|
Delaware
(State or other jurisdiction of incorporation or organization) |
| |
2834
(Primary Standard Industrial Classification Code Number) |
| |
85-0870387
(I.R.S. Employer Identification No.) |
|
|
Copies to:
|
| |||
|
Steven M. Skolnick, Esq.
Lowenstein Sandler LLP 1251 Avenue of the Americas New York, New York 10020 Telephone: (212) 262-6700 |
| |
Richard I., Anslow, Esq.
Lawrence Rosenbloom, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 Telephone: (212) 370-1300 |
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Large accelerated filer
☐
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Accelerated filer
☐
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Non-accelerated filer
☒
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Smaller reporting company
☒
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| | | |
Emerging growth company
☒
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| | |
Per Share
|
| |
Total
|
| ||||||
Initial public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | ||
Proceeds, before expenses, to us
|
| | | $ | | | | | $ | | |
| | |
Page
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| | | | 1 | | | |
| | | | 9 | | | |
| | | | 10 | | | |
| | | | 40 | | | |
| | | | 42 | | | |
| | | | 42 | | | |
| | | | 43 | | | |
| | | | 45 | | | |
| | | | 47 | | | |
| | | | 54 | | | |
MANAGEMENT | | | | | 73 | | |
| | | | 82 | | | |
| | | | 84 | | | |
| | | | 85 | | | |
| | | | 94 | | | |
| | | | 96 | | | |
| | | | 101 | | | |
| | | | 101 | | | |
| | | | 101 | | | |
| | | | 101 | | | |
| | | | F-1 | | |
| | |
For the Three
Months Ended March 31, 2020 |
| |
For the Three
Months Ended March 31, 2019 |
| |
For the
Year Ended December 31, 2019 |
| |
For the Period
from April 5, 2018 (Inception) through December 31, 2018 |
| ||||||||||||
Statement of Operations Data | | | | | | | | | | | | | | | | | | | | | | | | | |
General and administrative expense
|
| | | $ | 79,411 | | | | | $ | 7,747 | | | | | $ | 114,496 | | | | | $ | 12,342 | | |
Research and development expense
|
| | | | 195,812 | | | | | | 106,632 | | | | | | 484,113 | | | | | | 204,161 | | |
Research and development expense – license acquired
|
| | | | — | | | | | | — | | | | | | — | | | | | | 5,776 | | |
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | | | | $ | 598,609 | | | | | $ | 222,279 | | |
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 249,804 | | | | | $ | 6,442 | | | | | $ | 24,947 | | | | | $ | 9,322 | | |
Total assets
|
| | | | 249,804 | | | | | | 6,442 | | | | | | 24,947 | | | | | | 9,322 | | |
Working capital (deficit)
|
| | | | 32,690 | | | | | | 3,988 | | | | | | (98,301) | | | | | | 2,721 | | |
Temporary equity
|
| | | | 1,187,345 | | | | | | 352,619 | | | | | | 765,527 | | | | | | 232,096 | | |
Accumulated deficit
|
| | | | (1,154,655) | | | | | | (348,631) | | | | | | (863,828) | | | | | | (229,375) | | |
Total members’ deficit
|
| | | | (1,154,655) | | | | | | (348,631) | | | | | | (863,828) | | | | | | (229,375) | | |
| | |
As of
|
| |||||||||||||||
| | |
Actual
|
| |
Pro Forma
|
| |
Pro
Forma as Adjusted |
| |||||||||
| | |
(unaudited)
|
| |||||||||||||||
| | |
(in thousands, except share and per
share data) |
| |||||||||||||||
Cash | | | | $ | 250 | | | | | $ | | | | | $ | | | ||
Preferred units, 2,257,600 issued and outstanding at March 31, 2020; aggregate liquidation preferences of $1,187,345 as of March 31, 2020 (pro forma and pro forma adjusted)
|
| | | | 1,187 | | | | | | | | | | | | | | |
Members’ (deficit): | | | | | | | | | | | | | | | | | | | |
Common units, 10,000,000 shares issued and outstanding (actual), shares authorized, shares issued and outstanding (pro forma); shares authorized, issued and outstanding (pro forma as adjusted)
|
| | | | | | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (1,155) | | | | | | | | | | | | | ||
Total members’ deficit and temporary equity
|
| | | | 32 | | | | | | | | | | | | | ||
Total capitalization
|
| | | $ | 32 | | | | | $ | | | | | $ | | |
|
Assumed initial public offering price per share
|
| | | $ | | | |
|
Historical net tangible book value per share as of
|
| | | $ | 0.00 | | |
|
Pro forma increase in net tangible book value per share attributable to the conversion of
preferred stock |
| |
|
| |||
|
Pro forma net tangible book value per share as of
|
| |
|
| |||
|
Pro forma increase in net tangible book value per share attributable to new investors
|
| |
|
| |||
|
Pro forma as adjusted net tangible book value per share after this offering
|
| |
|
| |||
|
Dilution per share to new investors participating in this offering
|
| |
|
|
| | |
Shares Purchased
|
| |
Total Consideration
|
| |
Average Price
Per Share |
| ||||||||||||||||||
| | |
Number
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |||||||||||||||
Existing stockholders
|
| | | | | | | % | | | | | $ | | | | | | % | | | | | $ | | | ||
Investors participating in this offering
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total
|
| | | | | | | 100% | | | | | $ | | | | | | 100% | | | | | $ | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Operating expenses
|
| | | | | | | | | | | | |
General and administrative
|
| | | $ | 79,411 | | | | | $ | 7,747 | | |
Research and development
|
| | | | 195,812 | | | | | | 106,632 | | |
Total operating expenses
|
| | | | 275,223 | | | | | | 114,379 | | |
Loss from operations
|
| | | | (275,223) | | | | | | (114,379) | | |
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | |
Proforma weighted average number of common shares outstanding, basic and
diluted |
| | | | 10,000,000 | | | | | | 10,000,000 | | |
Proforma net loss per share, basic and diluted
|
| | | $ | (0.03) | | | | | $ | (0.01) | | |
| | |
For the
Year Ended December 31, 2019 |
| |
For the Period
from April 5, 2018 (Inception) through December 31, 2018 |
| ||||||
Operating expenses | | | | | | | | | | | | | |
General and administrative
|
| | | | 114,496 | | | | | | 12,342 | | |
Research and development
|
| | | | 484,113 | | | | | | 204,161 | | |
Research and development – license acquired
|
| | | | — | | | | | | 5,776 | | |
Total operating expenses
|
| | | | 598,609 | | | | | | 222,279 | | |
Loss from operations
|
| | | | (598,609) | | | | | | (222,279) | | |
Net loss
|
| | | $ | (598,609) | | | | | $ | (222,279) | | |
Weighted average number of common shares outstanding, basic and diluted
|
| | | | 10,000,000 | | | | | | 10,000,000 | | |
Net loss per share, basic and diluted
|
| | | $ | (0.06) | | | | | $ | (0.02) | | |
Outcome
|
| |
Suramin
|
| |
Placebo
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Instruments
|
| |
Factor or
behaviour |
| |
Time after
Treatement (days) |
| |
Difference from
baseline (mean ± SD) |
| |
95% CI
|
| |
d(1)
|
| |
N
|
| |
P(2)
|
| |
p(3)
|
| |
Difference from
baseline (mean ± SD) |
| |
95% CI
|
| |
d(1)
|
| |
N
|
| |
P(2)
|
| |
p(3)
|
| |||||||||||||||||||||||||||
Primary outcomes | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ADOS-2
|
| | Comparision | | | | | 45 | | | |
-1.6 ± 0.55
|
| |
-2.3 to -0.9
|
| | | | 2.9 | | | | | | 5 | | | | | | 0.0028 | | | | | | 0.038 | | | |
-0.4 ± 0.55
|
| |
-1.1 to + 0.28
|
| | | | 0.7 | | | | | | 5 | | | | | | 0.18 | | | | | | 0.16 | | |
| | | Raw | | | | | 45 | | | |
-4.6 ± 1.9
|
| |
-7.0. to -2.2
|
| | | | 2.4 | | | | | | 5 | | | | | | 0.0062 | | | | | | 0.039 | | | |
-0.4 ± 1.8
|
| |
-2.7 to +1.9
|
| | | | 0.22 | | | | | | 5 | | | | | | 0.65 | | | | | | 0.58 | | |
| | | Social | | | | | 45 | | | |
-3.2 ± 1.9
|
| |
-5.6 to -0.8
|
| | | | 1.7 | | | | | | 5 | | | | | | 0.020 | | | | | | 0.043 | | | |
0.0 ± 1.7
|
| |
-2.2 to +2.2
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | 0.71 | | |
| | | Rest/Rep | | | | | 45 | | | |
-1.4 ± 0.89
|
| |
-2.5 to -0.29
|
| | | | 1.6 | | | | | | 5 | | | | | | 0.025 | | | | | | 0.059 | | | |
-0.4 ± 2.1
|
| |
-3.0 to +2.2
|
| | | | 0.19 | | | | | | 5 | | | | | | 0.69 | | | | | | 0.58 | | |
EOWPVT
|
| | Vocabulary | | | | | 45 | | | |
-4.2 ± -8.3
|
| |
-14.50 to +6.1
|
| | | | -0.51 | | | | | | 5 | | | | | | 0.32 | | | | | | 0.50 | | | |
+2.0 ± 4.6
|
| |
-3.8 to +7.8
|
| | | | 0.43 | | | | | | 5 | | | | | | 0.39 | | | | | | 0.50 | | |
Secondary Outcomes | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ABC
|
| | Stereotypy | | | | | 7 | | | |
-3.6 ± 2.1
|
| |
-6.2 to -1.0
|
| | | | 1.7 | | | | | | 5 | | | | | | 0.018 | | | | | | 0.043 | | | |
+0.4 ± 1.9
|
| |
-2.0 to +2.8
|
| | | | -0.21 | | | | | | 5 | | | | | | 0.67 | | | | | | 0.68 | | |
| | | Stereotypy | | | | | 45 | | | |
-4.0 ± 2.3
|
| |
-6.9 to -1.1
|
| | | | 1.7 | | | | | | 5 | | | | | | 0.019 | | | | | | 0.042 | | | |
+1.0 ± 4.3
|
| |
4.3 to +6.3
|
| | | | -0.23 | | | | | | 5 | | | | | | 0.63 | | | | | | 0.69 | | |
ATEC
|
| | Total | | | | | 7 | | | |
-10 ± 7.7
|
| |
-20 to -0.46
|
| | | | 1.3 | | | | | | 5 | | | | | | 0.044 | | | | | | 0.043 | | | |
+7.2 ± 14
|
| |
-10 to +25
|
| | | | -0.51 | | | | | | 5 | | | | | | 0.32 | | | | | | 0.35 | | |
| | | Language | | | | | 7 | | | |
-2.2 ± 1.5
|
| |
-4.0 to -0.36
|
| | | | 1.4 | | | | | | 5 | | | | | | 0.021 | | | | | | 0.059 | | | |
0.0 ± 4.1
|
| |
-5.0 to +5.0
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | 0.89 | | |
| | | Sociability | | | | | 7 | | | |
-3.6 ± 2.6
|
| |
-6.8 to -0.36
|
| | | | 1.4 | | | | | | 5 | | | | | | 0.025 | | | | | | 0.063 | | | |
-0.8 ± 2.8
|
| |
4.3 to +2.6
|
| | | | 0.29 | | | | | | 5 | | | | | | 0.55 | | | | | | 0.58 | | |
| | | Language | | | | | 45 | | | |
-2.0 ± 1.4
|
| |
-2.7 to -0.49
|
| | | | 1.4 | | | | | | 5 | | | | | | 0.034 | | | | | | 0.059 | | | |
-0.2 ± 2.9
|
| |
-3.8 to +3.4
|
| | | | 0.07 | | | | | | 5 | | | | | | 0.88 | | | | | | 0.79 | | |
CGI
|
| |
Overall ASD
|
| | | | 45 | | | |
-1.8 ± 1.04
|
| |
-3.4 to -0.15
|
| | | | 1.7 | | | | | | 5 | | | | | | 0.05 | | | | | | n/a | | | |
0.0 ± 0.34
|
| |
-0.55 to +0.55
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | n/a | | |
| | |
E. Language
|
| | | | 45 | | | |
-2.0 ± 1.04
|
| |
-3.6 to -0.35
|
| | | | 1.9 | | | | | | 5 | | | | | | 0.01 | | | | | | n/a | | | |
0.0 ± 0.34
|
| |
-0.55 to +0.55
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | n/a | | |
| | |
Social Inter.
|
| | | | 45 | | | |
-2.0 ± 1.04
|
| |
-3.6 to -0.35
|
| | | | 1.9 | | | | | | 5 | | | | | | 0.01 | | | | | | n/a | | | |
0.0 ± 0.34
|
| |
-0.55 to +0.55
|
| | | | 0 | | | | | | 5 | | | | | | 0.99 | | | | | | n/a | | |
RBQ
|
| | Total | | | | | 45 | | | |
-3.2 ± 5.8
|
| |
-10.4 to +4.0
|
| | | | 0.55 | | | | | | 5 | | | | | | 0.28 | | | | | | 0.22 | | | |
-0.8 ± 3.3
|
| |
-4.9 to 3.3
|
| | | | 0.24 | | | | | | 5 | | | | | | 0.62 | | | | | | 0.47 | | |
Name
|
| |
Age
|
| |
Position(s)
|
|
Howard J. Weisman | | | 60 | | | Chief Executive Officer and Class Director | |
Joseph Lucchese | | | 53 | | | Chief Financial Officer | |
Michael Derby | | | 47 | | |
Executive Chairman of the Board and Class Director
|
|
Zachary Rome | | | 36 | | | Chief Operating Officer and Class Director | |
David Hough, MD | | | 63 | | | Chief Medical Officer | |
Karen Dawes | | | 67 | | | Class Director | |
Karen LaRochelle | | | 53 | | | Class Director | |
Paul K. Wotton, Ph.D. | | | 59 | | | Class Director | |
Robert Apple | | | 54 | | | Class Director | |
Name of Beneficial Owner(1)
|
| |
Number of
Shares Beneficially Owned(2) |
| |
Percentage
Owned Prior to the Offering |
| |
Percentage
Owned After the Offering(3) |
| ||||||
5% Stockholders | | | | | | | | | | | | | | | | |
TardiMed Sciences, LLC(4)(7)
|
| | | | 12,537,870 | | | | | | 96.6% | | | | | |
Directors and Executive Officers | | | | | | | | | | | | | | | | |
Howard J. Weisman(5)
|
| | | | — | | | | | | — | | | | | |
Joseph Lucchese(6)
|
| | | | — | | | | | | — | | | | | |
Michael Derby(7)
|
| | | | — | | | | | | — | | | | | |
Zachary Rome(8)
|
| | | | 432,833 | | | | | | — | | | | | |
David Hough, MD
|
| | | | — | | | | | | — | | | | | |
Karen Dawes(9)
|
| | | | — | | | | | | — | | | | | |
Karen | | | | | — | | | | | | — | | | | | |
LaRochelle | | | | | — | | | | | | — | | | | ||
Paul K. Wotton, Ph.D.
|
| | | | — | | | | | | — | | | | ||
Robert Apple
|
| | | | — | | | | | | — | | | | ||
Directors and Executive Officers as a group (9 persons)
|
| | | | — | | | | | | — | | | | | |
Date Available for Sale
|
| |
Shares Eligible for Sale
|
| |
Description
|
|
Date of Prospectus | | | | | | Shares sold in the offering that are not subject to a lock-up | |
90 Days after Date of Prospectus | | | | | | Shares saleable under Rules 144 and 701 that are not subject to a lock-up | |
180 Days after Date of Prospectus | | | | | | Lock-up released; shares saleable under Rules 144 and 701 | |
12 Months after Date of Prospectus | | | | | | Lock-up released; shares saleable under Rules 144 and 701 | |
Underwriter
|
| |
Number of
shares of common stock |
| |||
The Benchmark Company, LLC
|
| |
|
| |||
| | | | | | | |
Total:
|
| | | | | |
| | |
Per Share of
Common Stock |
| |
Total without
Exercise of Over-allotment option |
| |
Total with
Exercise of Over-allotment option |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount(1)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance(2)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Net proceeds to us
|
| | | $ | | | | | $ | | | | | $ | | |
| | |
Page No.
|
| |||
Audited Financial Statements
|
| | |||||
| | | | F-2 | | | |
| | | | F-3 | | | |
| | | | F-4 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | |
| | |
Page No.
|
| |||
Interim Condensed Financial Statements (Unaudited)
|
| | |||||
| | | | F-14 | | | |
| | | | F-15 | | | |
| | | | F-16 | | | |
| | | | F-17 | | | |
| | | | F-18 | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 24,947 | | | | | $ | 9,322 | | |
Total current assets
|
| | | | 24,947 | | | | | | 9,322 | | |
Total assets
|
| | | $ | 24,947 | | | | | $ | 9,322 | | |
LIABILITIES, TEMPORARY EQUITY AND MEMBERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 41,023 | | | | | $ | — | | |
Accounts payable – related party
|
| | | | 15,325 | | | | | | 2,454 | | |
Accrued expenses
|
| | | | 66,900 | | | | | | 4,147 | | |
Total current liabilities
|
| | | | 123,248 | | | | | | 6,601 | | |
Total liabilities
|
| | | | 123,248 | | | | | | 6,601 | | |
Temporary equity | | | | ||||||||||
Preferred units, 1,445,173 and 450,000 shares issued and outstanding at December 31, 2019 and 2018; liquidation preference of $765,527 and $232,096 and of December 31, 2019 and 2018, respectively
|
| | | | 765,527 | | | | | | 232,096 | | |
Commitments and contingencies (Note 7) | | | | | | | | | | | | | |
Members’ deficit | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (863,828) | | | | | | (229,375) | | |
Total members’ deficit
|
| | | | (863,828) | | | | | | (229,375) | | |
Total liabilities, temporary equity and members’ deficit
|
| | | $ | 24,947 | | | | | $ | 9,322 | | |
| | |
For the Year
Ended December 31, 2019 |
| |
For the Period
from April 5, 2018 (Inception) through December 31, 2018 |
| ||||||
Operating expenses | | | | | | | | | | | | | |
General and administrative
|
| | | $ | 114,496 | | | | | $ | 12,342 | | |
Research and development
|
| | | | 484,113 | | | | | | 204,161 | | |
Research and development – license acquired
|
| | | | — | | | | | | 5,776 | | |
Total operating expenses
|
| | | | 598,609 | | | | | | 222,279 | | |
Loss from operations
|
| | | | (598,609) | | | | | | (222,279) | | |
Net loss
|
| | | $ | (598,609) | | | | | $ | (222,279) | | |
Proforma weighted average number of common shares outstanding, basic and diluted
|
| | | | 10,000,000 | | | | | | 10,000,000 | | |
Proforma net loss per share, basic and diluted
|
| | | $ | (0.06) | | | | | $ | (0.02) | | |
| | |
Common Stock
|
| |
Accumulated
Deficit |
| |
Total
Members' Deficit |
| |||||||||||||||
| | |
Units
|
| |
Amount
|
| ||||||||||||||||||
Balance at April 5, 2018 (Inception)
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Contribution from TardiMed
|
| | | | 10,000,000 | | | | | | — | | | | | | — | | | | | | | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | — | | | | | | (7,096) | | | | | | (7,096) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (222,279) | | | | | | (222,279) | | |
Balance at December 31, 2018
|
| | | | 10,000,000 | | | | | $ | — | | | | | $ | (229,375) | | | | | $ | (229,375) | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | — | | | | | | (35,844) | | | | | | (35,844) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (598,609) | | | | | | (598,609) | | |
Balance at December 31, 2019
|
| | | | 10,000,000 | | | | | $ | — | | | | | $ | (863,828) | | | | | $ | (863,828) | | |
| | |
For the Year
Ended December 31, 2019 |
| |
For the Period
from April 5, 2018 (Inception) through December 31, 2018 |
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (598,609) | | | | | $ | (222,279) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Research and development-licenses acquired, expense
|
| | | | — | | | | | | 5,776 | | |
Non-cash contribution from TardiMed
|
| | | | 62,587 | | | | | | — | | |
Changes in assets and liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | | 41,023 | | | | | | — | | |
Accounts payable – related party
|
| | | | 12,871 | | | | | | 2,454 | | |
Accrued expenses
|
| | | | 62,753 | | | | | | 4,147 | | |
Net cash used in operating activities
|
| | | | (419,375) | | | | | | (209,902) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of research and development licenses
|
| | | | — | | | | | | (5,776) | | |
Net cash used in investing activities
|
| | | | — | | | | | | (5,776) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Contribution from TardiMed
|
| | | | 435,000 | | | | | | 200,000 | | |
Contribution from a third-party
|
| | | | — | | | | | | 25,000 | | |
Net cash provided by financing activities
|
| | | | 435,000 | | | | | | 225,000 | | |
Net increase in cash
|
| | | | 15,625 | | | | | | 9,322 | | |
Cash, beginning of period
|
| | | | 9,322 | | | | | | — | | |
Cash, end of period
|
| | | $ | 24,947 | | | | | $ | 9,322 | | |
Non cash financing activities: | | | | | | | | | | | | | |
Accrued preferred unit dividend
|
| | | $ | 35,844 | | | | | $ | 7,096 | | |
| | |
As of December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Accrued expenses: | | | | | | | | | | | | | |
Research and development
|
| | | $ | 66,900 | | | | | $ | 4,147 | | |
Total accrued expenses
|
| | | $ | 66,900 | | | | | $ | 4,147 | | |
| | |
Preferred Units
|
| |||||||||
| | |
Shares
|
| |
Amount
|
| ||||||
Balance at April 5, 2018 (Inception)
|
| | | | — | | | | | $ | — | | |
Contribution from TardiMed
|
| | | | 400,000 | | | | | | 200,000 | | |
Contribution from a third-party
|
| | | | 50,000 | | | | | | 25,000 | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | 7,096 | | |
Balance at December 31, 2018
|
| | | | 450,000 | | | | | $ | 232,096 | | |
Contribution from TardiMed
|
| | | | 870,000 | | | | | | 435,000 | | |
Non-cash contribution from TardiMed
|
| | | | 125,173 | | | | | | 62,587 | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | 35,844 | | |
Balance at December 31, 2019
|
| | | | 1,445,173 | | | | | $ | 765,527 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net Loss
|
| | | $ | (598,609) | | | | | $ | (222,279) | | |
Cumulative Dividends
|
| | | | (35,844) | | | | | | (7,096) | | |
Net Loss applicable to common unit holder
|
| | | $ | (634,453) | | | | | $ | (229,375) | | |
Weighted average number of common shares outstanding, basic and
diluted |
| | | | 10,000,000 | | | | | | 10,000,000 | | |
Pro forma net loss per share, basic and diluted
|
| | | $ | (0.06) | | | | | $ | (0.02) | | |
Pro forma net loss applicable to common unit holder per share, basic
and diluted |
| | | $ | (0.06) | | | | | $ | (0.02) | | |
| | |
March 31,
2020 |
| |
December 31,
2019 |
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 249,804 | | | | | $ | 24,947 | | |
Total assets
|
| | | $ | 249,804 | | | | | $ | 24,947 | | |
LIABILITIES, MEMBERS’ DEFICIT AND TEMPORARY EQUITY | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 170,160 | | | | | $ | 41,023 | | |
Accounts payable – related party
|
| | | | 7,988 | | | | | | 15,325 | | |
Accrued expenses
|
| | | | 38,966 | | | | | | 66,900 | | |
Total current liabilities
|
| | | | 217,114 | | | | | | 123,248 | | |
Total liabilities
|
| | | | 217,114 | | | | | | 123,248 | | |
Temporary equity | | | | | | | | | | | | | |
Preferred units, 2,257,600 and 1,445,173 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $1,187,345 and $765,527 as of March 31, 2020 and December 31, 2019, respectively
|
| | | | 1,187,345 | | | | | | 765,527 | | |
Commitments and contingencies (Note 6) | | | | | | | | | | | | | |
Members’ deficit | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (1,154,655) | | | | | | (863,828) | | |
Total members’ deficit
|
| | | | (1,154,655) | | | | | | (863,828) | | |
Total liabilities, members’ deficit and temporary equity
|
| | | $ | 249,804 | | | | | $ | 24,947 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Operating expenses | | | | | | | | | | | | | |
General and administrative
|
| | | $ | 79,411 | | | | | $ | 7,747 | | |
Research and development
|
| | | | 195,812 | | | | | | 106,632 | | |
Total operating expenses
|
| | | | 275,223 | | | | | | 114,379 | | |
Loss from operations
|
| | | | (275,223) | | | | | | (114,379) | | |
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | |
Proforma weighted average number of common shares outstanding, basic and
diluted |
| | | | 10,000,000 | | | | | | 10,000,000 | | |
Proforma net loss per share, basic and diluted
|
| | | $ | (0.03) | | | | | $ | (0.01) | | |
| | |
Common Stock
|
| |
Accumulated
Deficit |
| |
Total
Members’ Deficit |
| |||||||||||||||
| | |
Units
|
| |
Amount
|
| ||||||||||||||||||
Balance at January 1, 2020
|
| | | | 10,000,000 | | | | | $ | — | | | | | $ | (863,828) | | | | | $ | (863,828) | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | — | | | | | | (15,604) | | | | | | (15,604) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (275,223) | | | | | | (275,223) | | |
Balance at March 31, 2020
|
| | | | 10,000,000 | | | | | $ | — | | | | | $ | (1,154,655) | | | | | $ | (1,154,655) | | |
|
| | |
Common Stock
|
| |
Accumulated
Deficit |
| |
Total
Members’ Deficit |
| |||||||||||||||
| | |
Units
|
| |
Amount
|
| ||||||||||||||||||
Balance at January 1, 2019
|
| | | | 10,000,000 | | | | | $ | — | | | | | $ | (229,375) | | | | | $ | (229,375) | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | — | | | | | | (4,877) | | | | | | (4,877) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | (114,379) | | | | | | (114,379) | | |
Balance at March 31, 2019
|
| | | | 10,000,000 | | | | | $ | — | | | | | $ | (348,631) | | | | | $ | (348,631) | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Non-cash contribution from TardiMed
|
| | | | 36,214 | | | | | | 15,646 | | |
Changes in assets and liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | | 129,137 | | | | | | — | | |
Accounts payable – related party
|
| | | | (7,337) | | | | | | — | | |
Accrued expenses
|
| | | | (27,934) | | | | | | (4,147) | | |
Net cash used in operating activities
|
| | | | (145,143) | | | | | | (102,880) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Contribution from TardiMed
|
| | | | 320,000 | | | | | | 100,000 | | |
Third party investor contributions
|
| | | | 50,000 | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 370,000 | | | | | | 100,000 | | |
Net increase (decrease) in cash
|
| | | | 224,857 | | | | | | (2,880) | | |
Cash, beginning of period
|
| | | | 24,947 | | | | | | 9,322 | | |
Cash, end of period
|
| | | $ | 249,804 | | | | | $ | 6,442 | | |
Non cash financing activities: | | | | | | | | | | | | | |
Accrued preferred unit dividend
|
| | | $ | 15,604 | | | | | $ | 4,877 | | |
| | |
March 31,
2020 |
| |
December 31,
2019 |
| ||||||
Accrued expenses:
|
| | | ||||||||||
Research and development
|
| | | $ | 9,600 | | | | | $ | 66,900 | | |
Audit fees
|
| | | | 20,600 | | | | | | — | | |
Employee and related expenses
|
| | | | 8,766 | | | | | | — | | |
Total accrued expenses
|
| | | $ | 38,966 | | | | | $ | 66,900 | | |
|
| | |
Three Months Ended
March 31, 2020 |
| |
Year Ended
December 31, 2019 |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||
Opening balance
|
| | | | 1,445,173 | | | | | $ | 765,527 | | | | | | 450,000 | | | | | $ | 232,096 | | |
Contribution from TardiMed
|
| | | | 640,000 | | | | | | 320,000 | | | | | | 870,000 | | | | | | 435,000 | | |
Investor contributions
|
| | | | 100,000 | | | | | | 50,000 | | | | | | — | | | | | | — | | |
Non-cash contribution from TardiMed
|
| | | | 72,427 | | | | | | 36,214 | | | | | | 125,173 | | | | | | 62,587 | | |
Accrued preferred unit dividend
|
| | | | — | | | | | | 15,604 | | | | | | — | | | | | | 35,844 | | |
Ending balance
|
| | | | 2,257,600 | | | | | $ | 1,187,345 | | | | | | 1,445,173 | | | | | $ | 765,527 | | |
| | |
Three months ended March 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net loss
|
| | | $ | (275,223) | | | | | $ | (114,379) | | |
Weighted average number of common shares outstanding, basic and
diluted |
| | | | 10,000,000 | | | | | | 10,000,000 | | |
Net loss per share, basic and diluted
|
| | | $ | (0.03) | | | | | $ | (0.01) | | |
|
SEC Filing Fee
|
| | | $ | 2,395.78 | | |
|
FINRA Fee
|
| | | $ | 3,268.63 | | |
|
Underwriter Legal Fees and Expenses.
|
| | | $ | 100,000.00 | | |
|
Nasdaq Fee
|
| | | $ | | | |
|
Printing Expenses
|
| | | $ | | | |
|
Accounting Fees and Expenses
|
| | | $ | | | |
|
Legal Fees and Expenses
|
| | | $ | | | |
|
Transfer Agent and Registrar Expenses
|
| | | $ | | | |
|
Miscellaneous
|
| | | $ | | | |
|
Total
|
| | | $ | | | |
| | | | PAXMEDICA, INC. | |
| | | |
/s/ Howard J. Weisman
Howard J. Weisman
|
|
| | | | Chief Executive Officer | |
| | | | (Principal Executive Officer) | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Howard J. Weisman
Howard J. Weisman
|
| |
Chief Executive Officer and Director
(Principal Executive Officer) |
| | July 1, 2020 | |
|
/s/ Joseph Lucchese
Joseph Lucchese
|
| |
Chief Financial Officer
(Principal Financial and Accounting Officer) |
| | July 1, 2020 | |
|
/s/ Zachary Rome
Zachary Rome
|
| |
Chief Operating Officer and Director
|
| | July 1, 2020 | |
|
/s/ David Hough
David Hough, M.D.
|
| |
Chief Medical Officer
|
| | July 1, 2020 | |
|
/s/ Michael Derby
Michael Derby
|
| |
Director
|
| | July 1, 2020 | |
|
/s/ Karen Dawes
Karen Dawes
|
| |
Director
|
| | July 1, 2020 | |
|
/s/ Karen LaRochelle
Karen LaRochelle
|
| |
Director
|
| | July 1, 2020 | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Paul Wotton
Paul Wotton, Ph.D.
|
| |
Director
|
| | July 1, 2020 | |
|
/s/ Robert Apple
Robert Apple
|
| |
Director
|
| | July 1, 2020 | |
Exhibit 3.1
PAXMEDICA, INC.
CERTIFICATE OF INCORPORATION
ARTICLE I: NAME.
The name of this corporation is PaxMedica, Inc. (the “Corporation”).
ARTICLE II: REGISTERED OFFICE.
The address of the registered office of the Corporation in the State of Delaware is Corporation Service Company, 251 Little Falls Drive, city of Wilmington, county of New Castle, Delaware 19808. The name of its registered agent at such address is Corporation Service Company.
ARTICLE III: DEFINITIONS.
As used in this Certificate (the “Certificate”), the following terms have the meanings set forth below:
“Board Composition” the holders of record of the shares of Preferred Stock and Common Stock, voting together as a single class on an as-converted basis, shall be entitled to elect the directors of the Corporation.
“Original Issue Price” means with respect to the Series Seed Preferred Stock, $0.50 per share.
“Requisite Holders” means the holders of a majority of the outstanding shares of Preferred Stock (voting as a single class on an as-converted basis).
ARTICLE IV: PURPOSE.
The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.
ARTICLE V: AUTHORIZED SHARES.
The total number of shares of all classes of stock that the Corporation has authority to issue is 22,696,439, consisting of (a) 20,000,000 shares of Common Stock, $0.0001 per share (“Common Stock”) and (b) 2,696,439 shares of Preferred Stock, $0.0001 per share (“Preferred Stock”). As of the effective date of this Certificate, all of the shares of the authorized Preferred Stock of the Corporation are designated “Series Seed Preferred Stock,” with the rights, preferences, powers, privileges and restrictions, qualifications and limitations as set forth in this Certificate of Incorporation. The Preferred Stock may be issued from time to time in one or more series, each of such series to consist of such number of shares and to have such terms, rights, powers and preferences, and the qualifications and limitations with respect thereto, as stated or expressed herein.
- 1 -
A. | COMMON STOCK |
The following rights, powers privileges and restrictions, qualifications, and limitations apply to the Common Stock.
1. General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and privileges of the holders of the Preferred Stock set forth in this Certificate.
2. Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). Unless required by law, there shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Certificate) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law.
B. | PREFERRED STOCK |
The following rights, powers and privileges, and restrictions, qualifications and limitations, shall apply to the Preferred Stock. Unless otherwise indicated, references to “Sections” in this Part B of this Article V refer to sections of this Part B.
1. Liquidation, Dissolution, or Winding Up; Certain Mergers, Consolidations and Asset Sales.
1.1 Payments to Holders of Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Corporation or any Deemed Liquidation Event (as defined below), before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, the holders of shares of Preferred Stock then outstanding must be paid out of the funds and assets available for distribution to its stockholders, an amount per share equal to the greater of (a) the applicable Original Issue Price for such share of Preferred Stock, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all shares of Preferred Stock been converted into Common Stock pursuant to Section 3 immediately prior to such liquidation, dissolution or winding up or Deemed Liquidation Event. If upon any such liquidation, dissolution, or winding up or Deemed Liquidation Event of the Corporation, the funds and assets available for distribution to the stockholders of the Corporation are insufficient to pay the holders of shares of Preferred Stock the full amount to which they are entitled under this Section 1.1, the holders of shares of Preferred Stock will share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
- 2 -
1.2 Payments to Holders of Common Stock. In the event of any voluntary or involuntary liquidation, dissolution, or winding up or Deemed Liquidation Event of the Corporation, after the payment of all preferential amounts required to be paid to the holders of shares of Preferred Stock as provided in Section 1.1, the remaining funds and assets available for distribution to the stockholders of the Corporation will be distributed among the holders of shares of Common Stock, pro rata based on the number of shares of Common Stock held by each such holder.
1.3 Deemed Liquidation Events.
1.3.1 Definition. Each of the following events is a “Deemed Liquidation Event” unless the Requisite Holders elect otherwise by written notice received by the Corporation at least five (5) days prior to the effective date of any such event:
(a) a merger or consolidation in which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such merger or consolidation, the parent of such surviving or resulting party; provided that, for the purpose of this Section 1.3.1, all shares of Common Stock issuable upon exercise of options outstanding immediately prior to such merger or consolidation or upon conversion of Convertible Securities (as defined below) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, deemed to be converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged; or
(b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or, if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation, except where such sale, lease, transfer or other disposition is to the Corporation or one or more wholly owned subsidiaries of the Corporation.
1.3.2 Amount Deemed Paid or Distributed. The funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer or other disposition described in this Section 1.3 will be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be determined in good faith by the Board.
- 3 -
2. Voting.
2.1 General. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock may cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Fractional votes shall not be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Preferred stock held by each holder could be converted) will be rounded to the nearest whole number (with one-half being rounded upward). Except as provided by law or by the other provisions of this Certificate, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class on an as-converted basis, shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision of this Certificate, to notice of any stockholder meeting in accordance with the Bylaws of the Corporation.
2.2 Election of Directors. The holders of record of the Company’s capital stock are entitled to elect directors as described in the Board Composition. Any director elected as provided in the preceding sentence may be removed without cause by the affirmative vote of the holders of the shares of the class, classes, or series of capital stock entitled to elect the director or directors, given either at a special meeting of the stockholders duly called for that purpose or pursuant to a written consent of stockholders. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class, classes, or series entitled to elect the director constitutes a quorum for the purpose of electing the director.
3. Conversion. The holders of the Preferred Stock have the following conversion rights (the “Conversion Rights”):
3.1 Right to Convert.
3.1.1 Conversion Ratio. Each share of Preferred Stock is convertible, at the option of the holder thereof, at any time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the applicable Original Issue Price for the series of Preferred Stock by the Conversion Price for that series of Preferred Stock in effect at the time of conversion. The “Conversion Price” for each series of Preferred Stock means the applicable Original Issue Price for such series of Preferred Stock, which initial Conversion Price, and the rate at which shares of Preferred Stock may be converted into shares of Common Stock, is subject to adjustment as provided in this Certificate.
3.1.2 Termination of Conversion Rights. Subject to Section 3.3.1 in the case of a Contingency Event herein, in the event of a liquidation, dissolution, or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights will terminate at the close of business on the last full day preceding the date fixed for the first payment of any funds and assets distributable on such event to the holders of Preferred Stock.
- 4 -
3.2 Fractional Shares. No fractional shares of Common Stock will be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion will be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.
3.3 Mechanics of Conversion.
3.3.1 Notice of Conversion. To voluntarily convert shares of Preferred Stock into shares of Common Stock, a holder of Preferred Stock shall surrender the certificate or certificates for the shares of Preferred Stock (or, if such registered holder alleges that any such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that the holder elects to convert all or any number of the shares of the Preferred Stock represented by the certificate or certificates and, if applicable, any event on which the conversion is contingent (a “Contingency Event”). The conversion notice must state the holder’s name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder’s attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of the certificates (or lost certificate affidavit and agreement) and notice (or, if later, the date on which all Contingency Events have occurred) will be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such time. The Corporation shall, as soon as practicable after the Conversion Time, (a) issue and deliver to the holder, or to the holder’s nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion in accordance with the provisions of this Certificate and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (b) pay in cash such amount as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (c) pay all declared but unpaid dividends on the shares of Preferred Stock converted.
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3.3.2 Reservation of Shares. For the purpose of effecting the conversion of the Preferred Stock, the Corporation shall at all times while any share of Preferred Stock is outstanding, reserve and keep available out of its authorized but unissued capital stock, that number of its duly authorized shares of Common Stock as may from time to time be sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock is not be sufficient to effect the conversion of all then-outstanding shares of the Preferred Stock, the Corporation shall use its best efforts to cause such corporate action to be taken as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Certificate. Before taking any action that would cause an adjustment reducing the Conversion Price of a series of Preferred Stock below the then-par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation shall take any corporate action that may be necessary so that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price.
3.3.3 Effect of Conversion. All shares of Preferred Stock that shall have been surrendered for conversion as provided in this Certificate shall no longer be deemed to be outstanding and all rights with respect to such shares will immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 3.2, and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued.
3.3.4 No Further Adjustment. Upon any conversion of shares of Preferred Stock, no adjustment to the Conversion Price of the applicable series of Preferred Stock will be made with respect to the converted shares for any declared but unpaid dividends on such series of Preferred Stock or on the Common Stock delivered upon conversion.
3.4 Adjustment for Stock Splits and Combinations. If the Corporation at any time or from time to time after the date on which the first share of a series of Preferred Stock is issued by the Corporation (such date referred to herein as the “Original Issue Date” for such series of Preferred Stock) effects a subdivision of the outstanding Common Stock, the Conversion Price for each series of Preferred Stock in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of that series will be increased in proportion to the increase in the aggregate number of shares of Common Stock outstanding. If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock combines the outstanding shares of Common Stock, the Conversion Price for each series of Preferred Stock in effect immediately before the combination will be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 3.4 becomes effective at the close of business on the date the subdivision or combination becomes effective.
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3.5 Adjustment for Certain Dividends and Distributions. If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price for such series of Preferred Stock in effect immediately before the event will be decreased as of the time of such issuance or, in the event a record date has been fixed, as of the close of business on such record date, by multiplying such Conversion Price then in effect by a fraction:
(a) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of the issuance or the close of business on the record date, and
(b) the denominator of which is the total number of shares of Common Stock issued and outstanding immediately before the time of such issuance or the close of business on the record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.
Notwithstanding the foregoing, (i) if such record date has have been fixed and the dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, such Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter such Conversion Price shall be adjusted pursuant to this Section 3.5 as of the time of actual payment of such dividends or distributions; and (ii) no such adjustment shall be made if the holders of such series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock that they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of the event.
3.6 Adjustments for Other Dividends and Distributions. If the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall makes or issues, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock), then and in each such event the Corporation shall make, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution to the holders of the series of Preferred Stock in an amount equal to the amount of securities as the holders would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.
3.7 Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Original Issue Date for a series of Preferred Stock the Common Stock issuable upon the conversion of such series of Preferred Stock is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification, or otherwise (other than by a stock split or combination, dividend, distribution, merger or consolidation covered by Sections 3.4, 3.5, 3.6 or 3.8 or by Section 1.3 regarding a Deemed Liquidation Event), then in any such event each holder of such series of Preferred Stock may thereafter convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change.
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3.8 Adjustment for Merger or Consolidation. Subject to the provisions of Section 1.3, if any consolidation or merger occurs involving the Corporation in which the Common Stock (but not a series of Preferred Stock) is converted into or exchanged for securities, cash, or other property (other than a transaction covered by Sections 3.5, 3.6 or 3.7), then, following any such consolidation or merger, the Corporation shall provide that each share of such series of Preferred Stock will thereafter be convertible, in lieu of the Common Stock into which it was convertible prior to the event, into the kind and amount of securities, cash, or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to the consolidation or merger would have been entitled to receive pursuant to the transaction; and, in such case, the Corporation shall make appropriate adjustment (as determined in good faith by the Board) in the application of the provisions in this Section 3 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in this Section 3 (including provisions with respect to changes in and other adjustments of the Conversion Price of such series of Preferred Stock) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock.
3.9 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price of a series of Preferred Stock pursuant to this Section 3, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than 15 days thereafter, compute such adjustment or readjustment in accordance with the terms of this Certificate and furnish to each holder of such series of Preferred Stock a certificate setting forth the adjustment or readjustment (including the kind and amount of securities, cash, or other property into which such series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of any series of Preferred Stock (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (a) the Conversion Price of such series of Preferred Stock then in effect and (b) the number of shares of Common Stock and the amount, if any, of other securities, cash, or property which then would be received upon the conversion of such series of Preferred Stock.
3.10 Mandatory Conversion. Upon either (a) the closing of the sale of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the Requisite Holders at the time of such vote or consent, voting as a single class on an as-converted basis (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent, the “Mandatory Conversion Time”), (i) all outstanding shares of Preferred Stock will automatically convert into shares of Common Stock, at the applicable ratio described in Section 3.1.1 as the same may be adjusted from time to time in accordance with Section 3 and (ii) such shares may not be reissued by the Corporation.
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3.11 Procedural Requirements. The Corporation shall notify in writing all holders of record of shares of Preferred Stock of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to Section 3.10. Unless otherwise provided in this Certificate, the notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of the notice, each holder of shares of Preferred Stock shall surrender such holder’s certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice, and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled pursuant to this Section 3. If so required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder’s attorney duly authorized in writing. All rights with respect to the Preferred Stock converted pursuant to Section 3.10, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender the certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of their certificate or certificates (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 3.11. As soon as practicable after the Mandatory Conversion Time and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall issue and deliver to such holder, or to such holder’s nominee(s), a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof, together with cash as provided in Section 3.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such converted Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock (and the applicable series thereof) accordingly.
4. Dividends. The Corporation shall declare all dividends pro rata on the Common Stock and the Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders. For this purpose each holder of shares of Preferred Stock will be treated as holding the greatest whole number of shares of Common Stock then issuable upon conversion of all shares of Preferred Stock held by such holder pursuant to Section 3.
5. Redeemed or Otherwise Acquired Shares. Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries will be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following any such redemption.
6. Waiver. Any of the rights, powers, privileges and other terms of the Preferred Stock set forth herein may be waived prospectively or retrospectively on behalf of all holders of Preferred Stock by the affirmative written consent or vote of the holders of the Requisite Holders.
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7. Notice of Record Date. In the event:
(a) the Corporation takes a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
(b) of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or
(c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,
then, and in each such case, the Corporation shall send or cause to be sent to the holders of the Preferred Stock a written notice specifying, as the case may be, (i) the record date for such dividend, distribution, or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) will be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. The Corporation shall send the notice at least 20 days before the earlier of the record date or effective date for the event specified in the notice.
8. Notices. Except as otherwise provided herein, any notice required or permitted by the provisions of this Article V to be given to a holder of shares of Preferred Stock must be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and will be deemed sent upon such mailing or electronic transmission.
ARTICLE VI: BYLAW PROVISIONS.
A. AMENDMENT OF BYLAWS. Subject to any additional vote required by this Certificate or bylaws of the Corporation (the “Bylaws”), in furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws.
B. NUMBER OF DIRECTORS. Subject to any additional vote required by this Certificate, the number of directors of the Corporation will be determined in the manner set forth in the Bylaws.
C. BALLOT. Elections of directors need not be by written ballot unless the Bylaws so provide.
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D. MEETINGS AND BOOKS. Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws.
ARTICLE VII: DIRECTOR LIABILITY.
A. LIMITATION. To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article VII to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this Article VII by the stockholders will not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.
B. INDEMNIFICATION. To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law.
C. MODIFICATION. Any amendment, repeal, or modification of the foregoing provisions of this Article VII will not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification.
ARTICLE VIII: CORPORATE OPPORTUNITIES.
The Corporation renounces any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, or in being informed about, an Excluded Opportunity. “Excluded Opportunity” means any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any affiliate, partner, member, director, stockholder, employee, agent or other related person of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (a “Covered Person”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Corporation.
[Signature Page Follows]
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I, THE UNDERSIGNED, as the incorporator of the Corporation, has signed this Certificate of Incorporation on this 15th day of April, 2020.
By: | /s/Michael Derby | |
Michael Derby, Incorporator |
The mailing address of the above-named incorporator are as follows:
50 Tice Boulevard, Suite A26_____
Woodcliff Lake, NJ 07677________
Exhibit 3.3
BYLAWS OF
PAXMEDICA, INC.
(the “Corporation”)
ARTICLE I
Stockholders
SECTION 1.
(a) Annual Meeting. The annual meeting of stockholders (any such meeting being referred to in these Bylaws as an “Annual Meeting”) shall be held at the hour, date and place, if any, within or without the United States which is fixed by the Board of Directors of the Corporation (the “Board of Directors”) which time, date and place may subsequently be changed at any time by vote of the Board of Directors.
(b) Registered Office. The address of the registered office of the Corporation in the State of Delaware shall be as stated in the Corporation’s Certificate of Incorporation, as may be changed from time to time as provided by law. The Corporation may have other offices, both within and without the State of Delaware, as the Board of Directors from time to time shall determine or the business of the Corporation may require.
(c) Books and Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be maintained on any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.
SECTION 2. Notice of Stockholder Business and Nominations.
(a) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors and the proposal of other business to be considered by the stockholders may be brought before an Annual Meeting only (i) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Bylaw, who is entitled to vote at the meeting, and who complies with the notice procedures set forth in this Bylaw as to such nomination or business. For the avoidance of doubt, the foregoing clause (iii) shall be the exclusive means for a stockholder to bring nominations or business properly before an Annual Meeting (other than matters properly brought under Rule 14a-8 (or any successor rule) under the Securities Exchange Act of 1934, as amended (with the rules and regulations promulgated thereunder, the “Exchange Act”)), and such stockholder must comply with the notice and other procedures set forth in Article I, Section 2 of this Bylaw to bring such nominations or business properly before an Annual Meeting. In addition to the other requirements set forth in this Bylaw, for any proposal of business (other than the nomination of persons for election to the Board of Directors) to be considered at an Annual Meeting, it must be a proper subject for action by stockholders of the Corporation under Delaware law.
(2) For nominations or other business to be properly brought before an Annual Meeting by a stockholder pursuant to clause (iii) of Article I, Section 2(a)(1) of this Bylaw, the stockholder must (i) have given Timely Notice (as defined below) thereof in writing to the Secretary of the Corporation, (ii) have provided any updates or supplements to such notice at the times and in the forms required by this Bylaw and (iii) together with the beneficial owner(s), if any, on whose behalf the nomination or business proposal is made, have acted in accordance with the representations set forth in the Solicitation Statement (as defined below) required by this Bylaw. To be timely, a stockholder’s written notice shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the one-year anniversary of the preceding year’s Annual Meeting; provided, however, that in the event the Annual Meeting is first convened more than thirty (30) days before or more than sixty (60) days after such anniversary date, or if no Annual Meeting were held in the preceding year, notice by the stockholder to be timely must be received by the Secretary of the Corporation not later than the close of business on the later of the ninetieth (90th) day prior to the scheduled date of such Annual Meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made (such notice within such time periods shall be referred to as “Timely Notice”). Notwithstanding anything to the contrary provided herein, for the first Annual Meeting following the effective date of the Corporation’s registration statement submitted with the U.S. Securities and Exchange Commission, a stockholder’s notice shall be timely if received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the ninetieth (90th) day prior to the scheduled date of such Annual Meeting or the tenth (10th) day following the day on which public announcement of the date of such Annual Meeting is first made or sent by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Such stockholder’s Timely Notice shall set forth:
(A) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) provided, further, that the Corporation may require any proposed nominee to furnish such other information as the Corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.;
(B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment), the reasons for conducting such business at the meeting, and any material interest in such business of each Proposing Person (as defined below);
(C) (i) the name and address of the stockholder giving the notice, as they appear on the Corporation’s books, and the names and addresses of the other Proposing Persons (if any) and (ii) as to each Proposing Person, the following information: (a) the class or series and number of all shares of capital stock of the Corporation which are, directly or indirectly, owned beneficially or of record by such Proposing Person or any of its affiliates or associates (as such terms are defined in Rule 12b-2 promulgated under the Exchange Act), including any shares of any class or series of capital stock of the Corporation as to which such Proposing Person or any of its affiliates or associates has a right to acquire beneficial ownership at any time in the future, (b) all Synthetic Equity Interests (as defined below) in which such Proposing Person or any of its affiliates or associates, directly or indirectly, holds an interest including a description of the material terms of each such Synthetic Equity Interest, including without limitation, identification of the counterparty to each such Synthetic Equity Interest and disclosure, for each such Synthetic Equity Interest, as to (x) whether or not such Synthetic Equity Interest conveys any voting rights, directly or indirectly, in such shares to such Proposing Person, (y) whether or not such Synthetic Equity Interest is required to be, or is capable of being, settled through delivery of such shares and (z) whether or not such Proposing Person and/or, to the extent known, the counterparty to such Synthetic Equity Interest has entered into other transactions that hedge or mitigate the economic effect of such Synthetic Equity Interest, (c) any proxy (other than a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the Exchange Act), agreement, arrangement, understanding or relationship pursuant to which such Proposing Person has or shares a right to, directly or indirectly, vote any shares of any class or series of capital stock of the Corporation, (d) any rights to dividends or other distributions on the shares of any class or series of capital stock of the Corporation, directly or indirectly, owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, and (e) any performance-related fees (other than an asset based fee) that such Proposing Person, directly or indirectly, is entitled to based on any increase or decrease in the value of shares of any class or series of capital stock of the Corporation or any Synthetic Equity Interests (the disclosures to be made pursuant to the foregoing clauses (a) through (e) are referred to, collectively, as “Material Ownership Interests”), (iii) a description of the material terms of all agreements, arrangements or understandings (whether or not in writing) entered into by any Proposing Person or any of its affiliates or associates with any other person for the purpose of acquiring, holding, disposing or voting of any shares of any class or series of capital stock of the Corporation and (iv) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder;
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(D) (i) a description of all agreements, arrangements or understandings by and among any of the Proposing Persons, or by and among any Proposing Persons and any other person (including with any proposed nominee(s)), pertaining to the nomination(s) or other business proposed to be brought before the meeting of stockholders (which description shall identify the name of each other person who is party to such an agreement, arrangement or understanding), and (ii) identification of the names and addresses of other stockholders (including beneficial owners) known by any of the Proposing Persons to support such nominations or other business proposal(s), and to the extent known the class and number of all shares of the Corporation’s capital stock owned beneficially or of record by such other stockholder(s) or other beneficial owner(s); and
(E) a statement whether or not the stockholder giving the notice and/or the other Proposing Person(s), if any, will (i) deliver a proxy statement and form of proxy to holders of, in the case of a business proposal, at least the percentage of voting power of all of the shares of capital stock of the Corporation required under applicable law to approve the proposal or, in the case of a nomination or nominations, at least the percentage of voting power of all of the shares of capital stock of the Corporation reasonably believed by such Proposing Person to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder and/or (ii) otherwise solicit proxies or votes from stockholders in support of such proposal or nomination (such statement, the “Solicitation Statement”).
For purposes of this Article I of these Bylaws, the term “Proposing Person” shall mean the following persons: (i) the stockholder of record providing the notice of nominations or business proposed to be brought before a stockholders’ meeting, and (ii) the beneficial owner(s), if different, on whose behalf the nominations or business proposed to be brought before a stockholders’ meeting is made. For purposes of this Section 2 of Article I of these Bylaws, the term “Synthetic Equity Interest” shall mean any transaction, agreement or arrangement (or series of transactions, agreements or arrangements), including, without limitation, any derivative, swap, hedge, repurchase or so-called “stock borrowing” agreement or arrangement, the purpose or effect of which is to, directly or indirectly: (a) give a person or entity economic benefit and/or risk similar to ownership of shares of any class or series of capital stock of the Corporation, in whole or in part, including due to the fact that such transaction, agreement or arrangement provides, directly or indirectly, the opportunity to profit or avoid a loss from any increase or decrease in the value of any shares of any class or series of capital stock of the Corporation, (b) mitigate loss to, reduce the economic risk of or manage the risk of share price changes for, any person or entity with respect to any shares of any class or series of capital stock of the Corporation, (c) otherwise provide in any manner the opportunity to profit or avoid a loss from any decrease in the value of any shares of any class or series of capital stock of the Corporation, or (d) increase or decrease the voting power of any person or entity with respect to any shares of any class or series of capital stock of the Corporation.
(3) A stockholder providing Timely Notice of nominations or business proposed to be brought before an Annual Meeting shall further update and supplement such notice, if necessary, so that the information (including, without limitation, the Material Ownership Interests information) provided or required to be provided in such notice pursuant to this Bylaw shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to such Annual Meeting, and such update and supplement shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the fifth (5th) business day after the record date for the Annual Meeting (in the case of the update and supplement required to be made as of the record date), and not later than the close of business on the eighth (8th) business day prior to the date of the Annual Meeting (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting).
(4) Notwithstanding anything in the second sentence of Article I, Section 2(a)(2) of this Bylaw to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least ten (10) days before the last day a stockholder may deliver a notice of nomination in accordance with the second sentence of Article I, Section 2(a)(2), a stockholder’s notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be received by the Secretary of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.
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(5) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations for persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors or any committee thereof or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time the notice provided for in this Section 2 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 2. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (a)(2) of this Section 2 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(b) General.
(1) Except as otherwise expressly provided in any applicable rule or regulation promulgated under the Exchange Act, only such persons who are nominated in accordance with the provisions of this Bylaw shall be eligible for election and to serve as directors and only such business shall be conducted at a meeting as shall have been brought before the meeting in accordance with the provisions of this Bylaw. The Board of Directors or a designated committee thereof shall have the power to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the provisions of this Bylaw. If prior to the meeting neither the Board of Directors nor such designated committee makes a determination as to whether any stockholder proposal or nomination was made in accordance with the provisions of this Bylaw, the presiding officer of the meeting shall have the power and duty to determine whether the stockholder proposal or nomination was made in accordance with the provisions of this Bylaw. If the Board of Directors or a designated committee thereof or the presiding officer, as applicable, determines that any stockholder proposal or nomination was not made in accordance with the provisions of this Bylaw, such proposal or nomination shall be disregarded and shall not be presented for action at the meeting.
(2) Except as otherwise required by any applicable law or rule or regulation promulgated under the Exchange Act, nothing in this Article I, Section 2 shall obligate the Corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the Corporation or the Board of Directors information with respect to any nominee for director or any other matter of business submitted by a stockholder.
(3) Notwithstanding the foregoing provisions of this Article I, Section 2, if the proposing stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present a nomination or any business, such nomination or business shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Article I, Section 2, to be considered a qualified representative of the proposing stockholder, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, to the presiding officer at the meeting of stockholders.
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(4) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(5) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of (i) stockholders to have proposals included in the Corporation’s proxy statement pursuant to Rule 14a-8 (or any successor rule) under the Exchange Act and, to the extent required by such rule, have such proposals considered and voted on at an Annual Meeting or (ii) the holders of any series of Preferred Stock as specified in the Certificate of Incorporation of the Corporation (as the same may hereafter be amended and/or restated, the “Certificate”) (including any certificate of designation relating to any series of Preferred Stock).
(6) In addition to the requirements set forth elsewhere in these Bylaws, to be eligible to be a nominee for election or re-election as a director of the Corporation pursuant to a nomination under clause (iii) of Article I, Section 2(a)(1) and under clause (ii) of Article I, Section 2(a)(5) of this Bylaw, such proposed nominee or a person on such proposed nominee’s behalf must deliver, in accordance with the time periods for delivery of Timely Notice under Section 2(a)(2) of Article 1 and under clause (ii) of Article I, Section 2(a)(5) of this Bylaw, to the Secretary of the Corporation at the principal executive offices of the Corporation a completed and signed questionnaire with respect to the background and qualification of such proposed nominee and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such proposed nominee (i) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such proposed nominee, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (B) any Voting Commitment that could limit or interfere with such proposed nominee’s fiduciary duties under applicable law, (ii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed to the Corporation, and (iii) in such proposed nominee’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with, all applicable publicly disclosed corporate governance, code of conduct and ethics, conflict of interest, confidentiality, corporate opportunities, trading and any other policies and guidelines of the Corporation applicable to directors.
SECTION 3. Special Meetings. Except as otherwise required by statute and subject to the rights, if any, of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation may be called by the Board of Directors acting pursuant to a resolution approved by the affirmative vote of a majority of the Board of Directors to be held at such date, time and place either within or without the State of Delaware as may be stated in the notice of the meeting. A special meeting of stockholders shall be called by the Secretary upon the written request, stating the purpose of the meeting, of stockholders who together own of record at least twenty percent (20%) in voting power of the outstanding shares of stock entitled to vote at such meeting. The Board of Directors may postpone or reschedule any previously scheduled special meeting of stockholders. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the Corporation.
SECTION 4. Notice of Meetings; Adjournments.
(a) A notice of each Annual Meeting stating the hour, date and place, if any, of such Annual Meeting, the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) shall be given not less than ten (10) days nor more than sixty (60) days before the Annual Meeting, to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting by delivering such notice to such stockholder or by mailing it, postage prepaid, addressed to such stockholder at the address of such stockholder as it appears on the Corporation’s stock transfer books. Without limiting the manner by which notice may otherwise be given to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the Delaware General Corporation Law (“DGCL”).
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(b) Notice of all special meetings of stockholders shall be given in the same manner as provided for Annual Meetings, except that the notice of all special meetings shall state the purpose or purposes for which the meeting has been called.
(c) Notice of an Annual Meeting or special meeting of stockholders need not be given to a stockholder if a waiver of notice is executed, or waiver of notice by electronic transmission is provided, before or after such meeting by such stockholder or if such stockholder attends such meeting, unless such attendance is for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.
(d) The Board of Directors may postpone and reschedule any previously scheduled Annual Meeting or special meeting of stockholders, regardless of whether any notice or public disclosure with respect to any such meeting has been sent or made pursuant to Section 2 of this Article I of these Bylaws or otherwise.
(e) When any meeting is convened, the presiding officer may adjourn the meeting. When any Annual Meeting or special meeting of stockholders is adjourned to another hour, date or place, notice need not be given of the adjourned meeting other than an announcement at the meeting at which the adjournment is taken of the hour, date and place, if any, to which the meeting is adjourned and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting; provided, however, that if the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting, or, if after the adjournment a new record date is fixed for the adjourned meeting, the Board of Directors shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.
SECTION 5. Quorum. A majority in voting power of the shares entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum at any meeting of stockholders. If less than a quorum is present at a meeting, the holders of voting stock representing a majority of the voting power present at the meeting or the presiding officer may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice, except as provided in Section 4 of this Article I. At such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally noticed. The stockholders present at a duly constituted meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
SECTION 6. Voting and Proxies. Stockholders shall have one vote for each share of stock entitled to vote owned by them of record according to the stock ledger of the Corporation as of the record date, unless otherwise provided by law or by the Certificate. Stockholders may vote either (i) in person, (ii) by written proxy or (iii) by a transmission permitted by Section 212(c) of the DGCL. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission permitted by Section 212(c) of the DGCL may be substituted for or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. Proxies shall be filed in accordance with the procedures established for the meeting of stockholders. Except as otherwise limited therein or as otherwise provided by law, proxies authorizing a person to vote at a specific meeting shall entitle the persons authorized thereby to vote at any adjournment or postponement of such meeting, but they shall not be valid after final adjournment of such meeting.
SECTION 7. Action at Meeting. When a quorum is present at any meeting of stockholders, any matter before any such meeting (other than an election of a director or directors) shall be decided by a majority of the votes properly cast on such matter, except where a different vote is required by law, by the Certificate, by these Bylaws, by the rules or regulations of any stock exchange applicable to the Corporation, or pursuant to any regulation applicable to the Corporation or its securities, in which case, such different vote shall apply. For purposes of this Section 7, a majority of votes cast shall mean that the number of votes cast “for” a matter exceeds the number of votes cast “against” the matter (with “abstentions” and “broker nonvotes” not counted as a vote cast either “for” or “against” the matter). Any election of directors by stockholders shall be determined by a plurality of the votes properly cast on the election of directors.
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SECTION 8. Stockholder Lists. The officer who has charge of the stock ledger shall prepare and make, at least ten (10) days before every Annual Meeting or special meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), 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, for any purpose germane to the meeting at least ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting or (ii) during ordinary business hours at the principal place of business of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 8 or to vote in person or by proxy at any meeting of stockholders.
SECTION 9. Conduct of Meeting. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of stockholders (referred to herein as the “presiding officer”) shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of the presiding officer, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding officer, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the presiding officer shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding officer at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if the presiding officer should so determine, the presiding officer shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the presiding officer, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.
SECTION 10. Inspectors of Elections. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the presiding officer shall appoint one or more inspectors to act at the meeting. Any inspector may, but need not, be an officer, employee or agent of the Corporation. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall perform such duties as are required by the DGCL, including the counting of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors. The presiding officer may review all determinations made by the inspectors, and in so doing the presiding officer shall be entitled to exercise his or her sole judgment and discretion and he or she shall not be bound by any determinations made by the inspectors. All determinations by the inspectors and, if applicable, the presiding officer, shall be subject to further review by any court of competent jurisdiction.
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SECTION 11. Action Without Meeting. Except as otherwise provided in the Certificate, any action required or permitted to be taken by the stockholders of the Corporation must be effected only at a duly called Annual Meeting or special meeting of stockholders of the Corporation or may be effected by written consent.
ARTICLE II
Directors
SECTION 1. Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors except as otherwise provided by the Certificate or required by law.
SECTION 2. Number and Terms. The number of directors of the Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors. The directors shall hold office in the manner provided in the Certificate.
SECTION 3. Qualification. No director need be a stockholder of the Corporation.
SECTION 4. Vacancies. Vacancies in the Board of Directors shall be filled in the manner provided in the
Certificate.
SECTION 5. Removal. Directors may be removed from office only in the manner provided in the
Certificate.
SECTION 6. Resignation. A director may resign at any time by giving written notice, or notice by electronic transmission, to the Chairman of the Board, if one is elected, the President or the Secretary. A resignation shall be effective upon receipt, unless the resignation otherwise provides.
SECTION 7. Regular Meetings. The regular annual meeting of the Board of Directors shall be held, without notice other than this Section 7, on the same date and at the same place as the Annual Meeting following the close of such meeting of stockholders. Other regular meetings of the Board of Directors may be held at such hour, date and place as the Board of Directors may by resolution from time to time determine and publicized among all directors.
SECTION 8. Special Meetings. Special meetings of the Board of Directors may be called, orally or in writing or by electronic transmission, by or at the request of a majority of the directors, the Chairman of the Board, if one is elected, or the President. The person calling any such special meeting of the Board of Directors may fix the hour, date and place thereof.
SECTION 9. Notice of Meetings. Notice of the hour, date and place of all special meetings of the Board of Directors shall be given to each director by the Secretary or an Assistant Secretary, or by the Chairman of the Board, if one is elected, or the President or such other officer designated by the Chairman of the Board, if one is elected, or the President. Notice of any special meeting of the Board of Directors shall be given to each director in person, by telephone, or by facsimile, electronic mail or other form of electronic communication, sent to his or her business or home address, at least twenty-four (24) hours in advance of the meeting, or by written notice mailed to his or her business or home address, at least three (3) business days in advance of the meeting. Such notice shall be deemed to be delivered when hand-delivered to such address, read to such director by telephone, deposited in the mail so addressed, with postage thereon prepaid if mailed, dispatched or transmitted if sent by facsimile transmission or by electronic mail or other form of electronic communications. A written waiver of notice signed, or an electronic waiver given, before or after a meeting by a director and filed with the records of the meeting shall be deemed to be equivalent to notice of the meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because such meeting is not lawfully called or convened. Except as otherwise required by law, by the Certificate or by these Bylaws, neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
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SECTION 10. Quorum. At any meeting of the Board of Directors, a majority of the Board of Directors shall constitute a quorum for the transaction of business, but if less than a quorum is present at a meeting, a majority of the directors present may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice. Any business which might have been transacted at the meeting as originally noticed may be transacted at such adjourned meeting at which a quorum is present.
SECTION 11. Action at Meeting. At any meeting of the Board of Directors at which a quorum is present, the vote of a majority of the directors present shall constitute action by the Board of Directors, unless otherwise required by law, by the Certificate or by these Bylaws.
SECTION 12. Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the records of the meetings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Such consent shall be treated as a resolution of the Board of Directors for all purposes.
SECTION 13. Manner of Participation. Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these Bylaws.
SECTION 14. Presiding Director. The Board of Directors shall designate a representative to preside over all meetings of the Board of Directors, provided that if the Board of Directors does not so designate such a presiding director or such designated presiding director is unable to so preside or is absent, then the Chairman of the Board, if one is elected, shall preside over all meetings of the Board of Directors. If both the designated presiding director, if one is so designated, and the Chairman of the Board, if one is elected, are unable to preside or are absent, the Board of Directors shall designate an alternate representative to preside over a meeting of the Board of Directors.
SECTION 15. Committees. The Board of Directors may designate one or more committees, including, without limitation, a Compensation Committee, a Nominating & Corporate Governance Committee and an Audit Committee, and may delegate thereto some or all of its powers except those which by law, by the Certificate or by these Bylaws may not be delegated. Except as the Board of Directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the Board of Directors or in such rules, its business shall be conducted so far as possible in the same manner as is provided by these Bylaws for the Board of Directors. All members of such committees shall hold such offices at the pleasure of the Board of Directors. The Board of Directors may abolish any such committee at any time. Any committee to which the Board of Directors delegates any of its powers or duties shall keep records of its meetings and shall report its action to the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.
SECTION 16. Compensation of Directors. Directors shall receive such compensation for their services as shall be determined by the Board of Directors, or a designated committee thereof, provided that directors who are serving the Corporation as employees and who receive compensation for their services as such, shall not receive any salary or other compensation for their services as directors of the Corporation.
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ARTICLE III
Officers
SECTION 1. Enumeration. The officers of the Corporation shall consist of a President, a Chief Executive Officer, a Secretary, a Treasurer and such other officers, including, without limitation, a Chairman of the Board of Directors, a Chief Financial Officer, and one or more Vice Presidents (including Executive Vice Presidents or Senior Vice Presidents), Assistant Vice Presidents and Assistant Secretaries, as the Board of Directors may determine.
SECTION 2. Election. At the regular annual meeting of the Board of Directors following the Annual Meeting, the Board of Directors shall elect the President, the Chief Executive Officer, the Secretary and the Treasurer. Other officers may be elected by the Board of Directors at such regular annual meeting of the Board of Directors or at any other regular or special meeting.
SECTION 3. Qualification. No officer need be a stockholder or a director. Any person may occupy more than one office of the Corporation at any time.
SECTION 4. Tenure. Except as otherwise provided by the Certificate or by these Bylaws, each of the officers of the Corporation shall hold office until the regular annual meeting of the Board of Directors following the next Annual Meeting and until his or her successor is elected and qualified or until his or her earlier resignation or removal.
SECTION 5. Resignation. Any officer may resign by delivering his or her written resignation to the Corporation addressed to the President or the Secretary, and such resignation shall be effective upon receipt, unless the resignation otherwise provides.
SECTION 6. Removal. Except as otherwise provided by law, the Board of Directors may remove any officer with or without cause by the affirmative vote of a majority of the directors then in office.
SECTION 7. Absence or Disability. In the event of the absence or disability of any officer, the Board of
Directors may designate another officer to act temporarily in place of such absent or disabled officer.
SECTION 8. Vacancies. Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors.
SECTION 9. Chairman of the Board. The Chairman of the Board, if one is elected, shall have such powers and shall perform such duties as the Board of Directors may from time to time designate.
SECTION 10. Chief Executive Officer. The Chief Executive Officer shall have such powers and shall perform such duties as the Board of Directors may from time to time designate.
SECTION 11. President. The President shall, subject to the direction of the Board of Directors, have such powers and shall perform such duties as the Board of Directors may from time to time designate.
SECTION 12. Vice Presidents and Assistant Vice Presidents. Any Vice President (including any Executive Vice President or Senior Vice President) and any Assistant Vice President shall have such powers and shall perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.
SECTION 13. Chief Financial Officer. The Chief Financial Officer, if one is elected, shall, subject to the direction of the Board of Directors and except as the Board of Directors or the Chief Executive Officer may otherwise provide, have general charge of the financial affairs of the Corporation and shall cause to be kept accurate books of account. He or she shall have such other duties and powers as may be designated from time to time by the Board of Directors or the Chief Executive Officer.
SECTION 14. Secretary and Assistant Secretaries. The Secretary shall record all the proceedings of the meetings of the stockholders and the Board of Directors (including committees of the Board of Directors) in books kept for that purpose. In his or her absence from any such meeting, a temporary secretary chosen at the meeting shall record the proceedings thereof. The Secretary shall have charge of the stock ledger (which may, however, be kept by any transfer or other agent of the Corporation). The Secretary shall have custody of the seal of the Corporation, and the Secretary, or an Assistant Secretary, shall have authority to affix it to any instrument requiring it, and, when so affixed, the seal may be attested by his or her signature or that of an Assistant Secretary. The Secretary shall have such other duties and powers as may be designated from time to time by the Board of Directors or the Chief Executive Officer. In the absence of the Secretary, any Assistant Secretary may perform his or her duties and responsibilities. Any Assistant Secretary shall have such powers and perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.
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SECTION 15. Treasurer and Assistant Treasurers. The Treasurer shall have custody of all moneys and securities of the Corporation as are authorized and shall render from time to time an account of all such transactions. The Treasurer shall also perform such other duties and have such other powers as are commonly incident to the officer of Treasurer, or as may be designated from time to time by the Board of Directors or the Chief Executive Officer. In the absence of the Treasurer, any Assistant Treasurer may perform his or her duties and responsibilities. Any Assistant Treasurer shall have such powers and perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.
SECTION 16. Other Powers and Duties. Subject to these Bylaws and to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors or the Chief Executive Officer.
ARTICLE IV
Capital Stock
SECTION 1. Certificates of Stock. The shares of the Corporation shall be represented by certificates in such form as may from time to time be prescribed by the Board of Directors. Such certificate shall be signed by the Chief Executive Officer, the President or a Vice President and by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary. The Corporation seal and the signatures by the Corporation’s officers, the transfer agent or the registrar may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on such 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 he or she were such officer, transfer agent or registrar at the time of its issue. Every certificate for shares of stock which are subject to any restriction on transfer and every certificate issued when the Corporation is authorized to issue more than one class or series of stock shall contain such legend with respect thereto as is required by law. Notwithstanding anything to the contrary provided in these Bylaws, the Board of Directors of the Corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares (except that the foregoing shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation), and by the approval and adoption of these Bylaws the Board of Directors has determined that all classes or series of the Corporation’s stock may be uncertificated, whether upon original issuance, re-issuance, or subsequent transfer.
SECTION 2. Transfers. Subject to any restrictions on transfer pursuant to applicable federal or state securities law or as otherwise agreed to in writing and unless otherwise provided by the Board of Directors, shares of stock that are represented by a certificate may be transferred on the books of the Corporation by the surrender to the Corporation or its transfer agent of the certificate theretofore properly endorsed or accompanied by a written assignment or power of attorney properly executed, with transfer stamps (if necessary) affixed, and with such proof of the authenticity of signature as the Corporation or its transfer agent may reasonably require. Shares of stock that are not represented by a certificate may be transferred on the books of the Corporation by submitting to the Corporation or its transfer agent such evidence of transfer and following such other procedures as the Corporation or its transfer agent may require.
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SECTION 3. Record Holders. Except as may otherwise be required by law, by the Certificate or by these Bylaws, the Corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock, until the shares have been transferred on the books of the Corporation in accordance with the requirements of these Bylaws.
SECTION 4. Record Date.
(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. 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 determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or 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 a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than sixty (60) days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
SECTION 5. Replacement of Certificates. In case of the alleged loss, destruction or mutilation of a certificate of stock of the Corporation, a duplicate certificate may be issued in place thereof, upon such terms as the Corporation may prescribe.
ARTICLE V
Indemnification and Advancement
SECTION 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or an officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, or trustee of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer or trustee or in any other capacity while serving as a director, officer or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except with respect to proceedings to enforce rights to indemnification or an advancement of expenses or as otherwise required by law, the Corporation shall not be required to indemnify or advance expenses to any such Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee unless such proceeding (or part thereof) was authorized by the Board of Directors.
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SECTION 2. Right to Advancement of Expenses. In addition to the right to indemnification conferred in Article V, Section 1 of this Bylaw, an Indemnitee shall also have the right to be paid by the Corporation the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition (an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such Indemnitee is not entitled to be indemnified for such expenses under this Section 2 or otherwise.
SECTION 3. Right of Indemnitees to Bring Suit. If a claim under Article V, Section 1 or 2 of this Bylaw is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, or if a claim for an advancement of expense is not paid in full within thirty (30) days after a statement or statements requesting such amounts to be advanced has been received by the Corporation, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. To the fullest extent permitted by law, if successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expenses of prosecuting or defending such suit. In (i) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article V or otherwise shall be on the Corporation.
SECTION 4. Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article V with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.
SECTION 5. Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article V shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Certificate as amended from time to time, these Bylaws, any agreement, any vote of stockholders or disinterested directors or otherwise.
SECTION 6. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
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SECTION 7. Indemnity Agreements. The Corporation may enter into indemnity agreements with any director or officer of the Corporation, with any employee or agent of the Corporation as the Board of Directors may designate and with any officer, director, employee or agent of subsidiaries as the Board of Directors may designate, such indemnity agreements to provide in substance that the Corporation will indemnify such persons as contemplated by this Article V, and to include any other substantive or procedural provisions regarding indemnification as are not inconsistent with the DGCL.
SECTION 8. Nature of Rights. The rights conferred upon Indemnitees in this Article V shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, employee, agent or trustee and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article V that adversely affects any right of an Indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, alteration or repeal. The Corporation’s obligation, if any, to indemnify or to advance expenses to any Indemnitee who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Indemnitee may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.
SECTION 9. Severability. If any word, clause, provision or provisions of this Article V shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Article V (including, without limitation, each portion of any section of this Article V containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (ii) to the fullest extent possible, the provisions of this Article V (including, without limitation, each such portion of any section of this Article V containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
ARTICLE VI
Miscellaneous Provisions
SECTION 1. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.
SECTION 2. Seal. The Board of Directors shall have power to adopt and alter the seal of the Corporation.
SECTION 3. Execution of Instruments. All deeds, leases, transfers, contracts, bonds, notes and other obligations to be entered into by the Corporation in the ordinary course of its business without director action may be executed on behalf of the Corporation by the Chairman of the Board, if one is elected, the President, the Chief Executive Officer, the Chief Financial Officer, if one is elected, the Secretary, the Treasurer or any other officer, employee or agent of the Corporation as the Board of Directors or appropriate committee of the Board may authorize.
SECTION 4. Voting of Securities. Unless the Board of Directors otherwise provides, Chairman of the Board, if one is elected, the President, the Chief Executive Officer, the Chief Financial Officer, if one is elected, the Secretary or the Treasurer may waive notice of and act on behalf of the Corporation, or appoint another person or persons to act as proxy or attorney in fact for the Corporation with or without discretionary power and/or power of substitution, at any meeting of stockholders or shareholders of any other corporation or organization, any of whose securities are held by the Corporation. The power so conferred upon such officers or other persons shall include, without limitation, the voting of any securities of any other entity held by the Corporation, including executing and delivery written consents with respect to such securities.
SECTION 5. Corporate Records. The original or attested copies of the Certificate, Bylaws and records of all meetings of the incorporators, stockholders and the Board of Directors and the stock transfer books, which shall contain the names of all stockholders, their record addresses and the amount of stock held by each, may be kept outside the State of Delaware and shall be kept at the principal office of the Corporation, at an office of its counsel, at an office of its transfer agent or at such other place or places as may be designated from time to time by the Board of Directors.
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SECTION 6. Amendment of Bylaws.
(a) Amendment by Directors. Except as provided otherwise by law, these Bylaws may be amended or repealed by the Board of Directors.
(b) Amendment by Stockholders. These Bylaws may be amended or repealed at any Annual Meeting, or special meeting of stockholders called for such purpose in accordance with these By-Laws, by the affirmative vote of holders of at least a majority in voting power of the outstanding shares entitled to vote on such amendment or repeal, voting together as a single class. Notwithstanding the foregoing, stockholder approval shall not be required unless mandated by the Certificate or other applicable law.
SECTION 7. Notices. If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.
Adopted and effective as of April 15, 2020.
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Exhibit 10.2
PAXMEDICA, INC.
2020 OMNIBUS EQUITY INCENTIVE PLAN
1. | Establishment and Purpose |
1.1 The purpose of the PaxMedica, Inc. 2020 Omnibus Equity Incentive Plan (the “Plan”) is to provide a means whereby eligible employees, officers, non-employee directors and other individual service providers develop a sense of proprietorship and personal involvement in the development and financial success of the Company (as defined herein) and to encourage them to devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its stockholders. The Company, by means of the Plan, seeks to retain the services of such eligible persons and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Subsidiaries.
1.2 The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Incentive Bonus Awards, Other Cash-Based Awards and Other Stock-Based Awards. This Plan shall become effective upon the date set forth in Section 17.1 hereof.
2. | Definitions |
Wherever the following capitalized terms are used in the Plan, they shall have the meanings specified below:
2.1 “Affiliate” means, with respect to a Person, a Person that directly or indirectly Controls, or is Controlled by, or is under common Control with, such Person.
2.2 “Applicable Law” means the requirements relating to the administration of equity-based awards or equity compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction that applies to Awards.
2.3 “Award” means an award of a Stock Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Incentive Bonus Award, Other Cash-Based Award and/or Other Stock-Based Award granted under the Plan.
2.4 “Award Agreement” means either (i) a written or electronic agreement entered into between the Company and a Participant setting forth the terms and conditions of an Award including any amendment or modification thereof, or (ii) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. The Committee may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan and need not be identical.
2.5 “Board” means the Board of Directors of the Company.
2.6 “Cause” means a Participant’s (i) conviction of, or the entry of a plea of guilty or no contest to, a felony or any other crime that causes the Company or its Affiliates disgrace or disrepute, or materially and adversely affects the Company’s or its Affiliates’ operations or financial performance, (ii) gross negligence or willful misconduct with respect to the Company or any of its Affiliates, including, without limitation fraud, embezzlement, theft or proven dishonesty in the course of Awardee’s employment or other service; (iii) use of controlled drugs other than in accordance with a physician’s prescription; (iv) refusal to perform any lawful, material obligation or fulfill any duty (other than any duty or obligation of the type described in clause (vi) below) to the Company or its Affiliates (other than due to a disability), which refusal, if curable, is not cured within fifteen (15) days after delivery of written notice thereof; (v) material breach of any agreement with or duty owed to the Company or any of its Affiliates, which breach, if curable, is not cured within fifteen (15) days after the delivery of written notice thereof; (vi) any breach of any obligation or duty to the Company or any of its Affiliates (whether arising by statute, common law or agreement) relating to confidentiality, noncompetition, nonsolicitation or proprietary rights; or (vii) any material breach of any policy of the Company or its Affiliates or any action that the Board, in its sole discretion, determines is reasonably likely to cause the Company or its Affiliates disgrace or disrepute. Notwithstanding the foregoing, if a Participant and the Company (or any of its Affiliates) have entered into an employment agreement, consulting agreement or other similar agreement that specifically defines “cause,” then with respect to such Participant, “Cause” shall have the meaning defined in that employment agreement, consulting agreement or other agreement.
2.7 “Change in Control” shall be deemed to have occurred if any one of the following events shall occur:
(i) Any Person becomes the beneficial owner (as defined in Rule 13(d)-3 under the Exchange Act) of shares of Common Stock representing more than 50% of the total number of votes that may be cast for the election of directors of the Company; or
(ii) The consummation of any (a) merger or other business combination of the Company, (b) sale of all or substantially all of the Company’s assets or (c) combination of the foregoing transactions (a “Transaction”), other than a Transaction involving only the Company and one or more of its subsidiaries, or a Transaction immediately following which the shareholders of the Company immediately prior to the Transaction continue to have a majority of the voting power in the resulting entity or a parent entity; or
(iii) Within any twelve (12)-month period beginning on or after the Effective Date, the persons who were directors of the Company immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board (or the board of directors of any successor to the Company); provided that any director who was not a director as of the date hereof shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually or by prior operation of the foregoing unless such election, recommendation or approval was the result of an actual or threatened election contest of the type contemplated by Rule 14a-11 promulgated under the Exchange Act or any successor provision; or
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(iv) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, (1) no event or condition shall constitute a Change in Control to the extent that, if it were, a penalty tax would be imposed under Section 409A of the Code; provided that, in such a case, the event or condition shall continue to constitute a Change in Control to the maximum extent possible (e.g., if applicable, in respect of vesting without an acceleration of distribution) without causing the imposition of such penalty tax and (2) no Change in Control shall be deemed to have occurred, and no rights arising upon a Change in Control as provided in the Plan or any Award Agreement shall exist, to the extent that the Board so determines by resolution adopted and not rescinded prior to the Change in Control; provided, however, that no such determination by the Board shall be effective if it would cause a Participant to be subject to a penalty tax under Section 409A of the Code.
2.8 “Code” means the Internal Revenue Code of 1986, as amended. For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.
2.9 “Committee” means the committee of the Board delegated with the authority to administer the Plan, or the full Board, as provided in Section 3 of the Plan. With respect to any decision relating to a Reporting Person, the Committee shall consist solely of two or more directors who are disinterested within the meaning of Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision. The fact that a Committee member shall fail to qualify under any of these requirements shall not invalidate an Award if the Award is otherwise validly made under the Plan. The Board may at any time appoint additional members to the Committee, remove and replace members of the Committee with or without cause, and fill vacancies on the Committee however caused.
2.10 “Common Stock” means the Company’s Common Stock, par value $0.0001 per share.
2.11 “Company” means PaxMedica, Inc., a Delaware corporation, and any successor thereto as provided in Section 15.8.
2.12 “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an employee, director or consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an employee, director or consultant or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Committee in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such entity ceases to qualify as an Affiliate. For example, a change in status from an employee of the Company to a consultant of an Affiliate or to a director will not constitute an interruption of Continuous Service. To the extent permitted by Applicable Law, the Committee or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Company or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s (or an Affiliate’s) leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by Applicable Law or permitted by the Committee. Unless the Committee provides otherwise, in its sole discretion, or as otherwise required by Applicable Law, vesting of Awards shall be tolled during any unpaid leave of absence by a Participant.
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2.13 “Control” means, as to any Person, the power to direct or cause the direction of the management and policies of such Person, or the power to appoint directors of the Company, whether through the ownership of voting securities, by contract or otherwise (the terms “Controlled by” and “under common Control with” shall have correlative meanings).
2.14 “Date of Grant” means the date on which an Award under the Plan is granted by the Committee, or such later date as the Committee may specify to be the effective date of an Award.
2.15 “Disability” means a Participant being considered “disabled” within the meaning of Section 409A of the Code and Treasury Regulation 1.409A-3(i)(4), as well as any successor regulation or interpretation.
2.16 “Effective Date” means the date set forth in Section 17.1 hereof.
2.17 “Eligible Person” means any person who is an employee, officer, director, consultant, advisor or other individual service provider of the Company or any Subsidiary, or any person who is determined by the Committee to be a prospective employee, officer, director, consultant, advisor or other individual service provider of the Company or any Subsidiary.
2.18 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
2.19 “Fair Market Value” of a share of Common Stock shall be, as applied to a specific date (i) the closing price of a share of Common Stock as of such date on the principal established stock exchange or national market system on which the Common Stock is then traded (or, if there is no trading in the Common Stock as of such date, the closing price of a share of Common Stock on the most recent date preceding such date on which trades of the Common Stock were recorded), or (ii) if the shares of Common Stock are not then traded on an established stock exchange or national market system but are then traded in an over-the-counter market, the average of the closing bid and asked prices for the shares of Common Stock in such over-the-counter market as of such date (or, if there are no closing bid and asked prices for the shares of Common Stock as of such date, the average of the closing bid and the asked prices for the shares of Common Stock on the most recent date preceding such date on which such closing bid and asked prices are available on such over-the-counter market), or (iii) if the shares of Common Stock are not then listed on a national securities exchange or national market system or traded in an over-the-counter market, the price of a share of Common Stock as determined by the Committee in its discretion in a manner consistent with Section 409A of the Code and Treasury Regulation 1.409A-1(b)(5)(iv), as well as any successor regulation or interpretation.
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2.20 “Incentive Bonus Award” means an Award granted under Section 12 of the Plan.
2.21 “Incentive Stock Option” means a Stock Option granted under Section 6 hereof that is intended to meet the requirements of Section 422 of the Code and the regulations promulgated thereunder.
2.22 “Nonqualified Stock Option” means a Stock Option granted under Section 6 hereof that is not an Incentive Stock Option.
2.23 “Other Cash-Based Award” means a contractual right granted to an Eligible Person under Section 13 hereof entitling such Eligible Person to receive a cash payment at such times, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
2.24 “Other Stock-Based Award” means a contractual right granted to an Eligible Person under Section 13 representing a notional unit interest equal in value to a share of Common Stock to be paid and distributed at such times, and subject to such conditions as are set forth in the Plan and the applicable Award Agreement.
2.25 “Outside Director” means a director of the Board who is not an employee of the Company or a Subsidiary.
2.26 “Participant” means any Eligible Person who holds an outstanding Award under the Plan.
2.27 “Person” shall mean, unless otherwise provided, any individual, partnership, firm, trust, corporation, limited liability company or other similar entity. When two or more Persons act as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of Common Stock, such partnership, limited partnership, syndicate or group shall be deemed a “Person”
2.28 “Performance Goals” shall mean performance goals established by the Committee as contingencies for the grant, exercise, vesting, distribution, payment and/or settlement, as applicable, of Awards.
2.29 “Performance Shares” means a contractual right granted to an Eligible Person under Section 10 hereof representing a notional unit interest equal in value to a share of Common Stock to be paid and distributed at such times, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
2.30 “Performance Unit” means a contractual right granted to an Eligible Person under Section 11 hereof representing a notional dollar interest as determined by the Committee to be paid and distributed at such times, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
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2.31 “Plan” means this PaxMedica, Inc. 2020 Omnibus Equity Incentive Plan, as it may be amended from time to time.
2.32 “Reporting Person” means an officer, director or greater than ten percent stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.
2.33 “Restricted Stock Award” means a grant of shares of Common Stock to an Eligible Person under Section 8 hereof that are issued subject to such vesting and transfer restrictions and such other conditions as are set forth in the Plan and the applicable Award Agreement.
2.34 “Restricted Stock Unit Award” means a contractual right granted to an Eligible Person under Section 9 hereof representing notional unit interests equal in value to a share of Common Stock to be paid and distributed at such times, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
2.35 “Securities Act” means the Securities Act of 1933, as amended.
2.36 “Stock Appreciation Right” or “SAR” means a contractual right granted to an Eligible Person under Section 7 hereof entitling such Eligible Person to receive a payment, upon the exercise of such right, in such amount and at such time, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
2.37 “Stock Option” means a contractual right granted to an Eligible Person under Section 6 hereof to purchase shares of Common Stock at such time and price, and subject to such conditions, as are set forth in the Plan and the applicable Award Agreement.
2.38 “Subsidiary” means an entity (whether or not a corporation) that is wholly or majority owned or controlled, directly or indirectly, by the Company; provided, however, that with respect to Incentive Stock Options, the term “Subsidiary” shall include only an entity that qualifies under section 424(f) of the Code as a “subsidiary corporation” with respect to the Company.
3. | Administration |
3.1 Committee Members. The Plan shall be administered by the Committee; provided that the entire Board may act in lieu of the Committee on any matter, subject to Section 16b-3 Award requirements referred to in Section 2.9 of the Plan. If and to the extent permitted by Applicable Law, the Committee may authorize one or more Reporting Persons (or other officers) to make Awards to Eligible Persons who are not Reporting Persons (or other officers whom the Committee has specifically authorized to make Awards). Subject to Applicable Law and the restrictions set forth in the Plan, the Committee may delegate administrative functions to individuals who are Reporting Persons, officers, or employees of the Company or its Subsidiaries.
3.2 Committee Authority. The Committee shall have such powers and authority as may be necessary or appropriate for the Committee to carry out its functions as described in the Plan. Subject to the express limitations of the Plan, the Committee shall have authority in its discretion to determine the Eligible Persons to whom, and the time or times at which, Awards may be granted, the number of shares, units or other rights subject to each Award, the exercise, base or purchase price of an Award (if any), the time or times at which an Award will become vested, exercisable or payable, the performance criteria, performance goals and other conditions of an Award, the duration of the Award, and all other terms of the Award. Subject to the terms of the Plan, the Committee shall have authority to amend the terms of an Award in any manner that is not inconsistent with the Plan (including without limitation to determine, add, cancel, waive, amend or otherwise alter any restrictions, terms or conditions of any Award, or extend the post-termination exercisability period of any Stock Option and/or Stock Appreciation Right); provided that neither the Board nor the Committee may, without shareholder approval, reduce or reprice the exercise price of any Stock Option and/or Stock Appreciation Right that exceeds the Fair Market Value of a share of Common Stock on the date of such repricing; and provided further that no such action shall adversely affect the rights of a Participant with respect to an outstanding Award without the Participant’s consent. The Committee shall also have discretionary authority to interpret the Plan, to make all factual determinations under the Plan, and to make all other determinations necessary or advisable for Plan administration, including, without limitation, to correct any defect, to supply any omission or to reconcile any inconsistency in the Plan or any Award Agreement. The Committee may prescribe, amend, and rescind rules and regulations relating to the Plan. The Committee’s determinations under the Plan need not be uniform and may be made by the Committee selectively among Participants and Eligible Persons, whether or not such persons are similarly situated. The Committee shall, in its discretion, consider such factors as it deems relevant in making its interpretations, determinations and actions under the Plan including, without limitation, the recommendations or advice of any officer or employee of the Company or such attorneys, consultants, accountants or other advisors as it may select. All interpretations, determinations, and actions by the Committee shall be final, conclusive, and binding upon all parties.
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3.3 No Liability; Indemnification. Neither the Board nor any Committee member, nor any Person acting at the direction of the Board or the Committee, shall be liable for any act, omission, interpretation, construction or determination made in good faith with respect to the Plan or any Award or Award Agreement. The Company and its Subsidiaries shall pay or reimburse any member of the Committee, as well as any other Person who takes action on behalf of the Plan, for all reasonable expenses incurred with respect to the Plan, and to the full extent allowable under Applicable Law shall indemnify each and every one of them for any claims, liabilities, and costs (including reasonable attorney’s fees) arising out of their good faith performance of duties on behalf of the Company with respect to the Plan. The Company and its Subsidiaries may, but shall not be required to, obtain liability insurance for this purpose.
4. | Shares Subject to the Plan |
4.1 Plan Share Limitation.
(a) Subject to adjustment pursuant to Section 4.3 and any other applicable provisions hereof, the maximum aggregate number of shares of Common Stock which may be issued under all Awards granted to Participants under the Plan shall be 1,731,333 shares; all of which may, but need not, be issued in respect of Incentive Stock Options.
(b) The number of shares of Common Stock available for issuance under the Plan shall automatically increase on January 1st of each year commencing with the January 1 following the Effective Date and on each January 1 thereafter until the Expiration Date (as defined in Section 17.2 of the Plan), in an amount equal to four percent (4%) of the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year, to provide that there shall be no increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year shall be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For avoidance of doubt, none of the additional shares of Common Stock available for issuance pursuant to this Section 4.1(b) shall be issued in respect of Incentive Stock Options.
(c) Shares of Common Stock issued under the Plan may be either authorized but unissued shares or shares held in the Company’s treasury. To the extent that any Award payable in shares of Common Stock is forfeited, cancelled, returned to the Company for failure to satisfy vesting requirements or upon the occurrence of other forfeiture events, or otherwise terminates without payment being made thereunder, the shares of Common Stock covered thereby will no longer be counted against the foregoing maximum share limitations and may again be made subject to Awards under the Plan pursuant to such limitations. Awards settled in cash shall not count against the foregoing maximum share limitation. Shares of Common Stock that otherwise would have been issued upon the exercise of a Stock Option or SAR or in payment with respect to any other form of Award, but are surrendered in payment or partial payment of the exercise price thereof and/or taxes withheld with respect to the exercise thereof or the making of such payment, will no longer be counted against the foregoing maximum share limitations and may again be made subject to Awards under the Plan pursuant to such limitations.
4.2 Outside Director Limitation. Subject to adjustment as provided in Section 4.3, the accounting value of Awards granted under the Plan to any Outside Director during any calendar year shall not exceed $500,000 (inclusive of any cash awards to an Outside Director for such year that are not made pursuant to the Plan); provided that in the case of a new Outside Director, such amount shall be increased to $750,000 for the initial year of the Outside Director’s term.
4.3 Adjustments. If there shall occur any change with respect to the outstanding shares of Common Stock by reason of any recapitalization, reclassification, stock dividend, extraordinary dividend, stock split, reverse stock split, or other distribution with respect to the shares of Common Stock, or any merger, reorganization, consolidation, combination, spin-off or other similar corporate change, or any other change affecting the Common Stock, the Committee shall, in the manner and to the extent that it deems appropriate and equitable to the Participants and consistent with the terms of the Plan, cause an adjustment to be made in (i) the maximum numbers and kind of shares provided in Section 4.1 hereof, (ii) the numbers and kind of shares of Common Stock, units, or other rights subject to then outstanding Awards, (iii) the price for each share or unit or other right subject to then outstanding Awards, (iv) the performance measures or goals relating to the vesting of an Award, and (v) any other terms of an Award that are affected by the event to prevent dilution or enlargement of a Participant’s rights under an Award. Notwithstanding the foregoing, in the case of Incentive Stock Options, any such adjustments shall, to the extent practicable, be made in a manner consistent with the requirements of Section 424(a) of the Code.
5. | Participation and Awards |
5.1 Designation of Participants. All Eligible Persons are eligible to be designated by the Committee to receive Awards and become Participants under the Plan. The Committee has the authority, in its discretion, to determine and designate from time to time those Eligible Persons who are to be granted Awards, the types of Awards to be granted and the number of shares of Common Stock or units subject to Awards granted under the Plan. In selecting Eligible Persons to be Participants and in determining the type and amount of Awards to be granted under the Plan, the Committee shall consider any and all factors that it deems relevant or appropriate.
5.2 Determination of Awards. The Committee shall determine the terms and conditions of all Awards granted to Participants in accordance with its authority under Section 3.2 hereof. An Award may consist of one type of right or benefit hereunder or of two or more such rights or benefits granted in tandem or in the alternative. To the extent deemed appropriate by the Committee, an Award shall be evidenced by an Award Agreement as described in Section 15.1 hereof.
6. | Stock Options |
6.1 Grant of Stock Option. A Stock Option may be granted to any Eligible Person selected by the Committee. Subject to the provisions of Section 6.6 hereof and Section 422 of the Code, each Stock Option shall be designated, in the sole discretion of the Committee, as an Incentive Stock Option or as a Nonqualified Stock Option.
6.2 Exercise Price. The exercise price per share of a Stock Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the Date of Grant, subject to adjustments as provided for under Section 4.3.
6.3 Vesting of Stock Options. The Committee shall in its sole discretion prescribe the time or times at which, or the conditions upon which, a Stock Option or portion thereof shall become vested and/or exercisable. Unless otherwise provided by the Committee, no Stock Option shall provide for vesting or exercise earlier than one year after the Date of Grant. The requirements for vesting and exercisability of a Stock Option may be based on the Continuous Service of the Participant for a specified time period (or periods) and/or on the attainment of a specified performance goal (or goals) established by the Committee in its discretion. The Committee may, in its sole discretion, accelerate the vesting or exercisability of any Stock Option at any time. The Committee, in its sole discretion, may allow a Participant to exercise unvested Nonqualified Stock Options, in which case the shares of Common Stock then issued shall be Restricted Stock having analogous vesting restrictions to the unvested Nonqualified Stock Options.
6.4 Term of Stock Options. The Committee shall in its discretion prescribe in an Award Agreement the period during which a vested Stock Option may be exercised, provided that the maximum term of a Stock Option shall be ten (10) years from the Date of Grant. A Stock Option may be earlier terminated as specified by the Committee and set forth in an Award Agreement upon or following the termination of a Participant’s Continuous Service for any reason, including by reason of voluntary resignation, death, Disability, termination for Cause or any other reason. Except as otherwise provided in this Section 6 or in an Award Agreement as such agreement may be amended from time to time upon authorization of the Committee, no Stock Option may be exercised at any time during the term thereof unless the Participant is then in Continuous Service. Notwithstanding the foregoing, unless an Award Agreement provides otherwise:
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(a) If a Participant’s Continuous Service terminates by reason of his or her death, any Stock Option held by such Participant may, to the extent then exercisable, be exercised by such Participant’s estate or any Person who acquires the right to exercise such Stock Option by bequest or inheritance at any time in accordance with its terms for up to one year after the date of such Participant’s death (but in no event after the earlier of the expiration of the term of such Stock Option or such time as the Stock Option is otherwise canceled or terminated in accordance with its terms). Upon expiration of such one-year period, no portion of the Stock Option held by such Participant shall be exercisable and the Stock Option shall be deemed to be canceled, forfeited and of no further force or effect.
(b) If a Participant’s Continuous Service terminates by reason of his or her Disability, any Stock Option held by such Participant may, to the extent then exercisable, be exercised by the Participant or his or her personal representative at any time in accordance with its terms for up to one year after the date of such Participant’s termination of Continuous Service (but in no event after the earlier of the expiration of the term of such Stock Option or such time as the Stock Option is otherwise canceled or terminated in accordance with its terms). Upon expiration of such one-year period, no portion of the Stock Option held by such Participant shall be exercisable and the Stock Option shall be deemed to be canceled, forfeited and of no further force or effect.
(c) If a Participant’s Continuous Service terminates for any reason other than death, Disability or Cause, any Stock Option held by such Participant may, to the extent then exercisable, be exercised by the Participant up until ninety (90) days following such termination of Continuous Service (but in no event after the earlier of the expiration of the term of such Stock Option or such time as the Stock Option is otherwise canceled or terminated in accordance with its terms). Upon expiration of such 90-day period, no portion of the Stock Option held by such Participant shall be exercisable and the Stock Option shall be deemed to be canceled, forfeited and of no further force or effect.
(d) To the extent that a Stock Option of a Participant whose Continuous Service terminates is not exercisable, such Stock Option shall be deemed forfeited and canceled on the ninetieth (90th) day after such termination of Continuous Service or at such earlier time as the Committee may determine.
6.5 Stock Option Exercise. Subject to such terms and conditions as shall be specified in an Award Agreement, a Stock Option may be exercised in whole or in part at any time during the term thereof by notice in the form required by the Company, and payment of the aggregate exercise price by certified or bank check, or such other means as the Committee may accept. As set forth in an Award Agreement or otherwise determined by the Committee, in its sole discretion, at or after grant, payment in full or in part of the exercise price of an Option may be made: (i) in the form of shares of Common Stock that have been held by the Participant for such period as the Committee may deem appropriate for accounting purposes or otherwise, valued at the Fair Market Value of such shares on the date of exercise; (ii) by surrendering to the Company shares of Common Stock otherwise receivable on exercise of the Option; (iii) by a cashless exercise program implemented by the Committee in connection with the Plan; (iv) subject to the approval of the Committee, by a full recourse, interest bearing promissory note having such terms as the Committee may, in its sole discretion, permit and/or (v) by such other method as may be approved by the Committee and set forth in an Award Agreement. Subject to any governing rules or regulations, as soon as practicable after receipt of written notification of exercise and full payment of the exercise price and satisfaction of any applicable tax withholding pursuant to Section 16.5, the Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon the Participant’s request, Common Stock certificates in an appropriate amount based upon the number of shares of Common Stock purchased under the Option. Unless otherwise determined by the Committee, all payments under all of the methods indicated above shall be paid in United States dollars or shares of Common Stock, as applicable.
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6.6 Additional Rules for Incentive Stock Options.
(a) Eligibility. An Incentive Stock Option may only be granted to an Eligible Person who is considered an employee under Treasury Regulation §1.421-1(h) of the Company or any Subsidiary.
(b) Annual Limits. No Incentive Stock Option shall be granted to an Eligible Person as a result of which the aggregate Fair Market Value (determined as of the Date of Grant) of the stock with respect to which Incentive Stock Options are exercisable for the first time in any calendar year under the Plan and any other stock option plans of the Company or any Subsidiary would exceed $100,000, determined in accordance with Section 422(d) of the Code. This limitation shall be applied by taking Incentive Stock Options into account in the order in which granted.
(c) Ten Percent Stockholders. If a Stock Option granted under the Plan is intended to be an Incentive Stock Option, and if the Participant, at the time of grant, owns stock possessing ten percent (10%) or more of the total combined voting power of all classes of Common Stock of the Company or any Subsidiary, then (i) the Stock Option exercise price per share shall in no event be less than 110% of the Fair Market Value of the Common Stock on the date of such grant and (ii) such Stock Option shall not be exercisable after the expiration of five (5) years following the date such Stock Option is granted.
(d) Termination of Employment. An Award of an Incentive Stock Option shall provide that such Stock Option may be exercised not later than three (3) months following termination of employment of the Participant with the Company and all Subsidiaries, or not later than one (1) year following death or a permanent and total disability within the meaning of Section 22(e)(3) of the Code, as and to the extent determined by the Committee to be necessary to comply with the requirements of Section 422 of the Code.
(e) Disqualifying Dispositions. If shares of Common Stock acquired by exercise of an Incentive Stock Option are disposed of within two (2) years following the Date of Grant or one (1) year following the transfer of such shares to the Participant upon exercise, the Participant shall, promptly following such disposition, notify the Company in writing of the date and terms of such disposition and provide such other information regarding the disposition as the Company may reasonably require.
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7. | Stock Appreciation Rights |
7.1 Grant of Stock Appreciation Rights. A Stock Appreciation Right may be granted to any Eligible Person selected by the Committee. Stock Appreciation Rights may be granted on a basis that allows for the exercise of the right by the Participant or that provides for the automatic payment of the right upon a specified date or event.
7.2 Base Price. The base price of a Stock Appreciation Right shall be determined by the Committee in its sole discretion; provided, however, that the base price for any grant of a Stock Appreciation Right shall not be less than 100% of the Fair Market Value of a share of Common Stock on the Date of Grant, subject to adjustments as provided for under Section 4.3.
7.3 Vesting Stock Appreciation Rights. The Committee shall in its discretion prescribe the time or times at which, or the conditions upon which, a Stock Appreciation Right or portion thereof shall become vested and/or exercisable. Unless otherwise provided by the Committee, no Stock Appreciation Right shall provide for vesting or exercise earlier than one year after the Date of Grant. The requirements for vesting and exercisability of a Stock Appreciation Right may be based on the Continuous Service of a Participant for a specified time period (or periods) or on the attainment of a specified performance goal (or goals) established by the Committee in its discretion. The Committee may, in its sole discretion, accelerate the vesting or exercisability of any Stock Appreciation Right at any time.
7.4 Term of Stock Appreciation Rights. The Committee shall in its discretion prescribe in an Award Agreement the period during which a vested Stock Appreciation Right may be exercised, provided that the maximum term of a Stock Appreciation Right shall be ten (10) years from the Date of Grant. A Stock Appreciation Right may be earlier terminated as specified by the Committee and set forth in an Award Agreement upon or following the termination of a Participant’s Continuous Service for any reason, including by reason of voluntary resignation, death, Disability, termination for Cause or any other reason. Except as otherwise provided in this Section 7 or in an Award Agreement, as such agreement may be amended from time to time upon authorization of the Committee, no Stock Appreciation Right may be exercised at any time during the term thereof unless the Participant is then in Continuous Service.
7.5 Payment of Stock Appreciation Rights. Subject to such terms and conditions as shall be specified in an Award Agreement, a vested Stock Appreciation Right may be exercised in whole or in part at any time during the term thereof by notice in the form required by the Company and payment of any exercise price. Upon the exercise of a Stock Appreciation Right and payment of any applicable exercise price, a Participant shall be entitled to receive an amount determined by multiplying: (i) the excess of the Fair Market Value of a share of Common Stock on the date of exercise of the Stock Appreciation Right over the base price of such Stock Appreciation Right, by (ii) the number of shares as to which such Stock Appreciation Right is exercised. Payment of the amount determined under the immediately preceding sentence may be made, as approved by the Committee and set forth in the Award Agreement, in shares of Common Stock valued at their Fair Market Value on the date of exercise, in cash, or in a combination of shares of Common Stock and cash, subject to applicable tax withholding requirements set forth in Section 16.5. If Stock Appreciation Rights are settled in shares of Common Stock, then as soon as practicable following the date of settlement the Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon the Participant’s request, Common Stock certificates in an appropriate amount.
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8. | Restricted Stock Awards |
8.1 Grant of Restricted Stock Awards. A Restricted Stock Award may be granted to any Eligible Person selected by the Committee. The Committee may require the payment by the Participant of a specified purchase price in connection with any Restricted Stock Award. The Committee may provide in an Award Agreement for the payment of dividends and distributions to the Participant such times as paid to stockholders generally or at the times of vesting or other payment of the Restricted Stock Award. If any dividends or distributions are paid in stock while a Restricted Stock Award is subject to restrictions under Section 8.3 of the Plan, the dividends or other distributions shares shall be subject to the same restrictions on transferability as the shares of Common Stock to which they were paid unless otherwise set forth in the Award Agreement. The Committee may also subject the grant of any Restricted Stock Award to the execution of a voting agreement with the Company or with any Affiliate of the Company.
8.2 Vesting Requirements. The restrictions imposed on shares of Common Stock granted under a Restricted Stock Award shall lapse in accordance with the vesting requirements specified by the Committee in the Award Agreement. Upon vesting of a Restricted Stock Award, such Award shall be subject to the tax withholding requirement set forth in Section 16.5. The requirements for vesting of a Restricted Stock Award may be based on the Continuous Service of the Participant for a specified time period (or periods) or on the attainment of a specified performance goal (or goals) established by the Committee in its discretion. The Committee may, in its sole discretion, accelerate the vesting of a Restricted Stock Award at any time. If the vesting requirements of a Restricted Stock Award shall not be satisfied, the Award shall be forfeited and the shares of Common Stock subject to the Award shall be returned to the Company. In the event that the Participant paid any purchase price with respect to such forfeited shares, unless otherwise provided by the Committee in an Award Agreement, the Company will refund to the Participant the lesser of (i) such purchase price and (ii) the Fair Market Value of such shares on the date of forfeiture.
8.3 Restrictions. Shares granted under any Restricted Stock Award may not be transferred, assigned or subject to any encumbrance, pledge, or charge until all applicable restrictions are removed or have expired, unless otherwise allowed by the Committee. The Committee may require in an Award Agreement that certificates representing the shares granted under a Restricted Stock Award bear a legend making appropriate reference to the restrictions imposed, and that certificates representing the shares granted or sold under a Restricted Stock Award will remain in the physical custody of an escrow holder until all restrictions are removed or have expired.
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8.4 Rights as Stockholder. Subject to the foregoing provisions of this Section 8 and the applicable Award Agreement, the Participant to whom a Restricted Stock Award is made shall have all rights of a stockholder with respect to the shares granted to the Participant under the Restricted Stock Award, including the right to vote the shares and receive all dividends and other distributions paid or made with respect thereto, unless the Committee determines otherwise at the time the Restricted Stock Award is granted.
8.5 Section 83(b) Election. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to a Restricted Stock Award, the Participant shall file, within thirty (30) days following the Date of Grant, a copy of such election with the Company (directed to the Secretary thereof) and with the Internal Revenue Service, in accordance with the regulations under Section 83 of the Code. The Committee may provide in an Award Agreement that the Restricted Stock Award is conditioned upon the Participant’s making or refraining from making an election with respect to the Award under Section 83(b) of the Code.
9. Restricted Stock Unit Awards
9.1 Grant of Restricted Stock Unit Awards. A Restricted Stock Unit Award may be granted to any Eligible Person selected by the Committee. The value of each stock unit under a Restricted Stock Unit Award is equal to the Fair Market Value of the Common Stock on the applicable date or time period of determination, as specified by the Committee. A Restricted Stock Unit Award shall be subject to such restrictions and conditions as the Committee shall determine. A Restricted Stock Unit Award may be granted together with a dividend equivalent right with respect to the shares of Common Stock subject to the Award, which may be accumulated and may be deemed reinvested in additional stock units, as determined by the Committee in its sole discretion. If any dividend equivalents are paid while a Restricted Stock Unit Award is subject to restrictions under Section 9 of the Plan, the Committee may, in its sole discretion, provide in the Award Agreement for such dividend equivalents to immediately be paid to the Participant holding such Restricted Stock Unit Award or pay such dividend equivalents subject to the same restrictions on transferability as the Restricted Stock Units to which they relate.
9.2 Vesting of Restricted Stock Unit Awards. On the Date of Grant, the Committee shall, in its discretion, determine any vesting requirements with respect to a Restricted Stock Unit Award, which shall be set forth in the Award Agreement. The requirements for vesting of a Restricted Stock Unit Award may be based on the Continuous Service of the Participant for a specified time period (or periods) or on the attainment of a specified performance goal (or goals) established by the Committee in its discretion. The Committee may, in its sole discretion, accelerate the vesting of a Restricted Stock Unit Award at any time. A Restricted Stock Unit Award may also be granted on a fully vested basis, with a deferred payment date as may be determined by the Committee or elected by the Participant in accordance with rules established by the Committee.
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9.3 Payment of Restricted Stock Unit Awards. A Restricted Stock Unit Award shall become payable to a Participant at the time or times determined by the Committee and set forth in the Award Agreement, which may be upon or following the vesting of the Award. Payment of a Restricted Stock Unit Award may be made, at the discretion of the Committee, in cash or in shares of Common Stock, or in a combination thereof as described in the Award Agreement, subject to applicable tax withholding requirements set forth in Section 16.5. Any cash payment of a Restricted Stock Unit Award shall be made based upon the Fair Market Value of the Common Stock, determined on such date or over such time period as determined by the Committee. Notwithstanding the foregoing, unless specified otherwise in the Award Agreement, any Restricted Stock Unit, whether settled in Common Stock or cash, shall be paid no later than two and one-half months after the later of the calendar year or fiscal year in which the Restricted Stock Units vest. If Restricted Stock Unit Awards are settled in shares of Common Stock, then as soon as practicable following the date of settlement, the Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon the Participant’s request, Common Stock certificates in an appropriate amount.
10. Performance Shares
10.1 Grant of Performance Shares. Performance Shares may be granted to any Eligible Person selected by the Committee. A Performance Share Award shall be subject to such restrictions and condition as the Committee shall specify. A Performance Share Award may be granted with a dividend equivalent right with respect to the shares of Common Stock subject to the Award, which may be accumulated and may be deemed reinvested in additional stock units, as determined by the Committee in its sole discretion.
10.2 Value of Performance Shares. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the Date of Grant. The Committee shall set performance goals in its discretion that, depending on the extent to which they are met over a specified time period, shall determine the number of Performance Shares that shall be paid to a Participant.
10.3 Earning of Performance Shares. After the applicable time period has ended, the number of Performance Shares earned by the Participant over such time period shall be determined as a function of the extent to which the applicable corresponding performance goals have been achieved. This determination shall be made solely by the Committee. The Committee may, in its sole discretion, waive any performance or vesting conditions relating to a Performance Share Award.
10.4 Form and Timing of Payment of Performance Shares. The Committee shall pay at the close of the applicable Performance Period, or as soon as practicable thereafter, any earned Performance Shares in the form of cash or in shares of Common Stock or in a combination thereof, as specified in a Participant’s Award Agreement, subject to applicable tax withholding requirements set forth in Section 16.5. Notwithstanding the foregoing, unless specified otherwise in the Award Agreement, all Performance Shares shall be paid no later than two and one-half months following the later of the calendar year or fiscal year in which such Performance Shares vest. Any shares of Common Stock paid to a Participant under this Section 10.4 may be subject to any restrictions deemed appropriate by the Committee. If Performance Shares are settled in shares of Common Stock, then as soon as practicable following the date of settlement the Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon the Participant’s request, Common Stock certificates in an appropriate amount.
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11. Performance Units
11.1 Grant of Performance Units. Performance Units may be granted to any Eligible Person selected by the Committee. A Performance Unit Award shall be subject to such restrictions and condition as the Committee shall specify in a Participant’s Award Agreement.
11.2 Value of Performance Units. Each Performance Unit shall have an initial notional value equal to a dollar amount determined by the Committee, in its sole discretion. The Committee shall set performance goals in its discretion that, depending on the extent to which they are met over a specified time period, will determine the number of Performance Units that shall be settled and paid to the Participant.
11.3 Earning of Performance Units. After the applicable time period has ended, the number of Performance Units earned by the Participant, and the amount payable in cash, in shares or in a combination thereof, over such time period shall be determined as a function of the extent to which the applicable corresponding performance goals have been achieved. This determination shall be made solely by the Committee. The Committee may, in its sole discretion, waive any performance or vesting conditions relating to a Performance Unit Award.
11.4 Form and Timing of Payment of Performance Units. The Committee shall pay at the close of the applicable Performance Period, or as soon as practicable thereafter, any earned Performance Units in the form of cash or in shares of Common Stock or in a combination thereof, as specified in a Participant’s Award Agreement, subject to applicable tax withholding requirements set forth in Section 16.5. Notwithstanding the foregoing, unless specified otherwise in the Award Agreement, all Performance Units shall be paid no later than two and one-half months following the later of the calendar year or fiscal year in which such Performance Units vest. Any shares of Common Stock paid to a Participant under this Section 11.4 may be subject to any restrictions deemed appropriate by the Committee. If Performance Units are settled in shares of Common Stock, then as soon as practicable following the date of settlement the Company shall deliver to the Participant evidence of book entry shares of Common Stock, or upon the Participant’s request, Common Stock certificates in an appropriate amount.
12. Incentive Bonus Awards
12.1 Incentive Bonus Awards. The Committee, at its discretion, may grant Incentive Bonus Awards to such Participants as it may designate from time to time. The terms of a Participant’s Incentive Bonus Award shall be set forth in the Participant’s Award Agreement. Each Award Agreement shall specify such general terms and conditions as the Committee shall determine.
12.2 Incentive Bonus Award Performance Criteria. The determination of Incentive Bonus Awards for a given year or years may be based upon the attainment of specified levels of Company or Subsidiary performance as measured by pre-established, objective performance criteria determined at the discretion of the Committee. The Committee shall (i) select those Participants who shall be eligible to receive an Incentive Bonus Award, (ii) determine the performance period, (iii) determine target levels of performance, and (iv) determine the level of Incentive Bonus Award to be paid to each selected Participant upon the achievement of each performance level. The Committee generally shall make the foregoing determinations prior to the commencement of services to which an Incentive Bonus Award relates, to the extent applicable, and while the outcome of the performance goals and targets is uncertain.
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12.3 Payment of Incentive Bonus Awards.
(a) Incentive Bonus Awards shall be paid in cash or Common Stock, as set forth in a Participant’s Award Agreement. Payments shall be made following a determination by the Committee that the performance targets were attained and shall be made within two and one-half months after the later of the end of the fiscal or calendar year in which the Incentive Award is no longer subject to a substantial risk of forfeiture.
(b) The amount of an Incentive Bonus Award to be paid upon the attainment of each targeted level of performance shall equal a percentage of a Participant’s base salary for the fiscal year, a fixed dollar amount, or such other formula, as determined by the Committee.
13. | Other Cash-Based Awards and Other Stock-Based Awards |
13.1 Other Cash-Based and Stock-Based Awards. The Committee may grant other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted Shares) in such amounts and subject to such terms and conditions, as the Committee shall determine. Such Awards may involve the transfer of actual shares of Common Stock to a Participant, or payment in cash or otherwise of amounts based on the value of shares of Common Stock. In addition, the Committee, at any time and from time to time, may grant Other Cash-Based Awards to a Participant in such amounts and upon such terms as the Committee shall determine, in its sole discretion.
13.2 Value of Cash-Based Awards and Other Stock-Based Awards. Each Other Stock-Based Award shall be expressed in terms of shares of Common Stock or units based on shares of Common Stock, as determined by the Committee, in its sole discretion. Each Other Cash-Based Award shall specify a payment amount or payment range as determined by the Committee, in its sole discretion. If the Committee exercises its discretion to establish performance goals, the value of Other Cash-Based Awards that shall be paid to the Participant will depend on the extent to which such performance goals are met.
13.3 Payment of Cash-Based Awards and Other Stock-Based Awards. Payment, if any, with respect to Other Cash-Based Awards and Other Stock-Based Award shall be made in accordance with the terms of the Award, in cash or shares of Common Stock as the Committee determines.
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14. Change in Control
14.1 Effect of a Change in Control.
(a) The Committee may, at the time of the grant of an Award and as set forth in an Award Agreement, provide for the effect of a “Change in Control” on an Award. Such provisions may include any one or more of the following: (i) the acceleration or extension of time periods for purposes of exercising, vesting in, or realizing gain from any Award, (ii) the elimination or modification of performance or other conditions related to the payment or other rights under an Award, (iii) provision for the cash settlement of an Award for an equivalent cash value, as determined by the Committee, or (iv) such other modification or adjustment to an Award as the Committee deems appropriate to maintain and protect the rights and interests of Participants upon or following a Change in Control. To the extent necessary for compliance with Section 409A of the Code, an Award Agreement shall provide that an Award subject to the requirements of Section 409A that would otherwise become payable upon a Change in Control shall only become payable to the extent that the requirements for a “change in control” for purposes of Section 409A have been satisfied.
(b) Notwithstanding anything to the contrary set forth in the Plan, unless otherwise provided by an Award Agreement, upon or in anticipation of any Change in Control, the Committee may, in its sole and absolute discretion and without the need for the consent of any Participant, take one or more of the following actions contingent upon the occurrence of that Change in Control: (i) cause any or all outstanding Stock Options and Stock Appreciation Rights held by Participants affected by the Change in Control to become vested and immediately exercisable, in whole or in part; (ii) cause any or all outstanding Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Incentive Bonus Award and any other Award held by Participants affected by the Change in Control to become non-forfeitable, in whole or in part; (iii) cancel any Stock Option or Stock Appreciation Right in exchange for a substitute option in a manner consistent with the requirements of Treasury Regulation. §1.424-1(a) or §1.409A-1(b)(5)(v)(D), as applicable (notwithstanding the fact that the original Stock Option may never have been intended to satisfy the requirements for treatment as an Incentive Stock Option); (iv) cancel any Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units held by a Participant in exchange for restricted stock or performance shares of or stock or performance units in respect of the capital stock of any successor corporation; (v) redeem any Restricted Stock held by a Participant affected by the Change in Control for cash and/or other substitute consideration with a value equal to the Fair Market Value of an unrestricted share of Common Stock on the date of the Change in Control; (vi) terminate any Award in exchange for an amount of cash and/or property equal to the amount, if any, that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the Change in Control (the “Change in Control Consideration”); provided, however that if the Change in Control Consideration with respect to any Option or Stock Appreciation Right does not exceed the exercise price of such Option or Stock Appreciation Right, the Committee may cancel the Option or Stock Appreciation Right without payment of any consideration therefor; and/or (vii) take any other action necessary or appropriate to carry out the terms of any definitive agreement controlling the terms and conditions of the Change in Control. Any such Change in Control Consideration may be subject to any escrow, indemnification and similar obligations, contingencies and encumbrances applicable in connection with the Change in Control to holders of Common Stock. Without limitation of the foregoing, if as of the date of the occurrence of the Change in Control the Committee determines that no amount would have been attained upon the realization of the Participant’s rights, then such Award may be terminated by the Company without payment. The Committee may cause the Change in Control Consideration to be subject to vesting conditions (whether or not the same as the vesting conditions applicable to the Award prior to the Change in Control) and/or make such other modifications, adjustments or amendments to outstanding Awards or this Plan as the Committee deems necessary or appropriate.
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(c) The Committee may require a Participant to (i) represent and warrant as to the unencumbered title to the Participant’s Awards, (ii) bear such Participant’s pro rata share of any post-closing indemnity obligations, and be subject to the same or similar post-closing purchase price adjustments, escrow terms, offset rights, holdback terms and similar conditions as the other holders of Common Stock, and (iii) execute and deliver such documents and instruments as the Committee may reasonably require for the Participant to be bound by such obligations. The Committee will endeavor to take action under this Section 14 in a manner that does not cause a violation of Section 409A of the Code with respect to an Award.
15. General Provisions
15.1 Award Agreement. To the extent deemed necessary by the Committee, an Award under the Plan shall be evidenced by an Award Agreement in a written or electronic form approved by the Committee setting forth the number of shares of Common Stock or units subject to the Award, the exercise price, base price, or purchase price of the Award, the time or times at which an Award will become vested, exercisable or payable and the term of the Award. The Award Agreement may also set forth the effect on an Award of termination of Continuous Service under certain circumstances. The Award Agreement shall be subject to and incorporate, by reference or otherwise, all of the applicable terms and conditions of the Plan, and may also set forth other terms and conditions applicable to the Award as determined by the Committee consistent with the limitations of the Plan. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code. The grant of an Award under the Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the Award Agreement.
15.2 Forfeiture Events/Representations. The Committee may specify in an Award Agreement at the time of the Award that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events shall include, but shall not be limited to, termination of Continuous Service for Cause, violation of material Company policies, breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company. The Committee may also specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be conditioned upon the Participant making a representation regarding compliance with noncompetition, confidentiality or other restrictive covenants that may apply to the Participant and providing that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment on account of a breach of such representation. Notwithstanding the foregoing, the confidentiality restrictions set forth in an Award Agreement shall not, and shall not be interpreted to, impair a Participant from exercising any legally protected whistleblower rights (including under Rule 21 of the Exchange Act). In addition and without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any “clawback” policy adopted by the Company or as is otherwise required by applicable law or stock exchange listing condition.
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15.3 No Assignment or Transfer; Beneficiaries.
(a) Awards under the Plan shall not be assignable or transferable by the Participant, except by will or by the laws of descent and distribution, and shall not be subject in any manner to assignment, alienation, pledge, encumbrance or charge. Notwithstanding the foregoing, the Committee may provide in an Award Agreement that the Participant shall have the right to designate a beneficiary or beneficiaries who shall be entitled to any rights, payments or other benefits specified under an Award following the Participant’s death. During the lifetime of a Participant, an Award shall be exercised only by such Participant or such Participant’s guardian or legal representative. In the event of a Participant’s death, an Award may, to the extent permitted by the Award Agreement, be exercised by the Participant’s beneficiary as designated by the Participant in the manner prescribed by the Committee or, in the absence of an authorized beneficiary designation, by the legatee of such Award under the Participant’s will or by the Participant’s estate in accordance with the Participant’s will or the laws of descent and distribution, in each case in the same manner and to the same extent that such Award was exercisable by the Participant on the date of the Participant’s death.
(b) Limited Transferability Rights. Notwithstanding anything else in this Section 15.3 to the contrary, the Committee may in its discretion provide in an Award Agreement that an Award in the form of a Nonqualified Stock Option, share-settled Stock Appreciation Right, Restricted Stock, Performance Share or share-settled Other Stock-Based Award may be transferred, on such terms and conditions as the Committee deems appropriate, either (i) by instrument to the Participant’s “Immediate Family” (as defined below), (ii) by instrument to an inter vivos or testamentary trust (or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries, or (iii) by gift to charitable institutions. Any transferee of the Participant’s rights shall succeed and be subject to all of the terms of the applicable Award Agreement and the Plan. “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.
15.4 Rights as Stockholder. A Participant shall have no rights as a holder of shares of Common Stock with respect to any unissued shares of Common Stock covered by an Award until the date the Participant becomes the holder of record of such securities. Except as provided in Section 4.3 hereof, no adjustment or other provision shall be made for dividends or other stockholder rights, except to the extent that the Award Agreement provides for dividend payments or dividend equivalent rights.
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15.5 Employment or Continuous Service. Nothing in the Plan, in the grant of any Award or in any Award Agreement shall confer upon any Eligible Person or Participant any right to continue in Continuous Service, or interfere in any way with the right of the Company or any of its Subsidiaries to terminate the employment or other service relationship of an Eligible Person or Participant for any reason at any time.
15.6 Fractional Shares. In the case of any fractional share or unit resulting from the grant, vesting, payment or crediting of dividends or dividend equivalents under an Award, the Committee shall have the discretionary authority to (i) disregard such fractional share or unit, (ii) round such fractional share or unit to the nearest lower or higher whole share or unit, or (iii) convert such fractional share or unit into a right to receive a cash payment.
15.7 Other Compensation and Benefit Plans. The amount of any compensation deemed to be received by a Participant pursuant to an Award shall not constitute includable compensation for purposes of determining the amount of benefits to which a Participant is entitled under any other compensation or benefit plan or program of the Company or any Subsidiary, including, without limitation, under any bonus, pension, profit-sharing, life insurance, salary continuation or severance benefits plan, except to the extent specifically provided by the terms of any such plan.
15.8 Plan Binding on Transferees. The Plan shall be binding upon the Company, its transferees and assigns, and the Participant, the Participant’s executor, administrator and permitted transferees and beneficiaries. In addition, all obligations of the Company under this Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
15.9 Foreign Jurisdictions. The Committee may adopt, amend and terminate such arrangements and grant such Awards, not inconsistent with the intent of the Plan, as it may deem necessary or desirable to comply with any tax, securities, regulatory or other laws of other jurisdictions with respect to Awards that may be subject to such laws. The terms and conditions of such Awards may vary from the terms and conditions that would otherwise be required by the Plan solely to the extent the Committee deems necessary for such purpose. Moreover, the Board may approve such supplements to or amendments, restatements or alternative versions of the Plan, not inconsistent with the intent of the Plan, as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of the Plan as in effect for any other purpose.
15.10 No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising an Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.
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15.11 Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Committee or the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board or Committee consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement as a result of a clerical error in the papering of the Award Agreement, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement.
15.12 Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of the Participant’s services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an employee of the Company and the employee has a change in status from a full-time employee to a part-time employee) after the date of grant of any Award to the Participant, the Committee has the right in its sole discretion to (i) make a corresponding reduction in the number of shares subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
15.13 Substitute Awards in Corporate Transactions. Nothing contained in the Plan shall be construed to limit the right of the Committee to grant Awards under the Plan in connection with the acquisition, whether by purchase, merger, consolidation or other corporate transaction, of the business or assets of any corporation or other entity. Without limiting the foregoing, the Committee may grant Awards under the Plan to an employee or director of another corporation who becomes an Eligible Person by reason of any such corporate transaction in substitution for awards previously granted by such corporation or entity to such person. The terms and conditions of the substitute Awards may vary from the terms and conditions that would otherwise be required by the Plan solely to the extent the Committee deems necessary for such purpose. Any shares of Common Stock subject to these substitute Awards shall not be counted against any of the maximum share limitations set forth in the Plan.
16. Legal Compliance
16.1 Securities Laws. No shares of Common Stock will be issued or transferred pursuant to an Award unless and until all then applicable requirements imposed by Federal and state securities and other laws, rules and regulations and by any regulatory agencies having jurisdiction, and by any exchanges upon which the shares of Common Stock may be listed, have been fully met. As a condition precedent to the issuance of shares pursuant to the grant or exercise of an Award, the Company may require the Participant to take any reasonable action to meet such requirements. The Committee may impose such conditions on any shares of Common Stock issuable under the Plan as it may deem advisable, including, without limitation, restrictions under the Securities Act, as amended, under the requirements of any exchange upon which such shares of the same class are then listed, and under any blue sky or other securities laws applicable to such shares. The Committee may also require the Participant to represent and warrant at the time of issuance or transfer that the shares of Common Stock are being acquired only for investment purposes and without any current intention to sell or distribute such shares. All Common Stock issued pursuant to the terms of this Plan shall constitute “restricted securities,” as that term is defined in Rule 144 promulgated pursuant to the Securities Act, and may not be transferred except in compliance herewith and with the registration requirements of the Securities Act or an exemption therefrom. Certificates representing Common Stock acquired pursuant to an Award may bear such legend as the Company may consider appropriate under the circumstances.
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16.2 Incentive Arrangement. The Plan is designed to provide an on-going, pecuniary incentive for Participants to produce their best efforts to increase the value of the Company. The Plan is not intended to provide retirement income or to defer the receipt of payments hereunder to the termination of a Participant’s employment or beyond. The Plan is thus intended not to be a pension or welfare benefit plan that is subject to Employee Retirement Income Security Act of 1974 (“ERISA”), and shall be construed accordingly. All interpretations and determinations hereunder shall be made on a basis consistent with the Plan’s status as not an employee benefit plan subject to ERISA.
16.3 Unfunded Plan. The adoption of the Plan and any reservation of shares of Common Stock or cash amounts by the Company to discharge its obligations hereunder shall not be deemed to create a trust or other funded arrangement. Except upon the issuance of Common Stock pursuant to an Award, any rights of a Participant under the Plan shall be those of a general unsecured creditor of the Company, and neither a Participant nor the Participant’s permitted transferees or estate shall have any other interest in any assets of the Company by virtue of the Plan. Notwithstanding the foregoing, the Company shall have the right to implement or set aside funds in a grantor trust, subject to the claims of the Company’s creditors or otherwise, to discharge its obligations under the Plan.
16.4 Section 409A Compliance. To the extent applicable, it is intended that the Plan and all Awards hereunder comply with the requirements of Section 409A of the Code or an exemption thereto, and the Plan and all Award Agreements shall be interpreted and applied by the Committee in a manner consistent with this intent in order to avoid the imposition of any additional tax under Section 409A of the Code. Notwithstanding anything in the Plan or an Award Agreement to the contrary, in the event that any provision of the Plan or an Award Agreement is determined by the Committee, in its sole discretion, to not comply with the requirements of Section 409A of the Code or an exemption thereto, the Committee shall, in its sole discretion, have the authority to take such actions and to make such interpretations or changes to the Plan or an Award Agreement as the Committee deems necessary, regardless of whether such actions, interpretations, or changes shall adversely affect a Participant, subject to the limitations, if any, of applicable law. If an Award is subject to Section 409A of the Code, any payment made to a Participant who is a “specified employee” of the Company or any Subsidiary shall not be made before the date that is six months after the Participant’s “separation from service” to the extent required to avoid the adverse consequences of Section 409A of the Code. For purposes of this Section 16.4, the terms “separation from service” and “specified employee” shall have the meanings set forth in Section 409A of the Code. In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on any Participant by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.
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16.5 Tax Withholding.
(a) The Company shall have the power and the right to deduct or withhold, or require a participant to remit to the Company, the minimum statutory amount to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan, but in no event shall such deduction or withholding or remittance exceed the minimum statutory withholding requirements unless permitted by the Company and such additional withholding amount will not cause adverse accounting consequences and is permitted under Applicable Law.
(b) Subject to such terms and conditions as shall be specified in an Award Agreement, a Participant may, in order to fulfill the withholding obligation, (i) tender previously-acquired shares of Common Stock or have shares of stock withheld from the exercise, provided that the shares have an aggregate Fair Market Value sufficient to satisfy in whole or in part the applicable withholding taxes; and/or (ii) utilize the broker-assisted exercise procedure described in Section 6.5 to satisfy the withholding requirements related to the exercise of a Stock Option.
(c) Notwithstanding the foregoing, a Participant may not use shares of Common Stock to satisfy the withholding requirements to the extent that (i) there is a substantial likelihood that the use of such form of payment or the timing of such form of payment would subject the Participant to a substantial risk of liability under Section 16 of the Exchange Act; (ii) such withholding would constitute a violation of the provisions of any law or regulation, or (iii) such withholding would cause adverse accounting consequences for the Company.
16.6 No Guarantee of Tax Consequences. Neither the Company, the Board, the Committee nor any other Person make any commitment or guarantee that any federal, state, local or foreign tax treatment will apply or be available to any Participant or any other Person hereunder.
16.7 Severability. If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.
16.8 Stock Certificates; Book Entry Form. Notwithstanding any provision of the Plan to the contrary, unless otherwise determined by the Committee or required by any applicable law, rule or regulation, any obligation set forth in the Plan pertaining to the delivery or issuance of stock certificates evidencing shares of Common Stock may be satisfied by having issuance and/or ownership of such shares recorded on the books and records of the Company (or, as applicable, its transfer agent or stock plan administrator).
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16.9 Governing Law. The Plan and all rights hereunder shall be subject to and interpreted in accordance with the laws of the State of Delaware, without reference to the principles of conflicts of laws, and to applicable Federal securities laws.
17. Effective Date, Amendment and Termination
17.1 Effective Date. The effective date of the Plan shall be the date on which the Plan is approved by the requisite percentage of the holders of the Common Stock of the Company; provided, however, that Awards granted under the Plan subsequent to the approval of the Plan by the Board shall be valid if such stockholder approval occurs within one year of the date on which such Board approval occurs.
17.2 Amendment; Termination. The Board may suspend or terminate the Plan (or any portion thereof) at any time and may amend the Plan at any time and from time to time in such respects as the Board may deem advisable or in the best interests of the Company or any Subsidiary; provided, however, that (a) no such amendment, suspension or termination shall materially and adversely affect the rights of any Participant under any outstanding Awards, without the consent of such Participant, (b) to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required, and (c) stockholder approval is required for any amendment to the Plan that (i) increases the number of shares of Common Stock available for issuance under the Plan, or (ii) changes the persons or class of persons eligible to receive Awards. The Plan will continue in effect until terminated in accordance with this Section 17.2; provided, however, that no Award will be granted hereunder on or after the 10th anniversary of the date of the Plan’s initial adoption by the Board (the “Expiration Date”); but provided further, that Awards granted prior to such Expiration Date may extend beyond that date.
INITIAL BOARD APPROVAL: May 1, 2020
INITIAL STOCKHOLDER APPROVAL: May 1, 2020
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Exhibit 10.3
NONQUALIFIED STOCK OPTION GRANT AGREEMENT
PAXMEDICA, INC.
This Stock Option Grant Agreement (the “Grant Agreement”) is made and entered into effective on the Date of Grant set forth in Exhibit A (the “Date of Grant”) by and between PaxMedica, Inc., a Delaware corporation (the “Company”), and the individual named in Exhibit A hereto (the “Optionee”).
WHEREAS, the Company desires to provide the Optionee an incentive to participate in the success and growth of the Company through the opportunity to earn a proprietary interest in the Company; and
WHEREAS, to give effect to the foregoing intention, the Company desires to grant the Optionee an option pursuant to the Purinix Pharmaceutical, Inc. 2020 Omnibus Equity Incentive Plan (the “Plan”) to acquire the Company’s common stock, par value $0.0001 per share (the “Common Stock”);
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for good and valuable consideration, the parties hereto agree as follows:
1. Grant. The Company hereby grants the Optionee a Nonqualified Stock Option (the “Option”) to purchase up to the number of shares of Common Stock (the “Shares”) set forth in Exhibit A hereto at the exercise price per Share (the “Exercise Price”) set forth in Exhibit A, and on the vesting schedule set forth in Exhibit A, subject to the terms and conditions set forth herein and the provisions of the Plan, the terms of which are incorporated herein by reference. Capitalized terms used but not otherwise defined in this Grant Agreement shall have the meanings as set forth in the Plan.
2. Exercise Period Following Termination of Continuous Service. This Option shall terminate and be canceled to the extent not exercised within ninety (90) days after the Optionee’s Continuous Service terminates, except that if such termination is due to the death or Disability of the Optionee, this Option shall terminate and be canceled twelve (12) months from the date of termination of Continuous Service. Notwithstanding the foregoing, in the event that the Optionee’s Continuous Service is terminated for Cause, then the Option shall immediately terminate on the date of such termination of Continuous Service and shall not be exercisable for any period following such date. In no event, however, shall this Option be exercised later than the Expiration Date set forth in Exhibit A and in no event shall this Option be exercised for more Shares than the Shares which otherwise have become exercisable as of the date of termination.
3. Method of Exercise. This Option is exercisable by delivery to the Company of an exercise notice (the “Exercise Notice”) in a form satisfactory to the Committee or by such other form or means as the Committee may permit or require. Any Exercise Notice shall state or provide the number of Shares with respect to which the Option is being exercised (the “Exercised Shares”), and include such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price for the Exercised Shares in (i) cash; (ii) check; or (iii) such other manner as is acceptable to the Committee, provided that such form of consideration is permitted by the Plan and by applicable law. Upon exercise of the Option by the Optionee and prior to the delivery of such Exercised Shares, the Company shall have the right to require the Optionee to satisfy applicable Federal and state tax income tax withholding requirements and the Optionee’s share of applicable employment withholding taxes in a method satisfactory to the Company. Notwithstanding the foregoing, no Exercised Shares shall be issued unless such exercise and issuance complies with the requirements relating to the administration of stock option plans and other applicable equity plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted, and the applicable laws of any foreign country or jurisdiction where stock grants or other applicable equity grants are made under the Plan; assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Shares.
4. Covenants Agreement. This Option shall be subject to forfeiture at the election of the Company in the event that the Optionee breaches any agreement between the Optionee and the Company with respect to noncompetition, nonsolicitation, assignment of inventions and contributions and/or nondisclosure obligations of the Optionee.
5. Taxes. By executing this Grant Agreement, Optionee acknowledges and agrees that Optionee is solely responsible for the satisfaction of any applicable taxes that may be imposed on Optionee that arise as a result of the grant, vesting or exercise of the Option, including without limitation any taxes arising under Section 409A of the Code (regarding deferred compensation) or Section 4999 of the Code (regarding golden parachute excise taxes), and that neither the Company nor the Committee shall have any obligation whatsoever to pay such taxes or otherwise indemnify or hold Optionee harmless from any or all of such taxes.
6. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of the Plan and this Grant Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.
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7. Securities Matters. All Shares and Exercised Shares shall be subject to the restrictions on sale, encumbrance and other disposition provided by Federal or state law. The Company shall not be obligated to sell or issue any Shares or Exercised Shares pursuant to this Grant Agreement unless, on the date of sale and issuance thereof, such Shares are either registered under the Securities Act of 1933, as amended (the “Securities Act”), and all applicable state securities laws, or are exempt from registration thereunder. Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act, or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary in order to achieve compliance with the Securities Act or the securities laws of any state or any other law.
8. Investment Purpose. The Optionee represents and warrants that unless the Shares are registered under the Securities Act, any and all Shares acquired by the Optionee under this Grant Agreement will be acquired for investment for the Optionee’s own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of such Shares within the meaning of the Securities Act. The Optionee agrees not to sell, transfer or otherwise dispose of such Shares unless they are either (1) registered under the Securties Act and all applicable state securities laws, or (2) exempt from such registration in the opinion of Company counsel.
9. Lock-Up Agreement. The Optionee hereby agrees that in the event that the Optionee exercises this Option during a period in which any directors or officers of the Company have agreed with one or more underwriters not to sell securities of the Company, then, as a condition to such exercise, the Optionee shall enter into an agreement, in form and substance satisfactory to the Company, pursuant to which the Optionee shall agree to restrictions on transferability of the Shares comparable to the restrictions agreed upon by such directors or officers of the Company.
10. Other Plans. No amounts of income received by the Optionee pursuant to this Grant Agreement shall be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company or its subsidiaries, unless otherwise expressly provided in such plan.
11. No Guarantee of Continued Service. The Optionee acknowledges and agrees that the right to exercise the Option pursuant to the exercise schedule hereof is earned only through Continuous Service and such other requirements, if any, as are set forth in Exhibit A (and not through the act of being hired, being granted an option or purchasing shares hereunder). The Optionee further acknowledges and agrees that (i) this Grant Agreement, the transactions contemplated hereunder and the exercise schedule set forth herein do not constitute an express or implied promise of continued employment or service for the exercise period or for any other period, and shall not interfere with the Optionee’s right or the right of the Company or its Subsidiaries to terminate the employment or service relationship at any time, with or without cause, subject to the terms of any written employment agreement that the Optionee may have entered into with the Company or any of its Subsidiaries; and (ii) the Company would not have granted this Option to the Optionee but for these acknowledgements and agreements.
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12. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Grant Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and the Optionee. In the event of any conflict between this Grant Agreement and the Plan, the Plan shall be controlling, except as otherwise specifically provided in the Plan. This Grant Agreement shall be construed under the laws of the State of Delaware, without regard to conflict of laws principles.
13. Opportunity for Review. Optionee and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Grant Agreement. The Optionee has reviewed the Plan and this Grant Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Agreement and fully understands all provisions of the Plan and this Grant Agreement. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan and this Grant Agreement. The Optionee further agrees to notify the Company upon any change in the residence address indicated herein.
14. Section 409A. This Option is intended to be excepted from coverage under Section 409A and shall be administered, interpreted and construed accordingly. The Company may, in its sole discretion and without the Optionee’s consent, modify or amend the terms of this Grant Agreement, impose conditions on the timing and effectiveness of the exercise of the Option by Optionee, or take any other action it deems necessary or advisable, to cause the Option to be excepted from Section 409A (or to comply therewith to the extent the Company determines it is not excepted).
15. Recoupment. In the event the Company restates its financial statements due to material noncompliance with any financial reporting requirements under applicable securities laws, any shares issued pursuant to this Agreement for or in respect of the year that is restated, or the prior three years, may be recovered to the extent the shares issued exceed the number that would have been issued based on the restatement. In addition and without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company or as is otherwise required by applicable law or stock exchange listing conditions.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Grant Agreement as of the date set forth in Exhibit A.
PAXMEDICA, INC. | ||
By: | ||
Name: | ||
Title: |
OPTIONEE | |
Name: |
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EXHIBIT A
NONQUALIFIED STOCK OPTION GRANT AGREEMENT
PAXMEDICA, INC.
(a). | Optionee’s Name: |
(b). | Date of Grant: |
(c). | Number of Shares Subject to the Option: |
(d). | Exercise Price: | $______ per Share |
(e). | Expiration Date: |
(f). | Vesting Schedule: |
_______ (Initials)
Optionee
_______ (Initials)
Company Signatory
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Exhibit 10.4
INCENTIVE STOCK OPTION GRANT AGREEMENT
PAXMEDICA, INC.
This Stock Option Grant Agreement (the “Grant Agreement”) is made and entered into effective on the Date of Grant set forth in Exhibit A (the “Date of Grant”) by and between PaxMedica, Inc., a Delaware corporation (the “Company”), and the individual named in Exhibit A hereto (the “Optionee”).
WHEREAS, the Company desires to provide the Optionee an incentive to participate in the success and growth of the Company through the opportunity to earn a proprietary interest in the Company; and
WHEREAS, to give effect to the foregoing intention, the Company desires to grant the Optionee an option pursuant to the PaxMedica, Inc. 2020 Omnibus Equity Incentive Plan (the “Plan”) to acquire the Company’s common stock, par value $0.0001 per share (the “Common Stock”);
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for good and valuable consideration, the parties hereto agree as follows:
1. Grant. The Company hereby grants the Optionee an Incentive Stock Option (the “Option”) to purchase up to the number of shares of Common Stock (the “Shares”) set forth in Exhibit A hereto at the exercise price per Share (the “Exercise Price”) set forth in Exhibit A, and on the vesting schedule set forth in Exhibit A, subject to the terms and conditions set forth herein and the provisions of the Plan, the terms of which are incorporated herein by reference. Capitalized terms used but not otherwise defined in this Grant Agreement shall have the meanings as set forth in the Plan.
This Option is intended to qualify as an Incentive Stock Option (“ISO”) under Section 422 of the Code. However, notwithstanding such designation, if the Optionee becomes eligible in any given year to exercise ISOs for Shares having a Fair Market Value in excess of $100,000, those options representing the excess shall be treated as Non-Qualified Stock Options. In the previous sentence, “ISOs” include ISOs granted under any plan of the Company or any parent or any Subsidiary of the Company. For the purpose of deciding which options apply to Shares that “exceed” the $100,000 limit, ISOs shall be taken into account in the same order as granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. The Optionee hereby acknowledges that there is no assurance that the Option will, in fact, be treated as an Incentive Stock Option under Section 422 of the Code.
2. Exercise Period Following Termination of Continuous Service. This Option shall terminate and be canceled to the extent not exercised within three (3) months following termination of the Optionee’s Continuous Service; provided that if such termination is due to the Optionee’s death or permanent and total disability within the meaning of Section 22(e)(3) of the Code, this Option shall terminate and be cancelled one (1) year from the date of termination of Continuous Service. Notwithstanding the foregoing, in the event that the Optionee’s Continuous Service is terminated for Cause, then the Option shall immediately terminate on the date of such termination of Continuous Service and shall not be exercisable for any period following such date. In no event, however, shall this Option be exercised later than the Expiration Date set forth in Exhibit A and in no event shall this Option be exercised for more Shares than the Shares which otherwise have become exercisable as of the date of termination.
3. Method of Exercise. This Option is exercisable by delivery to the Company of an exercise notice (the “Exercise Notice”) in a form satisfactory to the Committee or by such other form or means as the Committee may permit or require. Any Exercise Notice shall state or provide the number of Shares with respect to which the Option is being exercised (the “Exercised Shares”), and include such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price for the Exercised Shares in (i) cash; (ii) check; or (iii) such other manner as is acceptable to the Committee, provided that such form of consideration is permitted by the Plan and by applicable law. Upon exercise of the Option by the Optionee and prior to the delivery of such Exercised Shares, the Company shall have the right to require the Optionee to satisfy applicable Federal and state tax income tax withholding requirements and the Optionee’s share of applicable employment withholding taxes in a method satisfactory to the Company. Notwithstanding the foregoing, no Exercised Shares shall be issued unless such exercise and issuance complies with the requirements relating to the administration of stock option plans and other applicable equity plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted, and the applicable laws of any foreign country or jurisdiction where stock grants or other applicable equity grants are made under the Plan; assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Shares.
4. Covenants Agreement. This Option shall be subject to forfeiture at the election of the Company in the event that the Optionee breaches any agreement between the Optionee and the Company with respect to noncompetition, nonsolicitation, assignment of inventions and contributions and/or nondisclosure obligations of the Optionee.
5. Taxes. By executing this Grant Agreement, Optionee acknowledges and agrees that Optionee is solely responsible for the satisfaction of any applicable taxes that may be imposed on Optionee that arise as a result of the grant, vesting or exercise of the Option, including without limitation any taxes arising under Section 409A of the Code (regarding deferred compensation) or Section 4999 of the Code (regarding golden parachute excise taxes), and that neither the Company nor the Committee shall have any obligation whatsoever to pay such taxes or otherwise indemnify or hold Optionee harmless from any or all of such taxes.
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6. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of the Optionee only by the Optionee. The terms of the Plan and this Grant Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.
7. Securities Matters. All Shares and Exercised Shares shall be subject to the restrictions on sale, encumbrance and other disposition provided by Federal or state law. The Company shall not be obligated to sell or issue any Shares or Exercised Shares pursuant to this Grant Agreement unless, on the date of sale and issuance thereof, such Shares are either registered under the Securities Act of 1933, as amended (the “Securities Act”), and all applicable state securities laws, or are exempt from registration thereunder. Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act, or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary in order to achieve compliance with the Securities Act or the securities laws of any state or any other law.
8. Investment Purpose. The Optionee represents and warrants that unless the Shares are registered under the Securities Act, any and all Shares acquired by the Optionee under this Grant Agreement will be acquired for investment for the Optionee’s own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of such Shares within the meaning of the Securities Act. The Optionee agrees not to sell, transfer or otherwise dispose of such Shares unless they are either (1) registered under the Securties Act and all applicable state securities laws, or (2) exempt from such registration in the opinion of Company counsel.
9. Lock-Up Agreement. The Optionee hereby agrees that in the event that the Optionee exercises this Option during a period in which any directors or officers of the Company have agreed with one or more underwriters not to sell securities of the Company, then, as a condition to such exercise, the Optionee shall enter into an agreement, in form and substance satisfactory to the Company, pursuant to which the Optionee shall agree to restrictions on transferability of the Shares comparable to the restrictions agreed upon by such directors or officers of the Company.
10. Other Plans. No amounts of income received by the Optionee pursuant to this Grant Agreement shall be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company or its subsidiaries, unless otherwise expressly provided in such plan.
11. No Guarantee of Continued Service. The Optionee acknowledges and agrees that the right to exercise the Option pursuant to the exercise schedule hereof is earned only through Continuous Service and such other requirements, if any, as are set forth in Exhibit A (and not through the act of being hired, being granted an option or purchasing shares hereunder). The Optionee further acknowledges and agrees that (i) this Grant Agreement, the transactions contemplated hereunder and the exercise schedule set forth herein do not constitute an express or implied promise of continued employment or service for the exercise period or for any other period, and shall not interfere with the Optionee’s right or the right of the Company or its Subsidiaries to terminate the employment or service relationship at any time, with or without cause, subject to the terms of any written employment agreement that the Optionee may have entered into with the Company or any of its Subsidiaries; and (ii) the Company would not have granted this Option to the Optionee but for these acknowledgements and agreements.
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12. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Grant Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and the Optionee. In the event of any conflict between this Grant Agreement and the Plan, the Plan shall be controlling, except as otherwise specifically provided in the Plan. This Grant Agreement shall be construed under the laws of the State of Delaware, without regard to conflict of laws principles.
13. Opportunity for Review. Optionee and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Grant Agreement. The Optionee has reviewed the Plan and this Grant Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Agreement and fully understands all provisions of the Plan and this Grant Agreement. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan and this Grant Agreement. The Optionee further agrees to notify the Company upon any change in the residence address indicated herein.
14. Section 409A. This Option is intended to be excepted from coverage under Section 409A and shall be administered, interpreted and construed accordingly. The Company may, in its sole discretion and without the Optionee’s consent, modify or amend the terms of this Grant Agreement, impose conditions on the timing and effectiveness of the exercise of the Option by Optionee, or take any other action it deems necessary or advisable, to cause the Option to be excepted from Section 409A (or to comply therewith to the extent the Company determines it is not excepted).
15. Recoupment. In the event the Company restates its financial statements due to material noncompliance with any financial reporting requirements under applicable securities laws, any shares issued pursuant to this Agreement for or in respect of the year that is restated, or the prior three years, may be recovered to the extent the shares issued exceed the number that would have been issued based on the restatement. In addition and without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company or as is otherwise required by applicable law or stock exchange listing conditions.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Grant Agreement as of the date set forth in Exhibit A.
PAXMEDICA, INC. | ||
By: | ||
Name: | ||
Title: | ||
OPTIONEE | ||
Name: |
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EXHIBIT A
INCENTIVE STOCK OPTION GRANT AGREEMENT
PAXMEDICA, INC.
(a). Optionee’s Name:
(b). Date of Grant:
(c). Number of Shares Subject to the Option:
(d). Exercise Price: $______ per Share
(e). Expiration Date:
(f). Vesting Schedule:
_______ (Initials)
Optionee
_______ (Initials)
Company Signatory
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Exhibit 10.5
50 Tice Boulevard
Suite A26
Woodcliff Lake, NJ 07677
(201) 645-4765 (tel) |
|
March 4, 2020
Howard Weisman
Subject: Weisman Employment Offer
Dear Howard,
On behalf of Purinix Pharmaceuticals LLC (“Purinix” or the “Company”), I am pleased to extend to you an offer of employment for the role of Chief Executive Officer. This position will be located at Purinix’s future headquarter offices, with the location to be determined in the Boston or New York City areas. You will report to the Board of Directors. Your start date will be mutually determined, but I anticipate it to be on or around March 15, 2020. I am excited about the possibility of you joining the team and your leading the growth of our high value neurodevelopment company.
The terms of your employment offer are outlined below:
· | Monthly base pay of $33,333, which, when annualized, is equivalent to $400,000 per year. This base pay will initially be paid as $16,667 per month in cash, with the balance accruing monthly and paid out in a single lump sum cash payment promptly upon the consummation of a private or public financing for the Company (anticipated within 3 months, around our anticipated IPO transaction). Following the consummation of the private or public financing, the base pay will be paid as $33,333 per month in cash and no further accrual will occur. Any increases in the base pay would be at the discretion of the Board of Directors, but would be expected upon achievement of key company milestones and commensurate with the growth of the company. |
· | Participation (pro-rated for 2020) in a Performance Bonus Plan with a target of 50% of your base salary, based on company and individual achievement. Your bonus will be based on your performance meeting mutually established individual goals and objectives to support the growth strategy of the Company as well as the Company’s overall performance. |
· | Commensurate with your position, and in order to award you with equity in the Company in a tax efficient manner, upon the commencement of your employment with the Company, you will be entitled to receive a grant of value appreciation rights (VARs) (at the fair market value at the grant date) in the Company equivalent to 5.0% (on a fully-diluted basis as of the grant date) of the common equity of the Company. These VARs will be governed by the terms of the Equity Incentive Plan of the Company. The VARs will have standard industry terms, inclusive of vesting over four (4) years from the grant date, with cliff vesting after the first year and the balance vesting monthly from the second year through the fourth year, and accelerated vesting in the case of a change in control. Upon the consummation of a public listing, it is anticipated that the Company would put an incentive stock option (ISO) plan in place, whereby senior management would receive annual grants of ISOs as part of their bonus compensation, commensurate with industry practice for early stage public biopharmaceutical companies. |
Confidential
1
· | As a regular, full-time employee of the Company, you will be eligible to participate in any Employee Benefit Plans that the Company puts in place. It is expected that initially such benefits will include health and dental insurance, and that additional benefits will be put in place as the Company grows. A company-wide policy on benefits will be developed as the company grows, and senior management (including the CEO) will have the costs of certain benefits covered by the company at 100%. |
· | As a regular, full time employee of the Company you will accrue vacation and sick leave. Vacation will accrue at the rate of 1.25 days per month, or fifteen days per year. |
This offer of employment does not represent an employment contract. You will be an employee at will, and just as you retain the right to resign, with or without notice or cause, Purinix has the same right with respect to termination of your employment.
If you understand and accept these terms, please sign and return one copy of this offer letter to me.
I would love to have you join Purinix and be a part of building a great company. Should you have any questions regarding this offer, please feel free to contact me at: 646-321-0593.
Sincerely, | ||||
/s/ Michael L. Derby | ||||
Michael L. Derby | ||||
Executive Chairman | ||||
Purinix Pharmaceuticals LLC | ||||
Agreed to and Accepted by: | ||||
/s/ Howard Weisman | 3/4/2020 | |||
Howard Weisman | Date |
Confidential
2
Exhibit 10.6
50 Tice Boulevard
Suite A26 Woodcliff Lake, NJ 07677 (201) 645-4765 (tel) |
|
June 25, 2020
Joseph Lucchese
Subject: Lucchese Employment Offer
Dear Joe,
On behalf of PaxMedica, Inc. (“PaxMedica” or the “Company”), I am pleased to extend to you an offer of employment for the role of Chief Financial Officer. This position will be located at PaxMedica’s current headquarters at 50 Tice Boulevard, Suite A26, Woodcliff Lake, NJ 07677. You will report to me. Your start date will be mutually determined, but I anticipate it to be on or around July 1, 2020. I am excited about the possibility of you joining the team and your helping to build our high value neurodevelopmental biopharma company.
The terms of your employment offer are outlined below:
· | Part-time employment, up to 20 hours per week, as required. |
· | Initial monthly base pay of $8,333.33, which, when annualized, is equivalent to $100,000 per year. |
· | Participation (pro-rated for 2020) in a Performance Bonus Plan with a target of 50% of your base salary, based on company and individual achievement. Your bonus will be based on your performance meeting mutually established individual goals and objectives to support the growth strategy of the Company as well as the Company’s overall performance. Upon early termination of your employment without cause, the maximum accrued but unpaid bonus (through the date of termination) will be paid out promptly. |
· | Your agreement not to compete with the Company in any capacity on any product candidate or product in the field of neurodevelopment, so long as you are employed by the Company. |
This offer of employment pursuant to the above terms shall remain in effect for two years from your start date, with automatic one-year renewals, unless terminated sooner either by you or the Company.
Confidential
1
If you understand and accept these terms, please sign and return one copy of this offer letter to me.
I would love to have you join the PaxMedica team and be a part of building a great company. Should you have any questions regarding this offer, please feel free to contact me at: .
Sincerely, | ||||
/s/ Howard Weisman | ||||
Howard Weisman | ||||
Chief Executive Officer | ||||
PaxMedica, Inc. | ||||
Agreed to and Accepted by: | ||||
/s/ Joseph Lucchese | June 25, 2020 | |||
Joseph Lucchese | Date |
Confidential
2
Exhibit 10.7
50 Tice Boulevard
Suite A26
Woodcliff Lake, NJ 07677
(201) 645-4765 (tel) |
|
June 25, 2020
Zach Rome
Subject: Rome Employment Offer
Dear Zach,
On behalf of PaxMedica, Inc. (“PaxMedica” or the “Company”), I am pleased to extend to you an offer of employment for the role of Chief Operating Officer. This position will be located at PaxMedica’s current headquarters at 50 Tice Boulevard, Suite A26, Woodcliff Lake, NJ 07677. You will report to me. Your start date will be mutually determined, but I anticipate it to be on or around July 1, 2020. I am excited about the possibility of you joining the team and your helping to build our high value neurodevelopmental biopharma company.
The terms of your employment offer are outlined below:
· | Part-time employment, up to 20 hours per week, as required. |
· | Initial monthly base pay of $8,333.33, which, when annualized, is equivalent to $100,000 per year. |
· | Participation (pro-rated for 2020) in a Performance Bonus Plan with a target of 50% of your base salary, based on company and individual achievement. Your bonus will be based on your performance meeting mutually established individual goals and objectives to support the growth strategy of the Company as well as the Company’s overall performance. Upon early termination of your employment without cause, the maximum accrued but unpaid bonus (through the date of termination) will be paid out promptly. |
· | Your agreement not to compete with the Company in any capacity on any product candidate or product in the field of neurodevelopment, so long as you are employed by the Company. |
This offer of employment pursuant to the above terms shall remain in effect for two years from your start date, with automatic one-year renewals, unless terminated sooner either by you or the Company.
Confidential
1
If you understand and accept these terms, please sign and return one copy of this offer letter to me.
I would love to have you join the PaxMedica team and be a part of building a great company. Should you have any questions regarding this offer, please feel free to contact me at: .
Sincerely, | ||||
/s/ Howard Weisman | ||||
Howard Weisman | ||||
Chief Executive Officer | ||||
PaxMedica, Inc. | ||||
Agreed to and Accepted by: | ||||
/s/ Zach Rome | June 25, 2020 | |||
Zach Rome | Date |
Confidential
2
Exhibit 10.8
50 Tice Boulevard
Suite A26
Woodcliff Lake, NJ 07677
(201) 645-4765 (tel) |
|
June 25, 2020
Michael Derby
Subject: Derby Employment Offer
Dear Michael,
On behalf of PaxMedica, Inc. (“PaxMedica” or the “Company”), I am pleased to extend to you an offer of employment for the role of Executive Chairman of the Board of Directors. This position will be located at PaxMedica’s current headquarters at 50 Tice Boulevard, Suite A26, Woodcliff Lake, NJ 07677. You will report to the Company’s Board of Directors. Your start date will be mutually determined, but I anticipate it to be on or around July 1, 2020. I am excited about the possibility of you joining the team and your helping to build our high value neurodevelopmental biopharma company.
The terms of your employment offer are outlined below:
· | Part-time employment, up to 20 hours per week, as required. |
· | Initial monthly base pay of $27,083.33, which, when annualized, is equivalent to $325,000 per year. |
· | Participation (pro-rated for 2020) in a Performance Bonus Plan with a target of 50% of your base salary, based on company and individual achievement. Your bonus will be based on your performance meeting mutually established individual goals and objectives to support the growth strategy of the Company as well as the Company’s overall performance. Upon early termination of your employment without cause, the maximum accrued but unpaid bonus (through the date of termination) will be paid out promptly. |
· | Your agreement not to compete with the Company in any capacity on any product candidate or product in the field of neurodevelopment, so long as you are employed by the Company. |
This offer of employment pursuant to the above terms shall remain in effect for two years from your start date, with automatic one-year renewals, unless terminated sooner either by you or the Company.
Confidential
1
If you understand and accept these terms, please sign and return one copy of this offer letter to me.
I would love to have you join the PaxMedica team and be a part of building a great company. Should you have any questions regarding this offer, please feel free to contact me at: .
Sincerely, | ||||
/s/ Howard Weisman | ||||
Howard Weisman | ||||
Chief Executive Officer | ||||
PaxMedica, Inc. | ||||
Agreed to and Accepted by: | ||||
/s/ Michael Derby | June 25, 2020 | |||
Michael Derby | Date |
Confidential
2
Exhibit 10.9
RENT AND ADMINISTRATIVE SERVICES AGREEMENT
Between
PAXMEDICA, INC. and TARDIMED SCIENCES, LLC
This Rent and Administrative Services Agreement (this “Agreement”) is made and entered into as of the 1st day of July, 2020 (“Effective Date”), by and between PaxMedica, Inc., located at 50 Tice Boulevard, Suite A26, Woodcliff Lake, NJ 07677 (“COMPANY”), and TardiMed Sciences (“SERVICE PROVIDER”) with an address at TardiMed Sciences, LLC, located at 50 Tice Boulevard, Suite A26, Woodcliff Lake, NJ 07677 and referred to collectively as the “Parties” or singly for either entity as the “Party”.
Agreement
1. | Performance; Independent Contractor. |
COMPANY hereby retains SERVICE PROVIDER, and SERVICE PROVIDER hereby agrees to be retained, to provide certain services (the “Services”) exclusively as an independent contractor of COMPANY. SERVICE PROVIDER shall perform the Services for COMPANY and shall commit such resources and professional time as is reasonably necessary to perform the Services.
2. | Consideration |
COMPANY shall compensate SERVICE PROVIDER as per the terms and conditions in Exhibit A.
3. | Representations and Warranties of COMPANY. |
The execution, delivery and performance of this Agreement by COMPANY will not result in any breach of, or default under, any term or provision of any agreement, obligation, instrument, judgment, decree, order, statute, rule or governmental regulation to which COMPANY is a party or by which COMPANY may be bound or which applies to COMPANY. COMPANY has all rights and permissions necessary for SERVICE PROVIDER to perform the Services. COMPANY is duly authorized to enter into this Agreement and perform its obligations hereunder.
4. | Representations and Warranties of SERVICE PROVIDER. |
The execution, delivery and performance of this Agreement by SERVICE PROVIDER will not result in any breach of, or default under, any term or provision of any agreement, obligation, instrument, judgment, decree, order, statute, rule or governmental regulation to which SERVICE PROVIDER is a party or by which SERVICE PROVIDER may be bound or which applies to SERVICE PROVIDER. SERVICE PROVIDER has all rights and permissions necessary to perform the Services. If required, SERVICE PROVIDER has obtained all authorizations to enter into this Agreement and perform the obligations hereunder.
5. | Return of Materials |
The SERVICE PROVIDER agrees to promptly return, following the termination of this Agreement or upon earlier request by the COMPANY, all tangible or digital or other electronic embodiments of the Confidential Information in the SERVICE PROVIDER’S possession and (i) supplied by the COMPANY in conjunction with the SERVICE PROVIDER’S performance of the Services under this Agreement or (ii) generated by the SERVICE PROVIDER in the performance of the Services under this Agreement.
6. | Term and Termination. |
The term of this Agreement shall commence upon the Effective Date. This Agreement shall be in effect for twenty-four (24) months (“Initial Term”) from the Effective Date, unless earlier terminated for breach. Following the Initial Term, this Agreement will automatically renew on a yearly basis. At any time, this Agreement may be terminated by either Party for any reason or no reason upon thirty (30) calendar days’ written notice. Either Party may terminate this Agreement for breach of the other Parties’ material obligations hereunder at any time, and such breach is not cured within ten (10) calendar days following notification.
1
Should COMPANY choose to terminate a specific Service prior to completion for any reason, COMPANY agrees to pay SERVICE PROVIDER:
A. | all reasonable direct fees for Services performed up to the effective date of termination, and; |
B. | all pre-approved non-cancelable costs for third party contracted Services and other expenses, if any, incurred in connection with any specific Service being terminated to the date of termination. |
7. | Indemnification. |
COMPANY will defend, indemnify, and hold SERVICE PROVIDER and its officers, trustees, affiliates, agents, servants, employees and independent contractors harmless from and against any third party claims, demands, suits, actions, causes of actions, losses, damages, fines and liabilities, including reasonable attorneys’ fees, arising out of the Services or breach of any of the covenants of this Agreement by COMPANY (“SERVICE PROVIDER Losses”), and will pay any costs and damages which may be assessed against SERVICE PROVIDER, except that COMPANY shall not be obligated to indemnify SERVICE PROVIDER for SERVICE PROVIDER Losses to the extent they result from the negligence or willful misconduct of SERVICE PROVIDER.
SERVICE PROVIDER will defend, indemnify, and hold COMPANY and its officers, trustees, affiliates, agents, servants, employees and independent contractors harmless from and against any third party claims, demands, suits, actions, causes of actions, losses, damages, fines and liabilities, including reasonable attorneys’ fees, arising out of the breach of any of the covenants of this Agreement by SERVICE PROVIDER (“COMPANY Losses”), and will pay any costs and damages which may be assessed against COMPANY, except that SERVICE PROVIDER shall not be obligated to indemnify COMPANY for COMPANY Losses to the extent they result from the negligence or willful misconduct of COMPANY.
8. | Notices. |
All notices under this Agreement shall be in writing, and shall be deemed given when personally delivered, or three (3) calendar days after being sent by prepaid certified or registered U.S. mail to the address of the other Party to be noticed as set forth herein or such other address as such Party last provided to the other by written notice.
9. | Counterparts; Facsimile Signatures. |
This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures received by facsimile shall be deemed to be original signatures.
10. | Injunctive Relief, Governing Law and Limitations of Liability. |
Injunctive Relief. Notwithstanding the foregoing, the Parties shall (in addition to any other remedies that may be available, in law, in equity or otherwise) be entitled to seek injunctive relief in connection with the breach or threatened breach of the covenants of this Agreement without the necessity of proving actual damages.
Governing Law. 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 New Jersey, without giving effect to principles of conflicts of law.
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Limitations of Liability. Except in the case of willful misconduct, gross negligence or fraudulent behavior, in no event shall either Party or its respectful affiliates be liable to the other Party or its respective affiliates for any special, indirect, incidental, consequential or exemplary damages, including without limitation, lost savings, lost profits or other economic loss, or loss of records or data, as a result of or arising out of this Agreement, the provision of Services hereunder or any other matters relating to or arising from this Agreement, whether such claim be in tort, contract or otherwise and whether or not the possibility of such damages was reasonably foreseeable or disclosed.
11. | Assignment. |
This Agreement may not be assigned or otherwise transferred (in whole or in part, whether voluntarily, by operation of law or otherwise) by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that such consent shall not be required if the COMPANY (i) makes an assignment to an affiliate, or (ii) makes an assignment in connection with the transfer or sale of all or substantially all of its business (whether by asset sale, merger, consolidation, or similar transaction) related to this Agreement. This Agreement shall be binding upon the permitted successors and assigns of the Parties.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by duly authorized representatives of all parties hereto as of the Effective Date.
TardiMed Sciences, LLC | PaxMedica, Inc. | |||
By: |
/s/ Michael Derby |
By: |
/s/ Howard Weisman |
|
Name: | Michael Derby | Name: | Howard Weisman | |
Title: |
Managing Partner
|
Title: | Chief Executive Officer |
3
Exhibit A
Services and Compensation
I. | Services |
A. | SERVICE PROVIDER shall provide use of its offices and office space, as needed and with reasonable notice, to the Company. In addition, SERVICE PROVIDER shall provide access on its premises to administrative services including photocopy, facsimile and shredding services, internet and telephone communications, courier or mail services, reasonable office storage, supplies and food items. Finally, SERVICE PROVIDER shall provide reasonable administrative personnel services, comprising management of payroll, accounts receivable and accounts payable, expense tracking and reimbursement, travel management and logistics, and other related administrative services. |
II. | Compensation |
A. | COMPANY shall pay SERVICE PROVIDER all fees, expenses and other amounts owed to SERVICE PROVIDER for Services within thirty (30) days of receipt of an invoice from SERVICE PROVIDER without any setoff or deduction. |
B. | Service activities will be billed at a fixed monthly rate of $15,000 per month. |
C. | Approved out of pocket and vendor expenses (i.e., Travel, FedEx etc.) will be billed at cost. Out of pocket and vendor expenses exceeding $50.00 shall be agreed upon in writing before these expenses are incurred. |
D. | Invoicing and Payment Terms |
1) | Monthly invoices for Services will be prepared and forwarded approximately five (5) days after the start of the month during which the corresponding services are provided. Invoices ordinarily will be dated as of the first day of the month for which they apply and will be submitted electronically. Invoices shall be submitted to: jlucchese@paxmedica.com. |
2) | Supporting documentation for invoices will be submitted including receipts for expenses of $25.00 or greater per transaction. |
3) | SERVICE PROVIDER shall provide Form W-9 to COMPANY accompanying the first invoice |
4) | FORM 1099 shall be submitted by COMPANY annually |
5) | SERVICE PROVIDER’s invoices shall be paid to: |
TardiMed Sciences, LLC
50 Tice Boulevard, Suite A26
Woodcliff Lake, NJ 07677
4
Exhibit 10.10
Certain identified information has been excluded because it is both not material and would
likely cause competitive harm if publicly disclosed.
PATIENT RECORDS
LICENSE AGREEMENT
This Patient Records License Agreement (“Agreement”) is dated as of this 9th day of November, 2018 (“Effective Date”) by and between Purinix Pharmaceuticals LLC, 1266 E Main Street, Suite 700R, Stamford, Connecticut, USA, 06902 (“Purinix”) and Lwala Hospital, with an address located at P.O Box 650, Soroti, Uganda (“Records Provider”). Purinix and Records Provider may individually be referred to hereinafter as a “Party” or collectively as the “Parties.”
WHEREAS, Purinix holds the rights to and is in the process of developing Suramin or a variant thereof (the “Product”) and intends to seek and obtain regulatory approval of the Product in jurisdictions throughout the world for the pharmaceutical treatment of human African trypanosomiasis (“HAT”);
WHEREAS, Records Provider maintains medical data and information (in the form of patient medical files) related to patients who have been diagnosed with and/or treated for HAT (“Patient Records”) and has the right under the laws of the jurisdiction in which it operates to grant the rights and licenses with respect to the Patient Records as contemplated under this Agreement; and
WHEREAS, Purinix wishes to use the Patient Records to conduct [***] from which it shall develop documentation to support its filings for regulatory approval of the Product in jurisdictions throughout the world, and including as otherwise set forth in Section 1 of this Agreement (the “Purpose”), and Records Provider wishes to license and transfer such Patient Records to Purinix in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, and for other good and valuable consideration, Purinix and Records Provider intend to be legally bound as follows:
1. | License, Ownership and Use. |
1.1. | Exclusive License to Patient Records. Records Provider hereby grants to Purinix a perpetual, exclusive, irrevocable, fully transferable, worldwide, [***] license (including, but not limited to, the right to grant sublicenses) to use, display, embed, reproduce, aggregate, modify, transmit, distribute, publish, and create derivative works in or otherwise related to the Patient Records in connection with the Purpose described herein. Purinix understands that the exclusivity of its license is connected to the Purpose and that Records Provider does not otherwise maintain exclusive rights to the patients’ medical records. |
1.2. | Exclusive Ownership of Derivative Works. Records Provider hereby disclaims, waives, and releases any right or title it has or might have in the future in and to any and all derivative works (or their equivalent) of the Patient Records created or developed by Purinix and/or its licensees including, without limitation,[***]; the exclusive right and title to which shall rest with Purinix and/or its licensees. In the event the foregoing is deemed unenforceable by a court of competent jurisdiction, Records Provider hereby grants to Purinix a perpetual, exclusive, irrevocable, fully transferable, worldwide, [***] license (including, but not limited to, the right to grant sublicenses) in and to any and all derivative works (or their equivalent) of the Patient Records created or developed by Purinix and/or its licensees. |
Purinix Confidential | Page 1 of 7 |
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1.3. | Restrictions. For the avoidance of doubt, Records Provider understands and agrees that it may not (i) use, license, disseminate, distribute, or otherwise share the Patient Records with a third party for any purpose in contravention of the Purpose described herein; or (ii) use, license, disseminate, distribute, or otherwise share any derivative works of the Patient Records created by Purinix or its licensees for any reason whatsoever. |
1.4. | Patient Privacy. Records Provider shall ensure that the Patient Records are transferred to Purinix in an irreversibly anonymous manner. If and to the extent Records Provider discovers that any transferred Patient Records include any identifiable “Patient Health Information,” as such term is defined under the U.S. Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the Parties shall cooperate in an effort to de-identify the Patient Records consistent with the Safe Harbor approach required by §164.514 of HIPAA. Purinix shall only be entitled to take copies of the Patient Records and, for the avoidance of doubt, nothing in this Agreement shall oblige Records Provider to deliver to Purinix any original documents containing Patient Records. |
1.5. | Use of Data. The rights and licenses provided for in this Agreement (a) are coupled with an interest, (b) are subject to any and all data privacy laws applicable to the Patient Records, and (c) include, without limitation, the right on the part of Purinix to use any or all of the data included in the Patient Records (i) [***] (ii) in filings or other submissions to the U.S. Food and Drug Administration and/or any other similar governmental and regulatory authorities throughout the world (collectively, for the purposes of this Agreement, the “FDA”) regarding the Product including, but not limited to, filings or other submissions to obtain or maintain FDA approval of an NDA (as defined hereunder) for the Product in the United States market. For the purposes of this Agreement, “NDA” means a United States New Drug Application (as defined in the U.S. Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et. seq.) (the “Act”) and the regulations promulgated thereunder) pursuant to Section 505 of the Act (21 U.S.C. Section 355) and the regulations promulgated thereunder submitted to the FDA for approval to market a pharmaceutical drug or product in the United States or, for registrations sought outside of the United States, any similar regulatory requirements in such jurisdictions. As the sponsor of the Product NDA, Purinix shall ensure that the results of its study are supported by source documentation, shall include reports on serious adverse events (SAE), and, where required, filings to the FDA at a pre-IND meeting, pre-NDA meeting, and/or in the NDA submission with respect to the Product shall include relevant Patient Records data. |
1.6. | Support. From time to time, at Purinix’s request [***], the Records Provider shall use commercially reasonable efforts to cooperate with Purinix in order to effectuate the foregoing, which cooperation may include, but not be limited to, confirming and/or effectuating the Patient Records by executing and delivering any such certifications, consents or other written documents or instruments as Purinix may reasonably request. Records Provider shall also use commercially reasonable efforts to cooperate with Purinix with respect to any FDA queries regarding the nature of the Patient Records and shall permit Purinix and FDA personnel to audit such Patient Records, as required. |
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2. | Term and Termination |
2.1. | Term. The term of this Agreement shall be perpetual (the “Term”), provided, however, either Party shall have the right to terminate the Agreement if the other Party breaches, in any material respect, any material term or condition of this Agreement and fails to remedy such breach within thirty (30) days after being given written notice of such breach by the non-breaching Party. |
2.2. | Survival. Notwithstanding anything in this Agreement to the contrary, the following Sections of this Agreement shall survive any termination of this Agreement: 1.2, 2, 4.2, and 5 – 13. |
3. | Administrative Fees and Attribution |
3.1. | Fees. Purinix shall, within [***], reimburse Records Provider, at the Record Provider’s standard rates, as set forth in Exhibit A, for time actually spent by one or more clinical study coordinators or other staff currently employed by the Records Provider, [***]. |
3.2. | Attribution. Purinix shall acknowledge the contributions of the Records Provider including, if appropriate, at Purinix’s sole and reasonable discretion or as mutually agreed in writing, the names of any individual Records Provider staff as authors, to the extent they contributed meaningfully to the Purpose. |
4. | Representations and Warranties. |
4.1. | Mutual Warranties. Each Party represents and warrants to the other that (a) the Agreement has been duly executed and delivered and constitutes a valid and binding agreement enforceable against such Party in accordance with its terms; (b) no authorization or approval from any third party is required in connection with such Party’s execution, delivery, or performance of the Agreement; and (c) the execution, delivery, and performance of the Agreement does not violate the laws of any jurisdiction or the terms or conditions of any other agreement to which it is a party or by which it is otherwise bound. |
4.2. | Additional Records Provider Warranties. Records Provider further represents and warrants that (a) it has and will have all requisite ownership, rights, and licenses necessary to grant to Purinix the rights and licenses granted under this Agreement, (b) the license grant does not violate any applicable law, regulation, or statute, (c) it has not and will not enter into any agreement with a third party the execution or performance of which would violate or conflict with any of the rights or licenses set forth in Section 1 of this Agreement, and (d) to Records Provider’s best knowledge and belief (having made no specific enquiry), the Patient Records are an accurate and complete record in all material respects. |
5. | Indemnification. |
5.1. | Mutual Indemnification. Each Party shall defend, indemnify, and hold harmless the other Party for a breach of its respective representations and warranties in Section 4.1 |
5.2. | Records Provider’s Indemnification. Records Provider shall indemnify, defend, and hold Purinix, and its officers, directors, employees, agents and licensees, harmless from and against all claims, demands, liabilities, causes of action, costs and expenses (including reasonable out-of-pocket attorneys’ fees) arising out of a breach of the representations and warranties contained in Section 4.2 or arising out of or based on Purinix’s use of the Patient Records as permitted by, and subject to, the terms of this Agreement. |
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5.3. | Indemnification Procedure. If any Party entitled to indemnification under this section (an “Indemnified Party”) makes an indemnification request to the other, the Indemnified Party shall permit the other party (the “Indemnifying Party”) to control the defense, disposition or settlement of the matter at its own expense; provided that the Indemnifying Party shall not, without the consent of the Indemnified Party enter into any settlement or agree to any disposition that imposes an obligation on the Indemnified Party that is not wholly discharged or dischargeable by the Indemnifying Party. The Indemnified Party shall notify the Indemnifying Party promptly of any claim for which the Indemnifying Party is responsible and shall cooperate with the Indemnifying Party as commercially reasonable to facilitate defense of any such claim; provided that the Indemnified Party’s failure to notify Indemnifying Party shall not diminish the Indemnifying Party's obligations under this Section except to the extent that the Indemnifying Party is materially prejudiced as a result of such failure. An Indemnified Party shall at all times have the option to participate in any matter or litigation through counsel of its own selection at its own expense. |
6. | Confidential Information. Each Party acknowledges that it may have access to certain confidential information of the other Party concerning the other Party’s business, plans, customers, technology, and products (“Confidential Information”) as a result of its obligations under this Agreement. The Parties agree: (a) the Party receiving the information (the “Receiving Party”) shall use, and cause their employees to use, reasonable efforts to safeguard the Confidential Information of the other Party (“Disclosing Party”); (b) the Receiving Party shall not disclose Confidential Information to any third party (other than contractors who have agreed to maintain its confidentiality); and (c) the Receiving Party shall not use Confidential Information for any purpose other than as authorized by this Agreement. Information shall not be subject to the foregoing confidentiality obligations if it is: (i) in the public domain through no fault of the Receiving Party; (ii) known to the Receiving Party prior to the time of disclosure; (iii) disclosed to the Receiving Party by a third party that doesn’t have a duty of confidentiality to the Disclosing Party; (iv) developed by the Receiving Party without reference to the Confidential Information; or (v) required to be disclosed by law, provided that the Receiving Party promptly provides notice to the Disclosing Party of any such request or requirement so that the Disclosing Party can seek appropriate protective orders. |
7. | WARRANTY DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4, NEITHER PARTY MAKES ANY REPRESENTATION, WARRANTY, OR GUARANTY WHATSOEVER AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED BY BOTH PARTIES TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. |
8. | LIMITATION OF LIABILITY. EXCEPT FOR ANY LIABILITY OF A PARTY ARISING UNDER OR RELATED TO ITS INDEMNIFICATION OBLIGATIONS IN SECTION 5 OR A BREACH OF ITS CONFIDENTIALITY OBLIGATION IN SECTION 6; IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, PUNITIVE, SPECIAL, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES OF ANY TYPE OR KIND ARISING UNDER OR IN RESPECT OF THIS AGREEMENT. |
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9. | Basis of the Bargain; Failure of Essential Purpose. The Parties acknowledge that each Party has entered into this Agreement in reliance upon the limitations of liability and the disclaimers of warranties and damages set forth herein, and that the same form an essential basis of the bargain between the Parties. The Parties agree that the limitations and exclusions of liability and disclaimers specified in this Agreement will survive and apply even if found to have failed of their essential purpose. |
10. | Notices. Any notice or other communication under this Agreement shall be sufficiently given if given in writing and delivered by hand delivery, or in lieu of such personal service, twenty-four (24) hours after delivery to a national, overnight courier service, to the addresses listed at the end of this Agreement. Either Party may designate a different address by giving notice of change of address in the manner provided above. |
11. | Choice of Law, Jurisdiction and Venue. This Agreement will be governed by and construed in accordance with the laws of the State of New York in the United States, without reference to its conflicts of law provisions. The Parties agree that the exclusive jurisdiction and venue of any action to enforce or interpret this Agreement will be the state and federal courts located in the State of New York in the United States. Each Party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any state or federal court in the State of New York. Each of the Parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. |
12. | Injunctive Relief. The Parties agree that any breach of Sections 1, 4, or 6 of the Agreement could cause the non-breaching Party substantial and irrevocable damage and, therefore, in the event of any such breach, in addition to such other remedies which may be available, the non-breaching Party shall have the right to specific performance and injunctive relief. |
13. | General Provisions. Neither Party may assign this Agreement to a third party without the prior written consent of the non-assigning Party, provided, however, Purinix may assign this Agreement to any affiliate, subsidiary, or parent entity, or in connection with a merger, acquisition, reorganization or other business combination or change of control event. Any assignment in derogation of the foregoing shall be deemed null and void. The Parties hereto are independent contractors and nothing contained herein or done in pursuance of this Agreement shall constitute either Party as the agent of the other Party for any purpose or in any sense whatsoever, or constitute the Parties as partners, joint venturers or franchisor and franchisee. No alteration, amendment, waiver, cancellation or any other change in any term or condition of this Agreement shall be valid or binding on either Party unless mutually assented to in writing by both Parties. Without limiting the foregoing, the failure of either Party to enforce at any time any of the provisions of this Agreement, or the failure to require at any time performance by the other party of any of the provisions of this Agreement, shall in no way be construed to be a present or future waiver of such provisions, nor in any way affect the ability of either party to enforce each and every such provision thereafter. The express waiver by either Party of any provision, condition or requirement of this Agreement shall not constitute a waiver of any future obligation to comply with such provision, condition or requirement. If for any reason a court of competent jurisdiction finds any provision of this Agreement, or portion thereof, to be unenforceable, that provision will be enforced to the maximum extent permissible so as to affect the intent of the parties, and the remainder of this Agreement will continue in full force and effect. This Agreement is the entire agreement between the Parties with respect to the subject matter hereof. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute one agreement. |
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IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the Effective Date written above.
Purinix Pharmaceuticals LLC | Lwala Hospital | |||
By: | By: | |||
Name: | Name: | |||
Title: | Title: | |||
Date: | Date: | |||
Notice Address: | Notice Address: | |||
Purinix Pharmaceuticals LLC | Lwala Hospital | |||
1266 E Main Street | P.O. Box 650 | |||
Suite 700R | Soroti, Uganda | |||
Stamford, Connecticut 06902 | [***] | |||
United States | ||||
[***] |
Purinix Confidential | Page 6 of 7 |
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Exhibit A
[***]
Purinix Confidential | Page 7 of 7 |
Exhibit 10.11
Certain identified information has been excluded because it is both not material and would
likely cause competitive harm if publicly disclosed.
PATIENT RECORDS
LICENSE AGREEMENT
This Patient Records License Agreement (“Agreement”) is dated as of this 10th day of October, 2018 (“Effective Date”) by and between Purinix Pharmaceuticals LLC, 1266 E Main Street, Suite 700R, Stamford, Connecticut, USA, 06902 (“Purinix”) and Ministry of Health, Republic of Malawi, with an address located at P.O. Box 30377, Lilongwe 3, Malawi (“Records Provider”). Purinix and Records Provider may individually be referred to hereinafter as a “Party” or collectively as the “Parties.”
WHEREAS, Purinix holds the rights to and is in the process of developing Suramin or a variant thereof (the “Product”) and intends to seek and obtain regulatory approval of the Product in jurisdictions throughout the world for the pharmaceutical treatment of human African trypanosomiasis (“HAT”);
WHEREAS, Records Provider maintains medical data and information (in the form of patient medical files) related to patients who have been diagnosed with and/or treated for HAT (“Patient Records”) and has the right under the laws of the jurisdiction in which it operates to grant the rights and licenses with respect to the Patient Records as contemplated under this Agreement; and
WHEREAS, Purinix wishes to use the Patient Records to conduct [***] from which it shall develop documentation to support its filings for regulatory approval of the Product in jurisdictions throughout the world, and including as otherwise set forth in Section 1 of this Agreement (the “Purpose”), and Records Provider wishes to license and transfer such Patient Records to Purinix in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, and for other good and valuable consideration, Purinix and Records Provider intend to be legally bound as follows:
1. | License, Ownership and Use. |
1.1. | Exclusive License to Patient Records. Records Provider hereby grants to Purinix a perpetual, exclusive, irrevocable, fully transferable, worldwide [***] license (including, but not limited to, the right to grant sublicenses) to use, display, embed, reproduce, aggregate, modify, transmit, distribute, publish, and create derivative works in or otherwise related to the Patient Records in connection with the Purpose described herein. Purinix understands that the exclusivity of its license is connected to the Purpose and that Records Provider does not otherwise maintain exclusive rights to the patients’ medical records. |
1.2. | Exclusive Ownership of Derivative Works. Records Provider hereby disclaims, waives, and releases any right or title it has or might have in the future in and to any and all derivative works (or their equivalent) of the Patient Records created or developed by Purinix and/or its licensees including, without limitation, [***]; the exclusive right and title to which shall rest with Purinix and/or its licensees. In the event the foregoing is deemed unenforceable by a court of competent jurisdiction, Records Provider hereby grants to Purinix a perpetual, exclusive, irrevocable, fully transferable, worldwide [***] license (including, but not limited to, the right to grant sublicenses) in and to any and all derivative works (or their equivalent) of the Patient Records created or developed by Purinix and/or its licensees. |
Purinix Confidential | Page 1 of 7 |
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1.3. | Restrictions. For the avoidance of doubt, Records Provider understands and agrees that it may not (i) use, license, disseminate, distribute, or otherwise share the Patient Records with a third party for any purpose in contravention of the Purpose described herein; or (ii) use, license, disseminate, distribute, or otherwise share any derivative works of the Patient Records created by Purinix or its licensees for any reason whatsoever. |
1.4. | Patient Privacy. Records Provider shall ensure that the Patient Records are transferred to Purinix in an irreversibly anonymous manner. If and to the extent Records Provider discovers that any transferred Patient Records include any identifiable “Patient Health Information,” as such term is defined under the U.S. Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the Parties shall cooperate in an effort to de-identify the Patient Records consistent with the Safe Harbor approach required by §164.514 of HIPAA. Purinix shall only be entitled to take copies of the Patient Records and, for the avoidance of doubt, nothing in this Agreement shall oblige Records Provider to deliver to Purinix any original documents containing Patient Records. |
1.5. | Use of Data. The rights and licenses provided for in this Agreement (a) are coupled with an interest, (b) are subject to any and all data privacy laws applicable to the Patient Records, and (c) include, without limitation, the right on the part of Purinix to use any or all of the data included in the Patient Records (i) [***], (ii) in filings or other submissions to the U.S. Food and Drug Administration and/or any other similar governmental and regulatory authorities throughout the world (collectively, for the purposes of this Agreement, the “FDA”) regarding the Product including, but not limited to, filings or other submissions to obtain or maintain FDA approval of an NDA (as defined hereunder) for the Product in the United States market. For the purposes of this Agreement, “NDA” means a United States New Drug Application (as defined in the U.S. Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et. seq.) (the “Act”) and the regulations promulgated thereunder) pursuant to Section 505 of the Act (21 U.S.C. Section 355) and the regulations promulgated thereunder submitted to the FDA for approval to market a pharmaceutical drug or product in the United States or, for registrations sought outside of the United States, any similar regulatory requirements in such jurisdictions. As the sponsor of the Product NDA, Purinix shall ensure that the results of its study are supported by source documentation, shall include reports on serious adverse events (SAE), and, where required, filings to the FDA at a pre-IND meeting, pre-NDA meeting, and/or in the NDA submission with respect to the Product shall include relevant Patient Records data. |
1.6. | Support. From time to time, at Purinix’s request [***], the Records Provider shall use commercially reasonable efforts to cooperate with Purinix in order to effectuate the foregoing, which cooperation may include, but not be limited to, confirming and/or effectuating the Patient Records by executing and delivering any such certifications, consents or other written documents or instruments as Purinix may reasonably request. Records Provider shall also use commercially reasonable efforts to cooperate with Purinix with respect to any FDA queries regarding the nature of the Patient Records and shall permit Purinix and FDA personnel to audit such Patient Records, as required. |
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2. | Term and Termination |
2.1. | Term. The term of this Agreement shall be perpetual (the “Term”), provided, however, either Party shall have the right to terminate the Agreement if the other Party breaches, in any material respect, any material term or condition of this Agreement and fails to remedy such breach within thirty (30) days after being given written notice of such breach by the non-breaching Party. |
2.2. | Survival. Notwithstanding anything in this Agreement to the contrary, the following Sections of this Agreement shall survive any termination of this Agreement: 1.2, 2, 4.2, and 5 – 13. |
3. | Administrative Fees and Attribution |
3.1. | Fees. Purinix shall, within [***], reimburse Records Provider, at the Record Provider’s standard rates, as set forth in Exhibit A, for time actually spent by one or more clinical study coordinators or other staff currently employed by the Records Provider,[***]. |
3.2. | Attribution. Purinix shall acknowledge the contributions of the Records Provider including, if appropriate, at Purinix’s sole and reasonable discretion or as mutually agreed in writing, the names of any individual Records Provider staff as authors, to the extent they contributed meaningfully to the Purpose. |
4. | Representations and Warranties. |
4.1. | Mutual Warranties. Each Party represents and warrants to the other that (a) the Agreement has been duly executed and delivered and constitutes a valid and binding agreement enforceable against such Party in accordance with its terms; (b) no authorization or approval from any third party is required in connection with such Party’s execution, delivery, or performance of the Agreement; and (c) the execution, delivery, and performance of the Agreement does not violate the laws of any jurisdiction or the terms or conditions of any other agreement to which it is a party or by which it is otherwise bound. |
4.2. | Additional Records Provider Warranties. Records Provider further represents and warrants that (a) it has and will have all requisite ownership, rights, and licenses necessary to grant to Purinix the rights and licenses granted under this Agreement, (b) the license grant does not violate any applicable law, regulation, or statute, (c) it has not and will not enter into any agreement with a third party the execution or performance of which would violate or conflict with any of the rights or licenses set forth in Section 1 of this Agreement, and (d) to Records Provider’s best knowledge and belief (having made no specific enquiry), the Patient Records are an accurate and complete record in all material respects. |
5. | Indemnification. |
5.1. | Mutual Indemnification. Each Party shall defend, indemnify, and hold harmless the other Party for a breach of its respective representations and warranties in Section 4.1 |
5.2. | Records Provider’s Indemnification. Records Provider shall indemnify, defend, and hold Purinix, and its officers, directors, employees, agents and licensees, harmless from and against all claims, demands, liabilities, causes of action, costs and expenses (including reasonable out-of-pocket attorneys’ fees) arising out of a breach of the representations and warranties contained in Section 4.2 or arising out of or based on Purinix’s use of the Patient Records as permitted by, and subject to, the terms of this Agreement. |
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5.3. | Indemnification Procedure. If any Party entitled to indemnification under this section (an “Indemnified Party”) makes an indemnification request to the other, the Indemnified Party shall permit the other party (the “Indemnifying Party”) to control the defense, disposition or settlement of the matter at its own expense; provided that the Indemnifying Party shall not, without the consent of the Indemnified Party enter into any settlement or agree to any disposition that imposes an obligation on the Indemnified Party that is not wholly discharged or dischargeable by the Indemnifying Party. The Indemnified Party shall notify the Indemnifying Party promptly of any claim for which the Indemnifying Party is responsible and shall cooperate with the Indemnifying Party as commercially reasonable to facilitate defense of any such claim; provided that the Indemnified Party’s failure to notify Indemnifying Party shall not diminish the Indemnifying Party's obligations under this Section except to the extent that the Indemnifying Party is materially prejudiced as a result of such failure. An Indemnified Party shall at all times have the option to participate in any matter or litigation through counsel of its own selection at its own expense. |
6. | Confidential Information. Each Party acknowledges that it may have access to certain confidential information of the other Party concerning the other Party’s business, plans, customers, technology, and products (“Confidential Information”) as a result of its obligations under this Agreement. The Parties agree: (a) the Party receiving the information (the “Receiving Party”) shall use, and cause their employees to use, reasonable efforts to safeguard the Confidential Information of the other Party (“Disclosing Party”); (b) the Receiving Party shall not disclose Confidential Information to any third party (other than contractors who have agreed to maintain its confidentiality); and (c) the Receiving Party shall not use Confidential Information for any purpose other than as authorized by this Agreement. Information shall not be subject to the foregoing confidentiality obligations if it is: (i) in the public domain through no fault of the Receiving Party; (ii) known to the Receiving Party prior to the time of disclosure; (iii) disclosed to the Receiving Party by a third party that doesn’t have a duty of confidentiality to the Disclosing Party; (iv) developed by the Receiving Party without reference to the Confidential Information; or (v) required to be disclosed by law, provided that the Receiving Party promptly provides notice to the Disclosing Party of any such request or requirement so that the Disclosing Party can seek appropriate protective orders. |
7. | WARRANTY DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4, NEITHER PARTY MAKES ANY REPRESENTATION, WARRANTY, OR GUARANTY WHATSOEVER AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED BY BOTH PARTIES TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. |
8. | LIMITATION OF LIABILITY. EXCEPT FOR ANY LIABILITY OF A PARTY ARISING UNDER OR RELATED TO ITS INDEMNIFICATION OBLIGATIONS IN SECTION 5 OR A BREACH OF ITS CONFIDENTIALITY OBLIGATION IN SECTION 6; IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, PUNITIVE, SPECIAL, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR OTHER DAMAGES OF ANY TYPE OR KIND ARISING UNDER OR IN RESPECT OF THIS AGREEMENT. |
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9. | Basis of the Bargain; Failure of Essential Purpose. The Parties acknowledge that each Party has entered into this Agreement in reliance upon the limitations of liability and the disclaimers of warranties and damages set forth herein, and that the same form an essential basis of the bargain between the Parties. The Parties agree that the limitations and exclusions of liability and disclaimers specified in this Agreement will survive and apply even if found to have failed of their essential purpose. |
10. | Notices. Any notice or other communication under this Agreement shall be sufficiently given if given in writing and delivered by hand delivery, or in lieu of such personal service, twenty-four (24) hours after delivery to a national, overnight courier service, to the addresses listed at the end of this Agreement. Either Party may designate a different address by giving notice of change of address in the manner provided above. |
11. | Choice of Law, Jurisdiction and Venue. This Agreement will be governed by and construed in accordance with the laws of the State of New York in the United States, without reference to its conflicts of law provisions. The Parties agree that the exclusive jurisdiction and venue of any action to enforce or interpret this Agreement will be the state and federal courts located in the State of New York in the United States. Each Party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any state or federal court in the State of New York. Each of the Parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. |
12. | Injunctive Relief. The Parties agree that any breach of Sections 1, 4, or 6 of the Agreement could cause the non-breaching Party substantial and irrevocable damage and, therefore, in the event of any such breach, in addition to such other remedies which may be available, the non-breaching Party shall have the right to specific performance and injunctive relief. |
13. | General Provisions. Neither Party may assign this Agreement to a third party without the prior written consent of the non-assigning Party, provided, however, Purinix may assign this Agreement to any affiliate, subsidiary, or parent entity, or in connection with a merger, acquisition, reorganization or other business combination or change of control event. Any assignment in derogation of the foregoing shall be deemed null and void. The Parties hereto are independent contractors and nothing contained herein or done in pursuance of this Agreement shall constitute either Party as the agent of the other Party for any purpose or in any sense whatsoever, or constitute the Parties as partners, joint venturers or franchisor and franchisee. No alteration, amendment, waiver, cancellation or any other change in any term or condition of this Agreement shall be valid or binding on either Party unless mutually assented to in writing by both Parties. Without limiting the foregoing, the failure of either Party to enforce at any time any of the provisions of this Agreement, or the failure to require at any time performance by the other party of any of the provisions of this Agreement, shall in no way be construed to be a present or future waiver of such provisions, nor in any way affect the ability of either party to enforce each and every such provision thereafter. The express waiver by either Party of any provision, condition or requirement of this Agreement shall not constitute a waiver of any future obligation to comply with such provision, condition or requirement. If for any reason a court of competent jurisdiction finds any provision of this Agreement, or portion thereof, to be unenforceable, that provision will be enforced to the maximum extent permissible so as to affect the intent of the parties, and the remainder of this Agreement will continue in full force and effect. This Agreement is the entire agreement between the Parties with respect to the subject matter hereof. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute one agreement. |
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IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the Effective Date written above.
Purinix Pharmaceuticals LLC | Ministry of Health, Republic of Malawi | |||
By: | By: | |||
Name: | Name: | |||
Title: | Title: | |||
Date: | Date: | |||
Notice Address: | Notice Address: | |||
Purinix Pharmaceuticals LLC | Ministry of Health | |||
1266 E Main Street | Republic of Malawi | |||
Suite 700R | P.O. Box 30377 | |||
Stamford, Connecticut 06902 | Lilongwe 3, Malawi | |||
United States | ||||
[***] | [***] |
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Exhibit A
[***]
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Exhibit 10.12
Certain identified information has been excluded because it is both not material and would
likely cause competitive harm if publicly disclosed.
Master Service Agreement
This Master Service Agreement (“Agreement”), entered into on May 25th, 2018 by and between CRO Consulting (Pty) Limited, whose Registered Office is at OnQ House 250 Market Street Fairland Johannesburg 2170 South Africa (hereinafter referred to as "CRO") and Purinix Pharmaceuticals LLC whose Registered Office is at 1266 East Main Street, Suite 700R, Stamford, CT 06902, USA (hereinafter referred to as “Client”).
1.0 | Services |
1.1. | Client requires CRO to carry out Clinical Research Services in South Africa (“Services”). CRO will carry out the tasks agreed and summarised in the Addenda to this Master Service Agreement. |
1.2. | This Agreement forms the basis for a working relationship between Client and CRO. This Agreement will be supplemented, in the form of Project-specific Addenda, as the need arises. The Project-specific Addenda will contain the detailed requirements of each Project for which Services are contracted to CRO by Client and all fees to be paid by Client. |
1.3. | Client will provide CRO with the documents and information necessary as requested by CRO for the conduct of the Services. |
1.4. | CRO agrees to perform the specific tasks set forth in the Project-specific Addenda in a professional manner, in strict accordance with the terms and conditions contained herein, relevant professional standards including in accordance with the Protocol and applicable amendments and ICH GCP Guidelines (ICH Harmonised Tripartite Guideline for Good Clinical Practice, May 1996) and all other relevant laws, rules, regulations and guidelines. |
1.5. | CRO agrees to perform these Services according to CRO’s Standard Operating Procedures (SOPs) or other guidelines as provided, which are provided to Client on request. |
1.6 | CRO may not subcontract any parts of the Services to a third party without the prior written approval of Client, which approval shall not unreasonably be withheld. CRO will remain fully liable for the acts and omissions of its employees and approved subcontractors as if performed by CRO. |
1.7 | CRO will provide Client with a weekly written report summarizing the Services including all clinical study activity and any other information reasonably requested by Client. |
2.0 | Payment |
2.1 | Client will pay CRO for satisfactory performance of Services as agreed in each Project-specific Addendum to this Agreement. |
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2.2 | Routine telephone calls, mobile calls, faxes and photocopying will be included in the rate provided by CRO. For clarity, there shall be no payment obligations other than as agreed in each Project-specific Addendum. |
2.4 | CRO will provide a detailed account of all time and tasks, as against project specific task and time addenda, and will be payable within 30 days of receipt of invoice by Client. |
2.5. | Changes in scope may be incorporated into this Agreement or the Project-specific Addenda upon the written consent of both parties. |
2.6. | In the event of a conflict between the terms of this Agreement and the Project-specific Addenda the terms of this Agreement shall prevail unless specifically stated in the Project-specific Addenda. |
3.0 | Period of the Agreement |
3.1. | This Agreement shall take effect on the date of signature of the Agreement by both parties and shall terminate when all obligations required of both parties hereunder are performed unless either terminated earlier or extended by the parties pursuant to the terms of this Agreement subject to clause 4.0. |
4.0 | Termination |
4.1. | Either party may terminate this Agreement on thirty (30) days written notice if the other materially breaches this Agreement; provided, however that the party in breach shall have the right to cure such breach within thirty (30) days after receipt of written notice of the other party’s intention to terminate. |
4.2. | Client may terminate this Agreement on thirty (30) days written notice without cause. In the event of termination by Client for reasons other than default by CRO, Client shall pay all sums owing to CRO, but unpaid, for work performed to date of receipt of termination notice, and all reasonable and necessary costs associated with the termination itself or to which CRO is committed to pay. In the event of termination by Client, CRO shall use all efforts to minimize any such costs, including cancelling orders and services to the extent possible. |
4.3. | In the event of early termination under 4.1. above where CRO is in material breach, any credit held in favour of CRO shall be returned to Client within thirty (30) days following such termination, provided that the Client will then be liable for all outstanding third party costs lawfully incurred hereunder by CRO prior to the termination. |
4.4. | Either party shall be entitled forthwith to terminate this Agreement with immediate effect by written notice to the other if that other is adjudged insolvent or goes into liquidation (other than for bona fide reconstruction) or has a receiver appointed over any of its property or assets. |
5.0 | Warranties, Limitations of Liability and Indemnification |
5.1. | CRO warrants to Client that the Services will be performed in a professional and workmanlike manner and on a best endeavours basis in accordance with the standard of care ordinarily and reasonably expected in the performance of such Services and that the work performed for Client will be correct in all material respects to the best of the knowledge and belief of CRO. However, Client acknowledges that the provision of the Services is dependent upon the responsiveness of the South African regulatory authorities and CRO shall not be held responsible for any acts or omissions of such authorities. |
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5.2. | CRO reserves the right to place staff on the project, however not without initially providing a project management and resource outline to Client, including but not limited to, the current Curriculum Vitae of proposed staff. CRO will notify Client of any change in staff. Any new or replacement personnel shall be subject to Client’s prior written approval, which approval shall not be unreasonably withheld. |
5.3. | CRO will utilize CRO business cards, letterheads and facsimile templates for the purpose of the conduct of this trial. |
5.4. | Notwithstanding any other provision of this Agreement, each party’s total liability in respect of damages under this Agreement, any regulation or common law shall be limited to the sum of all amounts received from Client in terms of this Agreement; provided, however, that this limitation shall not apply with respect to any claims arising out of or relating to clause 6 (Inventions and Proprietary Information), indemnification obligations or damages arising from a party’s gross negligence or willful misconduct. |
5.5. | Neither Party shall be liable to the other Party in respect of any indirect loses or damaged, pure economic nature, loss of profits or income howsoever arising. |
5.6. | CRO will defend, indemnify and hold harmless Client and its directors, officers, employees and agents from and against all liabilities, costs and expenses (including reasonable attorneys’ fees and court costs) arising from any third party claim, action or lawsuit or other proceeding which is attributable to any negligent or willful act or omission or breach of this Agreement on the part of CRO or any of its agents or employees in the course of performing CRO’s obligations hereunder. |
5.7. | Client will defend, indemnify and hold harmless CRO and its directors, officers, employees and agents from and against all liabilities, costs and expenses (including reasonable attorneys’ fees and court costs) arising from any third party claim, action or lawsuit or other proceeding which is attributable to any negligent or willful act or omission or breach of this Agreement on the part of Client or any of its agents or employees in the course of performing Client’s obligations hereunder, including but not limited to breaches of third party intellectual property rights. |
6.0 | Inventions and Proprietary Information |
6.1 | CRO agrees that during the term of this Agreement and for a period of three years thereafter: |
(a) to disclose and assign to Client as its exclusive property all inventions and technical or business innovations specifically derived from the work assigned by Client to CRO which CRO develops or conceives, solely or in conjunction with others (1) that are based on or involve information of Client, (2) that relate to, constitute, result from, or include the work in which CRO will be engaged for Client, or (3) that are otherwise made through the use of any time, facilities or materials of Client;
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(b) that all deliverables and work products in the form of works of authorship developed by CRO in the performance of Services under this Agreement shall be deemed works made for hire, and shall belong fully and exclusively to Client; and that if by operation of law such deliverables or work products are not works made for hire, CRO agrees to, and does hereby, assign to Client all right, title, and interest in such deliverables or work product, including all copyrights therein;
(c) to execute all necessary documents and provide Client proper assistance (at its expense) sufficient to enable it to obtain patent, copyright or other legal protections for any such inventions or innovations as described in paragraph 7.1(a) and (b), and to make and maintain reasonably detailed accurate records of any such inventions or innovations;
(d) to deliver to Client, upon termination or expiration of this Agreement, all materials which were provided to CRO under the terms of this Agreement and which relate to the business of, or belong to, Client or which were provided by Client for the use of its employees, contractors or consultants;
(e) not to use, publish, or otherwise disclose (except if properly authorized as a part of the work for Client) any information which is provided to CRO under the terms of this Agreement including but not limited to any non-public, proprietary or confidential information;
(f) not to disclose or utilize in the performance of Services for Client any proprietary or confidential information of others or any inventions of CRO which are not included within the scope of this Agreement;
(g) not to divulge to any person, firm, or corporation any information received during the course of this service agreement with regard to the personal, financial, or other affairs of Client or its subsidiaries, and that all such information shall be kept confidential and shall not, in any manner, be revealed to anyone.
h) not to divulge or make known to any person, firm, or corporation any of the methods, processes, formulae, discoveries, or inventions, and not, in any manner whatsoever, divulge, publish or otherwise reveal, either directly or indirectly, any knowledge of inventions or devices which CRO may come into knowledge of solely as a result of and during the terms of CRO agreement with Client and to retain whatever knowledge secured in trust as a fiduciary for the sole benefit of Client, its successors and assigns.
8.0 | Medical and Regulatory |
8.1. | Both parties shall promptly notify the other party of any governmental regulatory inspections of which it becomes aware and which relate to any project covered in the Addenda. Client shall have the right to be present at any such inspections and shall have primary responsibility for preparing any responses, which may be required, to the extent such responses relate to the project covered by the Addenda. |
8.2. | Client may designate representatives who shall, upon reasonable notice to CRO, have access to and shall be permitted to review all documents, information, data and/or materials specifically related to the conduct of the projects covered by the Addenda. |
8.3. | CRO will inform Client in writing immediately of any suspected fraud. |
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9.0 | Independent Contractor Status |
9.1 | It is understood and agreed that CRO is an independent contractor and will not have any rights to any of Client benefits, nor for any purposes be deemed or intended to be an employee of Client. CRO agrees to make any payments or withholding required by the South African Revenue Service. |
9.2 | It is further understood that CRO is not an agent of Client and is not authorized to bind Client with respect to any third party. |
10.0 | Conflicts of Interest |
10.1. | CRO represents that there is no conflict of interest between performance of this Agreement and the performance of services by CRO for any other party. In the event that CRO believes that there is presently any such conflict, or any such conflict arises during the term of this Agreement, CRO will immediately notify Client which may, at its sole discretion, immediately terminate this Agreement without liability to CRO. |
11.0 | Notices |
11.1. | Any notice will be in writing and will be given by registered mail, return receipt requested, or hand delivered to the other party at the address given on this agreement or to such other address as may be substituted by notice. If sent by mail, notice will be effective on the date of receipt. |
12.0 | General Provisions |
12.1 | CRO will not assign any right or delegate any obligation under this Agreement without the prior written consent of Client. Any attempted assignment or delegation without such consent will be void. |
12.2 | The headings in this Agreement are for reference purposes only; they will not affect the meaning or construction of the terms of this Agreement. |
12.3 | If any parts or part of this Agreement are held to be invalid, the remaining parts of the Agreement will continue to be valid and enforceable. |
12.4. | The provisions of this Agreement are for the sole benefit of the parties, and not for the benefit of any other persons or entities. |
12.5 | Any action of any kind by either party arising out of this Agreement must be commenced within five (5) years from the date the right, claim, demand, or cause of action shall first arise. |
12.6 | This Agreement contains the complete and exclusive understanding of the parties with respect to the subject matter hereof. No waiver, alteration or modification of any of the provisions hereof will be binding unless in writing and signed by a duly authorized representative of the party to be bound. Neither the course of conduct between the parties nor trade usage will act to modify or alter the provisions of this Agreement. |
12.7 | This Agreement shall be governed by the laws of the State of Connecticut, U.S.A. without regard to conflict of law principles. |
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BANKING DETAILS
[***]
Fur the purposes of invoicing, invoices shall be addressed to:
Purinix Pharmaceuticals LLC
[***]
Att: Chief Executive Officer
CRO | Client | |||
Signature | /s/ Michael Derby | Signature | /s/ Catherine Lund | |
Name | Michael Derby | Name | Catherine Lund | |
Title | CEO | Title | Managing Director | |
Date | 25/05/2008 | Date | 25/05/2008 |
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ADDENDA 1
Clinical Protocol Synopsis of Phase 2B Study using [***]to Treat Children with Autism Spectrum Disorder
PAYMENT SCHEDULE (USD)
With reference to OnQ proposal v3 13/04/2018
[***]
Signature of Contract: 20% of Professional Fees
OnQ costs | ||
Monitoring | [***] | [***] |
Office overhead | [***] | [***] |
Data Management | [***] | [***] |
[***] | [***] |
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Exhibit 23.1
Independent Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration Statement of PaxMedica, Inc. (formerly Purinix Pharmaceuticals LLC) on Form S-1 of our report dated May 15, 2020, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with respect to our audits of the financial statements of PaxMedica, Inc. (formerly Purinix Pharmaceuticals LLC) as of December 31, 2019 and 2018 and for the year ended December 31, 2019 and for the period from April 5, 2018 (Inception) through December 31, 2018, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
New York, NY
July 2, 2020