to prevent the infringement by a Product of the rights of such third party, the Company may reduce the royalty rate applicable hereunder (only with respect to any Product and in any country to which such licence relates) by [***] of the additional royalty rate beyond the first [***] payable to such third party; provided, however, that in no event will the royalty rate otherwise due to Yeda be reduced to less than [***] of the percentages set out in 9.1.2.1(a) to (c) and 9.1.2.2(a) to (c) above;

 

  and
   
9.1.3.the following percentages of all Sublicensing Receipts:

 

a)[***] of all Sublicensing Receipts [***];

 

b)[***] of all Sublicensing Receipts [***];

 

c)[***] of all Sublicensing Receipts [***];

 

d)[***] of all Sublicensing Receipts [***];

 

provided, however, that:

 

i)the amount payable to Yeda as a percentage of Sublicensing Receipts in respect of amounts received by the Company which constitute royalties based on sales of Company Products by Sublicensees shall not be less than an amount equal to [***] of the Net Sales of [***]; and

 

ii)in the event that payment from a Sublicensee to the Company in respect of Net Sales of Company Products shall, pursuant to the relevant Sublicence, cease due to lack of exclusivity or Patent protection as aforesaid, the Company will be relieved of its obligations to pay royalties on Net Sales of Company Products by Sublicensees pursuant to clause 9.1.2.1;

 

iii)for the avoidance of doubt, Yeda shall be entitled to receive percentages of Sublicensing Receipts which constitute royalties based on sales of Group 2 Company Products by Sublicensees in respect of the entire term of such Sublicence, including after the term of this Agreement; the provisions of this clause shall survive the termination or expiry of this Agreement; and

 

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iv)Yeda shall not be entitled to receive percentages of Sublicensing Receipts under Sublicenses that pertain solely to Other Products.

 

For the avoidance of doubt, the Company undertakes that all sales (within the meaning of such term in clause 1.3.4 above) of Products by the Company and each Sublicensee shall be for cash consideration only, save for reasonable quantities of Products provided for testing, registration and marketing purposes.

 

9.2.In calculating Net Sales, Sublicensing Receipts, all amounts shall be expressed in US Dollars and any amount received or invoiced in a currency other than US Dollars shall be translated into US Dollars, for the purposes of calculation, in accordance with the Exchange Rate between the US Dollar and such currency on the date of such receipt or invoice, as the case may be. For the avoidance of doubt, in calculating amounts received by the Company, whether by way of Net Sales or Sublicensing Receipts, any amount deducted or withheld in connection with any payment to the Company, on account of taxes on net income (including income taxes, capital gains tax, taxes on profits or taxes of a similar nature) payable by the Company in any jurisdiction, shall be deemed, notwithstanding such deduction or withholding, as having been received by the Company; provided that, in the case of a deduction or withholding in respect of Sublicensing Receipts only, in the event that the Company would not under Israeli or other applicable law be entitled to claim a corresponding tax credit or reimbursement in respect of the amount deducted or withheld, even assuming that in the relevant tax year the Company were to be liable to pay tax in Israel or other applicable jurisdiction, such amount would not be deemed to be a Sublicensing Receipt.

 

9.3.

 

9.3.1.Amounts payable to Yeda in terms of this clause 9 shall be paid to Yeda in US Dollars: (i) in the case of Net Sales, on a [***] and no later than [***] after the end of each [***] (provided that with respect only to the first [***] in which any Net Sales are made, the payment for such [***] will be made within [***] after the end of the [***]); or (ii) in the case of Sublicensing Receipts, no later than [***] after any such Sublicensing Receipts are received by the Company from any Sublicensees.

 

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9.3.2.The Company shall submit to Yeda: (i) no later than [***] after any Sublicensing Receipts are received, an interim written report setting out amounts owing to Yeda in respect of such Sublicensing Receipts, and (ii) no later than [***] after the end of each [***], commencing with the [***] in which any Net Sales are made or Sublicensing Receipts are received by the Company, a report, in a form acceptable to Yeda, certified as being correct by the chief financial officer of the Company, setting out all amounts owing to Yeda in respect of such previous [***] (or with respect to the [***] in which any Net Sales are made, the [***]) to which the report refers, and with full details of:

 

9.3.2.1.(i) the sales made by the Company and Sublicensees, including a breakdown of Net Sales according to country, identity of seller, currency of sales, dates of invoices, number and type of Products (including any Companion Diagnostic Kits of any Products)sold;

 

(ii)the Sublicensing Receipts, including a breakdown of Sublicensing Receipts according to identity of Sublicensees, countries, the currency of the payment and date of receipt thereof;

 

(iii)deductions applicable, as provided in the definition of “Net Sales”; and

 

(iv)any other matter necessary to enable the determination of the amounts of royalties payable hereunder.

 

9.4.The Company shall keep and shall contractually oblige its Sublicensees to keep complete, accurate and correct books of account and records consistent with sound business and accounting principles and practices and in such form and in such details as to enable the determination of the amounts due to Yeda in terms hereof. The Company shall supply Yeda at the end of each [***], commencing with the [***] in which any amount is payable by the Company to Yeda under this clause 9, a report signed by the Company’s chief financial officer in respect of the amounts due to Yeda pursuant to this clause 9 in respect of the year covered by the said report and containing details in accordance with clause 9.3 above in respect of the [***] reports. The Company shall retain and shall require and contractually oblige its Sublicensees to supply it with similar reports which may be divulged to Yeda’s representatives pursuant clause 9.5 and to retain the aforegoing books of account for [***] after the end of each [***] during the period of this Agreement, and, if this Agreement is terminated for any reason whatsoever, for [***] after the end of the [***] in which such termination becomes effective.

 

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9.5.At Yeda’s expense, Yeda shall be entitled to appoint representatives to inspect during normal business hours and to make copies of the Company’s books of account, records and other documentation (including technical data and lab books) to the extent relevant or necessary for the ascertainment or verification of the amounts due to Yeda under this clause 9, provided however that Yeda shall coordinate such inspection with the Company in advance. The Company shall take all steps necessary so that all such books of account, records and other documentation of the Company is available for inspection as aforesaid at a single location. Yeda shall not be entitled to exercise this right more than [***] a year. In the event that any inspection as aforesaid reveals any underpayment by the Company to Yeda in respect of any year of the Agreement in an amount exceeding [***] of the amount actually paid by the Company to Yeda in respect of such year then the Company shall (in addition to paying Yeda the shortfall together with interest thereon in accordance with clause 18.7 below), bear the costs of such inspection. The Company shall inspect and obtain copies of any Sublicensee’s books of account, records and other documentation (including technical data and lab books) to the extent relevant or necessary for the ascertainment or verification of the amounts due to Yeda under this clause 9 in accordance with the provisions of this clause 9.5, mutatis mutandis, provided that if the Company shall fail, following Yeda’s demand, to carry out such inspection, Yeda shall be entitled to exercise such rights of inspection with regard to any Sublicensee. The provisions of this clause 9.5 shall survive the termination of this Agreement for whatsoever reason for a period of [***] after the end of the calendar year in which such termination becomes effective.

 

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10.Confidentiality

 

10.1.The Company shall maintain in confidence all information or data relating to the Patents, the Licensed Information, the Subsequent Results, this Agreement and the terms hereof (hereinafter, collectively referred to as “the Confidential Information”), except and to the extent that the Company can prove that any such information or data is in the public domain at the date of the signing hereof or becomes part of the public domain thereafter (other than through a violation by the Company or a Sublicensee or a Distributor of this obligation of confidentiality) and except with regard to that portion, if any, of the Confidential Information expressly released by Yeda from this obligation of confidentiality by notice in writing to the Company to such effect. Notwithstanding the foregoing, the Company may disclose to its personnel, Distributors and Sublicensees, potential investors, FutuRx and the Incubators Committee the Confidential Information to the extent necessary for the exercise by it of its rights hereunder or in the fulfilment of its obligations hereunder, provided that it shall bind any such persons or entities with a similar undertaking of confidentiality in writing. The Company shall be responsible and liable to Yeda for any breach by its personnel or any Distributor or any Sublicensee of such undertakings of confidentiality as if such breach were a breach by the Company itself.

 

10.2.In addition to and without derogating from the aforegoing, the Company undertakes not to make mention of the names of Yeda, the Inventors, the Institute or any scientists or other employees of the Institute or any employee of Yeda in any manner or for any purpose whatsoever in relation to this Agreement, its subject-matter and any matter arising from this Agreement or otherwise, unless the prior written approval of Yeda thereto has been obtained.

 

10.3.Notwithstanding the provisions of clauses 10.1 and 10.2 above, the Company shall not be prevented from mentioning the name of Yeda, the Inventors, the Institute and/or any scientists or other employees of the Institute or any employee of Yeda or from disclosing any information if, and to the extent that, such mention or disclosure is to competent authorities for the purposes of obtaining approval or permission for the exercise of the Licence, or in the fulfilment of any legal duty owed to any competent authority (including a duty to make regulatory filings); The text that the Company may use in context of fundraising such as in a private placement memorandum or a public offering registration statement is attached hereto as Appendix G. Any other mention shall be subject to Yeda’s consent, which consent shall not be withheld unreasonably.

 

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10.4.Yeda shall maintain in confidence all information received by Yeda from the Company which has been designated by the Company in writing and in advance as confidential as well as all plans and reports received from the Company hereunder (including reports originating with its Affiliated Entities and Sublicensees), except and to the extent that: (i) any such information or data is in the public domain at the date of the signing hereof or becomes part of the public domain thereafter (other than through a violation by Yeda of this obligation of confidentiality) or is released by the Company from this obligation of confidentiality by notice in writing; (ii) Yeda is required to disclose such information in order to fulfil its obligations under this Agreement (including in connection with the filing and prosecution of patent applications in accordance with the provisions of clause 6 above); or (iii) Yeda is required to disclose such information in fulfilment of any legal duty owed to any competent authority (the Company hereby acknowledging that it is aware that such competent authority may not be bound by any confidentiality obligations and may disclose or be required to disclose such information to a third party, whether by order of court or by law or otherwise). For the avoidance of doubt, the provisions of this clause 10.4 shall not apply in respect of any information (not being Licensed Information) independently developed at the Institute without reference to the confidential information received from the Company.

 

10.5.For the avoidance of doubt, Yeda shall have the right to allow the scientists of the Institute to publish articles relating to the Licensed Information and the Subsequent Results in scientific journals or posters or to give lectures or seminars to third parties relating to the Licensed Information, on the condition that, to the extent that the information to be published or disclosed is Licensed Information which is not in the public domain, a draft copy of the said contemplated publication or disclosure shall have been furnished to the Company at least [***] before the making of any such publication or disclosure and the Company shall have failed to notify Yeda in writing, within [***] from receipt of the said draft publication or disclosure, of its opposition to the making of the contemplated publication or disclosure. Should the Company notify Yeda in writing within [***] from the receipt of the draft contemplated publication or disclosure that it opposes the making of such publication or disclosure because it includes material (which has been specified in said notice) in respect of which there are reasonable grounds (which have also been specified in said notice) requiring the postponement of such publication or disclosure so as not adversely to affect the Company’s interests under the Licence because such Licensed Information is patentable subject-matter for which patent protection pursuant to clause 6.1 above should be sought, then Yeda shall not permit such publication or disclosure unless and until there shall first have been filed an appropriate patent application in respect of the material to be published or disclosed as aforesaid. The Company acknowledges that it is aware of the importance to the researchers of publishing their work and, accordingly, the Company will use its best efforts not to oppose such publications. In no event may any such publications contain the Confidential Information of the Company.

 

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10.6.The obligations of the parties under this clause 10 shall survive any termination of this Agreement for a period of [***] (other than Yeda’s obligations pursuant to clause 10.5 which shall terminate upon the termination of this Agreement), but without derogating from Yeda’s right to commercialise pursuant to clause 13.5 below.

 

11.Assignment

 

The Company may assign or encumber all of its rights or obligations under this Agreement or arising therefrom, provided that (save where any such assignment would constitute an event entitling Yeda to an Exit Fee as set out in clause 15 below) any consideration received by the Company in respect of an assignment as aforesaid shall be deemed to be Sublicensing Receipts, entitling Yeda to consideration as set out in clause 9.1.3(b) to (d) above, and to which the other relevant provisions of clause 9 above shall apply, mutatis mutandis. Any assignment permitted under this clause 11 shall be subject to the assignee undertaking to Yeda in writing, in a form reasonably acceptable to Yeda, to be bound by all obligations of the Company under this Agreement.

 

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12.Exclusion of Liability and Indemnification

 

12.1.Yeda, the Inventors, the Institute and the directors, officers and employees of Yeda and/or of the Institute (hereinafter collectively “the Indemnitees”) shall not be liable for any claims, demands, liabilities, costs, losses, damages or expenses (including legal costs and attorneys’ fees) of whatever kind or nature (all of the aforegoing, collectively, “Liabilities”) caused to or suffered by any person or entity (including the Company or any Sublicensee or Further Sublicensee or Distributor of either) that directly or indirectly arise out of or result from or are encountered in connection with this Agreement or the exercise of the Licence, including directly or indirectly arising out of or resulting from or encountered in connection with: (i) the development, manufacture, sale or use of any of the Products or Other Products (including any Companion Diagnostic Kits of any Products or Other Products) by the Company, any Sublicensee, any Further Sublicensee, any Distributor or any person acting in the name of or on behalf of any of the aforegoing, or acquiring, directly or indirectly, any of the Products or Other Products (including any Companion Diagnostic Kits of any Products or Other Products) from any of the aforegoing; or (ii) the exploitation or use by the Company or any Sublicensee or any Further Sublicensee or any Distributor of the Licensed Information or any part thereof, including of any data or information given, if given, in accordance with this Agreement.

 

12.2.In the event that any of the Indemnitees should incur or suffer any Liabilities that directly or indirectly arise out of or result from or are encountered in connection with this Agreement or the exercise of the Licence as aforesaid in clause 12.1 above, or shall be requested or obliged to pay to any person or entity any amount whatsoever as compensation for any Liabilities as aforesaid in clause 12.1 above, then the Company shall indemnify and hold harmless such Indemnitees from and against any and all such Liabilities (including, for the avoidance of doubt, legal costs and attorneys’ fees). Without limiting the generality of the aforegoing, the Company’s indemnification as aforesaid and the exclusion of liability in clause 12.1 above shall extend to product liability claims and to damages, claims, demands, liabilities, losses, costs and expenses (in each case whether based in tort, contract or otherwise) attributable to death, personal injury or property damage or to penalties imposed on account of the violation of any law, regulation or governmental requirement.

 

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12.3.The Company shall at its own expense insure its liability pursuant to clause 12.2 above during the period beginning on the date of the signing of this Agreement and continuing during the entire period that the Licence is in force in any country, plus an additional period of [***]. Such insurance shall be in reasonable amounts and on reasonable terms in the circumstances, having regard, in particular, to the nature of the Products, and shall be subscribed for from a reputable insurance company. The named insured under such insurances shall be the Company, the Inventors, Yeda and the Institute and the beneficiaries thereof shall include also the respective employees, officers and directors of Yeda and the Institute. The policy or policies so issued shall include a “cross-liability” provision pursuant to which the insurance is deemed to be separate insurance for each named insured (without right of subrogation as against any of the insured under the policy, or any of their representatives, employees, officers, directors or anyone in their name) and shall further provide that the insurer will be obliged to notify each insured in writing at least [***] in advance of the expiry or cancellation of the policy or policies. The Company hereby undertakes to comply punctually with all obligations imposed upon it under such policy or policies and in particular, without limiting the generality of the aforegoing, to pay in full and punctually all premiums and other payments for which it is liable pursuant to such policy or policies. The Company shall be obliged to submit to Yeda copies of the aforesaid insurance policy or policies within [***] of the date of issue of each such policy.

 

12.4.The provisions of this clause 12 shall survive the termination of this Agreement for whatsoever reason but without derogating from Yeda’s right to commercialise pursuant to clause 13.5 below.

 

13.Term and Termination

 

13.1.Save as set out hereunder or unless otherwise agreed to in writing, this Agreement shall terminate upon the occurrence of the later of the following:

 

13.1.1.the date of expiry of the last of the Patents; or

 

13.1.2.the expiry of a continuous period of 15 (fifteen) years during which there shall not have been a First Commercial Sale of any Product in any country.

 

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13.2.The Company shall have the right to terminate this Agreement by [***] advance written notice to Yeda at any time prior to the First Commercial Sale in respect of the first Product, provided that such notice is accompanied by a written undertaking to Yeda that (i) the Company will not and does not intend to develop, test, manufacture, produce or sell WIS Products or Group 1 Company Products; and (ii) should the Company develop, test, manufacture, produce or sell Group 2 Company Products, the financial provisions of this Agreement relating thereto, including clauses 9.1.2.2 and 9.1.3, solely as relating to Group 2 Company Products, shall continue to apply in accordance with their terms, as though this Agreement had remained in force and effect.

 

13.3.Notwithstanding anything to the contrary contained in this Agreement:

 

13.3.1.Yeda shall be entitled (without derogating from clause 7.3.4.1 above) to terminate the Licence hereunder, by written notice to the Company (effective immediately), such termination being its sole remedy in respect of the matters set out below, if:

 

13.3.1.1.the Company shall fail to meet the requirement set out in clause 8.6; or

 

13.3.1.2.the Company shall, at any given time, have fewer than [***] Products in active development or continuous sales (where “continuous sales” in relation to a Product shall mean that there shall not have been a period of [***] or more during which no sales of such Product shall have taken place (except as a result of force majeure or other factors beyond the control of the Company); or

 

13.3.1.3.a Phase I clinical study in respect of at least [***] Product shall not have commenced within [***] from the date projected by the Company pursuant to clause 8.1, unless the Company can demonstrate that it is making diligent efforts to achieve commencement of Phase I clinical studies as aforesaid.

 

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13.3.2.Without derogating from the aforegoing, Yeda shall be entitled to terminate this Agreement (unless previously terminated in accordance with the provisions of this Agreement), by written notice to the Company (effective immediately), if the Company challenges the validity of any of the Patents. If any such challenge is unsuccessful, the Company shall (in addition to Yeda’s right to terminate pursuant to this clause 13.3.2) pay to Yeda liquidated damages in the amounts of [***], such liquidated damages being a genuine pre-estimate of the damage that would be incurred by Yeda as a result of any such challenge.

 

13.4.Without derogating from the parties’ rights hereunder or by law to any other or additional remedy or relief, it is agreed that either Yeda or the Company may terminate this Agreement and the Licence hereunder by serving a written notice to that effect on the other upon or after: (i) the commitment of a material breach hereof by the other party, which material breach cannot be cured or, if curable, which has not been cured by the party in breach within [***] (or, in the case of failure by the Company to pay any amount due from the Company to Yeda pursuant to or in connection with this Agreement on or before the due date of payment, [***] after receipt of a written notice from the other party in respect of such breach, or (ii) the granting of a winding-up order in respect of the other party, or upon an order being granted against the other party for the appointment of a receiver, or if such other party passes a resolution for its voluntary winding-up, or if a temporary or permanent liquidator or receiver is appointed in respect of such other party, or if a temporary or permanent attachment order is granted on such other party’s assets, or a substantial portion thereof, or if such other party shall seek protection under any laws or regulations, the effect of which is to suspend or impair the rights of any or all of its creditors, or to impose a moratorium on such creditors, or if anything analogous to any of the aforegoing in this clause 13.3 above under the laws of any jurisdiction occurs in respect of such other party; provided that in the case that any such order or act is initiated by any third party, the right of termination shall apply only if such order or act as aforesaid is not cancelled within [***] of the grant of such order or the performance of such act. Notwithstanding the foregoing, any delay in payment by the Company of no more than [***], occurring no more than [***] per year, caused by a corresponding delay in receiving payment from a Sublicensee, which occurs in the ordinary course of business, shall not be grounds for termination by Yeda pursuant to this clause 13.4.

 

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13.5.Upon the termination of this Agreement for whatever reason, except for the termination of this Agreement due to the passage of time: (i) all rights in and to the Licensed Information and the Yeda Patents and Yeda’s rights in the Subsequent Results and the Joint Patents shall revert to Yeda and the Company shall not be entitled to make any further use thereof and the Company shall deliver to Yeda all drawings, plans, diagrams, specifications, other documentation, models or any other physical matter in the Company’s possession in any way containing, representing or embodying the Licensed Information; and (ii) the Company shall grant to Yeda a non-exclusive, irrevocable, perpetual, fully paid-up, sublicenseable, worldwide licence in respect of the Company’s rights in the Subsequent Results and the Company’s Information (subject, if required, to the consent of the Incubators Committee and/or to Yeda’s undertaking to comply with any regulatory obligations and to assume any royalty obligations in respect thereof). In this clause 13.5, the term “the Company’s Information” shall mean any invention, product, material, method, process, technique, know-how, data, information or other result which does not form part of the Licensed Information, the Initial Research Results or the Subsequent Results, discovered or occurring in the course of or arising from the performance by the Company of the development work pursuant to clause 8 above, including any regulatory filing or approval, filed or obtained by the Company in respect of WIS Products and Group I Products (including any Companion Diagnostic Kits of any WIS Products or Group 1 Products, all communications with the regulatory authorities, the drug master file and any data, information or document covered by data protection or data exclusivity. Yeda shall bear all out-of-pocket costs reasonably incurred by the Company in order to comply with the provisions of this clause 13.5. For the avoidance of doubt, nothing in the foregoing shall be construed as an obligation on the part of the Company to deliver to Yeda any physical matter relating to Group 2 Company Products or to any Other Products.

 

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13.6.In the event that this Agreement shall be terminated, other than by way of termination by Yeda pursuant to clause 13.4 above, and that Yeda shall grant to a third party a licence in respect of the Subsequent Results, the Joint Patents and/or the Company’s Information (either without or together with the Licensed Information and the Yeda Patents) and Yeda shall receive in respect of such licence consideration, then, subject to the Company having complied and continuing to comply with all its obligations under this Agreement which remain in existence following termination of this Agreement as aforesaid, Yeda shall pay to the Company an amount equal to [***] of the Net Proceeds actually received by Yeda in respect of such a licence to Company Products and [***] of the Net Proceeds actually received by Yeda in consideration of such a licence to WIS Products, until such time as the Company shall have received, in aggregate, an amount equal to (i) [***] the amount invested by the Company (not including grants funding and any payments made to Yeda hereunder or to the Scientists under any consultancy agreement for research into Group 1 Products) in the development of the Products included within the scope of such licences and (ii) the amount of any obligations of the Company to repay or pay royalties in respect of grants awarded for the development of any Products incorporating such Subsequent Results, Joint Patents and/or Company’s Information included within the scope of such licences, but only to the extent such obligations are not assumed by Yeda. The provisions of clauses 9.3 through 9.5 shall apply with respect to payments to the Company in respect of Net Proceeds, mutatis mutandis.

 

For the purpose of this clause 13.6, “Net Proceeds” means any consideration actually received by Yeda in respect of such licence in cash or in kind (excluding funds or grants for research and/or development at the Institute or payments for the supply of services) after deduction of all costs, fees and expenses incurred by Yeda in connection with such licence (including, without limitation, patent related costs, and all attorneys’ fees and expenses and other costs and expenses in connection with the negotiation, conclusion and administration of such licence).

 

13.7.The termination of this Agreement for any reason shall not relieve the Company of any obligations which shall have accrued prior to such termination.

 

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14.EQUITY

 

14.1.The Company will, on the date of signature of this Agreement, issue to Yeda, in consideration for their nominal value, a number of ordinary shares of the Company, representing, immediately after the issue thereof, [***] of the Company’s issued and outstanding share capital of the Company, on a Fully Diluted Basis (“Yeda’s Shares”), as per the cap table attached hereto as Appendix H. The rights to be attached to Yeda’s Shares will be identical to those rights attached to any ordinary shares in the Company issued or transferred to the incorporating shareholders of the Company. In this clause 14, “Fully Diluted Basis” shall mean, after taking into account all issued and outstanding share capital of the Company, all securities issuable upon the conversion of any then-existing convertible securities or loans, the exercise of all outstanding warrants or options and any other right granted to any third party to receive shares in the Company, as if all such matters had been converted or exercised, as applicable. For the avoidance of doubt, commitments by the shareholders to invest further funds in the Company against receipt of preferred shares of nominal value NIS 0.01 each of the Company (the “Preferred Shares”), beyond the Ordinary Share Investment (defined below) shall not be taken into account for the purpose of calculating the Fully Diluted Basis. [REINSTATED]
14.2.The Company undertakes that Yeda’s percentage ownership of the Company as aforesaid will not be diluted by grants from the OCS which are invested in the Company within the framework of the biotechnological incubator operated by FutuRx pursuant to Directive 8.22 of the Director General of the Israeli Ministry of Economy (“FutuRx Investment Amount”) or by investments in the Company by way of irredeemable ordinary share capital, including ordinary share capital invested by way of matching funds to the FutuRx Investment Amount as required under the terms of the OCS grants (the “Ordinary Share Investment”), in the aggregate amount of [***].

 

14.3.Upon expiry of the Incubator Period, in the event that the sum of the FutuRx Investment Amount and the Ordinary Share Investment shall equal or exceed [***] in aggregate, then no further shares of the Company shall be issued to Yeda. To the extent that such sum shall be less than [***] in aggregate, then the Company shall issue to Yeda further fully-paid up ordinary shares in the Company as per the formula shown in Appendix I attached hereto.

 

14.4.Yeda shall be entitled, free of any restriction, whether in the Company’s articles of association or otherwise, to transfer any or all of the Shares to the Institute or to any scientist, employee or any other person entitled to receive shares under the rules of the Institute or to a trust created for the benefit of any of the aforementioned persons (all such entities “Permitted Transferees”).

 

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14.5.In the event that the Company shall propose at any time to issue (any such proposed issue a “Share Issue”) any shares therein or other securities convertible into shares of any class or nature (“Additional Shares”), Yeda shall have the same right as afforded to the incorporating shareholders of the Company or contractually granted thereto, to participate in such Share Issue pro rata to Yeda’s then percentage shareholding in the Company, on the same terms and conditions as are offered to other prospective acquirers of Additional Shares in each such Share Issue (such right a “Right of Participation”), all in accordance with the articles of association of the Company.

 

14.6.Yeda shall be entitled, by written notice to the Company, to assign, at any time any particular Right of Participation, in whole or in part, or all Rights of Participation, to one or more Permitted Transferees or to Osage University Partners. Any Participation Notice confirming participation in a Share Issue shall further indicate whether the relevant Right of Participation is being exercised by Yeda, by Permitted Transferees, by Osage University Partners or a combination thereof.

 

14.7.The provisions of clauses 14.3 to 14.6 shall survive the termination of this Agreement.

 

15.Exit FEE

 

In the event of any M&A Transaction (as defined in the Company’s articles of association), including: (i) a merger of the Company with or into another entity; or (ii) the sale of substantially all of the Company’s shares or assets (any of the aforegoing an “Exit”), the Company confirms and undertakes that Yeda shall, in addition to any entitlement as a shareholder of the Company, within [***] of the closing of the relevant Exit, receive from the Company an amount equal to 1% (one per cent) of the total consideration (of whatever kind) received by the Company’s shareholders as a result of the Exit, following, where relevant, the payment of all deemed liquidation preferences.

 

For the avoidance of doubt, in the event of an Exit, Yeda shall not be entitled to any share in the consideration received in connection therewith other than the Exit Fee and the proceeds of the sale of any shares issued to Yeda as referred to in clause 14 above.

 

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16.Notices

 

Any notice or other communication required to be given by one party to the other under this Agreement shall be in writing and shall be deemed to have been served: (i) if personally delivered, when actually delivered; or (ii) if sent by facsimile, the next business day after receipt of confirmation of transmission; or (iii) 10 (ten) days after being mailed by certified or registered mail, postage prepaid (for the purposes of proving such service—it being sufficient to prove that such notice was properly addressed and posted) to the respective addresses of the parties set out below, or to such other address or addresses as any of the parties hereto may from time to time in writing designate to the other party hereto pursuant to this clause 16:

 

16.1.to Yeda at: P.O. Box 95

Rehovot 76100

Israel

Attention:the CEO
Facsimile:(08) 9470739

 

16.2.to the Company at: 2 Ilan Ramon Street, Science Park

Ness Ziona 7403635

Israel

Attention:the CEO
Facsimile:(08) 9553111

 

with a copy that will not

  constitute notice to: Pearl Cohen Zedek Latzer Baratz

1 Azrieli Centre,

Round Tower, 18th floor

Tel-Aviv 6702101

Attention: [***]

Facsimile: (03) 6073778

 

17.Value Added Tax

 

The Company shall pay to Yeda all amounts of Value Added Tax imposed on Yeda in connection with the transactions under this Agreement. All amounts referred to in this Agreement shall be exclusive of Value Added Tax.

 

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18.Governing law and jurisdiction

 

This Agreement shall be governed in all respects by the laws of Israel and the parties hereby submit to the exclusive jurisdiction of the competent Israeli courts, except that Yeda may bring suit against the Company in any other jurisdiction outside Israel in which the Company has assets or a place of business.

 

19.Miscellaneous

 

19.1.The headings in this Agreement are intended solely for convenience or reference and shall be given no effect in the interpretation of this Agreement.

 

19.2.This Agreement constitutes the entire agreement between the parties hereto in respect of the subject-matter hereof, and supersedes all prior agreements or understandings between the parties relating to the subject-matter hereof (including the Memorandum of Understanding between Yeda and the Company dated 30 September 2014) and this Agreement may be amended only by a written document signed by both parties hereto. No party has, in entering into this Agreement, relied on any warranty, representation or undertaking, except as may be expressly set out herein.

 

19.3.This Agreement may be executed in any number of counterparts (including counterparts transmitted by telecopier or fax), each of which shall be deemed to be an original, but all of which taken together shall be deemed to constitute one and the same instrument.

 

19.4.No waiver by any party hereto, whether express or implied, of its rights under any provision of this Agreement shall constitute a waiver of such party’s rights under such provisions at any other time or a waiver of such party’s rights under any other provision of this Agreement. No failure by any party hereto to take any action against any breach of this Agreement or default by another party hereto shall constitute a waiver of the former party’s rights to enforce any provision of this Agreement or to take action against such breach or default or any subsequent breach or default by such other party.

 

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19.5.If any provision of this Agreement is held to be unenforceable under applicable law, then such provision shall be modified as set out below and the balance of this Agreement shall be interpreted as if such provision were so modified and shall be enforceable in accordance with its terms. The parties shall negotiate in good faith in order to agree on the terms of an alternative provision which complies with applicable law and achieves, to the greatest extent possible, the same effect as would have been achieved by the invalid or unenforceable provision.

 

19.6.Nothing contained in this Agreement shall be construed to place the parties in a relationship of partners or parties to a joint venture or to constitute either party an agent, employee or a legal representative of the other party and neither party shall have power or authority to act on behalf of the other party or to bind the other party in any manner whatsoever.

 

19.7.Any amount payable hereunder by one of the parties to the other that has not been paid by its due date of payment shall bear interest from its due date of payment until the date of actual payment, at the rate of the lower of [***] or the highest rate permitted under applicable law or pro rata for part thereof.

 

19.8.All payments to be made to Yeda hereunder shall be made in US Dollars or in Euros by banker’s cheque or by bank transfer to Yeda’s bank account, the details of which are as follows: Bank Leumi le–Israel B.M., Rehovot business branch, 2 Ilan Ramon Street, Ness Ziona, branch #[***], account no. [***]; swift: [***], Routing Number: [***], IBAN no. [***].

 

19.9.All payments to be made to Yeda hereunder shall be made free and clear of, and without any deduction for or on account of, any set-off, counterclaim or tax.

 

19.10.Each party agrees to execute, acknowledge and deliver such further documents and instruments and do any other acts, from time to time, as may be reasonably necessary, to effectuate the purposes of this Agreement.

 

19.11.None of the provisions of this Agreement shall be for the benefit of, or enforceable by, any person who is not a party to this Agreement, save for clauses 10 and 12 above.

 

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IN WITNESS WHEREOF the parties hereto have set their signatures as of this 22 day of June 2015.

 

for YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED   for MBCURE LTD.
         
Signature:  /s/ Prof. Mudi Sheves   Signature:  /s/ Dr. Naomi Zak
Name Prof. Mudi Sheves   Name: Dr. Naomi Zak
Title Chairman   Title: CEO
         
      Signature:  /s/ Dr. Einat Zisman
      Name: Dr. Einat Zisman
      Title: Director

 

List of Appendices:

 

AExisting Know-How
BThe Research Budget
CThe Research Program
DLetter of Instructions/Power of Attorney
EMTA
FInitial Development Program
GApproved Text
HCapitalization Table
IYeda Anti-Dilution Calculation

 

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Appendix D

Letter of Instructions - Patent Counsel

 

Date:

To:

 

The undersigned, on its own behalf and, as applicable, on behalf of its permitted successors and/or assigns, hereby empowers, authorises, directs and instructs you, to:

 

release the Power of Attorney attached hereto as Annex 1 (the “POA”) to Yeda Research and Development Company Limited and/or, as applicable, its respective successors and/or assigns (“Yeda”), upon Yeda’s first demand to you in writing to such effect (the “Demand”); and

 

act upon and in accordance with Yeda’s other instructions as may be included in the Demand and/or in any other writing issued to you by Yeda.

 

You shall hold the POA in escrow pending your receipt of the Demand or Yeda’s other instructions as aforesaid, and upon and as from your receipt of the Demand or Yeda’s other instructions as aforesaid, you shall act solely in accordance therewith, and in no other manner. Without limiting the foregoing, you shall not be entitled to act upon the demand and/or instructions of any person or entity, other than Yeda.

 

Yeda shall be deemed a third party beneficiary of this Letter of Instructions.

 

This Letter of Instructions and any of its terms are irrevocable and unconditional on the part of the undersigned and, as applicable, on the part of the undersigned’s permitted successors and/or assigns.

 

IN WITNESS WHEREOF, the undersigned has executed this Letter of Instructions as of the date hereof, by its duly authorized representatives:

 

   
MBCure LTD.  
   
By:              
Name:     
Title:    
   
Agreed and accepted,  
   
   

 

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Annex 1

 

Power of Attorney

 

Date:

 

To: Yeda Research and Development Company Ltd.

 

The undersigned, on its own behalf and, as applicable, on behalf of its permitted successors and/or assigns, hereby empowers and authorises Yeda Research and Development Company Ltd. and/or, as applicable, its respective successors and/or assigns (“Yeda”) and/or any of Yeda’s officers, and appoints Yeda and/or any of Yeda’s officers as the undersigned’s attorney-in-fact, to execute any document and/or instrument including without limitation any deeds of assignment and patent forms and perform any other acts, all on behalf of the undersigned and on behalf of its permitted successors and/or assigns, as Yeda may deem necessary or appropriate for purposes of the assignment to Yeda of the undersigned’s part interest in the Yeda Patents (as such term is defined in the Research and Licence Agreement by and between MBCure LTD. and Yeda of June 22, 2015).

 

This Power of Attorney and any of its terms are worldwide, and this Power of Attorney is given for the benefit of a third party, and since a third party’s rights are dependent upon the validity of this power of attorney, it is irrevocable and unconditional on the part of the undersigned and, as applicable, on the part of the undersigned’s permitted successors and/or assigns.

 

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as of the date hereof, by its duly authorised representatives:

 

   
MBCure Ltd.  
   
By:              
Name:     
Title:    

 

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Appendix I

[***]

 

[***]

 

 

- 59 -

 

(Back To Top)

Section 10: EX-10.6 (EXCLUSIVE PATENT LICENSE AGREEMENT DATED, APRIL 25, 2017, BETWEEN BIOMX LTD. AND THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY)

Exhibit 10.6

 

Pursuant to Item 601(B)(10) of Regulation S-K, certain portions of this exhibit have been redacted and, where applicable, have been marked “[***],” such redactions are immaterial and would be competitively harmful if publicly disclosed.

 

 

 

 

 

 

 

 

 

 

 

 

 MASSACHUSETTS INSTITUTE OF TECHNOLOGY

 

 

EXCLUSIVE PATENT LICENSE AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

TABLE OF CONTENTS ii
R E C I T A L S 1
1. Definitions. 2
2. Grant of Rights. 7
3. COMPANY Diligence Obligations. 10
4. Royalties and Payment Terms. 12
5. Reports and Records. 16
6. Patent Prosecution. 18
7. Infringement. 20
8. Indemnification and Insurance. 22
9. Representations AND Warranties. 23
10. Assignment. 24
11. General Compliance with Laws 24
12. Termination. 25
13. Dispute Resolution. 27
14. Miscellaneous. 29
APPENDIX A 33
APPENDIX B 34
EXHIBIT A 35

 

ii

 

 

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

EXCLUSIVE PATENT LICENSE AGREEMENT

 

This Agreement, effective as of the date set forth above the signatures of the parties below (the “EFFECTIVE DATE”), is between the Massachusetts Institute of Technology (“M.I.T.”), a Massachusetts corporation, with a principal office at 77 Massachusetts Avenue, Cambridge, MA 02139-4307 and MBcure Ltd. (“COMPANY”), a company formed under the laws of Israel, having its principal office at 2 Ilan Ramon, Ness Ziona, Israel.

 

R E C I T A L S

 

WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined herein) relating [***] and has the right to grant licenses under said PATENT RIGHTS;

 

WHEREAS, Timothy Kuan-Ta Lu, an inventor of the PATENT RIGHTS and current employee of M.I.T., has or will shortly acquire equity in COMPANY, the Conflict Avoidance Statement of inventor name is attached as Exhibit A hereto;

 

WHEREAS, M.I.T. desires to have the PATENT RIGHTS developed and commercialized to benefit the public and is willing to grant a license thereunder;

 

WHEREAS, COMPANY has represented to M.I.T., to induce M.I.T. to enter into this Agreement, that COMPANY shall commit itself to a diligent program of exploiting the PATENT RIGHTS so that public utilization shall result therefrom; and

 

WHEREAS, COMPANY desires to obtain a license under the PATENT RIGHTS upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, M.I.T. and COMPANY hereby agree as follows:

 

1. Definitions.

 

1.1 “AFFILIATE” shall mean any legal entity (including, but not limited to, a corporation, partnership, or limited liability company) that is controlled by COMPANY. For the purposes of this definition, the term “control” means (i) beneficial ownership of at least fifty percent (50%) of the voting securities of a corporation or other business organization with voting securities or (ii) a fifty percent (50%) or greater interest in the net assets or profits of a partnership or other business organization without voting securities.

 

 

 

 

1.2 “COVERED MATERIAL” shall mean any active ingredient for use in the Field that, in whole or in part:

 

(i) absent the license granted hereunder, would infringe one or more valid claims of the PATENT RIGHTS; or

 

(ii) is manufactured using a LICENSED PROCESS or that, when used, practices a LICENSED PROCESS; and/or

 

(iii) contains an IDENTIFIED PRODUCT

 

1.3 “FIELD” shall mean (a) the treatment, prevention or diagnosis of any disease or condition within the labeled indications: [***] and (b) the treatment, prevention or diagnosis of any other human disease or condition by specifically targeting any of the following: [***].

 

COMPANY may request, from time to time, the inclusion of one or more additional bacteria to the FIELD; if MIT has not granted an exclusive license with respect to such requested bacteria that would prevent the inclusion of such bacteria in the license, the parties will negotiate in good faith the possibility of including such additional bacteria to the FIELD.

 

1.4 “IDENTIFIED PRODUCT” shall mean any product that in whole or in part is created, developed, discovered, identified or selected by the use of LICENSED PROCESS(ES) by the COMPANY or AFFILIATES or SUBLICENSEES. Notwithstanding the foregoing, any IDENTIFIED PRODUCT that also falls within the definition of LICENSED PRODUCT shall still be deemed a LICENSED PRODUCT for the purposes of the AGREEMENT and COMPANY shall make all payments due for a LICENSED PRODUCT

 

1.5 “IMPROVEMENT” shall mean any patentable or potentially patentable invention that:

 

(i) is made under an M.I.T. research program in the laboratory of Timothy Kuan-Ta Lu as the Principal Investigator (“Principal Investigator”);

 

(ii) is disclosed to the M.I.T. Technology Licensing Officer within [***] of the EFFECTIVE DATE;

 

(iii) is dominated by claims of the PATENT RIGHTS licensed under this Agreement and listed in Appendix A as of the EFFECTIVE DATE; and

 

2

 

 

(iv) is available for licensing after satisfaction of any obligations to third parties, including without limitation sponsors of the research leading to such invention.

 

1.6 “LICENSED PRODUCT” shall mean any product that, in whole or in part:

 

(i) absent the license granted hereunder, would infringe one or more valid claims of the PATENT RIGHTS; or

 

(ii) is manufactured by using a LICENSED PROCESS or that, when used, practices a LICENSED PROCESS.

 

1.7 “LICENSED PROCESS” shall mean any process the practice of which, absent the license granted hereunder, would infringe one or more valid claims of the PATENT RIGHTS or which uses a LICENSED PRODUCT.

 

1.8 “NET SALES” shall mean the gross amount billed by COMPANY and its AFFILIATES and SUBLICENSEES for LICENSED PRODUCTS, IDENTIFIED PRODUCTS, and LICENSED PROCESSES, less the following:

 

(i) customary trade, quantity, or cash discounts to the extent actually allowed and taken;

 

(ii) amounts repaid or credited by reason of rejection or return;

 

(iii) portions of invoiced amounts written off by COMPANY or its AFFILIATES as uncollectable (if such amounts are subsequently collected, they will be deemed NET SALES in the quarter in which they are collected); and

 

(iv) to the extent separately stated on purchase orders, invoices, or other documents of sale, any taxes or other governmental charges levied on the production, sale, transportation, delivery, or use of a LICENSED PRODUCT, IDENTIFIED PRODUCT or LICENSED PROCESS which is paid by or on behalf of COMPANY, its AFFILIATE or a SUBLICENSEE; and

 

(v) outbound transportation (including packaging, freight, shipping and insurance) costs if separately stated on the invoice.

 

No deductions shall be made for commissions paid to individuals whether they be with independent sales agencies or regularly employed by COMPANY and on its payroll, or for cost of collections. NET SALES shall occur on the date of billing for a LICENSED PRODUCT, IDENTIFIED PRODUCT or LICENSED PROCESS. If a LICENSED PRODUCT, IDENTIFIED PRODUCT or a LICENSED PROCESS is distributed at a discounted price that is substantially lower than the customary price charged by COMPANY for sales to similarly situated customers (e.g. customers of similar size, buying power and/or strategic value in the same or similar territory, taking into consideration factors such as government imposed pricing and local pricing of therapeutics) or distributed for non-monetary consideration (whether or not at a discount), NET SALES shall be calculated based on the average price (the average price is not calculated using sale prices of LICENSED PRODUCTS, IDENTIFIED PRODUCTS or LICENSED PROCESSES that are substantially lower than customary price or that are distributed for non-monetary consideration) of the same LICENSED PRODUCT, IDENTIFIED PRODUCT or LICENSED PROCESS charged to an independent third party in the same territory during the same REPORTING PERIOD or, in the absence of such sales, on the fair market value of the LICENSED PRODUCT, IDENTIFIED PRODUCTS or LICENSED PROCESS.

 

3

 

 

Non-monetary consideration shall not be accepted by COMPANY, any AFFILIATE, or any SUBLICENSEE for any LICENSED PRODUCTS, IDENTIFIED PRODUCTS or LICENSED PROCESSES without the prior written consent of M.I.T.